2 - The Michigan Daily - Tuesday, October 12, 2004 NATION/WORLD Senate OKs $136B corporate tax cut NEWS IN BRIEF Bill sent to President Bush also contains disaster relief aid ' -11 A f h i WASHINGTON (AP) - The Senate shipped Presi- dent Bush a wide-ranging $136 billion corporate tax- cut bill and a disaster aid package yesterday, letting lawmakers head home for the finale of the presidential and congressional campaigns. Florida, a vote-rich prize that both parties covet, will be chief beneficiary of the $14.5 billion disaster measure as the state rebuilds from a battering by four recent hurricanes. Included is $2.9 billion for farmers The Senate was finishing its pre-election business in a testy mood, with the usual campaign-season parti- san feelings heightened by clashes over items dropped from the compromise House-Senate tax measure. Those battles, along with Republican divisions over how to pay for the farm disaster package, forced Con- gress to meet over the weekend and on the Columbus Day holiday. The House finished its work Saturday. The Senate toiled into yesterday as Democrats beset by drought, floods or other emergencies, with some money headed to other electoral battle- ground states like Ohio and Wis- consin. The tax bill, which the Senate approved 69 to 17, began as an effort to help U.S. exporters avoid European tariffs. But as Republi- can leaders hunted for votes, it swelled into the most profound rewrite of the corporate tax code in two decades. The final 633-page product pared taxes for interests ranging from major manufacturers to native As Republican leaders hunted for votes, the bill swelled into the most profound rewrite of the corporate tax code in two decades. used delaying tactics to protest the removal of items from the original Senate version. These included provisions allowing federal regulation of tobacco, blocking Bush administration rules on overtime pay, and cut- ting taxes for companies that pay workers who are reservists and are called to active duty. "The conferees chose ceil- ing fans over businesses saving jobs of our National Guard and reservists," said Sen. Christo- pher Dodd (D-Conn). Senate approved separate bills on and reservists' pay. House passage turing firms would benefit. But opponents said the main beneficiaries would be well-connected special interests. "What was supposed to be a quick and minor fix of the tax code blossomed into this huge giveaway of tax benefits," said Sen. Richard Durbin (D-1ll.). Grassley responded earlier in the debate to critics who said the measure had provisions for specific inter- ests, saying, "Well, that's true. But that's how the Sen- ate works." Work on the tax bill began two years ago as a drive to repeal a $5 billion-a-year subsidy for U.S. exporters that the World Trade Organization ruled illegal. About 1,600 American exports to Europe were slapped with penalty tariffs rising 1 percent monthly to 12 percent now. The legislation repealed that subsidy, which was to cost $49.2 billion over 10 years. Its other savings included nearly $82 billion from closing tax loopholes and corporate shelters. In their place, taxes were cut for U.S. manufacturers by $76.5 billion. The top corporate tax rate was cut by 3 per- cent - to 32 percent - and qualifying businesses were expanded to include engineering and architectural firms, film and music companies, and the oil and gas industry. Tax breaks for multinational companies totaled $42.6 billion, including lower rates for one year for companies returning overseas profits to the United States. Opponents said that would reward companies that moved jobs overseas, but supporters said it would increase capital available for investments in the United States. Residents of states without income taxes will be allowed to deduct state and local sales taxes from their federal income returns. There also is a $10.1 billion buyout of holders of quotas held by tobacco farm- ers, though a provision allowing the Food and Drug Administration to regulate tobacco was dropped. Candidates back off election boycott President Hamid Karzai's main challenger yesterday backed off a boycott of Afghan- istan's landmark election over allegations of fraud. saying he would accept the forma- tion of an independent commission to look into any irregularities in the vote. German Chancellor Gerhard Schroeder. the first foreign leader to visit since Satur- day's election, all but declared Karzai the winner before a single ballot was counted. The announcement by ethnic Tajik candidate Yunus Qanooni that he would accept the formation of the election commission followed similar statements Sun- day by Massooda Jalal, the only female presidential hopeful, and ethnic Hazara candidate Mohammed Mohaqeq. "I don't want to be against the election and I appreciate the good will of the people of Afghanistan." Qanooni said. '1 want to prove to the people of Afghani- stan that the national interest is my highest interest." He said he made his decision after a meeting with U.N. representative Jean Arnault and U.S. Ambassador Zalmay Khalilzad. Abdul Satar Sirat, a minor Uzbek candidate who rallied the others to support the boycott, also appeared to back down. His spokesman, Ramatullah Jalili, also said Sirat would respect the decision of an independent electoral commission. 