WASHINGTON--The Senate Finance Committee kept the GATT Uruguay Round alive Friday by approving a controversial $11.5 billion financing plan, but the funding is not assured yet. It faces renewed opposition among House Republicans who vow that if taxes are raised to make up for the lost tariff income, they will oppose the pact. The Senate panel vote was 11 to 9. It took a special visit to Capitol Hill by Treasury Secretary Lloyd Bentsen to muster the votes among Finance Committee members for the funding. Bentsen agreed to remove one of the most contentious proposals, which would have reduced the amount of interest earned on tax overpayments made by individuals. The interest payment reductions instead will apply only to corporations that overpay their taxes by $10,000 or more. Bentsen predicted it would affect less than 1 percent of all U.S. corporations. Pointing out that if the committee did not approve the financing, the pact would be dead, Bentsen said, "It's unacceptable that the United States would not pass GATT. It's too important to American business." Not being a member of the worldwide free trade agreement would force the U.S. to negotiate bilaterals with all of its trading partners and could open the door for special interests to greatly influence U.S. trade policy, he added. The Senate panel is expected to consider amendments to the agreement this week. Among them are a controversial proposal by Sen. John Breaux (D., La.) to change the rule of origin for apparel; an amendment to extend the Generalized System of Preferences and a plan to give Caribbean Basin Initiative countries the same free-trade benefits accorded Mexico. Breaux's amendment, which would designate the place of assembly as the country of origin, has particularly mobilized opponents and proponents, who seize breaks in committee deliberations to press their arguments with committee staffers and administration officials. Sen. Bob Packwood (R, Ore.), ranking minority member of the committee, said that if Breaux's amendment were added to GATT, it would cost the agreement several votes. House Republicans, led by Georgia's Newt Gingrich, said in a Capitol Hill press conference Friday that they would work to defeat any agreement that raises new taxes to pay for GATT. The plan approved by the Senate Finance Committee includes roughly $4.5 billion in spending cuts, $5 billion in new taxes or extensions of existing levies and $2 billion in leftover government money that has not been spent by entitlement programs. The House Ways and Means Committee did not include a funding plan in its draft of GATT-implementing legislation. "If the administration is determined to commit suicide on GATT by sending it up here with new taxes, that's their prerogative," Gingrich said at the press conference. "If there are taxes in this, we'll defeat it." Senate Republicans also oppose the idea of using unspent government money to cover GATT expenses. Gingrich added that in addition to funding problems, Republican support in the House depended on two other changes. The administration would have to agree to delete any requirements that future trade agreements contain environmental and labor standards, and changes would have to be made in the World Trade Organization to make sure U.S. sovereignty would be maintained.
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