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Senate votes to protect earmarks

By ASSOCIATED PRESS
Published May 3, 2006

WASHINGTON - The Senate voted Tuesday to protect home-state projects added by some of its most senior members to an Iraq war and hurricane relief funding bill as the tide turned against efforts by spending hawks to strip them out.

The powerful Mississippi delegation defended a controversial plan to give Northrop Grumman, which owns the Ingalls Shipyard in Pascagoula, perhaps $200-million for hurricane-related losses that its insurers are unwilling to pay.

Tom Coburn, R-Okla., pressed the bid to strip the provision, saying that it's wrong for taxpayers to pay for losses that should be borne by insurers and that Congress should stay out of the battle between the giant defense contractor and its insurers.

But by a 51-48 vote, the Senate supported GOP Appropriations Committee Chairman Thad Cochran and former Majority Leader Trent Lott after they defended the idea.

Earlier, senators by a 59-40 vote supported a plan by Hawaii Democrat Daniel Inouye to give two of his state's sugar growers $6-million in aid to recover from flood damages caused by recent torrential rains.

While the battle continued, the Senate quietly added about $1.6-billion - for a total of $3.7-billion - to the measure for levees and other flood control projects in and around New Orleans.

The Senate is expected to pass the bill today.

As the full Senate battled over home-state projects added to the bill in excess of Bush's request, the Senate Budget Committee held a hearing on a proposal to give the president a scaled-back version of the line-item veto that he could use to battle such "earmarks."

Deal reached on capital gains, dividend tax cuts

WASHINGTON - An agreement in principle has been reached on the key provisions of legislation to extend tax cuts on capital gains and dividends and keep 15-million middle income taxpayers from getting hit with a tax designed for the wealthy, congressional aides said late Tuesday.

However, final passage of the measure is being linked by Senate Finance Committee Chairman Charles Grassley to achieving an agreement with House Republicans over the outlines of a second package of tax breaks, the Associated Press reported.

Aides said they expected the disputes on the contents of the second bill to be resolved quickly.

[Last modified May 3, 2006, 07:12:22]