0 Alaskan whalers and ethanol producers. Other winners included fishing tackle box makers, NASCAR track owners, Chinese ceiling fan importers, and foreigners winning bets at U.S. horse and dog racing tracks. "Let the record show this bill is fair. This bill is balanced," said Senate Finance Committee Chairman Charles Grassley (R-Iowa). The White House has signaled that Bush will sign the legislation. But the administration kept a low pro- file as the bill progressed, underscoring the controver- sy enveloping some provisions. In the end, the tobacco, overtime seemed doubtful. Though the tax bill would cut business taxes by $136 billion over the next decade, it claimed to raise an equal amount of revenue by increasing other taxes, including stricter rules governing the deduction for cars contributed to charities. Supporters said the bill would create jobs - the loss of which during the Bush administration has become a campaign issue. Sen. Max Baucus (D-Mont.), who helped write the measure, said 200,000 U.S. manufac- Shiite insurgents disarm for cash BAGHDAD, Iraq (AP) - Shi- ite fighters in tracksuits and sneakers unloaded cars full of machine guns, mortars and land mines yesterday as a five-day, weapons-for-cash disarma- ment program kicked off in Baghdad's Sadr City district - a sign of progress in the center of Shiite resistance in Iraq. A lasting peace in the sprawling slum would allow U.S. and Iraqi forces to focus on the mounting Sunni insurgency. Underscoring the threat, two American soldiers were killed in a rocket attack in southern Baghdad, and a third U.S. sol- dier died when a suicide driver exploded a car bomb in front of a U.S. convoy in the northern city of Mosul. U.S. aircraft attacked a mosque in the predominantly Sunni town of Hit and set it on fire after insurgents hiding in the shrine opened fire on American Marines, the U.S. military said. In the Sunni insurgent stronghold of Fal- lujah, a U.S. warplane destroyed a popular restaurant that the American command said was a meeting place for members of Iraq's most feared terrorist organization, Tawhid and Jihad, led by Jordanian-born extremist Abu Musab al-Zarqawi. There was no report of casualties, and the Haj Hussein restaurant was closed during the 12:01 a.m. attack today. In Sadr City, followers of radical Shi- ite cleric Muqtada al-Sadr promised the government last weekend they would hand over medium and heavy weapons for cash in a deal considered an impor- tant step toward ending weeks of fight- ing with U.S. and Iraqi forces. Iraqi police and National Guardsmen will then assume security responsibility for the district, which is home to more than 2 million people. In return, the government has pledged to start releasing al-Sadr followers who have not committed crimes, suspend raids and rebuild the war-ravaged slum. Members of al-Sadr's Mahdi Army started showing up at three designated police stations early yesterday morning, carting bags full of guns and explosives - even TNT paste. Many of the weap- ons appeared old and rusted, but gov- ernment officials expressed satisfaction with the first day's haul. "Sadr City residents were very responsive, and the process went with- out any incidents," Interior Ministry WASHINGTON Poll: Iraq war increased beat of telTorism More than two-thirds of the people living in Australia, Britain and Italy, three countries allied with the United States in the Iraq war, believe the war has increased the threat of terrorism. Leaders of those countries - prime ministers Tony Blair of Britain and John Howard of Australia and Premier Silvio Berlusconi of Italy - all get low marks from their people for their handling of the war on terrorism, an Associated Press-Ipsos poll shows. More than half of those in the United States, 52 percent, believe the Iraq war has increased the threat of terrorism, while three in 10 in the United States think it has decreased the threat - a view promoted by President Bush. "In the context of the presidential campaign in the United States, this is unde- niably a blow for George W. Bush, since it shows that a majority of Americans don't agree with the main justification for his policy in Iraq," said Gilles Corman, research director at Ipsos-Inra of Belgium, who