- The Washington Times - Thursday, January 24, 2002

The issue of whether to cancel or delay President Bush's tax cuts has Democrats split four ways. It could block any significant budget action in Congress this year. And, so far, it is bringing joy to Republicans.

Likely as not, the tax issue also will present a challenge to Democratic presidential candidates as they define themselves as liberals or moderates.

Senate Majority Leader Thomas Daschle of South Dakota staked out what aides view as the middle-ground Democratic position on Jan. 4 by declaring that Mr. Bush's $1.6 trillion tax-cut plan has worsened the nation's economic outlook, while refusing to recommend their repeal or delay.

Mr. Daschle's logic led to the conclusion that the tax cuts shouldn't take effect. But, instead, he put the onus on Mr. Bush to submit a new economic plan in view of diminishing budget surpluses.

However, unlike his father, whom Democrats pressured into repudiating his "no new taxes" pledge in 1992, Mr. Bush refused to play into Mr. Daschle's game plan.

Quite the contrary. He falsely accused the majority leader of calling for tax increases and vowed, "Not over my dead body will they raise your taxes."

In response to Mr. Daschle's speech and Mr. Bush's gibes, the 12 Democratic senators who voted for Mr. Bush's cuts last May reaffirmed their position, pointing up the split in Democratic ranks.

Some of the 12, including Democratic Sens. Zell Miller of Georgia and John Breaux of Louisiana, went so far as to join the president in accusing Mr. Daschle of favoring a tax increase, which Mr. Breaux said was "the worst thing you can do" in a recession.

Then, last week, Sen. Edward Kennedy, Massachusetts Democrat, defined the third, most liberal Democratic position by calling for $350 billion of Mr. Bush's cuts to be "postponed" until other "national needs" are met.

Mr. Kennedy's list of "needs" including a prescription drug benefit for seniors that his staff says will cost between $300 billion and $350 billion certainly would require permanent postponement of the tax cuts, i.e. cancellation.

A fourth option probably the most sensible of all was suggested by Rep. Ellen Tauscher, California Democrat, who called for enactment of a "trigger" that would make carrying out the tax cuts contingent on the return of large budget surpluses.

With Congress back in town this week, it's almost inevitable that every prominent Democrat will be asked where he or she stands on the tax cuts.

It could be a defining issue for potential Democratic presidential candidates. Besides Mr. Daschle, the only one who has addressed it at all is Sen. Joe Lieberman of Connecticut, who's said "everything should be on the table," presumably including delay, repeal or a trigger.

Sen. Hillary Rodham Clinton of New York, who says she's not running in 2004, actually was the first important Democratic officeholder to recommend delaying the cuts last year.

House Minority Leader Richard Gephardt, Missouri Democrat, is planning a major economic speech this week in which he'll have to address the issue. His staff says the speech isn't written yet but that Mr. Gephardt is likely to land "in the Daschle camp," disapproving of the Bush cuts but declining to call for their delay or repeal.

The staff of Sen. John Edwards, North Carolina Democrat, said he, too, thinks it's "Bush's responsibility to come up with a plan." Mr. Edwards, however, has as an adviser liberal consultant Bob Shrum, who contends that Democrats can profit politically by championing delay or repeal of the cuts.

Another leading Democratic consultant, who asked not to be named, predicted that by 2004, no Democratic presidential candidate will be able to avoid calling for one of those options because party polls indicate the highest priority for Democratic voters even higher than homeland defense is protecting the Social Security surplus.

The combination of the Bush tax cuts, the recession and terrorism has slashed the projected 10-year Social Security surplus from $3.2 trillion to around $1.8 trillion.

One immediate consequence of Democratic division on taxes may be the inability of the Senate to pass a budget resolution this year, meaning no tax or Medicare legislation can be voted under reconciliation rules requiring only 51 votes. That practically guarantees there won't be any action.

So far, the political fallout from Mr. Daschle's raising the tax issue has been hugely pro-Republican. A Jan. 9 Gallup poll indicated that by 67 percent to 28 percent, voters want Mr. Bush's tax cuts to take effect as planned.

By 43 percent to 37 percent, the poll found, voters said Republicans were better able to handle the nation's economic problems than Democrats. However, by 46 percent to 41 percent they favored increased government spending over new tax cuts.

A Gallup poll released Jan. 16 did show that by 63 percent to 31 percent, voters would not consider the cancellation or delay of tax cuts to be a tax increase. But by 59 percent to 34 percent, they said they wanted Mr. Bush's tax breaks to take effect as planned or be speeded up.

Asked which party would do a better job handling taxes, voters preferred the GOP by 52 percent to 40 percent. In terms of strengthening the economy, they also chose Republicans, 47 percent to 41 percent. Asked who should have more influence over national policy, they favored Mr. Bush over congressional Democrats by 59 percent to 36 percent, and the GOP over Democrats by 47 percent to 44 percent.

Democrats have gotten themselves into a fix over taxes. Maybe they can get out of it by pointing to goals that can't be met because of Mr. Bush's tax cuts, such as prescription drugs and saving Social Security.

Maybe.

Morton Kondracke is a nationally syndicated columnist.

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