Fate of new-car tax break is out of Mikulski's hands

The Baltimore Sun

WASHINGTON -Sen. Barbara A. Mikulski said she is worried that a tax break for new-car buyers could be watered down or eliminated from the huge stimulus measure that cleared another hurdle yesterday in Congress.

In a brief interview shortly before the Senate approved its version of President Barack Obama's $800 billion spending and tax-cut plan, Mikulski expressed concern about the fate of the new-car tax break she authored, which could be worth $1,500 to the buyer of a $25,000 car.

The Maryland Democrat pointed out that two of the five senators who will take part in negotiations to craft a final package - Finance Committee Chairman Max Baucus, a Montana Democrat, and Sen. Charles E. Grassley of Iowa, the senior Republican on the finance panel - oppose her idea.

Key lawmakers from the House and Senate have the responsibility of meshing the different stimulus packages approved by the two chambers. The Senate approved Mikulski's new-car tax break last week. However, the House-passed version of the stimulus package contains no such provision. That could make Mikulski's proposal vulnerable to being weakened or eliminated as negotiators work to produce a compromise that will win enough votes for the measure to be sent to Obama for his signature.

Several moderate Republican senators whose votes are key to winning final approval of the stimulus measure have said they will withdraw their support if the size of the package increases. One way to keep the cost in check would be to remove Senate provisions, such as Mikulski's, which has a price tag of $11 billion over 10 years, to make room for House provisions that were not included in the Senate version.

Mikulski contends that her plan would spur sales of new cars and help the environment, since newer cars are typically cleaner-burning than the older models they replace.

Critics argue that the tax break is not the most efficient use of federal money, because many who will buy new cars this year would do so anyway.

Yesterday, Mikulski took to the Senate floor in an effort to generate popular sentiment for preserving her proposal.

"If you want a car in your house, call the White House or call the House of Representatives," she said, standing beside an easel displaying the relevant phone numbers.

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