- The Washington Times - Monday, March 19, 2001

Senate Democratic and Republican leaders are joining in a call for immediate tax cuts to stimulate the economy, and the Senate's top Democrat favors cutting the maximum income tax rate for working people from 15 percent to 10 percent.
"We would support bringing that 15 percent tier down to 10 percent, as the president has proposed … let's do that now. We could do it by May 1," Senate Minority Leader Tom Daschle, South Dakota Democrat, said yesterday on NBC's "Meet the Press."
On "Fox News Sunday," Sen. Don Nickles also called for speedier reductions in income tax rates than those proposed in the House-passed version of President Bush's $1.6 trillion tax-cut plan.
"We need tax relief now," said the Oklahoma Republican, who serves as the Senate's assistant majority leader.
"The economy is sputtering a little bit. I think we can give some tax relief more on the personal income tax side for all the rates as early as possible. And also, I think we should also look at having a capital gains [tax] reduction from 20 to 15 percent this year as well. I think that would really help the economy," said Mr. Nickles, the Senate's second-in-command.
He said more of the proposed tax relief "needs to be retroactive" or "more up-front," rather than becoming effective four or five years down the road as does most of Mr. Bush's plan. "Let's make some of it effective July 1," Mr. Nickles said on Fox.
He noted that Mr. Bush has "indicated a willingness" to make tax cuts available earlier to those in modest income brackets.
The Senate is split 50-50 between Republicans and Democrats. Last week, some centrists in the Senate warned Treasury Secretary Paul O'Neill the votes are not there to pass the Bush tax-cut package.
On March 8, the House enacted a bill seen as the heart of the Bush tax-cut plan, since it would slash personal income tax rates across the board. The House measure would cost $958 billion over the next 10 years, about 60 percent of the $1.6 trillion Mr. Bush wants for tax cuts in that period.
Mr. Daschle, on NBC, said his plan to cut the 15 percent income tax rate to 10 percent would cost "somewhere around $450 billion, just a fraction of what the administration's proposing." What's more, he said, the extra money "would really go to those people where it could do the most good" and so it would stimulate the economy.
"This would mean about a $600 tax cut for everybody across the board, because everybody" who earns between $15,000 and $65,000 "pays the 15 percent rate," the Senate Democratic leader said.
Sen. Joseph I. Lieberman, Connecticut Democrat, interviewed on several talk shows yesterday, said on ABC's "This Week" he believes the "Bush tax plan is dead in the Senate."
"It has died of its weight. It's fiscally irresponsible, and it's too large," he said.
However, Mr. Lieberman added that "There should and will be a tax cut. But it should be smaller than what the president wants, because we can't afford what he wants."
The Connecticut senator charged that the president's plan "doesn't put anything into the economy for tax cuts this year" and "puts very little in next year." So it can't do anything to reverse the sagging economy, said Mr. Lieberman, who called the tax plan "politically driven."
He added: "I think that we're at a point … to think about … a tax cut now. And I think the best way to do that would be to take that estimated surplus at the end of this year, take an agreed-upon percentage of it, maybe two-thirds, and give it back to every taxpayer. The same amount to every taxpayer right now."
Mr. Lieberman stressed that a one-year tax cut would be a lot less risky than the president's 10-year proposal, given the uncertainty about projected budget surpluses over the long term.
Asked about Mr. Daschle's proposal to cut the income tax rate from 15 to 10 percent in the lower earnings bracket, Mr. Lieberman said it would be an "improvement" over the Bush plan. But he did not immediately endorse it.
On ABC, Mitch Daniels, director of the White House Office of Management and Budget, was asked if he believes those with low-to-moderate incomes could be receiving a tax cut as early as this summer.
"It's possible. And the president's indicated his interest already, and the House has acted on that to accelerate … the benefits of the tax cuts … particularly for those in the lower [income] brackets. So all things are possible," said Mr. Daniels.
Lawrence Lindsey, the president's chief economic adviser, was asked about Mr. Daschle's modified tax plan on "Meet the Press." He insisted the bill passed by the House, which would initially lower the tax rate for the bottom income bracket to 12 percent, would accomplish the same goals as the Daschle proposal.
"I think that what we have to pass, and we could pass it right away, is the bill that just cleared the House with bipartisan support that puts money in people's pockets right away. The entire portion of the acceleration was on the bottom bracket in that bill, and that's exactly what Senator Daschle is talking about," said Mr. Lindsey.


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