- The Washington Times - Friday, March 2, 2001

The House's tax-writing committee yesterday passed on a party-line vote an accelerated version of President Bush's across-the-board cut in income-tax rates.
The 11-year, $960 billion proposal passed the House Ways and Means Committee on a 23-15 vote and is expected to come to the House floor next week, possibly Thursday.
The committee's chairman, Rep. Bill Thomas, California Republican, yesterday said the legislation would provide a "stimulus for the unsteady American economy" while helping working taxpayers.
Vehement Democratic opposition and Republican insistence on charging ahead anyway presage a bitter partisan battle in both the House and Senate, a fight for which both sides and their allies are already girding themselves.
More than 100 liberal groups who had fought the nomination of John Ashcroft as attorney general announced the formation of the Fair Taxes for All coalition to fight Mr. Bush's proposal, while top House Republicans eagerly declared their willingness to do battle.
"We realize with a 50-50 split in the Senate, it's going to be up to us to hang together and carry the day for the president," said Rep. Ray LaHood, Illinois Republican. "We're ready to do it."
Mr. Bush, speaking yesterday at the Fern Bank Museum in Atlanta as part of a five-state tour to rouse support for his plan, asked his audience to help pass his proposals.
"I could use your help," he said. "If you find a member that you may have some influence with, or know an e-mail address, or can figure out where to write a letter, and find out somebody isn't listening to you, to do what's right for the country, just drop them a line."
He also repeated his standing-ovation-winning argument from his speech to Congress earlier this week painting his proposal as a "refund" for American taxpayers.
"When you have more money than you need, it seems like somebody is getting overtaxed and overcharged," he said. "And what I am going to do is remind the Congress that if we've overcharged somebody, it's time for a refund."
Democrats say bringing the tax bill to a vote jumps the gun. Congress has not yet approved a budget for the year and without a budget, lawmakers cannot know how large tax cuts should be, they argued.
"This is irresponsible to the extreme," said Senate Minority Leader Tom Daschle, South Dakota Democrat, shortly before the committee began its six-hour markup.
Also yesterday, Democrats offered an alternative tax-cut proposal that would create a new 12 percent bracket on the first $10,000 of an individual's income, but left the other income-tax brackets unchanged, reflecting the Democrats' claim that the GOP plan favors the wealthy.
The proposal also would have raised the standard deduction for a married couple to twice that of a single person and increased the Earned Income Tax Credit for poor families.
The Ways and Means panel rejected the Democratic alternative, estimated to have a $590 billion value, on a 26-12 vote.
Treasury Secretary Paul O'Neill wrote yesterday to applaud the "prompt consideration" of the Republican measure. "This bill is a very positive first step on the way to passage of the president's tax-cut plan," Mr. O'Neill wrote to Mr. Thomas.
The Republican plan is almost identical to the one presented by Mr. Bush during his campaign. By 2006, the plan would create a new 10 percent tax bracket and consolidate four upper brackets ranging from 28 percent to 39.6 percent into two brackets of 33 percent and 25 percent.
One change from Mr. Bush's plan would accelerate the creation of the new 10 percent bracket.
Under both plans, the bracket would apply to the first $6,000 of a taxpayer's income the first $12,000 for married couples.
Mr. Bush proposed a gradual phase-in of the new bracket, starting at 14 percent in 2002 and hitting 10 percent by 2006. The plan that passed yesterday would drop the lowest bracket to 12 percent retroactive to Jan. 1, but also take until 2006 to hit 10 percent.
Changes in the new lowest bracket, coupled with differences in estimates of the other rate reductions, make projections of the value of the House Republican plan $130 billion larger than predicted in Mr. Bush's budget released Tuesday.
Democrats say the true cost of the plan is larger still.
In 2002, the alternative minimum tax (AMT) will prevent 2.2 million taxpayers from receiving some or all of the benefit of the tax-cut plan approved yesterday, according to estimates provided to Democrats by the Joint Committee on Taxation. By 2011, the number seeing their tax cut reduced would rise to 15 million, and fixing the problem would cost an extra $292 billion over the decade.
Democrats made a point of noting that their rejected alternative would have assured that the AMT did not erode any of the plan's promised benefits.
Republicans and Treasury officials said the alternative minimum tax is a structural problem with the tax code that they hope to address later.
House Republican leaders said they also plan to act later on the remaining parts of Mr. Bush's tax-cut plan, which include increasing the child credit and phasing out the estate tax.
"We are looking at the estate tax repeal, we are looking at the marriage penalty, we are talking about the child-tax credit going from $500 to $1,000, we are talking about the inheritance tax … the AMT," House Speaker J. Dennis Hastert told reporters.
The Illinois Republican called the pending tax cut "a work in progress" and vowed, "in the end we will have $1.6 trillion of components and they will fit together."
Democrats say yesterday's markup is another major step back from the bipartisanship Mr. Bush promised.
Republicans did not consult with Democrats before writing the bill and gave them little warning before the committee began its work, Democrats contend.
More importantly, at least one Republican leader has said he hopes to use House rules to prevent Democrats from offering any amendments when the measure comes to the House floor next week, Democrats said.
"This tells you in the clearest possible way that there is no willingness to run this institution in a bipartisan way," said House Minority Leader Richard A. Gephardt, Missouri Democrat.
House Republican Conference Chairman J.C. Watts rejected the charges.
"They controlled Congress for 40 years. They played with their bats and their balls, on their field with their officials," the Oklahoma Republican said. "That is the way the process works around here."
This article was based in part on wire service reports.


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