President Clinton raised the prospect Monday of casting his first line-item veto on the tax cut bill.
As he prepared for today’s signing of the legislation aimed at balancing the federal budget in five years and cutting taxes by $95 billion, he also dispatched his chief of staff, Erskine Bowles, to scour the list of 79 provisions of the tax bill that affect fewer than 100 taxpayers.
“I think if we have it, it ought to be used. I believe that it ought to be used somewhat sparingly,” Clinton said in a picture-taking session in the Oval Office. The preliminary review has been finished by the Joint Committee on Taxation, which was required by law to identify narrowly focused provisions in the tax bill and produced the list of 79. It ranges from a $2.3 billion tax credit for Amtrak to revision in pensions for clergy that would have minimal tax consequences. The line-item veto legislation, passed by the Republican Congress last year, allows the president to veto specific spending and narrowly focused tax provisions. The Supreme Court dismissed a challenge to the line-item veto as premature, which means that the first line-item veto Clinton actually casts will likely become the basis for the Supreme Court test.
The president has been getting plenty of advice, from members of Congress to a group of workers in Hot Springs, Ark. “There are secrets buried in this bill,” Rep. Courtney “Pete” Stark, D-Calif., said.
The loudest call came from Sen. John McCain, R-Ariz., who called the tax credit for Amtrak “the greatest train robbery since the James brothers,” except that the roles were reversed. “Instead of someone robbing the train, the train is robbing the Treasury,” he said last week. The provision is a favorite of Senate Finance Committee Chairman William Roth, R-Del., the Senate’s leading champion of the financially ailing rail line. The law allows Amtrak to reclaim credits on losses dating back to 1913 suffered by the private railways that were consolidated when Amtrak was created.
The Amtrak provision was the subject of intense negotiation between the administration and Roth. Although it was included in the final tax bill, the funds cannot be freed until Amtrak is reorganized, a move that labor groups opposed unless laid-off workers received full benefits.
Clinton said his experience as governor of Arkansas, where he had similar authority over state spending, showed that “once I used it a few times I didn’t need to use it very much anymore.”
The list of 79 provisions is the product of a host of key members of Congress, especially members of the two committees responsible for tax legislation, the House Ways and Means Committee and the Senate Finance Committee. Ways and Means veteran Rep. Clay Shaw, R-Fla., negotiated a series of tax breaks for the real estate industry and investors in real estate investment trusts, and committee newcomer Rep. David Camp, R-Mich., filed the provision exempting the electric car being developed by Detroit automakers from the 8 percent luxury tax, even though the car will cost more than $30,000. Senate Majority Leader Trent Lott, R-Miss., also pushed through a provision that adds to the deductions county clerks in his state can claim.
Northeast apple farmers had the advantage that three of the four sponsors of cider tax break legislation - Sens. Alfonse D’Amato, R-N.Y., Daniel P. Moynihan, D-N.Y., and James Jeffords, R-Vt. - were Finance Committee members. The apple growers wanted the $1.07 per gallon tax dropped to 22 cents.
The president also has been targeted by some of the 88 Mountain Valley Spring Co. workers from Hot Springs. They work for Sammons Enterprises Inc., an insurance, machine tool and bottled water company that has been lobbying for eight years to protect an employee stock plan devised by company founder Charles Sammons.
Sammons developed the firm from three persons to a $1.2 billion conglomerate with 2,210 employees. He hoped that after his death, his estate could be used to finance an employee stock ownership plan, but only if the law could be changed to provide the same deduction for the stock plan as is available for charitable contributions. The company has employed an army of high-priced lobbyists to secure the tax break, spending $360,000 in 1996 alone.