GOP leaders pull military tax cut bill from House floor

House Republicans pulled the plug Thursday afternoon on a military tax cut bill after whip counts showed GOP lawmakers were reluctant to support a bill that included a number of unrelated special interest tax breaks.

After huddling with House Ways and Means Committee Chairman Bill Thomas, R-Calif., Rules Committee Chairman David Dreier, R-Calif., and Majority Whip Roy Blunt, R-Mo., Majority Leader Tom DeLay, R-Texas, decided to pull the bill and acknowledged so-called add-ons had endangered the bill's prospects for passage.

"We need to keep working," DeLay told CongressDaily.

Addressing Minority Whip Steny Hoyer, D-Md., on the floor, DeLay said he wanted to reschedule a vote as soon as possible. "Unfortunately, as the bill headed to the floor there were concerns raised by our members and your members," DeLay said.

The underlying bill would restore the tax-exempt status of death gratuity benefits and allow military families to take advantage of an existing tax provision that allows homeowners to exclude as much as $500,000 in capital gains from the sale of a principal residence.

A glum-faced Thomas declined to comment on problems with the bill, which his committee amended last week with many of the controversial provisions. "You'll have to ask the leadership," he said.

DeLay said the bill might be back on the floor calendar next week, but did not indicate whether Republicans would strip out the extraneous language.

Democrats said they fully supported the underlying bill, which cost $478 million over 10 years, but weakened GOP support for the bill by slamming the inclusion of unrelated provisions, including a break to manufacturers of tackle boxes and producers of a diesel-water fuel mix.

Rules ranking member Martin Frost, D-Texas, charged the bill would shortchange military reservists by capping travel expense reimbursements at $500. Rep. Charles Stenholm, D-Texas, called the bill fiscally irresponsible, adding, "You talk about hypocrisy and shamelessness at its worst."

Rep. Jeff Flake, R-Ariz., also said some GOP members objected to the late addition of a moratorium on corporations moving offshore to avoid paying U.S. taxes. "We're punishing businesses-because our tax system is so convoluted," Flake said.

Ways and Means member Jim McCrery, R-La., who won inclusion of a provision that would eliminate the surcharge on foreigners abroad placing bets on races at U.S. horse tracks, defended the tax breaks as "good provisions, sound policy and needed to be done." McCrery said tax writers were serious about seeing the provisions become law. "That was part of the equation. We needed a vehicle that would move this through the process."

One GOP aide said Republicans legislators were comfortable with the costs of the tax breaks because they were offset with revenue raisers, but said the bill was troubled by a perception problem. The aide predicted the underlying bill would return to the floor next week on the suspension calendar.

"If we pull it, you'll probably see it next week-on suspension," the aide said. "It won't be Christmas-except for the military."

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