- The Washington Times - Tuesday, May 22, 2001

The Senate, plagued by Democratic amendments, gave up after nearly 15 hours of debate yesterday and postponed a final vote on a $1.35 trillion tax cut.
"Well take a time out here and hopefully the senators will be prepared to return to get their work done tomorrow," Senate Majority Leader Trent Lott, Mississippi Republican, said shortly before midnight, when he shut the chamber down for the evening.
Sen. John Breaux, Louisiana Democrat, said "there is a lot of frustration out there [and under Senate rulesyou can offer as many amendments as you can write," explaning how Democrats had managed to put the brakes on a procedure designed to curtail debate.
The measure is expected to eventually pass with the support of some Democrats including Mr. Breaux, largely because of promises from Republicans that they would continue to have a say in the bills content during final negotiations between the House and Senate.
Time for debate on the measure has expired, and the Senate has yet to adopt any of the amendments offered by Democrats, but they made it clear last night that the list would only grow if the session were not ended for the night.
"Its more a question of when than if," Mr. Breaux said of the bills eventual passage.
A White House aide predicted about 10 Democrats would vote for the bill, while just two Republicans will vote against it.
Mr. Lott has said he would prefer to speed up the cuts in the income-tax rates in the Senates bill. Those rate reductions were delayed to make room for breaks targeted to education, retirement and married couples.
"But we have to involve Senate Republicans and Democrats that have supported the package and confer with the administration… . This is going to be an all-inclusive conference," Mr. Lott said.
House Ways and Means Committee Chairman Bill Thomas, California Republican, said the effort to keep those senators on board had made their bill more of a political document than a "policy product."
For example, he said, the bill assumes the ending of some tax breaks to make room for others.
"You cant fund something for five years and then cut it off cold turkey," Mr. Thomas said. "Were talking about making law here, not some political pie."
A plan last week by conservative Republicans to drop Democrat-supported provisions, with the goal of getting just enough votes to pass the Senate was rebuffed Finance Committee Chairman Charles E. Grassley, Iowa Republican.
He wrote the Senates version of the bill with Sen. Max Baucus, Montana Democrat, and the two have successfully blocked amendments from conservative Republicans and liberal Democrats while shepherding the bill through the Senate.
"Its a solid bill, built upon bipartisanship … and the recognition that nobody in a 50-50 Senate can get everything they want, but maybe a majority can get something they can support," Mr. Grassley wrote in a column in yesterdays editions of The Washington Times.
He and Mr. Baucus told reporters yesterday they had already warned House and Senate leaders not to stray too far from the bill they had written.
"They have got to be cognizant of the fact that there are five to seven Republicans and eight to 10 Democrats that agreed to certain provisions that made this possible and cannot be ignored," Mr. Grassley said.
Liberal Democrats focused most of their fire on provisions they said favored the wealthy, such as a repeal of the estate tax and a reduction in upper-income tax rates. They also said the plan hid its true cost by phasing in some tax breaks and simply assuming that others will expire halfway through the next decade.
"This amounts to a gross abdication of fiscal responsibility," said Sen. Kent Conrad, North Dakota Democrat.
In one of the closest votes of the evening, the Senate rejected on a 50-48 vote an amendment that would have reduced the 15 percent marginal income-tax rate to 14 percent.
Democrats argued that those in the 15 percent bracket, applying to the first $26,000 in taxable income for a single person, would receive no specific benefit under the bill. Republicans countered that all taxpayers, including those in the 15 percent bracket, would benefit from the bills new 10 percent rate on the first $6,000 of taxable income.
The reduction would have been made at the expense of proposed reductions to marginal rates on higher-income earners and fell on a largely party-line vote. Sen. John McCain of Arizona was the sole Republican to vote for the amendment. Mr. Baucus and Sen. Zell Miller of Georgia were the only Democrats to vote against it. Sens. Daniel Inouye, Hawaii Democrat, and Ted Stevens, Alaska Republican, did not vote.
Republicans generally argued that the bill focuses most of its attention on the middle class, and the proportion of the benefits that go to the rich is smaller than the amount they pay.
"The only kind of bigotry that is still acceptable is bigotry against the successful," said Sen. Phil Gramm, Texas Republican. He and other conservatives want to see the top marginal tax rate, which applies to those with taxable income more than $288,350, lowered from 39.6 percent to 33 percent. The Grassley-Baucus bill cuts the top rate to 36 percent.
The Senate also rejected an amendment by Mr. McCain that would have expanded the lowest bracket, taxing more income at 15 percent rather than 28 percent. The measure, which deadlocked on a 49-49 vote, also would have limited the reduction in the top rate to 38.6 percent.
Conservatives also want reductions in the remaining tax brackets to come faster, but Mr. Grassley said that, contrary to his wishes, "the budget blueprint limits how much we can cut each year."
Calling the federal tax system a "beast," Mr. Grassley said, "It wasnt grown overnight, and it cant be tamed in a day."
Mr. Breaux said "I dont see any way it could go below 35 percent and be expected to pass the Senate."
The Louisiana Democrat, who spoke on "Fox News Sunday," has led the group of conservative Democrats that Republicans have relied upon to pass the budget and oppose liberal Democratic amendments.
Another key issue negotiators must resolve is how to dispense a $100 billion economic stimulus package proposed by the congressionally approved budget. Both the House and Senate would create a new tax bracket of 10 percent on the first $6,000 of income, retroactive to the start of this year.
In both versions, the income taxes saved would be realized in 2001 through lowered withholding, worth about $150 per taxpayer through December. To get more money into peoples hands faster, Republicans are now reconsidering the idea of mailing rebate checks.
"I am not a fan of just issuing checks, but in order to get the job done well have to consider that," Mr. Lott said.
If the Senate bill were to be signed by Memorial Day, Americans would see an extra $150 in their pockets by December. By the time the bill takes full effect in 2011, a single taxpayer would save about $350 a year.


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