- The Washington Times - Wednesday, February 7, 2001

Congress is tinkering with President Bush's $1.6 trillion tax cut before it even reaches Capitol Hill, with conservatives calling for more aggressive cuts and centrists trying to limit tax relief if the federal surplus dwindles.

"There will be some changes as we go through this process," Senate Majority Leader Trent Lott said yesterday. "I don't have a problem with that, and I don't think the president does."

Vice President Richard B. Cheney told reporters yesterday that the White House intends to stick with its plan, no smaller or larger. Mr. Cheney said the plan was developed during the campaign and still "makes sense."

Still, lawmakers throughout the Capitol spent the day discussing their plans to cut, amend or otherwise revise the plan.

In the House, a group of conservative lawmakers led by Rep. Patrick J. Toomey, Pennsylvania Republican, is pushing a plan that would cut taxes by more than $2 trillion over 10 years. It would speed up some of Mr. Bush's proposed tax cuts, reduce capital-gains rates and include tax cuts for small businesses.

"It's time for a bigger and faster tax-cut proposal," they wrote in a letter to Republican colleagues, calling their effort the Economic Recovery and Growth Act.

Some centrists from both parties, meanwhile, urged Mr. Bush in a letter to include a "trigger" that would prevent his tax cuts from taking effect in a given year if surplus projections, now forecast at $5.6 trillion over 10 years, do not come to fruition.

Sen. Olympia J. Snowe, Maine Republican, said yesterday that such a brake on tax cuts might be the best way to gain bipartisan support for the president's plan. Sen. Evan Bayh, Indiana Democrat, called the idea "a conservative approach to cutting taxes.

"I do think there would be a higher comfort level if there was some sort of trigger mechanism," Mrs. Snowe said. "I'm sure the president will be flexible."

Mr. Lott dismissed the centrists' proposal.

"Preliminarily, I'm not inclined to do that," Mr. Lott said. "We're not going to fall for a trap where all the Democrats have to do is to spend more and then you lose your tax relief."

Most Democrats are resisting Mr. Bush's proposal as too large, instead advocating tax cuts in the range of $750 billion. Mr. Cheney met yesterday with the 33-member Blue Dog Coalition of House Democrats, who told the vice president their group prefers to use more of the surplus for debt reduction.

But in another memorandum yesterday, House Majority Leader Dick Armey warned against paying off the national debt too fast. The Texas Republican said paying off the government-issued bonds in six years would require that subsequent budget surpluses would force the U.S. Treasury to buy nearly $1 trillion in private assets.

This would undermine the economy and "forever change the relationship between government and its citizens … [causing] the diminution of American liberty," Mr. Armey warned.

Rep. J.C. Watts Jr. of Oklahoma, chairman of the House Republicans, yesterday hailed the news that Senate Minority Leader Tom Daschle said he would consider tax cuts that take effect retroactively.

"Thank you and happy birthday, Ronald Reagan, for leading the charge in providing tax relief for all Americans," Mr. Watts said on the former president's 90th birthday. "You know that your message is resonating when your opponents finally take a look at it."

Mr. Bush promoted his tax-cut plan yesterday at a toy store in McLean, saying it was crafted in part to help small-business owners.

"We need to act, and act as quickly as we possibly can, including working with Congress to make sure … as much of the tax cuts as possible can take immediate effect to help people," Mr. Bush said. "The economy is slowing down. The goal is to get money in the pockets of the working people as quickly as we can."

The good news for Mr. Bush is the consensus in both parties for a sizable tax cut, and that the size of his proposal falls between those suggested by the most eager Republicans and the most reluctant Democrats.

"There is strong support for the $1.6" trillion, Mrs. Snowe said.

Mr. Lott said there could be disagreement with the White House over some aspects of what lawmakers call "fairness" issues, such as the timetable for phasing out the estate and gift tax.

"You have to factor … how you do it and when the different changes take effect into the overall package," Mr. Lott said.

Senate Majority Whip Don Nickles, Oklahoma Republican, said the size of the tax-cut plan and its keystone, an across-the-board individual income-tax rate reduction, will remain intact. But, Mr. Nickles said, additions to the bill and revisions to make room for those additions are possible.

For example, Congress might decide to phase-in the marginal rate cuts more slowly to make room for deeper tax cuts targeted specifically to married couples, said a senior Senate Republican leadership aide.

Mr. Armey said no member of his caucus is dragging his heels on the size of the tax-cut plan, at least not publicly, but not many are talking about going beyond it either.

"I talked to an awful lot of people at the [House Republican retreat last weekend] and no one was less than enthusiastic about the president's tax-relief plan," Mr. Armey said.

Common items that Republicans would like to add to the bill include a revision or repeal of the alternative minimum tax, legislation reforming pension laws and increasing tax breaks for retirement savings, and repealing the excise tax on telephone services.

A business-tax break gaining support is a revision of the current depreciation schedules. That reform as envisioned by Republicans would accelerate the rate at which capital investments such as petroleum drilling costs and software could be depreciated.

Senate Budget Committee Chairman Pete V. Domenici, New Mexico Republican, echoed Mr. Nickles comments that while the contents of the tax bill might change, the size must remain at $1.6 trillion.

"I do feel that leadership has done a good job of saying 'This is for real this time,' " Mr. Domenici said, noting there has been a tendency in the past to load bills up, secure in the knowledge that President Clinton would veto them.

• Joseph Curl contributed to this article.

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