Conservatives threaten to jump ship over taxes to pay for NAFTA

October 19, 1993|By New York Times News Service

WASHINGTON -- With the fate of the North American Free Trade Agreement turning on a few undecided lawmakers, the Clinton administration is now threatened with the loss of a group that is central to the White House's legislative strategy: conservative Republicans.

House Republicans have mutinied at the prospect of $2.37 billion in higher taxes over five years to replace tariffs eliminated by the trade agreement, inflicting a serious blow to the pact's prospects with the vote only a month away.

The higher taxes would consist of increases in the international airline and cruise ticket tax -- amounting to $5 a ticket -- for travelers entering the United States by air or sea, and an increase in fees on trucks and trains entering the country.

The pact cannot pass without Republican support because most House Democrats oppose it. A group of 27 House Republicans, including Rep. Newt Gingrich of Georgia, the minority whip, sent a letter yesterday to President Clinton threatening to withdraw their support.

"It would be difficult for many of us to support a NAFTA which included tax increases," said the letter, which was signed only by Republicans who had previously endorsed the agreement or had been leaning toward an endorsement.

The opposition is to the tax increases, not the agreement itself, and is a Republican bargain position in the struggle over how to raise money, and also reflects resentment at the White House for expecting Republicans to bear most of the burden of voting for an unpopular pact.

The administration proposal last week for the higher ticket fees "could be the straw that broke the camel's back," said Rep. Thomas W. Ewing, the Illinois Republican who organized the letter. "I believe that there's enough adverse pressure to NAFTA that when you ask the Republicans to come up with more than 50 percent of the votes, then adding a tax increase to it could sink the ship, could scuttle the program."

The letter called for spending cuts to replace the fees on travelers, trucks and trains, an approach that the administration has rejected so far because it creates many political and procedural problems.

If approved by a simple majority of both houses of Congress, the pact would gradually remove tariffs and other trade barriers between Canada, Mexico and the United States beginning Jan. 1.

The House Ways and Means Committee is scheduled to vote today on legislation putting the agreement into law.

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