- The Washington Times - Wednesday, April 25, 2001

Senate Republicans said after meeting with President Bush yesterday they probably will settle for $1.4 trillion in tax cuts, including $85 billion in rebates this year, amid growing consensus to complete the budget quickly.
Senate Finance Committee Chairman Charles E. Grassley told reporters yesterday after a Senate Republican caucus that going beyond that figure "risks losing bipartisanship" that helped pass the Senate version of the bill.
Even $1.4 trillion might be a hard sell, the Iowa Republican said, unless negotiators make it clear that they intend a 10-year, $1.3 trillion tax cut, with a $65 billion to $85 billion tax rebate for fiscal year 2001.
He and other key Republicans said the economy needs quick action.
"The Federal Reserve helped a little bit last week; we need to do the rest of the job , and we need to do it quick, " House Speaker J. Dennis Hastert, Illinois Republican, said after the 90-minute strategy session at the White House between the president and top Hill Republicans.
"The president made the case that its very important that we come to an agreement on the budget because of the worsening state of the economy, and because of his desire to make certain that the American people get tax relief," White House spokesman Ari Fleischer told reporters.
Mr. Hastert and other Republicans leaving the White House session said no compromise has been reached, but senators and Senate aides said it is becoming clear that securing passage may be impossible if the tax cut is any larger than $1.4 trillion.
Senate Majority Leader Trent Lott, Mississippi Republican, thinks the Senate would pass an 11-year, $1.4 trillion tax-cut plan, said an aide in his office.
Senate Minority Leader Tom Daschle of South Dakota would not speculate on whether he or other Democrats would support the plan if it is stretched over 11 years, as Mr. Grassley has described.
Also yesterday, the House officially appointed lawmakers to negotiate differences between its budget, which largely mirrors the plan outlined by Mr. Bush, and the Senates, which provides for more spending. The House-passed budget also provides room for $1.6 trillion in tax cuts, but the Senates budget provides for a $1.2 trillion tax cut, with an additional $85 billion "rebate" for fiscal year 2001.
The Senate appointed its conference members on Monday.
Mr. Lott predicted Republicans could reach agreement on the budget by weeks end with a final vote in both the House and Senate next week.
That would give Congress plenty of time to finish work on the tax-cut bill authorized by that budget before July 4, Mr. Lott said.
A senior Senate aide said picking a size for the tax cut will be relatively easy, particularly when net tax relief can be enhanced with a series of issue-driven tax packages later.
For example, a $1.4 trillion tax-cut plan might be limited to rate reductions, tax breaks for married couples and other broad tax cuts.
But a later education bill might include tax breaks for tuition, or a minimum wage increase might have a capital gains tax cut attached. Mr. Lott, Senate Majority Whip Don Nickles, Oklahoma Republican, and other Republicans leaders back that plan.
Republicans also must set a spending level for fiscal 2002.
The House-passed bill would provide a 4 percent increase in discretionary spending from fiscal 2001 to fiscal 2002, but would give House Budget Committee Chairman Jim Nussle, Iowa Republican, the authority to allocate tens of billions of dollars more for "appropriate" needs.
The Senate specifically voted to increase spending on defense, education, Medicare and farm aid.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide