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Cheering that advertising's fully deductible status never got challenged by President Clinton in either his State of the Union speech or new budget, ad groups are now turning their anxiety to Congress.

"We've gotten over the first hurdle, but we remain at risk," said Jeff Perlman, senior VP-government affairs for the American Advertising Federation.

John Kamp, senior VP for the American Association of Advertising Agencies, noted that both Democrats and Republicans are still looking hard for money to fund a middle-class tax cut.

"There is only so much blood in the turnip; as long as there is a question on whether ad taxes [should be] deductible, there is a possibility [a proposal to cut deductibility] will happen," he said.

Members of the 11 groups composing the Advertising Tax Coalition in mid-January began a major lobbying effort, fearful the budget would include some cutback in ad deductibility.

"We are very pleased that the rumored inclusion of an ad tax didn't materialize," said Dan Jaffe, exec VP of the Association of National Advertisers. He credited the "unprecedented" response of the ad community for blocking any threat.

Mr. Jaffe said he remains worried. "I don't think anybody on the Republican side is coming after us, but in searching for other goals, there is always a danger that they will look at us."

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