Lobbyists Raise Stimulus Price Tag

WASHINGTON -- Lobbyists for industry and labor are gearing up to add costly proposals Tuesday to the Senate's nearly $890 billion economic stimulus plan.

Florida citrus growers, California wine growers and a range of agricultural interests are pushing a tiny change that would allow farmers to more quickly depreciate new fields. High-tech and pharmaceutical companies want to save billions in taxes by including a plan that would allow them to bring overseas profits back home at lower tax rates. Labor unions are pressing Congress to make sure that new government funding for green technology results in jobs with good pay and benefits for workers.

Together, the competing lobbying efforts are likely to drive up the overall cost of the stimulus package that President Barack Obama and congressional Democrats hope to enact by the end of next week. The Senate version of the legislation, which Senate leaders hope to approve by week's end, has already swelled to $885 billion, according to a new estimate released Monday by the nonpartisan Congressional Budget Office.

A key Democratic architect of the bill, Senate Finance Chairman Max Baucus of Montana, said the measure "has been carefully crafted to produce meaningful improvements to our economy."

Republicans are stepping up criticism of the measure, saying the spending that accounts for two-thirds of the package is a waste of taxpayer dollars. They are pushing instead for greater tax cuts. "Republicans believe we must put money back into the pockets of taxpayers," said Senate Minority Leader Mitch McConnell (R., Ky.)

At the White House Monday, Mr. Obama pressed for rapid action, and played down the emerging partisan divisions. "There are still some differences between Democrats and Republicans," he said. "But what we can't do is let very modest differences get in the way of the overall package moving forward swiftly."

Senate debate on the recovery plan is scheduled to begin in earnest Tuesday. Senate leaders have expressed more sympathy for business-friendly ideas, and interest groups are poised to press for a wide array of provisions not included in the House version of the bill.

Some of the expensive special-interest provisions hinge on technical definitions and seemingly small changes in legislative wording. For example, California grape and Florida citrus growers could reap the rewards of a "bonus depreciation" incentive in the Senate bill if the language is tweaked to include crops that are "planted" in 2009, rather than crops that are "ready to market."

That's because the definition included in the current legislation only allows farmers to qualify for the tax incentive if their crops can be sold in the current year. Owners of citrus trees and vineyards seek the change because citrus trees and grape vines take much longer to produce a harvest. "I'm old school... I've always believed that we asked the government to assist in times of critical need," like disaster relief, said Joel Nelsen, president of California Citrus Mutual, a trade and lobbying group.

Pharmaceutical firms, high-tech companies and a coalition of U.S. multinationals are advancing a plan to allow them to bring hundreds of billions in overseas profits back to the U.S. to spend however they see fit.

This change, backed by California Democratic Sen. Barbara Boxer and Nevada Republican Sen. John Ensign, would create a tax "holiday" for any company's overseas earnings, sharply reducing the tax that the U.S. normally imposes on the money when it comes back to the U.S. from corporate subsidiaries in Europe, Asia and elsewhere. Critics worry, however, that the change ultimately could lead to more such tax holidays, and encourage companies to park more money overseas, and avoid U.S. tax.

One recent private estimate puts the amount that U.S. companies currently have parked overseas at $518 billion.

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