- The Washington Times - Wednesday, July 19, 2000

The Senate yesterday voted 61-38 to give married couples tax cuts over the next five years, bringing the Republicans a step closer to a showdown with President Clinton.
"All of these families have contributed to the record surplus that we have in Washington," said Sen. William V. Roth, Delaware Republican and Senate Finance Committee chairman. "They deserve to get some of it back."
Mr. Clinton immediately issued a statement that he will veto the bill.
"While I strongly support targeted marriage penalty relief, the marriage penalty bill put forth by the majority in Congress is one part of a fiscally irresponsible, poorly targeted and regressive tax plan," Mr. Clinton said.
Despite Mr. Clinton's oft-stated threat, Republicans predicted he would sign it in the end.
"I think this may be one his toughest decisions," said Senate Budget Committee Chairman Pete V. Domenici, New Mexico Republican. "I believe the issue of whether or not to veto the bill is very much alive."
Senate Majority Leader Trent Lott, Mississippi Republican, addressed his comments from Capitol Hill specifically to Mr. Clinton.
"Now you can complicate it with a lot of arguments, a lot of spin, a lot of class warfare stuff, but it's real simple, Mr. President," he said. "Do you actually want to eliminate the marriage penalty tax?"
As first drafted, the measure would have provided $250 billion in tax cuts over 10 years, but a budget rule intended to fight deficits meant the breaks had to be "sunsetted" after five years, cutting their predicted value to $56 billion.
The bill would ease the marriage penalty by increasing the standard deduction for married couples from $7,350 to $8,800.
It would also raise the amount of income subject to the lowest rate of tax 15 percent from $43,850 to $52,500 and the amount of income subject to the next-highest rate 28 percent from $105,950 to $127,100.
The president gave himself some wiggle room by repeating in his statement his demand for a Medicare prescription drug benefit in return for his signature.
"This is the best way to break the partisan logjam and help the tens of millions of older Americans across this country who face rising prescription drug costs," Mr. Clinton said. "By itself, I would veto this bill."
Under current law, couples earning roughly the same income will see their taxes rise if they marry. This marriage penalty affects 24 million couples and is caused by many provisions in the tax code, including the standard deduction and tax-rate brackets.
Easing the marriage penalty has become a top Republican priority in recent years and especially since January, when they decided to send the president a series of issue-specific tax cuts instead of one bill.
House and Senate Republicans are expected to resolve quickly the relatively minor differences in their marriage penalty bills, with a final vote possible in both chambers as early as tomorrow.
If that happens, the deadline for the president to sign or veto the measure would come on Aug. 1, right in the middle of the Republican National Convention.
Republican leaders have also decided to hold legislation repealing the estate and gift tax until after they return from a monthlong recess in August.
Both houses have passed the estate-tax repeal, but Republicans will delay it until September to force Mr. Clinton to consider it and the marriage bill separately.
The Senate Finance Committee passed an identical bill March 30, but consideration by the full Senate was held up as Democratic and Republican leaders fought over what amendments would be allowed during the debate.
Yesterday's bill was brought to the floor under special budget rules and thus was protected from all but germane amendments. Even so, all amendments were either defeated or subsequently stripped from the bill on a final party-line vote immediately before the vote on final passage.
Both the Senate vote and the 269-159 vote in the House on July 12 fell short of the margin necessary to override a veto, but Republicans feel confident they have Democrats and the White House on their heels on the marriage penalty and the estate tax.
"How the Democrats plan to win elections by taxing love and death I don't know," said Sen. Phil Gramm, Texas Republican.
Democrats insist they have nothing to worry about.
"Bill Clinton is not without the ability to explain his position," said Sen. Robert G. Torricelli, New Jersey Democrat.
"Every time Republicans get in a debate with the president, they lose," said Mr. Torricelli, who was one of eight Democrats to vote for the Republican plan.
"I am on the record firmly against the marriage-tax penalty," said Sen. John Edwards, North Carolina Democrat, who voted against the Republican plan, but joined one Republican in backing a Democratic alternative.
That plan failed on a 50-46 vote and would have allowed married couples to file jointly or singly.
"There are, sir, 65 marriage penalties in the tax code," said the alternative's author, Sen. Daniel Patrick Moynihan, New York Democrat.
"This amendment would abolish all of them."
Sen. Lincoln Chafee, Rhode Island Republican, voted for both the Democratic and Republican plans.
"I did vote for the Democratic plan because it was a more direct solution, but if you can fix it, you ought to fix it," Mr. Chafee said.
By contrast, Democrats argued that the Republican plan would shower benefits on the 21 million single-earner couples who already benefit under the current tax system, receiving a "marriage bonus."
"Never in the entire history of the country has so much been given away so quickly to so few with so little semblance of fairness or even thoughtful consideration," said Sen. Edward M. Kennedy, Massachusetts Democrat, of the Republican bill.
Late Monday, Treasury Secretary Lawrence H. Summers held a telephone conference call with a selected group of reporters, and Treasury released to some daily newspapers a report purporting to show that the tax breaks Congress has passed this year are skewed to the top 20 percent of income earners.
"Don't you think they put out all that information yesterday because they are panicked," Mr. Gramm asked reporters.

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