updated 10/22/2004 4:44:47 PM ET 2004-10-22T20:44:47

With no fanfare, President Bush Friday signed the most sweeping rewrite of corporate tax law in nearly two decades, showering $136 billion in new tax breaks on businesses, farmers and other groups.

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Intended to end a bitter trade war with Europe, the election-year measure was described by supporters as critically necessary to aid beleaguered manufacturers who have suffered 2.7 million lost jobs over the past four years.

But opponents charged that the tax package had grown into a massive giveaway that will add to the complexity of the tax system and end up rewarding multinational companies that move jobs overseas.

There was no ceremony for the bill-signing. White House press secretary Scott McClellan announced it on Air Force One as Bush flew to a campaign appearance in Pennsylvania. Bush mentioned the new tax law at the beginning of a health care event in Canton, Ohio.

“I signed a bill that’s going to help our manufacturers — that will save $77 billion over the next 10 years for the manufacturing sector of America,” Bush said. “That will help keep jobs here.”

The handling of the corporate tax bill was in contrast to Bush’s action on Oct. 4 when he sat before television cameras on a stage in Des Moines, Iowa, to sign three tax-cut breaks popular with middle-class voters and reviving other tax incentives for businesses.

Bush’s campaign rival, Sen. John Kerry, missed the vote on the corporate tax breaks. Kerry spokesman Phil Singer said there were many important things in the bill but that “George Bush filled the bill up with corporate giveaways and tax breaks for multinational companies that send jobs overseas. In his first budget, John Kerry will call for the repeal of all the unwarranted international tax breaks that George Bush included in this bill.”

The Joint Tax Committee said the overall bill would not increase the deficit because the $136 billion in tax cuts over the next decade were balanced by $136 billion in tax increases.

Democrats contended the true costs of the tax cuts would be nearly $80 billion higher because Republicans used accounting gimmicks such as having popular provisions expire after a few years.

Keith Ashdown, a spokesman for the watchdog group Taxpayers for Common Sense, agreed.

"Our concern is they’ve used smoke and mirrors and accounting gimmicks to make the legislation look much smaller than it is," he said.

He also called it a giant step backward for efforts to simplify the tax code.

The original purpose of the legislation was to repeal a $5 billion annual tax break provided to American exporters that was ruled illegal by the Geneva-based World Trade Organization.

Repeal of the tax break was needed to lift retaliatory tariffs that are now being imposed on more than 1,600 American manufactured products and farm goods exported to Europe.

The bill replaces the $49.2 billion export tax break with $136 billion in new tax breaks over the next decade for a wide array of groups from farmers, fishermen and bow and arrow hunters to some of America’s largest corporations.

The legislation also includes a $10.1 billion buyout of quotas held by tobacco farmers. A  Senate provision that would have coupled this buyout with regulation of tobacco by the Food and Drug Administration was dropped by the conference committee that resolved differences between the two chambers.

The measure is the most sweeping overhaul of corporate tax law since 1986. It provides a wide range of tax benefits for native Alaskan whalers, importers of Chinese ceiling fans and NASCAR race track owners.

The centerpiece is $76.5 billion in new tax relief for the battered manufacturing sector, but manufacturing is broadly defined to include not just factories but also oil and gas producers, engineering, construction and architectural firms and large farming operations.

The bill also includes a $5 billion tax break primarily for residents of seven states that have no income tax. The measure allows taxpayers to take a deduction for sales tax instead.

MSNBC.com's Martin Wolk contributed to this story.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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