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Gas Tax Repeal, Small Business Tax Incentives Could Be Linked in Possible Compromise

Thursday, May 16, 1996

Deloitte & Touche OnLine

A compromise linking the small business tax incentives, repeal of the 4.3 cents-per-gallon gasoline excise tax, and an increase in the minimum wage now appears to be coalescing in the Senate, congressional sources told Deloitte & Touche, LLP.

"There appears to be a willingness to accept these provisions," Senate Minority Leader Tom Daschle, R-S.D., told reporters after a conversation with the White House.

Also fueling the belief that a deal could be reached soon was the announcement by GOP senators regarding a willingness to separate the so-called TEAM Act, a proposed labor-law reform, from the gas-tax repeal and the minimum wage hike. The TEAM Act's inclusion in an earlier compromise plan prevented approval by the Senate.

GOP Senate strategists now seem to support substituting, in some form, the small business tax incentive plan for the TEAM Act in the package that includes the minimum wage hike and the gas tax cut. GOP congressional leaders could then claim victory because they obtained tax relief for small businesses and consumers, while forcing President Clinton to give something up to gain a minimum wage increase.

No details on the precise procedure that would be used to enact the possible compromise package in the Senate have been worked out. One significant, unresolved issue is how the small business tax incentives would be handled in the Senate, where it is relatively easy to offer amendments to legislation.

It must be decided, for instance, whether the package would be considered by the Finance Committee and then on the Senate floor, or whether it would be sent directly to the Senate floor without committee action. In addition, the number and scope of possible amendments must, if possible, be determined.

On the House side, the legislative process also seems to be picking up pace. The House Rules Committee, for instance, Thursday approved a rule controlling floor debate on the gas tax repeal bill (HR 3415), thus paving the way for floor consideration May 21.

The small business tax incentive package, which will be linked to a minimum wage hike, also is moving ahead now that the Ways and Means Committee plans to file its report on the bill (HR 3448) May 20 and House floor action is expected May 22.