WASHINGTON – Republicans agreed Thursday to let Democrats push debates on overtime pay (search) and other economic priorities in an effort to dislodge a stalled tax cut for American manufacturers.
The preliminary agreement gives Democrats an opportunity before the fall presidential election to criticize the president's economic stewardship. The parties struggled for weeks over whether to open the tax cut to broader economic matters.
When senators dive back into debate, they plan to start with a Democratic effort to block redrafted rules for overtime pay. Sen. Tom Harkin, D-Iowa, wants to bar any part of the Bush administration's proposed rules that would strip the benefit from workers now eligible for extra pay.
Democrats want to follow that with efforts to extend expiring unemployment insurance (search) and remove tax breaks viewed as encouragement for companies to move jobs overseas. They also want to propose new aid for health care and service workers whose jobs are shipped oversees, building on a program that already helps manufacturing workers.
Sen. Ted Kennedy, D-Mass., also plans to press for expanded pension relief to help multiemployer plans, programs run jointly by management and workers in construction, trucking and other trades.
Republicans have their own wish list. Sen. Don Nickles, R-Okla., wants to use the bill to ensure that three popular tax cuts don't expire at the end of the year. Those tax cuts created a new 10 percent tax bracket, lowered taxes for some married couples and increased the child tax credit (search).
Sen. John McCain, R-Ariz., wants the opportunity to strike billions in new tax cuts for energy production and conservation.
Even after Senate leaders spent hours trying to pare the list, senators want to offer 80 possible changes.
"We have more amendments than either one of us would like," said Senate Majority Leader Bill Frist, R-Tenn.
Top Republican aides said the agreement could falter if some of the amendments aren't dropped.
The bill also eliminates a tax break for exporters that was declared illegal in international trade courts after the European Union (search) challenged it. As a result, U.S. exports face punitive tariffs that ratchet up 1 percentage point each month until the bill becomes law.
The sanctions started at 5 percent in March and increased to 6 percent this month.
"All of us know that the calendar is working against us," Frist said.
Lawmakers eliminated the offending tax break and simultaneously extended new tax breaks to help American manufacturers. The bill has since accumulated a host of other tax breaks large and small.