White House backs off on NAFTA tax

October 22, 1993|By Los Angeles Times

WASHINGTON -- Faced with a barrage of complaints from Republican lawmakers and the travel industry, the White House is backing away from a plan to pay for the North American Free Trade Agreement by doubling fees paid by air and sea passengers entering the United States from Mexico.

The increase, from $5 to $10, would have been used to make up for the loss of revenue expected to follow implementation of the three-nation agreement.

Clinton administration officials said yesterday the latest plan would increase the fees by $2.50 per passenger, rather than $5. But White House officials and members of Congress made it clear that even that proposal could be redrawn, or replaced with spending cuts or increases in other fees.

The decision leaves the administration and congressional supporters of the trade pact scrambling for a financing arrangement that will not cast votes in the difficult campaign to gain House and Senate approval of the agreement.

Meanwhile, reflecting the newly aggressive White House effort on behalf of one of the president's most important initiatives, Mr. Clinton and his aides considered a variety of proposals to put more pressure on recalcitrant House members, particularly Democrats. The ideas included a televised address to the nation by Mr. Clinton, travel around the country, and an appearance on CNN's "Larry King Live" television program, a White House official said.

The free trade agreement would eliminate tariffs among the United States, Mexico and Canada over a 15-year period.

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