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US lawmakers set to act on economic package & Trade benefits for Haiti

07 Dec 2006 21:59:29 GMT

WASHINGTON, Dec 7 (Reuters) - The Republican-led U.S. Congress, rushing to adjournment this week, was preparing to act on a patchwork economic package that would open trade with old cold war foe Vietnam, give new life to some popular tax breaks and save doctors who treat the elderly from a pay cut.

The U.S. House of Representatives was expected to take up the legislation later on Thursday, sending it to the Senate for final passage possibly on Friday as Republicans tried to clear up some outstanding issues before Democrats take control of a new Congress in January.

"This legislation is a bipartisan compromise that is 'must-do' work in Congress this year. It will prevent tax increases on millions of Americans and improve the Medicare program and use of taxpayer money," said retiring House Ways and Means Chairman Bill Thomas, a California Republican.

The tax package would extend a number of expired tax breaks for education, research and development, hiring welfare recipients and other popular causes.

The tax package, which includes tax breaks for energy conservation and use of alternate energy and cancels a scheduled pay cut next year for doctors in the Medicare health-care program for the elderly, would cost about $45 billion over 10 years.

It includes provisions that would liberalize trade with Vietnam and give some new trade benefits to Haiti, despite concern among some southern lawmakers about textile imports.

It would be the second attempt by House Republican leaders to approve normal trade relations for Vietnam. The measure failed last month when leaders tried to push it through under a procedure that required more than a simple majority.

PUTTING THE COLD WAR TO REST

Congress wants to set aside Cold War trade restrictions that require periodic review of Vietnam's record on religious rights and approve so-called Permanent Normal Trade Relations.

The goal is to allow U.S. farmers, bankers and other businesses to share in the market-opening benefits of Hanoi's entry into the World Trade Organization next month.

The House proposal would also renew duty preferences for six months for four Andean nations under the Andean Trade Preference and Drug Eradication Act, or ATPDEA, which expires at the end of the month.

Some lawmakers had proposed restricting those preferences to just Peru and Colombia, which have signed bilateral free trade deals with Washington, and excluding Bolivia and Ecuador. The current plan will cut off preferences after six months to countries that don't have deals in place with Washington.

The legislation also opens parts of the Gulf of Mexico to new offshore oil and gas drilling. Some 8.3 million acres in the eastern Gulf of Mexico near Florida would be opened under the bill, which redistributes billions of dollars in federal royalties to four nearby Gulf Coast states.

Before adjourning, the current Republican-led Congress must pass legislation to keep the government running, since nine of 11 spending bills that finance various government programs remain unfinished. A stop-gap spending bill expires on Friday, requiring the extension into the new Congress.