- The Washington Times - Thursday, May 20, 2004

The House last night passed a one-year budget agreement that makes cutting taxes easier than increasing spending, daring the Senate to block final passage and directly challenging a few Senate Republicans who want to make it harder to pass tax cuts.

“Our members will not be tied down in future years,” said House Speaker J. Dennis Hastert, Illinois Republican, who complained that “four or five [Senate] members tried to nail us down” and make it harder to provide “real tax relief” in the future.

“To have a small number of people dictate to this nation what they can do and what they can’t is just unacceptable,” he said.

The House approved the $2.4 trillion fiscal 2005 budget by a 216-213 vote. All 216 votes for the budget were by Republicans, while 203 Democrats, nine Republicans and the chamber’s one independent voted “no.”

Senate Republican leaders also have signed off on the agreement, and the Senate could consider it today, though they don’t appear to have enough votes to pass it.

“I don’t think we should be cutting taxes without paying for them in a time of war,” said Sen. John McCain of Arizona, one of four Senate Republicans whohave stood in the way of the chamber passing a final federal budget.

The handful of Republicans want the final budget to reinstate a rule they helped pass in March that makes it harder for Congress to approve new tax cuts or increases in entitlement spending unless offset by other spending cuts or tax increases.

Sens. Olympia J. Snowe and Susan Collins of Maine, Lincoln Chafee of Rhode Island and Mr. McCain joined Senate Democrats in voting to add this rule to the Senate’s version of the budget two months ago — a proposal known as “pay-go.”

The House voted against the rule, and negotiators from the two chambers have spent more than a month trying to find a compromise, but without success.

House Republican leaders, tired of negotiating with the four senators, decided this week to move ahead with a compromise that would reinstate the pay-go rule for a year, and would exempt some of the tax cuts that Republicans want to pass this year.

“I can’t believe that one or two members, Republican members of the Senate, can hold up a budget,” said House Majority Leader Tom DeLay, Texas Republican.

A spokeswoman for Senate Majority Leader Bill Frist, Tennessee Republican, said her boss is working on getting enough Senate votes.

Republicans said their budget would provide President Bush’s request for defense and homeland security, and would hold all other discretionary spending at current levels. Mr. Bush had asked for a half-percent increase.

The measure would fund the Defense Department at Mr. Bush’s requested level of $402 billion, and homeland security would receive about $31 billion, a $2.8 billion increase, as he had requested.

Total discretionary spending would be $821 billion, in addition to $50 billion for the war efforts in Iraq and Afghanistan. Administration officials didn’t seek the $50 billion in their budget request, but they admit it probably will be needed.

The House-passed budget would protect $27.5 billion in 2005 tax cuts from the Senate pay-go rule, which dictates that any bill that cuts taxes or increases entitlement spending needs 60 votes to pass unless it has offsetting spending cuts or increases in other taxes.

The protected tax cuts would require only a simple majority to win Senate approval.

Though the budget leaves it to the tax-writing committee to decide which tax cuts to include under this protection, Republicans said it is likely to be a one-year extension of three key tax cuts set to expire — the $1,000 child tax credit, tax relief for married couples and the new 10 percent income tax bracket.

The budget proposal also allows for an additional $23 billion in tax relief this year, but doesn’t protect those from the 60-vote rule.

House Democrats attacked the budget deal, reminding lawmakers that it would automatically increase the nation’s debt limit by $690 billion to $8.1 trillion and that because it’s a one-year budget, it has no plan to reduce the deficit and no assurance that critical funds will be available in the future for key priorities.

Mr. Frist and Senate Budget Committee Chairman Don Nickles, Oklahoma Republican, met with the four Republicans at various times yesterday, but it seemed unlikely that any would vote for the new budget agreement.

Mrs. Snowe, who wouldn’t comment on specifics yesterday afternoon, said, “Nothing has changed.”

Mr. McCain said he would not accept the proposed compromise. He said he could have agreed to a three-year reinstatement of the rule, but is “not going any further” than that.

Miss Collins and Mr. Chafee said they definitely will vote against the budget deal.

“The budget that is expected to be brought before the U.S. Senate this week does not meet my concerns, therefore, I plan to vote against it,” Miss Collins said. “Pay-go provides a strong protection against future deficits soaring even higher. A one year pay-go does little to address this concern.”

Mr. Chafee, who has been the most reluctant of the group to compromise, “would not be willing to accept anything that exempts tax cuts” from the rule, and is planning to vote against the budget, said spokesman Stephen Hourahan.

Senate Republican leaders also have courted Sen. Ben Nelson, Nebraska Democrat, as a possible “yes” vote on their budget, but Mr. Nelson said yesterday that he is inclined to vote against the deal because a one-year extension of the pay-go rule is inadequate and that any such rules must apply to spending as well as taxes.

“If you’re going to balance the budget, you need to have it in both cases,” he said.

Sen. Max Baucus, Montana Democrat, predicted that Republicans won’t be able to persuade any Senate Democrats except Sen. Zell Miller of Georgia to vote for their budget proposal.

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