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Tax-cut bill filled with add-ons

WASHINGTON - In the spirit of the holiday season, President Obama's tax-cut deal with Republicans is becoming a Christmas tree tinseled with gifts for lobbyists and lawmakers.

WASHINGTON - In the spirit of the holiday season, President Obama's tax-cut deal with Republicans is becoming a Christmas tree tinseled with gifts for lobbyists and lawmakers.

There are ethanol subsidies for rural folks, commuter tax breaks for their cousins in the cities and suburbs, wind and solar grants for the environmentalists - all aimed at winning votes, particularly from reluctant Democrats.

The holiday additions are being hung on the big bill that was Congress' main reason for spending December in Washington, long after the elections that will give Republicans new power next month. The measure will extend Bush-era tax cuts, averting big tax increases for nearly all Americans, and keep jobless benefits flowing.

Republicans generally liked that agreement, worked out by Obama and GOP leaders. Democrats generally didn't, hence the add-ons.

It's all expected to come to a decisive vote next week, total cost by the latest congressional estimate: $855 billion.

Yesterday there were contrasting events for the TV cameras.

On Capitol Hill, Vermont independent Sen. Bernie Sanders spoke vigorously for hours in a virtually empty chamber, urging defeat of a measure that he said would give "tax breaks to millionaires and billionaires who don't need it."

At the White House, Obama turned over the briefing room microphone to former President Bill Clinton who declared, "I don't believe there is a better deal out there." All sides, he said, "are going to have to eat some things they don't like."

The add-ons were being attached behind the scenes.

Almost $5 billion in subsidies for corn-based ethanol and a continuing tariff to protect against ethanol imports were wrapped up and placed on the tree Thursday night for farm-state lawmakers and agribusiness lobbyists. Environmentalists won more grants for developers of renewable energy, like wind and solar.

For urban lawmakers, there's a continuation of about-to-expire tax breaks that could save commuters who use mass transit about $1,000 a year. Other popular tax provisions aimed at increasing production of hybrid automobiles, biodiesel fuel, coal and energy-efficient household appliances would be extended through the end of 2011 under the new add-ons.

The package also includes an extension of two Gulf Coast tax-incentive programs enacted after Hurricane Katrina to spur economic development in Mississippi, Louisiana and Alabama.

The ethanol money was added despite a growing congressional opposition to subsidizing the fuel after decades of government support. Last month, 17 Republican and Democratic senators wrote to leaders calling the tax breaks "fiscally indefensible," since there's already a law in place that requires ethanol be blended into gasoline.

"Historically, the government has helped a product compete in one of three ways: subsidize it, protect it from competition or require its use. We understand that ethanol may be the only product receiving all three forms of support from the U.S. government at this time," the senators wrote.

But ethanol still has powerful supporters on Capitol Hill, including Iowa Sen. Charles Grassley, the top Republican on the Senate Finance Committee and a key negotiator on the Senate tax bill. Adding the ethanol tax breaks was designed to help shore up the votes of many rural Democratic as well as Republican senators.

The efforts to round up votes come as the Senate prepares to hold its first vote Monday on the process of approving the tax package.

With the congressional session waning, House Democrats must decide how far they are willing to fight to change the proposal. The Senate could send the bill to the House by the middle of next week.