- The Washington Times - Friday, July 6, 2001

The 10-year, $1.35 trillion tax cut that was passed last month was supposed to be just the beginning of an unstoppable tax-cutting onslaught. Congressional Republicans and the Bush administration used budget rules to force a big bill through Congress, thinking they would use political pressure to drive though billions more in tax cuts later.
But a funny thing happened on the way to the victory parade: Democrats took control of the Senate, and Republicans ran out of surplus money.
While some still hope to push for further tax reductions this year, most say only the smallest of provisions are likely to see further action.
"The bloom is off," said a high-ranking Senate Republican aide after meeting with administration officials last week.
With the president's signature on the largest tax cut in a generation, it is hard to imagine there could be more to do. But President Bush and congressional Republicans hoped to do far more.
During his campaign and in his budget proposal for fiscal 2002, Mr. Bush proposed creating a deduction for charitable contributions for those who do not itemize, permanently extending the tax credit for research and experimentation expenses, and creating a refundable tax credit for health insurance costs. All told, these and other unfinished business on the president's agenda would cost another $170 billion over 10 years.
Republicans also promised to finish work on the tax bill they passed. None of the provisions in the bill last through the 10-year budget cycle and many do not take effect until 2004 or later. Republicans also would like to correct the fact that millions of middle-income taxpayers will see some or all of the tax benefit promised by the bill eroded by the alternative minimum tax. Fixing that problem alone would mean another $200 billion in tax breaks through 2011.
Apart from the cuts championed by the administration, lawmakers have their list of priorities, such as allowing businesses to write off expenses faster.
Republicans had planned on passing a series of bills, each with a tax component. For example, the charitable deduction would be attached to legislation giving more federal money to faith-based organizations, or business-tax breaks would be attached to a bill to increase the minimum wage.
But in the month since the president signed the tax-cut bill, there has been no action.
Part of the holdup is just scheduling, said Rep. Rob Portman. The Ohio Republican, who sits on the House's tax-writing committee and also has a seat in House Republican leadership meetings, believes more progress will be made later.
Still, he said, planned cuts are likely to be scaled back in light of recent developments.
Mr. Portman said Democrats taking control of the Senate hurt the plan but he insists other factors are in play.
The most obvious is the slowdown in the economy, which some say could rob the government of nearly $50 billion in receipts in fiscal 2001.
While conservatives argue that tax cuts are the panacea for slow growth, many fear that shrinking federal receipts from tax cuts and slow growth could force Congress to resume tapping the Social Security receipts to balance the budget.
"I don't think it's so much because of the economy; I think it was because [the tax cut] was such a huge bill," said Senate Finance Committee Chairman Max Baucus, Montana Democrat.
The tax cut will "preclude us from having enough money for Social Security, Medicare and defense," said Sen. John McCain, Arizona Republican.
Mr. Portman and Sen. Phil Gramm, Texas Republican, agreed they could be victims of their own success by stealing momentum and scaring liberals in their own party.
"The truth is we got most things in that one … substantially more than we thought we could," Mr. Gramm said. "We have more we want to do, and if the economy gets stronger it could be something we do again next year."
Mr. Gramm will have allies in that endeavor.
"It would be hard for the mind of man to come up with a tax cut that I could not support," said Sen. Zell Miller, Georgia Democrat. "But it should be a stand-alone bill or attached to some germane piece of legislation," Mr. Miller said. "I am not going to be part of playing the game of adding tax cuts willy nilly."

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