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Senate votes to give tax break to new car buyers as price tag approaches $900B in stimulus bill

By DAVID ESPO, Associated Press
Last updated: 9:25 p.m., Tuesday, February 3, 2009

WASHINGTON -- The Senate voted Tuesday to give a tax break to new car buyers, setting aside bipartisan concerns over the size of an economic stimulus bill with a price tag approaching $900 billion. The 71-26 vote came as President Barack Obama said he lies awake nights worrying about the economy, and signaled opposition to congressional attempts to insert "buy American" provisions into the legislation for fear it would spark a trade war.
     
Sen. Barbara Mikulski led the successful effort to allow many car buyers to claim an income tax deduction for sales taxes paid on new autos and interest payments on car loans.

She said the plan would aid the beleaguered automobile industry as well as create jobs at a time the economy is losing them at a rapid rate. "I believe we can help by getting the consumer into the showroom," she said.

The provision was attached to the economic stimulus bill at the heart of Obama's economic recovery plan and is subject to change or even elimination as the measure makes its way toward final passage.

Democratic leaders have pledged to have the bill ready for his signature by mid-month, and in a round of network television interviews, the president underscored the urgency. He told CNN that even three months ago, most economists would not have predicted the economy was "in as bad of a situation as we are in right now."

He also spoke out against efforts to require the use of domestic steel in construction projects envisioned in the bill, telling Fox News, "we can't send a protectionist message."

The stimulus bill remains a work in progress, following last week's party-line vote in the House and an Oval Office meeting on Monday in which Obama and Democratic leaders discussed ways to reach across party lines.

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Senate to vote on softened "Buy American" plan
Wed Feb 4, 2009 6:54pm EST

WASHINGTON (Reuters) - The U.S. Senate planned to vote late on Wednesday on a softened "Buy American" plan as part of its nearly $900 billion economic stimulus bill, after President Barack Obama expressed concern the original language could trigger a trade war.

The proposed amendment adds language requiring that Buy American measures that have upset Canada, the European Union and other trading partners be "applied in a manner consistent with U.S. obligations under international agreements."

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