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US Senator Levin Seeks Tax Changes, ‘Real’ Tanker Competition January 9, 2007

Posted by notapundit in Congress, Politics, US News.

WASHINGTON (Dow Jones)–U.S. Sen. Carl Levin, D-Mich., and new chairman of the Senate Armed Services Committee, on Tuesday called for an overhaul of the Bush administration’s tax policy, in part to pay for the war in Iraq and other Pentagon needs.

Levin also said his panel would keep up scrutiny on the Air Force’s high-profile contest to buy new tanker planes. Northrop Grumman Corp. (NOC) made headlines this week when it said it might not bid against Boeing Co. (BA) unless the Air Force made major revisions to its bidding proposals.

The Air Force is still reeling from a botched attempt to lease and buy Boeing tankers, proposed more than five years ago. Since then, the service has struggled to craft a competition that would be a fair runoff between Boeing’s 767 and the bigger, Northrop Grumman-backed Airbus A330, the only two imminent aircraft contenders.

Levin said the Air Force must draw multiple bids to win approval of the $20 billion-plus program. “They’re going to have to persuade us that there’s real competition,” Levin told reporters at a Defense Writers Group breakfast.

The Air Force had hoped to put out its final request for bids next week. Now, however, the service is looking at further delays to revise its approach, in order to secure Defense Department and congressional approval.

To pay for the tanker program, other modernization needs, and the huge cost of Iraq and Afghanistan operations, Democrats will seek to roll back many of the tax cuts enacted during President George W. Bush’s administration, Levin said. He said this reversal would be different than an outright tax increase, but acknowledged that it could be viewed as a tax hike.

“Our first step has got to be to reverse this president’s tax policy, in terms of tax cuts,” Levin said. “If we can do that, then we’ll be making a major contribution.”

These proposals aren’t driven entirely by the need for more Pentagon funding, he said. But he acknowledged that Congress has no desire to cut funding to the troops as long as they are deployed overseas.

Levin said his committee would push for a series of oversight hearings on past and future White House defense policies. Lawmakers need to investigate more of the Bush administration’s handling of terrorism-related detainees, the role of contractors and other areas where “there was a failure of oversight”, he said.

Weapons buying also will come under the spotlight. Levin said he would continue the active scrutiny of many weapons programs championed by senior Republicans on the Senate Armed Services Committee, such as Sen. John McCain, R-Ariz., and former chairman Sen. John Warner, R-Va.

By Rebecca Christie, Dow Jones Newswires


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