- The Washington Times - Friday, February 9, 2001

President Bush yesterday sent his across-the-board tax-cut proposal to Congress, where Republicans hailed it as good news for all taxpayers, but Democrats derided it as offering only "a new Lexus for every millionaire."
"Our Treasury is full, and our people are overcharged," Mr. Bush said in his first Rose Garden ceremony, in which he promoted his tax cut. "Returning some of their money is right, and it is urgent. I urge the Congress to pass my tax-relief plan with the swiftness these uncertain times demand."
The $1.6 trillion proposal is twice as large as a tax cut vetoed by President Clinton two years ago. It would trim federal income-tax rates in all brackets, eliminate the estate and gift tax, ease the so-called "marriage penalty" and double the per-child credit to $1,000.
By the 10th year of Mr. Bush's plan, the average family would save about $1,600.
House and Senate Republican leaders at the Capitol received the proposal from Treasury Secretary Paul O'Neill, who joked that income-tax relief is so urgent in this economic slowdown that he would "wait downstairs" while Congress approved it.
"There are enormous good reasons to get on with enacting the president's bill and getting money flowing back to average Americans," Mr. O'Neill said.
Republicans, who control both chambers of Congress, promised swift passage. Mr. O'Neill will testify Tuesday as the House Ways and Means Committee takes up the proposal.
"We've reached a great tax milestone in this country," said House Speaker J. Dennis Hastert of Illinois. "After years of waiting, we finally have received an honest-to-goodness tax-relief proposal from the White House."
But the top two Democrats in Congress yesterday criticized Mr. Bush's plan as benefiting primarily the wealthy. To highlight their argument, Senate Minority Leader Tom Daschle of South Dakota and House Minority Leader Richard A. Gephardt of Missouri posed with a luxury automobile outside the Capitol.
Mr. Daschle said the 2000 Lexus GS-300 was "fully loaded just like the Bush tax cut."
"If you're a millionaire, under the Bush tax cut, you get a $46,000 tax cut, more than enough to pay for this Lexus," Mr. Daschle said. "But if you're a typical working person, you get $227, and that's enough to buy this muffler."
Asked about the Democrats' stunt with the Lexus, White House spokesman Ari Fleischer said, "There are some tax-and-spend Democrats who, every time they see a car, start thinking about building a toll booth. And that's how they collect all these taxes… . What the president is saying to people is we need to take down the toll booth to the middle class."
The arrival of Mr. Bush's tax-cut proposal on Capitol Hill finds Democrats on the defensive Sen. Zell Miller, Georgia Democrat, has sponsored the president's plan; the economy has taken a significant downturn; and Federal Reserve Chairman Alan Greenspan has endorsed a tax cut.
Confronted with the Bush administration's momentum, Democratic leaders have raised their tax-cutting sights recently from about $250 billion to the range of $750 billion over 10 years. Mr. Gephardt said that "virtually every Democrat in Washington supports a tax cut."
"But the plan the president has offered is too big, too risky and too unfair to working families," Mr. Gephardt said, echoing themes of Al Gore's failed presidential bid.
Sen. Joseph I. Lieberman, Connecticut Democrat and Mr. Gore's vice-presidential running mate, yesterday called Mr. Bush's plan "fiscally irresponsible."
"Last year, then-Governor Bush quite often said that our military was strapped, that it was becoming weak and that 'Help is on the way,' " Mr. Lieberman said on the Senate floor. "More recently, he's said to the military, 'Don't expect any large increases in spending this year.' If we spend all the money on his tax proposal, there's no way we will have the money we need to invest in strengthening the military."
Mr. Fleischer responded to the Democrats' criticism by saying, "What you have here is an old issue, where there are some Democrats who want to keep taxes high; that way, they can spend more money."
He said those who earn more than $200,000 a year currently pay 41.8 percent of federal income-tax receipts. Under the Bush plan, they will receive 26.9 percent of the tax cut.
Sen. Don Nickles, Oklahoma Republican and assistant majority leader, said Mr. Bush's plan will not fully repeal the Democratic tax increases of 1993.
"When President Clinton was elected, the [highest] tax rate was 31 percent," Mr. Nickles said. "He raised that to 39.6 [percent]. President Bush is going to reduce the maximum rate from 39.6 to 33 percent."
Sen. Charles E. Grassley, Iowa Republican and chairman of the Senate Finance Committee, said the federal government will collect about $27.9 trillion over the next 10 years and called a $1.6 trillion tax cut "chicken feed."
"There's a lot of people in town that are saying that we can't afford a tax cut," Mr. Grassley said. "We obviously can afford a tax cut. And it'll bring discipline to government."
Much work remains to fill in the details of the president's plan.
For example, Mr. Bush has proposed allowing taxpayers to deduct charitable contributions whether they itemize them or not. But documents released yesterday make no mention of provisions in his original tax plan, released in May, allowing tax-free IRA withdrawals for charitable donations and increasing corporate deductions for charitable giving.
Some centrists of both parties in Congress advocate a "trigger" that would prevent Mr. Bush's tax cuts from taking effect in any year in which the projected federal surplus does not materialize. And some conservative House Republicans are pushing for a $2.2 trillion tax cut that would take effect quicker.
Rep. Bill Thomas, California Republican and chairman of the House Ways and Means Committee, said Congress will examine ways to make the administration's income-tax cuts retroactive to Jan. 1 of this year.
"That'll be the congressional contribution to the president's tax plan," Mr. Thomas said.
He said work to reduce Social Security and Medicare taxes also lies ahead.
"Those payroll taxes will be addressed, but today it's income," Mr. Thomas said. "This is the beginning of an effort, and it's really exciting to be a part of it."
Mr. Bush has said he "strongly" supports making the tax cuts retroactive, an idea also embraced by Senate Majority Leader Trent Lott of Mississippi.
John Godfrey contributed to this report.

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