- The Washington Times - Tuesday, May 15, 2001

Senate Republican leaders switched legislative strategy yesterday on President Bushs $1.35 trillion tax-cut plan, saying their best hope now is to strengthen the watered-down bill when it goes into conference with the House.
At the same time, disappointed conservative tax cutters complained that the first draft of a bipartisan bill being written in the Senate Finance Committee would provide little or no immediate economic stimulus and should be recast to bring the top income-tax rate down further and faster. Some called on Mr. Bush to "draw a line in the sand" to Democratic adversaries.
Even some of the presidents most loyal allies in the tax-cut battle said they were unhappy with the working draft crafted by Sen. Charles E. Grassley of Iowa, the committees Republican chairman, and Sen. Max Baucus of Montana, its top Democrat.
But some said that the committee bill, which could go to the Senate this week, will be much closer to Mr. Bushs across-the-board rate reductions at the end of the legislative process.
"I dont know if were going to get a better bill out of the Finance Committee. I dont know if its worth improving it on the Senate floor. I think we should quickly pass it and then rewrite the bill in the conference," said Sen. Phil Gramm, Texas Republican, a member of the committee.
"At that point, we can make it more to our liking by lowering the marginal tax rates, by implementing the rate reductions quicker and by assuring that we make this a tax cut that helps the economy by reducing the rates and repealing the 'death tax," Mr. Gramm told The Washington Times last night.
"Theres nothing broken in this bill that cant be fixed. I believe the bill can be dramatically improved and will be dramatically improved in conference," he said.
"This bill has changed the Finance Committee from a committee that redistributed the tax burden to a committee that redistributes wealth. The Democrats first fought to make the tax cuts smaller and they sought to give the tax cuts to non-taxpayers," Mr. Gramm said in a sharp attack on his committee colleagues.
Sen. Larry Craig of Idaho, the third-ranking Senate Republican, said that the Democrats had succeeded in nibbling away at the Bush plan. "We dont want bleed this tax bill."
Taking a more combative stance that called for fighting it out in the Senate, instead of trying to lure some swing Democrats to vote for it by modifying it, Mr. Craig said, "My personal belief is that if we can pass it on '50 plus one thats good enough."
But Senate Republican leadership officials confirmed Mr. Gramms rear-guard plan, saying they would offer no amendments in committee and only a few in the Senate and to get it quickly into conference, where Republicans will have a clear majority.
Meanwhile, some of the Republicans conservative base was upset with Mr. Grassleys bill.
"This would be a great tax-cut bill if it were effective in 2001, but this is an extremely backloaded bill. Almost all the rate reduction occurs after 2005," said Stephen Moore, president of the Club for Growth, which supports candidates who back lower taxes.
"Im worried that were about to pass a tax cut that will have a zero impact on the economy before the next congressional and even the next presidential election," he said.
"It concerns me that the White House is not fighting more vigorously to save every element of their tax-cut plan. This bill could be whittled down even further in the Finance Committee and on the Senate floor," he said.
"What Bush needs to do is to draw a line in the sand about what hes not willing to accept," he said.
Mr. Bush proposed a plan that would lower the top 39.6 percent income-tax rate to 33 percent, but the committees draft would drop it to only 36 percent, a level that conservative supply-siders said would not be enough to boost the economy.
Other features of the Senate bill would not take full effect for 10 years. A provision to eliminate the marriage penalty, the higher taxes that a married working couple must pay, would take effect between 2005 and 2010. The estate tax would not be eliminated until 2010.
"Im much more concerned about its backloaded nature than the fact that the rates were not as low as we had hoped for," Mr. Moore said. "The economy needs stimulus now. Its a leap of faith that these tax cuts will take place on schedule."
Similar misgivings were voiced yesterday by other tax-cut advocates.
"If this was the first and last tax cut in a Bush presidency, Id be disappointed. But since this is the first tax cut out of at least 10 in the next eight years, its less problematic," said Grover Norquist, president of American for Tax Reform.
Mr. Norquist, a Bush tax-cut adviser, said he also believes that the president will end up getting much more of what he wants in the conference.
"The House is at a top rate of 33 percent and the Senate committee bill is at 36, and well compromise somewhere between 33 and 36," he said.
Meantime, several tax-cut groups planned to send Mr. Bush a letter today, saying that lowering the top marginal rate to 33 percent and fully repealing the estate and gift tax "will have the most stimulatory effect on the economys performance."
The letter was signed from the National Taxpayers Union, the Club for Growth and the Heritage Foundation and other pro-tax-cut organizations.
* John Godfrey contributed to this report.


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