WASHINGTON (CBS.MW) -- A proposed compromise designed to reconcile competing versions of a key corporate tax bill would allow for a federal buyout of subsidized tobacco growers, but strikes Senate-approved language that would give the Food and Drug Admini

The Senate and House bills would both repeal a corporate tax break that has prompted retaliatory trade sanctions by the European Union, replacing it with a tax deduction for U.S. manufacturers. The compromise bill includes other measures that have little to do with repealing the offending tax break, but were added to the House or Senate version to attract needed votes. Both the Senate and the House, for example, included provisions to buy out tobacco growers in order to attract votes. Only the Senate version has the FDA language. Senators from both sides of the aisle, however, have threatened to filibuster any final bill that doesn't include the regulatory authority. See archived story. The proposed, 633-page compromise unveiled Monday evening by House Ways and Means Committee Chairman Bill Thomas, R-Calif., would provide more than $81 billion in tax breaks and incentives over the next 10 years. The lost revenues would be offset by closing a number of loopholes and other measures, resulting in a bill that would raise revenues by a net $238 million over the next decade. House and Senate negotiators were meeting Monday night to begin working through 350 proposed amendments. The 17 House members and 23 senators that make up the conference committee are aiming to complete work by Friday, when congressional leaders plan to adjourn. "Markets will likely know by midweek whether anything the conference can produce will satisfy enough stakeholders in the export and multinational corporate communities," wrote Kim Wallace, Washington policy analyst with Lehman Brothers, in a weekly research note. "We continue to analyze success at no greater than 45 percent probability, but surprises are likely during this fluid, fast-moving process," Wallace wrote. The bills were prompted by the need to repeal parts of the U.S. tax code, known as the "foreign sales corporation" and "extraterritorial income" portions. The World Trade Organization last year declared the "foreign sales corporation" designation an illegal subsidy and authorized the European Union to impose as much as $4 billion in retaliatory sanctions. The E.U. began implementing tariffs in March against some U.S. goods, ratcheting them up on a monthly basis. In the Senate version, the government would pay tobacco growers $13 billion to give up a federal subsidy program, while also granting the Food and Drug Administration authority to regulate tobacco products. In the House version, the government would pay $10 billion to end subsidies. The cost of the tobacco measure in Thomas' proposal wasn't immediately available. Documents released by Thomas said the revenue and outlay figures would be provided by the Congressional Budget Office.

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