ABC News, May 12, 2000

Congress Logs On
Lawmakers Court Internet Millions for Campaign Cash


By A.B. Stoddard

W A S H I N G T O N, May 12 - The Silicon Valley suck-up kicked into full
gear this week on Capitol Hill as Republicans and Democrats united in
bipartisan agreement and each party ditched some of their key constituencies
in the race to win over the high-tech community.
In a key vote to ban Internet taxes cast this week in the House, Democrats
abandoned their role as guardians of taxes while Republicans ignored
opposition from 30 of their governors, whose states rights usually top their
list of concerns. The GOP also defied a portion of the small business sector
that they take credit for protecting.
By a vote of 352-75, the House approved a five-year extension of the
moratorium on Internet taxation that retailers and state and local
governments say will deny them untold billions in coming years.
No matter that the moratorium in place now, originally passed in 1998,
wasn't set to expire until October of 2001. But with congressional elections
just six months away - and Democrats just six seats away from control of the
House - neither party could resist the opportunity to go on the record about
the issue.


Catering to the New Rich

The "Internet Nondiscrimination Act" is the first of many goodies on the
menu Congress is set to serve the wealthy high-tech sector, which flexes
increasing amounts of muscle in Washington. In the next few weeks the House
will vote to increase the amount of "H-1B" visas business offers foreign
workers skilled in technology. Watch for another odd role reversal on that
vote, with Republicans expected to embrace immigration while Democrats
ignore the wishes of organized labor.
While the dot-conomy fuels the stock market, Democrats and Republicans are
talking up their industry-friendly agendas at every opportunity as they vie
for high-tech campaign cash.
House Republicans unveiled their "eContract" this week, a takeoff on the
"Contract With America" that former House Speaker Newt Gingrich authored as
a campaign platform that helped Republicans win control of the House. A day
later, the New Democrat Coalition announced in response that they would be
introducing their own "egenda 2.0," in coming weeks, an upgrade to their
plan from last year.


Visa Debate Intensifies

Meanwhile, business and labor groups are busy penetrating Capitol Hill in
anticipation of the upcoming vote on trade with China, which promises to be
the most controversial battle of the year. So when House GOP leaders
announced the vote just three business days in advance, there was little
time to shift gears and focus on H-1B visas or extending the online tax ban.


"It was helpful to bring a bill like this to the floor quickly in order to
move it and not get mired in [opposition from] lobbyists, the governors and
state legislators," said one House Republican leadership aide. He added,
"It's very difficult to schedule meetings, mobilize the grass roots and do
all you can to win or to blunt" with such short warning.
The question of whether or not there is a shortage of American workers with
adequate high-tech skills will dominate the debate next week over whether
Congress should raise the amount of visas for foreign workers. Though the
United States gave out 115,000 this year, that number is slated to decline
in the next two years. The industry claims a lack of qualified American
workers has left 300,000 jobs open.
Democrats were first to propose the legislation for more visas and
Republicans recently jumped on board to share the credit. Rep. Lamar Smith,
R-Texas, chairman of the immigration subcommittee that oversees the matter,
has one version of a bill. But industry favors another bipartisan plan that
would provide for more visas, a measure that may eventually replace Smith's
bill on the House floor.
"Industry is concerned because Lamar Smith has never been an advocate for
bringing in immigrants on work visas," said Rep. Jim Moran, D-Va., a founder
and co-chairman of the New Democrat Coalition. "If it's objectionable to
industry we may have to amend it."


Stand By Their Man?

House Republican leaders are in a bind over the visa issue, being forced to
to choose between one of their chairmen and the high-tech industry. And
chances are, they won't stand by their man.
"It's kind of a loser for the Republicans, in a way, politically," said Rep.
Bob Matsui, D-Calif., another New Democrat.
Members of both parties privately concede that both issues are temporary
fixes for burgeoning problems. Matsui said the moratorium on Internet
taxation could lead to an end to sales taxes, forcing states to recover
revenue losses with income taxes.
"If this continues, and it will because of the moratorium, there is going to
be a backlash," he said.
And in order to stop selling jobs to foreigners, America will have to better
educate its students in the field of technology. Though he would prefer to
see Americans in these jobs, Rep. Mike Castle, R-Del., said visas are the
temporary solution to the shortage. "If we're going to keep high-tech
businesses here, it is, in my judgment, the right direction to go in," he
said.
But Castle added: "Both parties are doing everything in their power to help
the high-tech businesses for both economic and political reasons.
Economically I think that's correct - but at some point these two things are
going to clash."

A.B. Stoddard covers Congress for ABCNEWS. Her column appears each Friday on
ABCNEWS.com.