studies public opinion trends across Europe. WASHINGTON Report: Millions of workers living in poverty One in every five U.S. jobs pays less than a poverty-level wage for a family of four, according to a study by the nonpartisan Working Poor Families Project. The result of so many low-paying jobs is that nearly 39 million Americans, including 20 million children, are members of "low-income working families" - those that barely have enough money to cover basic needs like housing, grocer- ies and child care, the study found. The study classified a "working family" as one in which there was one or more children and at least one family member had a job or was actively seeking work. Besides staying up on bills, many people also struggled to save up for a bigger home or for a child's college education, said Brandon Roberts, one of the report's authors. LUXEMBOURG EU lifts Libyan sanctions, eases arms embargo The European Union yesterday ended 12 years of sanctions against Libya and eased an arms embargo to reward the North African country for giving up plans to develop weapons of mass destruction. The decision by the EU foreign ministers brought the 25-nation bloc in line with a U.N. decision last year and reflected a significant warming of relations in recent months. "This is a turning point in relations with Libya," French European Affairs Min- ister Claudie Haignere said. Iraqi National Guard members stand next to collected weapons in Sadr City, Baghdad, Iraq, yesterday. Followers of radical cleric Muqtada al-Sadr trickled into police stations In Baghdad's Sadr City district to hand in weapons under a deal seen as a key step toward ending weeks of fighting with U.S. and Iraqi forces in the Shiite militant stronghold. spokesman Col. Adnan Abdul-Rahman said. "We hope this will be completed in a comprehensive manner so that recon- struction can start in the city." Security was tight, with numerous checkpoints set up along the way and Iraqi troops deployed on the rooftops. U.S. sol- diers also watched from a distance. Abdul al-Nawaf pulled up in front of al-Habibiya station in a white sedan and started unloading machine guns, mortar shells and grenade launchers. "We have more, but we're waiting to see whether money will be paid or not," the 26-year-old fighter said. "We also want to see if there will be a truce - and whether that truce will last." He appeared disappointed when police handed him a receipt and told him to come back later to collect his cash. Militia fighters started arriving in larger numbers once officials turned up with cash to pay them. Rates ranged from $5 for a hand grenade to $1,000 for a heavy-caliber machine gun. "We are fed up with fighting," said Hassan Kadhim, 31, as he unloaded guns and mortar rounds from a pickup truck. He hoped to use the money to start a business. U.S. and Iraqi authorities hope the weapons surrender will be the first step toward restoring peace in Sadr City. "Until that process is completed, and until the Iraqi government itself is satisfied, it is way too early to characterize it as a suc- cess," said Lt. Col. James Hutton, spokes- man for the U.S. 1st Cavalry Division. If disarmament is successful in Sadr City, officials hope to replicate the pro- cess in other insurgent enclaves so they can curb resistance by nationwide elec- tions in January. Both sides, however, view one anoth- er with suspicion. Many militia fighters and even some National Guard members covered their faces during the handover, apparently in fear of being targeted. There have been several truces before with al-Sadr - none of which lasted more than 40 days. A deal brokered after heavy fighting in the Shiite holy city of Najaf in August allowed his militia to walk away with its weapons. Soon afterward, clashes broke out again in Sadr City. "We made sure this time that all weapons should be surrendered," Prime Minister Ayad Allawi said on a visit to another former insurgent strong- hold, Samarra. U.S. and Iraqi forces reclaimed that city by force, and Allawi hinted the same would happen in Sadr City if negotiations fail. "We are going to prevail against the forces of evil here in Iraq," he told reporters. "Whatever it takes, we'll do." Elsewhere, two U.S. soldiers were killed and five wounded in a rocket attack yesterday in southern Baghdad, the military said. No further details were disclosed. A series of heavy explo- sions rocked the city after nightfall. - Corniled from Daily wire reports MARKET UPDATE MON. CLOSE CHANGE DOW JONES 10,056.97 + 26.77 NASDAQ 1,928.76 + 8.79 S&P 500 1,124.39 +2.25 www.michigandaily.com The Michigan Daily (ISSN 0745-967) is published Mondays during the spring and summer terms by students at the University of Michigan. 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