- The Washington Times - Thursday, January 17, 2002

Democratic Sen. Edward M. Kennedy yesterday proposed freezing the administration's tax cuts for families earning more than $130,000, a step that Senate Majority Leader Tom Daschle said he opposes.
"We can and should postpone a portion of the future tax cuts that overwhelmingly benefit the wealthiest taxpayers," Mr. Kennedy said in a speech at the National Press Club.
Citing projected budget deficits, the Massachusetts Democrat said $350 billion of scheduled tax relief over 10 years should be spent instead on health care, education and homeland security. Some liberal colleagues such as Sen. Hillary Rodham Clinton, New York Democrat, also favor repealing or delaying the tax cuts.
But Mr. Daschle, South Dakota Democrat, said he doesn't support Mr. Kennedy's plan.
"My plan did not call for either the suspension or delay of the tax cut passed last spring," Mr. Daschle said. "One thing on which we can all agree is that the rapid deterioration in our nation's fiscal situation calls for concerted and immediate bipartisan action."
President Bush, who praised Mr. Kennedy lavishly last week on a trip to promote their education plan, criticized his proposal for being a tax increase in disguise.
"I think raising taxes in the midst of a recession is wrong economic policy," Mr. Bush told reporters. "It would be a huge mistake. It's bad for American workers. It will hurt when it comes to creating jobs. I'm confident that the American people agree with me as well. And if members of the House and the Senate listen to their constituents and listen to those who want to find work, they will understand the wisdom of our ways."
Mr. Kennedy said he still hopes to work with Mr. Bush on various issues, "but if we can't, we'll agree to differ."
His speech set the stage for a resumption of partisan battles on the economy when Congress returns next week.
The White House and congressional Republicans want to end the recession primarily through business tax cuts to create jobs; Democrats mainly favor more aid to the unemployed and increased federal spending.
Several Republicans praised Mr. Kennedy for having the "courage" to call for freezing the Bush tax cuts. They said Mr. Daschle favors the idea, but is afraid to say it publicly.
Some Republicans, noting that Mr. Daschle has blamed the tax cuts for deficits and the recession, accused the majority leader and Mr. Kennedy of playing a "good cop, bad cop" routine on tax relief.
"Kennedy is simply explaining the unstated objective behind Tom Daschle's criticism of the Bush tax cut," said House Majority Whip Tom DeLay, Texas Republican.
Mr. Kennedy listed a litany of liberal priorities for Congress, including "responsible gun control," hate-crimes legislation, an increase of the federal minimum wage from $5.15 to $6.65 per hour, more spending on early childhood education and "guaranteed" health insurance for every American.
He said the money for those programs would come from stopping the income-tax cuts for the three highest income brackets 30 percent, 35 percent and 38.6 percent beginning in 2004. He also would block the full repeal of the estate tax, raising the exempt amount to $4 million.
Mr. Kennedy said allowing the government to dip into Social Security and Medicare trust funds to pay for other government programs "is a violation of fundamental pledges that both parties made in the 2000 campaign."
Even many rank-and-file Democrats gave Mr. Kennedy's proposal little chance of being approved.
"I don't see a lot of support for it," said Sen. Tim Johnson, South Dakota Democrat who voted for the tax cuts. He said he would not meddle with the tax cut this year, in which he is running for re-election.
"There will be five more congresses and three more presidents before this tax cut is over," he said.
Sen. Zell Miller, Georgia Democrat who co-sponsored the tax cuts in the Senate, said Mr. Kennedy was singing "the Class Warfare Ode" leftover from the Clinton administration.
"It's still badly out of tune," Mr. Miller said. "And I'm afraid it's going to stay that way as long as Bob Rubin is the political strategist and James Carville the economist. They're not exactly Rogers and Hammerstein."
Mr. Miller said lawmakers ought to make the tax cuts permanent instead of delaying them. "For Democrats to even hint that we should somehow reverse it during an economic downturn is, in my opinion, about the worst move the party leaders could be making," he said.
Republicans said Mr. Kennedy is taking the lead on the tax-cut issue, but Mr. Daschle quietly approves of blocking the tax relief.
"With renewed calls each week to raise taxes in a slow economy by national Democrats, such as Tom Daschle, Ted Kennedy and Hillary Clinton, it appears some folks in Congress need to brush up on the fundamentals of economics," said House Speaker J. Dennis Hastert, Illinois Republican. "Tax increases in tough economic times only make matters worse and do nothing for working folks and unemployed families struggling to make ends meet."
And several Republicans scoffed at Mr. Kennedy's description of families earning $130,000 as the wealthiest Americans.
"Senator Kennedy may say he would only take away tax relief for the 'rich,' but if he is serious about overturning the tax relief law, his proposal will threaten family farms, grab money out of the hands of new parents, sock married couples with a tax penalty and force workers to give more of their paychecks to the federal government," said Rep. J.C. Watts Jr. of Oklahoma, chairman of the House Republican conference.

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