White House Sidelines Christmas Tree 'Tax'

The White House is seen in the background after the lighting of the National Christmas Tree, Thursday, Dec. 3, 2009, in Washington. (AP Photo/Haraz N. Ghanbari) (AP)

The White House has decided to sideline a proposed fee on Christmas trees, after the fee was ridiculed by critics as a tax on Christmas.

The 15-cent tax on Christmas trees was announced Tuesday in the Federal Register and was meant to pay for a new board tasked with promoting the Christmas tree industry. It was supported by Christmas tree growers, who wanted a stable source of revenue to fund a new marketing campaign.

But the change quickly drew complaints from Rep. Steve Scalise, R-La., and others. Scalise described the fee as a "Grinch" move by the Obama administration and vowed to fight it.

White House spokesman Matt Lehrich told Fox News on Wednesday afternoon that the administration is putting a stop to the proposal.

"I can tell you unequivocally that the Obama administration is not taxing Christmas trees. What's being talked about here is an industry group deciding to impose fees on itself to fund a promotional campaign, similar to how the dairy producers have created the 'Got Milk?' campaign," he said. "That said, USDA is going to delay implementation and revisit this action."

The new program was set to go into effect Wednesday. According to the Agriculture Department announcement, the government would have imposed a 15-cent-per-tree charge on "producers and importers" of fresh Christmas trees, provided they sell or import more than 500 trees a year.

The program and fee were supported by some in the Christmas tree industry. The money was not meant to pay down the debt or fund any other program, but designed to go back into the new Christmas Tree Promotion Board.

The board, proposed earlier this year, is the culmination of a years-long effort by the fresh Christmas tree industry to promote itself, according to background information provided in the Federal Register. The industry has faced increasing competition from producers of artificial trees, but efforts to collect voluntary contributions for a fresh-tree marketing campaign have repeatedly run out of funding. So the government stepped in to mandate a fee to support the promotion board.

Heritage Foundation Vice President David Addington, who first reported on the rule on his blog Tuesday evening, said there were two problems with the new fee. First, he said, it's likely the 15-cent fee would be passed on to consumers. Second, he said it's inappropriate for the government to be putting its "thumb on the scale," helping out the fresh-tree sellers and not the artificial-tree sellers.

"If it's one thing I think the free market could handle, it's letting people decide what kind of tree they want to buy for Christmas," Addington told FoxNews.com.

But Agriculture Department spokesman Michael T. Jarvis had defended the program, saying it's along the lines of over 20 other promotional programs supported by the department, such as the "got milk" campaign.

"It's worked great for beef, pork, chicken, eggs," he added.

Jarvis also insisted the fee does not count as a tax, since the industry is effectively "assessing themselves."

"This one's not a tax," he said.

The industry itself further rejected the claim that the fee would be passed onto consumers. The National Christmas Tree Association said in a statement that the program "is not expected to have any impact on the final price consumers pay for their Christmas tree."

The group said most growers who weighed in on the proposal were in favor of it.

According to the Federal Register, the new board was supposed to launch a "program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry's position in the marketplace."

As part of that job, the board was charged with improving the image of both Christmas trees and the industry itself. After three years, an industry-wide referendum will be held to determine whether to renew the program.

Fox News' Ed Henry contributed to this report.