Finance Committee Chairman Charles E. Grassley expects that the corporate tax cut bill will not be completed until after the August recess. The House bill (HR 4520) and the Senate bill (S 1637) both replace an export subsidy ruled illegal by the World Trade Organization with business tax breaks to force the European Union to lift its retaliatory trade sanctions. The EU’s duties, currently 9 percent for more than 1,600 US products, will otherwise continue to increase by 1 percent each month.

The Senate has still not appointed conferees, and Senate Majority Leader Bill Frist (R-Tennessee) blames the delays on demands from Democrats. Minority Leader Tom Daschle (D-South Dakota) is insisting upon establishing similar ground rules to those used on the highway reauthorization bill (HR 3550), which assured the inclusion of Senate Democrats in the drafting of the final bill. Other Democratic demands include requirements that the Food and Drug Administration regulate the tobacco buyout, preventing the administration from implementing new overtime pay rules, and including enough revenue increases to offset the cost of tax cuts. Grassley predicts that Congress will finish the bill before the November elections.