- The Washington Times - Thursday, May 3, 2001

The White House and congressional Republican leaders yesterday put the final touches on a budget plan that would allow discretionary spending to grow by about 5 percent next year, increase farm aid by an additional $80 billion through 2011 and provide an 11-year, $1.35 trillion tax cut.
"In the agreement is the largest tax cut in a generation and reasonable levels of spending," President Bush told reporters as he met at the White House with Republican leaders and a handful of congressional Democrats who are supporting the budget plan.
"Its a good budget for the working people of America, and Im proud to congratulate you all for a job really well done," Mr. Bush told the assembled lawmakers.
The plan is not binding but provides a strong indication of Congress legislative intentions for the year. The plan comes to a formal vote today in the House and Senate, where it is expected to pass with the backing of most Republicans and some Democrats.
"We feel very good about the budget agreement that has been worked out. We believe itll pass with a substantial bipartisan vote in the Senate," Senate Majority Leader Trent Lott, Mississippi Republican, told reporters.
Mr. Bush congratulated congressional Republicans and praised the work of some Democrats, including Sens. John B. Breaux of Louisiana and Zell Miller of Georgia, as well as Rep. Gary A. Condit of California.
Those Democrats, Mr. Bush said, "realized that what were talking about is not partisan politics, but good budget politics, good budget policy, that always recognized that were here to serve the people."
While the plan includes substantially more spending and less tax relief than the president wanted, he and his supporters claimed victory.
Who would have thought that the president would have, "on the 102nd day of his administration, gotten 84 percent of his tax cut in a thoroughly evenly divided Congress," asked Trent Duffy, spokesman for the Republican National Committee.
Mr. Bush had initially proposed a 10-year, $1.65 trillion tax cut. The budget would provide a 10-year, $1.25 trillion tax cut, with a $100 billion "economic stimulus" plan for fiscal 2001 and 2002.
Democrats said that the budget plan meant that Mr. Bush had seen his 10-year tax-cut proposal reduced by $400 billion.
The president was "dragged kicking and screaming to number and now has claimed victory," Senate Minority Leader Tom Daschle, South Dakota Democrat, said.
"Well take more victories like that," he added.
Mr. Daschle, along with other liberal Democrats, and even some conservatives from both parties, however, plan to oppose the measure.
Rep. Tom Tancredo, Colorado Republican, said the 5 percent spending growth agreed to in the plan "will be swept aside this fall in favor of more spending and bigger government."
He said he is particularly troubled because limiting the tax cut to $1.35 trillion does not provide enough room to repeal the estate and gift tax and the marriage penalty.
Yet White House spokesman Ari Fleischer disputed that argument, saying there was no need for major restructuring of the tax-cut plan.
"There are all kinds of ways to look at phase-ins and the periods of time at which things become effective to implement the same policies over a slower period of time, which means the tax cut can be accomplished for less money over a longer period of time," Mr. Fleischer said.
Mr. Tancredo said he sympathized with the presidents bargaining dilemma.
"I know the president has his problems. He has got squishy Republicans here and in the Senate," Mr. Tancredo said. However, he still could not back the budget plan.
Also likely to vote against the budget is Rep. Charles W. Stenholm of Texas, one of the conservative Democrats the White House hoped would back its plan.
"If they were going to cap tax cuts at $1.25 trillion [over 10 years] for the rest of the year, I could have been persuaded, but all I hear from the [Republican] leadership is that this is just the beginning," Mr. Stenholm said.
The budget resolution would provide certain parliamentary protections to altering the 11-year, $1.35 trillion tax cut. That plan is likely to include across-the-board rate reductions, tax cuts targeted to married couples, and an easing if not outright repeal of the estate and gift tax.
But some Republicans plan to push further tax reductions later this year, in the hopes that they will be too politically popular to oppose.
Those cuts could include business tax breaks attached to a minimum-wage bill, or $50 billion in retirement-savings incentives similar to that passed yesterday in the House.
Given that strategy, Mr. Stenholm said, "Id just as soon let Republicans take full credit for this budget."
The plan would provide $667 billion in discretionary spending in fiscal 2002. About $325 billion would go to defense, a relatively modest 4.5 percent increase over fiscal 2001, but the negotiators said they assume the president will make a supplemental request upon completion of a "review" of the nations defense needs.
To make room for that defense request and other unforeseen needs, the plan would allow the House and Senate Budget committees chairmen to allocate any non-Social Security, non-Medicare budget surpluses toward defense or other "appropriate legislation."
That reserve fund adds up to about $440 billion over 10 years, according to House Budget Committee Chairman Jim Nussle, Iowa Republican.
After fiscal 2002, the plan assumes discretionary spending will grow by about 2.5 percent each year, or about the rate of inflation.
If Congress sticks to the tax and spending plan, then the federal government will pay off about $2 trillion in federal debt over the next decade, leaving about $1 trillion in publicly held debt by 2011.
* Joseph Curl contributed to this story.


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