Atelier 16, article 8

Dan Morgan :
(from the Washington Post, March 5, 2001

Business Toes the Line on President's Proposal
by Dan Morgan

                                  WASHINGTON President George W. Bush has pressured
                                  leading business groups to put off seeking to attach a long list of
                                  tax breaks to his $1.6 trillion tax cut proposal and instead plan to
                                  press Congress to pass it without amendments.

                                  The change of strategy among dozens of trade associations and
                                  corporations - which a few weeks ago were eyeing the tax
                                  legislation as a golden opportunity - is due in large part to
                                  aggressive arm-twisting by Mr. Bush; Vice President Dick
                                  Cheney; the president's chief of staff, Andrew Card Jr., and the
                                  presidential adviser Karl Rove.

                                  "The message has been 'Get with the program,'" a business
                                  lobbyist said. "They're saying if you don't fit into what the president
                                  wants, we won't help you and we may even fight you."

                                  The turnaround is a significant victory for the administration, which
                                  has warned that a rash of add-ons would undermine congressional
                                  support for the bill. With business supporting the legislation as
                                  proposed, the Bush lobbying effort will be much easier. The
                                  change also reflects hard-boiled realism on the part of veteran
                                  business representatives, who say the message from the White
                                  House has been clear: If they give Mr. Bush political aid by helping
                                  to pass his tax plan now, they will have the chance to add their
                                  proposals to subsequent legislation.

                                  One trade association representative said that the White House
                                  had told business groups that "anyone who wants to talk to this
                                  administration must first help establish Bush's presidency and do it
                                  in a way that keeps this bill slick and clean."

                                  The House Ways and Means Committee on Thursday approved
                                  the main component of the president's proposal - the reduction in
                                  personal income taxes. The panel plans to take up other elements
                                  later, such as elimination of the estate tax, marriage penalty relief
                                  and expansion of the child tax credit.

                                  Mr. Bush has vowed repeatedly - most recently in his address to
                                  Congress last week - to fight attempts to add to the plan, which
                                  the White House says will cost $1.6 trillion over the next decade.
                                  Representatives of business groups, which contributed tens of
                                  millions of dollars to Mr. Bush's campaign, say the message has
                                  gotten through. Scores of them have signed on to a newly formed
                                  Tax Relief Coalition to lobby for passage of Mr. Bush's bill.

                                  "Lots of folks have come on board where there's no dollar
                                  incentive to them of a direct nature," said Dirk Van Dongen,
                                  president of the National Association of Wholesaler-Distributors in
                                  Washington. "Why are they there? In my judgment they recognize
                                  this president is either going to make his bones on this or we find
                                  out we have an administration that cannot easily advance its
                                  agenda in this city."

                                  Nonetheless, postponing the battle for corporate tax breaks entails
                                  risks, lobbyists said. The president's proposal does contain
                                  provisions that directly benefit business owners, such as elimination
                                  of the estate tax and lower rates for smaller businesses or
                                  partnerships. More broadly, a cut in tax rates "puts more income
                                  in the hands of workers when we badly need a restoration of
                                  consumer and business confidence," said Jerry Jasinowski,
                                  president of the National Association of Manufacturers.

                                  But the package leaves out most of the business community's wish
                                  list, including a cut in the corporate tax rate, accelerated
                                  depreciation of equipment, permanent extension of the research
                                  and development tax credit, changes in the corporate alternative
                                  minimum tax and sweeping revision of tax-haven rules.

                                  So far discipline is holding. After a breakfast pep talk from Mr.
                                  Cheney on Wednesday, dozens of visiting manufacturing
                                  executives fanned out on Capitol Hill to lobby home-state
                                  members of Congress on behalf of the package. So far, nearly
                                  100 trade associations and companies have joined the Tax Relief
                                  Coalition. The coalition is led by four groups representing
                                  thousands of companies with tens of millions of employees: the
                                  National Association of Wholesaler-Distributors, the National
                                  Association of Manufacturers, the National Federation of
                                  Independent Business and the U.S. Chamber of Commerce.

                                  When President Ronald Reagan advanced his tax cut in 1981,
                                  there was so much clawing and elbowing for a piece of the pie that
                                  the initiative nearly collapsed under the weight of special
                                  provisions.