'CORPORATE WELFARE' AX MAY THREATEN DEDUCTIBILITY

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Congressional leaders last week promised to overhaul "corporate welfare," immediately bringing forth new fears that advertising deductibility could be back in play.

The Senate Commerce Committee chairman, Sen. John McCain (R., Ariz.), specifically sidestepped the question of ad deductibility in proposing a commission to evaluate examples of what he called corporate welfare and develop a list of "pork" that could be voted up or down by Congress.

The commission would be similar to the one Congress created to look at military base closings.

AD GROUPS ALARMED

Sen. McCain's praise of the Progressive Policy Institute as one group offering suggestions prompted alarms from advertising groups that have seen the institute rate ad deductibility as among the largest of possible targeted programs.

"If he is complimentary, what is [the institute's] agenda?" said Dan Jaffe, exec VP of the Association of National Advertisers. "There were lots of ways [deductibility] could get into the debate . . . as part of a balanced-budget program or an attack on a specific product-and now there is a third apolitical process."

Wally Snyder, president of the American Advertising Federation, warned that ad groups "have to make sure the powder is dry and we stay off that list."

Mr. Snyder said the fact Congress is struggling to find a process to cut back on business support "is something we will have to deal with."

Sen. McCain declined to talk about ad deductibility, and Sen. John Kerry (D., Mass.), a co-sponsor of the commission proposal, said the sponsors want the commission to look at a wide variety of government spending and tax policies; they didn't wanted to provide specific targets to the commission.

Both he and Sen. McCain said the commission could help generate support for ideas and noted that last year a proposal from members for cuts received about 25 out of the 51 votes needed.

While Sen. McCain is pushing a commission in the Senate, an acknowledged "strange bedfellows" list of House members with support from conservative groups and Ralph Nader is proposing its own "dirty dozen" list of corporate programs to be eliminated.

TARGETING MARKET ACCESS

That list makes no mention of advertising deductibility, but House Budget Committee Chairman John Kasich (R., Ohio) said it does include the Market Access Program, which provides marketing support and advertising monies to U.S. marketers of various agricultural commodities overseas, ranging in the past from cranberries to chocolate.

Some marketers who have taken advantage of the program said they would be disappointed to see it disappear, but that it wouldn't affect overall marketing.

"The purpose was to increase exports," said Susan Smith, senior VP of the Chocolate Manufacturers Association and the National Confectioners Association.

"We have always said that if [Congress] would drop pricing supports for nuts and

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