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GOP leaders pull controversial tax bill

Lawmakers packing bags for campaign trail

From Ted Barrett
CNN Washington Bureau

Lawmakers packing bags for campaign trail

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WASHINGTON (CNN) -- House Republican leaders, looking to finish their work and send their members home to campaign for re-election, pulled a controversial tax package from consideration Wednesday and then passed a bill to fund the government until after next month's midterm elections.

The Senate is expected to adopt the funding measure, which would cover government spending through November 22.

House Speaker Dennis Hastert said he will call his members back as early as next week if the Senate -- which is expected to stay on the job next week -- passes a bill creating the Department of Homeland Security or passes any of the outstanding spending bills.

"Why hang around waiting when all the Senate does is sit around and talk?" complained Ways and Means Committee Chairman Bill Thomas, R-California.

Hastert said he was disappointed to leave Washington with many bills pending but said he hopes negotiators for two key measures -- energy and terrorism insurance -- would use the time to reach agreements.

The tax bill that was pulled Wednesday included a provision to punish corporations that move offshore to avoid paying taxes. Democrats charged those corporations were acting unpatriotically. But many Republicans, including Hastert and Majority Leader Dick Armey, opposed the measure.

"When you really look in depth, the reason we're losing people offshore is the inequity of our tax code as compared to our competitors overseas," Hastert explained.

The tax bill also included provisions related to capital losses, pension reform and a provision extending benefits for unemployed workers. GOP leaders promised to address the unemployment benefits issue when Congress returns.

The government spending bill, known officially as a "continuing resolution," will fund government agencies at 2002 levels until Congress passes the 2003 appropriations bills.

Republicans, who overwhelmingly supported the funding bill, had been split on the issue. Some argued government agencies, pressed by the war on terrorism, need higher funding levels. Others, mostly fiscal conservatives, were happy to accept several months of government spending at 2002's lower levels.

Most House Democrats, upset at the lower funding levels, voted against the bill.

Efforts to attach higher payments to Medicare providers and new drought aid for farmers failed. But Hastert promised to continue negotiations with the White House to find assistance for the farmers.

"If there's a problem, we need to solve the problem," he said.

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