McCain Blasts Access Tax Ban Maneuvers

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UPDATED:
Internet tax legislation in the U.S. Senate veered into bitter partisan politics Tuesday afternoon, bringing a sharp rebuke from Arizona Republican John McCain as a deadline for compromise looms.

Attempting to broker a deal on the suddenly sputtering Internet access tax ban legislation, McCain was angered when Minority Leader Tom Daschle (D-S.D.) introduced a non-related energy item to McCain’s compromise measure.

“This is a totally, completely extraneous amendment introduced without warning,” McCain said. “You know very well that if an Internet tax moratorium is passed, an energy bill will not be part of it. Are we going to seriously legislate as the American people sent us here to do?”

Last November, Senate Republicans failed by two votes to cut off a Democratic filibuster blocking the high profile energy bill already passed by the House of the Representatives. Tuesday, Daschle cherry-picked a popular farm belt provision from the energy bill to attach to the Internet access tax ban bill.

“So, here we go. The Democrats have a retreat on Friday so we’re not going to work five days this week,” McCain said. “Meanwhile, we’re not addressing the issues the American people care about and right now they care about whether we’re going to tax the Internet. We’re not working; we’re not doing anything. Now we’re going to go through a parliamentary charade.”

After McCain withdrew his amendment in protest, New Mexico Republican Pete Dominici introduced his own amendment to the Internet access ban that includes a slimmed down version of the entire energy package.

Several hours later, Majority Leader Bill Frist (R-Tenn.) called an end to the deadlocked Tuesday session and said, “Hopefully, we can get something done [on the Internet access tax moratorium] Wednesday, but that is going to
take cooperation from both sides of the aisle.” Frist has set a Thursday night deadline for a final vote on the bill.

George Allen (R-Va.) and Ron Wyden (D-Ore.) introduced legislation almost a year ago to permanently ban Internet access taxes and to expand the definitions of access. The House overwhelmingly passed similar legislation last year. The original access tax moratorium passed in 1998 and extended again in 2000, expired on Nov. 1.

Allen admitted the day had dissolved into “tangents and detours. The main point of this debate and where we’re supposed to be today with those who want to have the Internet free from taxation, and a lot of us who have concerns about it, was debating those ideas.” He urged the Senate to “get back on the subject, get back on point.”

Mississippi Republican Trent Lott agreed with Allen and McCain, saying, “I urge my colleagues to not make this bill a punching bag. It’ll show we can’t get anything done. Senators can dump their out baskets on this bill — that
is their right — but we need to get this bill done.”

Working against Frist’s deadline for a final vote, McCain’s amendment sets a four-year duration for a new ban on Internet access taxes. The amendment also extends the access definitions to include DSL, cable modems and other types of broadband connections.

McCain’s compromise also phases out a grandfather clause for the 10 states already taxing access when the first moratorium was passed by Congress. The Senate version has run into staunch opposition from lawmakers, particularly those from the grandfathered states, who fear the revenue loss to state and local taxing authorities.

“We are here debating this measure because the two opposing sides will not budge from their positions,” McCain said as he introduced his compromise amendment. “Under this amendment, an overwhelming amount of state and local taxes will be protected.”

Sen. Lamar Alexander (R.-Tenn.), who has led the opposition, wasn’t convinced.

“The definitions [in the McCain amendment] of Internet access are the same as in the Allen-Wyden bill,” said Alexander, who is supporting an amendment to keep a new ban limited to two years and narrower in definitional scope.

Updates prior version to correct second paragraph reference to Daschle