- The Washington Times - Friday, July 28, 2000

The House Thursday voted 265-159 to pass Republican legislation that would repeal a tax on Social Security benefits enacted in 1993, and also sent to the White House a bill that would cut taxes by an average of $735 for married couples.
"Seniors should not be taxed on their Social Security, period," said House Ways and Means Committee Chairman Bill Archer, Texas Republican, during floor debate Thursday.
The White House countered with a veto threat, warning in a statement from the Office of Management and Budget that the Social Security bill was just the "latest in a series of tax-cut proposals considered by the 106th Congress that, taken together, would drain away the nation's hard-earned budget surplus."
President Clinton has already said he will veto the Republican-backed bill that eliminates the "marriage penalty" in the tax code.
In 1993, citing the need to reduce the then-$255 billion annual deficit, Mr. Clinton pushed through Congress a measure that increased the amount of Social Security benefits subject to income tax.
The so-called Tier II taxes on individual retirees earning more than $34,000 and retired couples earning more than $44,000 originally hit just one in 10 seniors. But today 20 percent of Social Security beneficiaries pay an average of $1,180 more because of the increase.
"Today, the surplus is $233 billion. We have no deficit, and it is time to repeal this tax," Mr. Archer said.
But Democrats said the 10-year, $117 billion tax cut would put the Medicare trust fund to which the tax receipts are today dedicated at risk.
"This would not be a problem, if you could be trusted to put [the money] back in," Rep. Charles B. Rangel, New York Democrat, said. "Haven't you played three-card monte?" Mr. Rangel asked, referring to a crooked card game.
Other tax breaks were included in a catchall tax and spending bill cobbled together by Republicans in an attempt to sidestep a filibuster in the Senate.
The House stayed in session through 7 a.m. Thursday morning to file the bill on the legislative day of Wednesday. But the bill was pulled from the House floor when brought up later in the day and was never even considered in the Senate.
The tax and spending bill includes the 2001 budget for Congress itself and for the Treasury Department, Postal Service and Internal Revenue Service.
It also includes a repeal of the 3 percent excise tax on telephone and teletype services. But Republicans dropped provisions that would have boosted the $5.15 hourly minimum wage by $1 over two years, and cut taxes for some small businesses.
House Republicans used a party-line vote to clear a procedural hurdle and bring the tax and spending bill to the floor, but later pulled it from consideration. Democrats said Republicans simply did not have the votes to pass it. Republicans insist they just ran out of time.
On the Social Security tax cut, the Clinton administration lobbied successfully to keep the measure from getting a veto-proof two-thirds margin. Only 52 Democrats or about one-quarter of the Democratic caucus voted for the Republican bill to cut taxes on Social Security, while three Republicans voted against the bill.
The tax cut bill is different from legislation passed easily this year and signed into law that repealed a limit on Social Security benefits for wealthier seniors.
At stake now is the current law which says that if a senior earns more than $25,000, but less than $34,000, then as much as 50 percent of his benefits are taxable. These so-called Tier I taxes were first imposed in 1983 to extend the life of the Social Security trust fund.
But if a senior earns more than $34,000, then as much as 85 percent of his benefits are taxed. The Tier II taxes were created in 1993, and used to extend the solvency of the Medicare trust fund.
The bill passed Thursday would repeal the Tier II taxes. To avoid charges they were draining the Medicare trust fund, Republicans also included language in the bill to credit the trust fund with receipts equal to the money that would have been raised had the taxes stayed in place.
"Republicans have gone on a gambling junket. The Republican plan would leave the next generation with little else than empty promises and an enormous federal deficit," said Rep. David Bonior, Michigan Democrat.
House Ways and Means Committee Chairman Bill Archer, Texas Republican, responded by asking rhetorically: "If you needed money to reduce the deficit today, would you tax seniors on their retirement benefits? I think not."
In other tax news, House Speaker J. Dennis Hastert, Illinois Republican, sent to the White House legislation that would cut taxes for married couples by $90 billion over five years.
The bill would increase the standard deduction for married couples from $7,350 to $8,800. It would also increase the amount of income subject to the lowest tax bracket from $43,850 to $52,500. That change would be phased in over five years.
In a ceremony to highlight the tax cut, Republicans had Mr. Hastert hand the bill to a couple dressed as bride and groom who were then whisked from the Capitol in a green sedan festooned with streamers and cans on strings.
White House spokesman Joe Lockhart laughed at the news, comparing it to the ill-starred couple united on the Fox TV special, "Who Wants to Marry a Multimillionaire?"
"This is the worst contrived marriage since our friends Darva Conger and Rick Rockwell got together," Mr. Lockhart said, "except this one should be called, under the Republican plan, 'Who Wants to Help a Millionaire?' "

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