US tax, spending deal meets resistance from lawmakers

[WASHINGTON] A deal to fund the US government met resistance on Wednesday from conservative Republicans concerned about spending, as well as House of Representatives Democrats who complained about corporate tax breaks and a planned end to a ban on US oil exports.

But House Speaker Paul Ryan said he was confident of a bipartisan compromise and that there is "no reason to believe we're going to have a shutdown" of the federal government, which would hurt the US economy.

The deal, reached late on Tuesday after weeks of wrangling, includes a US$1.15 trillion US government spending bill and a companion US$650 billion package of tax breaks.

The Republican-controlled House will vote on extending the tax breaks for corporations and individuals on Thursday and the"omnibus" spending bill which would fund the US government through September 2016, on Friday, lawmakers said.

Meantime, the House and Senate passed and sent to President Barack Obama a temporary funding bill to keep the government running through next Tuesday, by which time leaders hope the massive funding measure will have been approved. Without the stopgap measure, money for federal programs and offices would have run out at midnight Wednesday.

Some Republican fiscal hawks balked at the massive funding bill, raising questions about the overall level of support for it in the House, although conservatives were not talking about shutting down the government. It was unclear whether opponents had the votes to stop the measure.

The government last shut down in 2013 for more than two weeks due to a fight in Congress over the Obamacare healthcare program. Hundreds of thousands of federal workers were furloughed.

Representative Jim Jordan told Reuters some members of the Freedom Caucus he heads, and other conservative Republicans, would vote against the spending bill because it failed to include provisions to tighten U.S. screening of Syrian refugees, address national security concerns and deny funding to Planned Parenthood, a target of abortion rights opponents.

The White House reacted positively to the deal, saying it met Obama's priorities without including "hundreds of needless ideological" extra measures.

HISTORIC OIL ACCORD

Lifting the prohibition on oil exports would be a historic move and a win for the US oil industry and Republicans, who had argued that the ban was a relic of the 1970s Arab oil embargo. But with US output falling as oil prices slump, analysts say it could be months or years before exports flow in large volumes.

In a partial victory for Obama and other Democrats, the spending bill would grant tax incentives to boost wind and solar development. Shares of solar companies rose sharply.

But House Democratic leader Nancy Pelosi said she was concerned American oil refinery jobs could be lost by lifting the crude export ban. "There are concerns we have about jobs, that jobs would leave the country because of lifting the ban on crude oil exports," Pelosi told reporters.

She also cited worries about costly corporate tax breaks, telling reporters they amounted to "practically an immorality." As often happens with "must-pass" legislation, lawmakers added in seemingly unrelated measures to the overall deal to increase chances of approval in Congress.

Under changes to the "visa-waiver" program tucked into the spending bill, citizens of 38 countries, including many in Europe, will face new restrictions on travel to the United States. US officials have been eyeing the program since last month's Islamic State attacks in Paris.

Companies that share data with the US government for cyber-security purposes will get more protection from consumer lawsuits.

The bill will also repeal US meat labeling laws, removing the threat of retaliation by Canada and Mexico against US$1 billion a year in US exports.

While there was no financial bailout for Puerto Rico to ease its fiscal crisis, an omission Pelosi criticised, Ryan said the House would work to address the problem by the end of March.

At the beginning of this year, Senate Majority Leader Mitch McConnell boasted of using the appropriations process to roll back major Obama administration environmental initiatives. But at year's end, Republicans have fallen short of doing so.

REUTERS