- The Washington Times - Thursday, March 27, 2003

Senate Republicans passed a budget resolution yesterday that failed to restore the bulk of President Bush's $726 billion tax cuts to the 2004 budget, dealing a blow to his economic agenda.
The budget resolution, which calls for $350 billion in tax cuts, passed 56-44, with only one Republican, Sen. John McCain of Arizona, voting against it. He has consistently opposed supporting any tax cuts until the full cost of war in Iraq is known.
Six Democrats voted for the budget resolution. They were Sens. Max Baucus of Montana, Evan Bayh of Indiana, Zell Miller of Georgia, John B. Breaux and Mary L. Landrieu, both of Louisiana, and Ben Nelson of Nebraska.
The administration says Mr. Bush's full plan which is in the House version of the budget is essential to reviving the sluggish economy. A key feature of the package was a provision to tax the cashing of dividends just once, and not at both the corporate and personal levels.
An amendment to cap the tax cut at $350 billion, passed Tuesday by Democrats and some liberal Republicans, essentially kills the dividend cut, but the White House vowed a fight to restore it.
"We've got the full number in the House bill," Commerce Secretary Donald L. Evans said. "We'll continue to work very hard for the president's full plan. It's what the economy needs."
Senate and House members will meet in conference, probably starting early next week, to hammer out the differences in the two budget resolutions. Senior Republican staffers said they anticipate a final package of about $500 billion.
"We're very hopeful that when we go to conference, that number will be bigger and better, and I anticipate that being the case," said Sen. Rick Santorum, Pennsylvania Republican.
The final budget resolution in the Senate reduces Mr. Bush's long-term effort to enact a total of $1.3 trillion in tax cuts which includes making permanent and accelerating elements of his 2001 tax cut to $857 billion over 11 years.
Senate Minority Leader Tom Daschle, South Dakota Democrat, said his side will fight to reduce the tax cut even more.
"We still think [the current tax-cut level] is way too much, given the need for sacrifice in this country, given the need to ensure that we have the funds, the resources to provide the many needs that we have in fighting the war in Iraq and our homeland security needs as well," Mr. Daschle said.
Sen. Kent Conrad, North Dakota Democrat and ranking member of the Senate Budget Committee, said many in his party "do not think that is affordable or wise, given the fact we're already in record budget deficits."
Republicans yesterday reiterated that the Democrats' concerns about the tax cut increasing the size of the deficit ring hollow.
Mr. Santorum kept a running "Democrat Spendometer" that he said tallied up $1.6 trillion in new spending proposed by Senate Democrats in two weeks of budget wrangling.
"They offered 20 percent more in spending increases than what we proposed in tax relief," he said. "So when you hear the comments about how they want to maintain fiscal discipline, how they're so concerned about deficits, I refer you to their voting records."
Sen. Charles E. Grassley, Iowa Republican and chairman of the tax-writing Senate Finance Committee, said yesterday in a speech before a tax-policy seminar that he will try to make the best of the tax-cut instructions he was given in the budget.
"I believe the Finance Committee can do a lot of good tax policy with the centrists' compromise number of $350 billion," Mr. Grassley said. "We can still accelerate individual rate cuts, expand the 10 percent bracket, reduce the marriage penalty, and increase the child care credit. We can still increase small-business expensing."

LOAD COMMENTS ()

 

Click to Read More

Click to Hide