- The Washington Times - Thursday, April 12, 2001

Democratic spinmeisters and their allies in the media blurred what happened when the Senate passed its budget bill last Friday. It was spun as a defeat for President Bush, even though a bipartisan, 65-vote majority effectively approved the $1.3 trillion in tax cuts that Mr. Bush originally proposed.

A compromise bill calling for tax cuts totaling $1.2 trillion over 10 years emerged from the fierce, weeklong budget battle, and the post-fight analysis was all about that figure. Television´s talking heads made little, if any, mention of the $80 billion in additional tax cuts that would be applied retroactively this fiscal year under the Senate budget, bringing the total tax cut to nearly $1.3 trillion.

True, this is $300 billion below the $1.6 trillion tax cut the House approved and that Mr. Bush sought. But $1.3 trillion is the amount he campaigned on in 2000. He boosted the tax-cut figure later, when government forecasts showed that tax surpluses would be about $1 trillion higher than expected over the next 10 years.

In a town that sees every story only in terms of winners and losers, the story about the Bush tax cuts is actually much more complicated than the sophomoric, simple-minded tale reported by the news media.

First, the $1.3 trillion in tax cuts proposed in the Senate will have to be reconciled with the House budget resolution the spending blueprint that appropriators are supposed to follow, but rarely do. That´s why the amount of the tax cuts is likely to come very close to what Mr. Bush originally proposed.

Republicans are going to have a majority in the House-Senate conference that will iron out the differences between the two budgets. They are going to leave the conference with a bill that is more to their liking than what Senate Democratic Leader Tom Daschle wants.

House-Senate conferences very often split the difference between the two versions they have to reconcile. With the House approving $1.6 trillion, and the Senate backing $1.3 trillion, Republican leadership officials think the president will get about $1.4 trillion in cuts in the final budget and most likely more than that, once the legislative and tax-cut process has played itself out.

After all, a decade is a long time. There may be provisions in the tax-cut bill to increase or accelerate the tax cuts if the surplus turns out to be much larger than current forecasts.

Second, despite the media spin, the Senate´s $1.3 trillion in tax cuts was a big defeat for Mr. Daschle and the Democrats. Last year, Mr. Daschle and other Democratic leaders were opposed to any tax cut. Then they called for $250 billion in cuts, then $500 billion, then $700 billion. Finally, in last week´s debate Mr. Daschle said he could go no higher than $900 billion. At one point last month, he called for a $60 billion stimulus this year and for putting off any further tax cuts indefinitely.

Well, last Friday, not only did all 50 Senate Republicans vote for nearly $1.3 trillion in tax cuts, but also an astonishing 15 Democrats deserted Mr. Daschle to join them.

Will some of the 15 support a larger tax cut when the budget comes out of conference? Sen. Phil Gramm, Texas Republican, a veteran of many budget and tax-cut battles, thinks many will. "Remember," he told me, "when the budget comes back from the conference, it´s not amendable. You have to say yea or nay. It´s all or nothing." Some of those Democrats will not want to be seen killing tax cuts at a time when the economy is weak, people are struggling to pay their bills, businesses are closing, job layoffs are mounting, unemployment is rising, and millions of American are losing their retirement wealth in a declining stock market.

Contrary to the Democratic spin that the president has suffered a defeat, his advisers could not be happier about the way things are going.

"If someone had told us at the beginning of this year that by early April we would have our $1.6 trillion tax cut passed by the House, a budget calling for at least a $1.3 trillion cut passed by the Senate, we wouldn´t have believed them," said Karl Rove, the president´s political adviser.

In a lengthy interview in his West Wing office, Mr. Rove sent clear signals that the White House was more than willing to negotiate a compromise figure at the appropriate time.

Asked if the president would be willing to agree to a slightly smaller figure, Mr. Rove told me, "Let´s see something reasonable from the Democrats. There´s plenty of time to come together. The president is listening. He´s listening."

So are America´s businesses and workers. People are hurting out there, and they are waiting for Congress to act. If Senate Democrats block a reasonable tax cut, the purpose of which is to get the economy growing again, they are going to pay a huge political price at the polls in next year´s midterm elections.

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