- The Washington Times - Monday, August 6, 2001

Senate Majority Leader Tom Daschle has ruled out a bid to repeal President Bush's $1.3 trillion tax cut, but another top Senate Democrat says the tax cut must be reduced, as it is leading the federal government "into deficit in this fiscal year."
"We've got to go back and look at the Bush tax cut, which I think will be seen from hindsight of history as one of the most serious mistakes the federal government" has ever made, Sen. Joseph I. Lieberman of Connecticut said yesterday on ABC's "This Week."
Mr. Lieberman acknowledged that Democrats, who are in control of the Senate, do not have the votes necessary to change the tax-cut law. But he said, "We've got to have support from the administration and some of the Republicans to say, 'OK, we can have a tax cut, but this one went way beyond our ability to pay. It's fiscally irresponsible. It threatens our prosperity.'"
On the news talk shows yesterday, both Mr. Daschle and Mr. Lieberman blamed the economic downturn and the Bush tax cut for what is being described as the government's shrinking budget surplus.
The Treasury Department said last week it expects to borrow $51 billion this quarter, largely to pay for this year's costs of the tax bill. That was a sharp reversal from April 30, when the Treasury Department said it expected to retire $57 billion in debt during that period.
"The Bush fiscal program is taking money out of the budget, and it will send us into deficit that's a shocking turn from a $91 billion surplus projected just in May that would be on our books Sept. 30," Mr. Lieberman said yesterday. The Connecticut Democrat was Al Gore's vice-presidential running mate in last year's election.
Mr. Daschle of South Dakota, the Senate's top-ranking official, told CBS' "Face the Nation" that he sees no point in seeking to rescind the tax cut.
"The president says he will veto [repeal legislation]. We don't need to confront another veto threat," he said.
Nevertheless, Mr. Daschle reiterated concerns he has raised repeatedly about how the government will meet its obligations and whether it will be forced to tap into Social Security and Medicare trust funds.
On CNN's "Late Edition," White House Chief of Staff Andrew Card was asked whether Mr. Bush's tax cut was a political mistake.
"First of all, it wasn't a political initiative. This was an initiative to return money to the taxpayers. It was also an initiative to stimulate our economy," Mr. Bush's top adviser said.
"Every economist that I've talked to has said that this is the right kind of stimulus at the right time," he added.
As for Democrats' concerns about vanishing surpluses, Mr. Card said: "We have huge surpluses. In fact, our surpluses are still there. We are not going to get into the Social Security trust fund."
Mr. Card's comments came after Mr. Daschle said the administration will probably need to use some of the money in the trust funds to meet the government's spending obligations. "We think it's very likely the administration will have to use Medicare and Social Security trust funds, since we've already used up three-quarters of the surplus."
Asked on CNN whether the administration would have to dip into Medicare, Mr. Card explained that there are two Medicare funds, accounts A and B.
"The A fund that you [as a taxpayer] contribute to, not one dime that goes into that account will be used for any other purpose than Medicare. The other trust fund, account B, which is really not a trust fund account but an ongoing appropriation from this government, will continue to be" that, the senior White House official said.
Mr. Card said the B account will "not be lock-boxed." Nevertheless, "Medicare will increase in its funding, and medical services will continue to be provided," he said.
Mr. Card insists the Bush tax-relief package is "right for America, right for the economy and right for bringing discipline to the federal fiscal system."
But Mr. Daschle said congressional appropriators are "in a box," facing pressures for new spending measures while the tax cut limits the amount of funds in the budget. On CBS, he urged the president to "give us some direction" on how to "find a way out of it."
As for the additional $18 billion being sought for the Pentagon next year, the majority leader said Democrats would be "happy to support" increases for defense.
"But we don't know where to get the money to pay for additional increases. We think new expenditures should be offset, so we don't threaten Social Security or Medicare," Mr. Daschle said.
He also said that most Democrats believe requests for missile defense spending "need to be pared back."

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