[that's 4.5 billion $$ a year] Wednesday November 1 12:48 PM ET Senate Passes Export Tax Measure By CURT ANDERSON, AP Tax Writer WASHINGTON (AP) - The Senate passed a $4.5 billion export tax measure Wednesday that would replace a law ruled an illegal trade subsidy by the World Trade Organization (news - web sites). The bill is a major step in avoiding potential retaliation from the European Union. On a voice vote, the Senate sent the legislation to the House, but GOP leaders balked at immediately following suit. The measure is also part of a larger 10-year, $240 billion tax relief package that is being delayed in the Senate for unrelated reasons and has drawn a veto threat from President Clinton (news - web sites). House Majority Leader Dick Armey, R-Texas, told reporters that House Republicans favor holding firm on the entire tax measure rather than moving individual pieces, even if Congress takes a break until mid-November for next week's election. ``The House has spoken on taxes,'' Armey said. ``We think it's good work and we think it ought to be signed.'' Sen. Daniel Patrick Moynihan of New York, senior Democrat on the Senate Finance Committee, said if Congress did not pass the export tax legislation before adjourning for the year it could result in $4 billion in retaliatory tariffs from the Europeans. ``It had the potential for a ruinous trade war,'' Moynihan said. ``We have just dodged a big bullet.'' The legislation, costing $4.5 billion over 10 years, would replace the Foreign Sales Corporation law invalidated by the WTO, which provides tax breaks for more than 6,000 U.S. companies operating offshore sales subsidiaries. The measure is a top priority for the Clinton administration and has broad bipartisan support, but for weeks it was blocked by a handful of Democrats - Sens. Richard Bryan of Nevada, Paul Wellstone of Minnesota and Ernest Hollings of South Carolina among them. They had objected to extending the export tax breaks to such industries as drug makers, tobacco companies and defense contractors. The larger $240 billion tax bill pending in the Senate faces an uncertain future, especially with the priority export tax provision moving separately. Sen. Ron Wyden, D-Ore., is steadfast in his refusal to grant GOP leaders unanimous Senate consent for the bill to be brought up because it would effectively block Oregon's assisted suicide law. Clinton opposes it for several reasons, contending its school construction provisions are inadequate and that $30 billion in Medicare money is not properly divided. If agreement is not reached to bring up the bill for debate, Lott said he would seek a vote, probably Thursday, to cut off the filibuster. That would require 60 votes and some Democratic support. GOP leaders have adamantly opposed rewriting the bill to meet Clinton's demands. The tax bill would increase contribution limits for 401(k) plans and IRAs, cut taxes for businesses, create new incentives for investment in impoverished areas and increase the $5.15-an-hour minimum wage by $1 over two years. -
