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Sen. Boxer's push for multinational tax break goes against party

The California liberal's proposal draws Republican votes and Democratic rebukes, illustrating how home-state and political concerns can drag down the party in power.

February 06, 2009|Richard Simon

WASHINGTON — File this under "politics" in "Ripley's Believe It or Not!": California Sen. Barbara Boxer, stalwart liberal and frequent antagonist of big business, sided with Republicans to champion a tax break for multinational corporations -- and against a majority of her own party.

Boxer attempted to attach the tax break to the economic stimulus bill, only to be shot down by fellow Democrats.

Still, the unusual, if not unprecedented, sight of Boxer drawing more votes for one of her proposals from Republicans than from members of her own party underscores a challenge facing President Obama and congressional leaders: Even in a more Democratic Congress, home-state and political needs can crack party unity and produce strange alliances.

"I do not stand here every day and endorse tax breaks," Boxer told her colleagues.

The measure she was pushing, eagerly sought by California's high-tech industry, would have temporarily cut the tax rate on overseas profits brought back into the country.

"It's something that benefits her constituents," said Dorothy Coleman of the National Assn. of Manufacturers.

Boxer, in an unusual debate with her Democratic colleagues this week, argued that the measure would generate billions of dollars to create jobs. "At a time that we want to inject dollars into this economy, those dollars are sitting offshore," she said.

Several Democrats complained that companies used a similar tax break in 2004 not to create jobs but to benefit their shareholders. Boxer supported that tax cut too.

"This is a tax gift to those companies that move operations overseas," said Sen. Carl Levin (D-Mich.).

After Sen. Max Baucus of Montana, a fellow Democrat who heads the tax-writing Senate Finance Committee, spoke against the tax break, Boxer said: "My friend can stand up there and say it didn't work the last time and it won't work this time. We have evidence to the contrary."

She was even more blunt with Sen. Byron L. Dorgan (D-N.D.), who also assailed the tax break. "My friend," she said, "has it wrong."

In an effort to win more support for the measure, she proposed strict conditions on how foreign earnings brought back into the U.S. could be spent. But only seven of her fellow Democrats, including Californian Dianne Feinstein, supported her measure, which was defeated Tuesday night, 55 to 42.

Boxer last year voted with the majority of her fellow Democrats 99% of the time on party-line votes. So it was a Ripley's moment when Utah Sen. Orrin G. Hatch, a conservative Republican, walked up after the vote to thank Boxer for her efforts. "Wow, that's different," she acknowledged in an interview.

She said she would break with her party "when I think it's the right thing."

In fact, she was planning to work with Republican Sen. James M. Inhofe of Oklahoma, her chief adversary on global warming legislation, on an infrastructure-funding amendment to the stimulus bill.

"Stimulus makes strange bedfellows," said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC. "Just as many Republicans are more willing to see the government spend money in order to jump-start the economy, you're seeing someone like Boxer responding to the needs of her business constituencies."

Though Boxer has often been at odds with business -- she is a leader in the effort to crack down on industrial greenhouse gas emissions -- she earned a 100% rating in the last Congress from the Information Technology Industry Council.

In 2004, she helped lead an unsuccessful fight against new accounting rules for stock options that high-tech companies adamantly wanted halted.

Bruce Cain, who directs the UC Washington Center, said Boxer's break from most of her fellow Democrats could be an honest disagreement about the effect of the earlier tax cut "combined with an effort to be bipartisan, which never hurts when you have a reelection looming in the future and Obama spirit fills the air."

But bipartisanship is likely to go only so far when the parties already are looking ahead to the next election.

Indeed, even though Boxer cosponsored the tax break with Sen. John Ensign (R-Nev.), she took issue with him when he called for more time to consider whether the overall stimulus bill would achieve its goal.

"Instead of working together, our friends on the other side come out, one after the other, with the same talking points: 'The Democrats are irresponsible,' " said Boxer, who faces reelection next year. "Well, I ask: Who is irresponsible?"

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richard.simon@latimes.com

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