At session's end, Congress cuts taxes

The 11th-hour output also included controversial provisions for Gulf Coast drilling and a trade deal with Haiti.

In a final, late-night surge of legislating, the 109th Congress passed $45 billion in tax cuts and a trade package affecting at least 150 developing nations, as well as a range of smaller bills on issues from healthcare to energy. But they left most of the current fiscal year's spending decisions to the next Congress.

It was the last gasp of a lame-duck Congress caught between two majorities – and ready to go home. With Democrats poised to take control of both the House and Senate next month, Republicans used their final hours in charge of Congress to make good on promises to many of Washington's most powerful interests as well as to American families they hope to woo back in 2008.

The 11th-hour output includes popular tax extenders, such as the research and development tax credit for businesses and the tax break for college tuition. It also includes more controversial provisions, such as opening some 8.3 million acres along the Gulf Coast to oil and gas drilling, and a trade deal with Haiti that could hurt US textile interests.

Meanwhile, Democrats say the outgoing "do nothing" Republican Congress met rarely and accomplished little. On Friday, House majority leader-elect Steny Hoyer (D) of Maryland announced there would be more five-day work weeks in the next Congress "to address the critical issues facing our nation and fulfill our responsibility to oversee the executive branch." (Under GOP control, the Washington work week was about 2.5 days.)

In the final days, Republicans faced their greatest opposition from within their own ranks. "This is an embarrassing situation to be chairman of [the] Budget Committee in a Republican Congress and to have a bill brought to the floor that does such damage to the budget," said Sen. Judd Gregg (R) of New Hampshire in a floor speech directed mainly to his GOP colleagues Friday night.

As late as Friday, eight senators from textile states were threatening to block the omnibus trade and tax bill unless a proposal to lift tariffs on clothing manufactured in Haiti was removed. They said it would open US markets even further to unfair competition from China, but they fell short of the votes needed to prevail.

"It's stunning that the House leadership and Senate as its last act before it adjourns is going to ramrod a job-destroying trade bill past the Congress," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, before Friday's vote.

In response, backers said the trade package, including permanent normal trade relations with Vietnam, will lower costs for US manufacturers and consumers.

"This legislation will help to create stronger trading partners for the future, while also recognizing our responsibility as having one of the world's strongest economies to help developing countries grow," said House Ways and Means Chairman Bill Thomas (R) of California in a statement after the 212-to-184 House vote.

The 109th Congress also voted to postpone completing nine of 11 FY 2007 spending bills until Feb. 15, forcing Democrats to take up divisive spending issues as they are ramping up in the next Congress.

"It's real act of defiance by the lame-duck Congress and a conscious attempt to set up a political problem for the next Congress," says Julian Zelizer, a congressional historian at the Boston University.

"It's more than just leaving a budgetary mess. It's creating a huge problem in how Democrats will solve the tension within their party between fiscal conservatives and those who want to start new spending initiatives and how Democrats will deal with corruption and whole pork-barrel issues," he adds.

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