Morning after the bailout: A 'sweetener' hangover

Morning after the bailout: A 'sweetener' hangover

President Bush signs the Emergency Economic Stabilization Act of 2008 in the Oval Office.

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By KOMO Staff and Associated Press

The morning after the $700 billion bailout package was signed into law Friday, Americans woke up to find it contains more billions of dollars in tax relief and other "sweeteners" that were thrown in to assure its passage.

Lawmakers and others say many of these "sweeteners" undoubtedly are good for the economy. For instance, a provision that promotes renewable energy development is expected to preserve and create about 500,000 good-paying U.S. jobs

Another tax credit for research and development is expected to keep America competitive in the global marketplace. And about 20 million middle-class Americans were exempted from paying a $2,000 tax that originally was intended only for the very rich.

But there are plenty of other bizarre "sweeteners" in the fine print of the measure that seemingly have nothing to do with rescuing the nation's failing economy. Some of them are almost comical:

- There's a nearly $200 million tax rebate for the Virgin Islands' and Puerto Rico's rum production.

- Another tax credit exempts wooden practice arrows used by children from an excise tax of 39 cents per arrow. Cost: $2 million.

- A tax credit for race-track owners will save them an estimated $100 million.

- A tariff relief measure for U.S. worsted wool fabric producers that use imported fibers and yarns will cost $148 million.

With provisions like these thrown into the bailout package, it's no wonder that some Seattle-area residents are frustrated with Congress and its response to the economic crisis facing the country.

"It's like a bunch of fourth-graders are involved and we have nothing to say about it," says Shawn Cavanah of Seattle. "It's a really sad situation."

Billy Watson, another local resident, says, "It's pretty ridiculous, but it's politics as usual. There's not a lot of bills that don't include stuff like that."

Mike Knudson echoed that sentiment. "I'm familiar enough with Washington not to be surprised by that," he says.

Lawmakers who supported the tax breaks say that, even though they're not directly related to the bailout, they still give breaks to the working people who need them.

Others say, the bigger picture - so-called "pork" and all - will mean economic relief in the long run.

Says Corina Rachina: "I don't think that each individual person on the street is going to feel the $700 billion bailout plan, but I do believe it's going to stimulate the economy."

How did the tax breaks get into the bailout package?

Some of them had been included in other bills that were stalled in the Senate. And many lawmakers, like Senate Majority Leader Harry Reid, say they didn't force those breaks into the legislation. But they don't see it as a problem that they're there.

however, some House members and radio-TV commentators have vowed to do something about the more flagrant examples, including those affecting wooden arrows, Puerto Rican rum and race track owners.

"All these things are called sweeteners in order to get votes from Democrats and Republicans in the House," conservative commentator Rush Limbaugh said at the opening of his show Thursday.

"To get this bailout through the Senate and House, they've added pork. Surprise, surprise."

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