- The Washington Times - Friday, March 30, 2001

The House yesterday passed on a 282-144 vote $400 billion worth of tax cuts to benefit married couples and parents, while a key House panel voted to repeal the estate and gift tax, a move worth another $200 billion.

The "marriage penalty" bill had the support of all Republicans who voted, and 64 Democratic representatives joined in passing a key part of President Bush's tax-cutting agenda.

"What we are debating today is a conflict of vision," said House Majority Leader Dick Armey.

The Texas Republican said his party believes "that America is made great by real people at home earning a living and deciding how to spend their own money." Democrats, Mr. Armey said, believe "America is made great by big government."

"Today, we have shown our commitment to hardworking American families," said Rep. Jim Ryun, Kansas Republican.

The Senate is scheduled Monday to take up the budget resolution for 2002. The House resolution, which assumes $1.6 trillion in tax cuts over the next 10 years, passed Wednesday. But it could be months before the Senate debates the tax cuts themselves.

The estate-tax repeal passed 24-14 on a mostly party-line vote in the House Ways and Means Committee. Rep. John Tanner of Tennessee was the sole Democrat to vote for the estate-tax bill, while Rep. Amo Houghton of New York was the sole Republican to vote against it.

Mr. Bush told reporters yesterday he is eager "to get tax relief enacted quickly and to get money as quickly as possible into the people's pockets." He said he is also willing to discuss a "trigger" on tax cuts wanted by centrist Republicans who worry some may be overestimating federal budget surpluses.

House Minority Leader Richard A. Gephardt argued that the moves "leave no room for anything except tax cuts."

The Missouri Democrat warned members to "consider the consequences of the decision we are making today. Consider what happens if the surpluses don't materialize."

"Democrats want fair and meaningful tax relief for working American families," said House Democratic Conference Chairman Martin Frost. "But Democrats want tax relief in the context of a real budget with real numbers."

The Texas Democrat accused Republicans of using "winks and wishes instead of the real numbers that would give the American public the real picture of what is really going on with the federal budget."

The measures bring to $1.55 trillion the amount of tax cuts the House has considered so far this year, with more than $200 billion more in tax cuts promised by the president during his campaign remaining.

The proposals by Mr. Bush that the House has yet to consider include: giving a deduction for charitable contributions to those who claim the standard deduction; creating a tax credit and deduction for long-term health care; extending a business credit for research; and increasing the adoption tax credit from $5,000 to $7,500.

Those proposals, with another half-dozen items promised by Mr. Bush during his campaign and as part of his February budget outline, would put the total of tax cuts consider by the House at $1.8 trillion to $1.85 trillion, beyond the $1.6 trillion requested by Mr. Bush.

Some Republican leaders have said they would exceed the $1.6 trillion with the separate bills first passed in the House, but squeeze the entire tax-cut plan back down to size before a final House vote.

Mr. Bush said yesterday "nothing has changed my opinion … about the size of the package."

And Rep. Ray LaHood, Illinois Republican, said a fourth and final tax-cut package might lose Republican votes if it pushed the total past $1.6 trillion.

The married-couples tax-cut bill, dubbed marriage penalty relief because it would help couples that now pay more taxes because of their marital status, passed the House with about the same amount of Democratic backing as it had last year before President Clinton vetoed it.

The measure also would raise the child tax credit from $500 to $600, retroactive to Jan. 1, 2001. Subsequent increases to the child credit would increase the credit to $1,000 by 2006.

The bill would, beginning in 2004, increase the amount of income included in the lowest tax bracket for a married couple. By the time the bracket change takes full effect in 2009, married couples earning more than $52,500 would pay about $1,100 less in taxes.

Couples earning from $43,850 to $52,000 would get a smaller tax cut, and those earning less than $43,850 would not benefit from the bracket change.

The legislation would also increase the standard deduction for married couples from $7,350 to $8,800, effective Jan. 1, 2002, and expand the earned income tax credit.

The House-passed bill differs substantially from the $100 billion marriage-penalty provision advocated by Mr. Bush. That provision would have created a deduction worth up to $800 for two-income couples.

The estate-tax repeal passed by the Ways and Means Committee is similar to one advocated by Mr. Bush and passed by Congress last year.

This bill, however, is more generous than last year's bill and less generous than the president's proposal on the capital gains tax treatment of inherited assets. The bill approved by the Ways and Means Committee would let beneficiaries erase up to $4.3 million in capital gains on inherited assets.

The vote came as Mr. Bush received a letter on the estate tax from a bipartisan group of 18 representatives nine centrists from each party, including Reps. Michael N. Castle, Delaware Republican, and Tim Roemer, Indiana Democrat.

"We agree that the estate tax must be modified to protect small businesses and family farms," the group wrote. "However, we do not believe all estates, particularly the largest should escape all taxation."

Meanwhile in the Senate, Republicans rebuffed a last-minute effort by Democrats to delay consideration of the budget.

A Republican aide said they want to move quickly now that they have reduced to just two the number of Republicans who have not yet decided to back the Bush budget.

Senate Democrats warned that they could use delaying tactics to make debate of the budget a long and painful process if Republicans insist upon bypassing the Senate Budget Committee and moving the debate directly to the Senate floor.

"This is, again, a real test of whether we want real bipartisanship," said Senate Minority Leader Tom Daschle, South Dakota Democrat. "I can't imagine this is the way our Republican colleagues believe this is how we ought to govern."

"We need to move ahead with the people's business," Senate Majority Leader Trent Lott, Mississippi Republican, said after meeting with Mr. Daschle and other top Democrats.

"Democrats want to put off debate on the budget by two to three weeks so we can't get to passing tax relief," said a spokesman for Mr. Lott.


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