- The Washington Times - Monday, April 28, 2003

Senate Finance Committee Chairman Charles E. Grassley says it "might not be difficult" to get the Senate to approve a $450 billion tax cut but that it will be hard to get the full $550 billion tax cut President Bush is seeking.
Mr. Grassley, Iowa Republican, who earlier pushed a $350 billion tax-cut compromise through the Senate after failing to get more than 48 votes for the president's higher proposal, said yesterday on "Fox News Sunday" that there "will be some attempt" to go above the $350 billion figure by closing corporate tax loopholes and cutting spending.
"I think [it will be] a little bit above, hopefully, quite a bit above [$350 billion], but I can't tell you what that will be right now," Mr. Grassley said.
"I can say flat out it's going to be difficult to get to $550 [billion]. It might not be difficult to get to $425 billion or $450 billion, but, remember, it's got to be dollar-for-dollar" offsets, he said, speaking of a Senate agreement that tax cuts of more than $350 billion be matched by spending reductions.
But Sen. George V. Voinovich, Ohio Republican, who voted for the budget resolution only after the president's tax cut was reduced to $350 billion, says he believes that $350 billion is the "responsible" amount.
Mr. Voinovich, interviewed on NBC's "Meet the Press," called the president's request for a $550 billion tax cut "fiscally irresponsible, with the deficits we're confronting" and uncertainty about the cost of the war in Iraq.
"We need a shot in the arm of the economy, but we don't need to shoot ourselves in the foot by increasing the deficit," he said.
Mr. Voinovich and Sen. Olympia J. Snowe, Maine Republican, both voted to reduce the Bush tax cut to $350 billion. They initially said they would support efforts to increase the tax cut only if they were accompanied by spending offsets.
Mr. Grassley said he believes Mr. Voinovich and Mrs. Snowe would still be willing to "vote for dollar-for-dollar offsets above $350 billion," provided they are "intellectually honest offsets and not some sort of blue smoke."
However, Mr. Voinovich said he is "locked in" to a $350 billion tax cut. "Not a cent more," he said.
The House has already passed Mr. Bush's plan for a $550 tax reduction. That amount was down from his original request for $726 billion. Now the House and Senate must try to resolve their differences in conference.
The White House yesterday declined to respond to the tax-cut adjustment Mr. Grassley discussed on Fox. Presidential spokeswoman Nicolle Devenish said Mr. Bush still believes his plan is best in terms of creating jobs and stimulating the economy.
Mr. Grassley yesterday said the Bush package would create 1.8 million jobs. "I would support that package if we could get it passed," he said.
Asked whether he believes $425 billion would be the "outer limit, practically speaking" for a 10-year tax cut, Mr. Grassley said, "The answer is yes, based upon where I know closing tax loopholes and some budget expenditures can take us. But who knows?"
Pressed for examples of where further cuts might be made, Mr. Grassley said, "There's a lot of people in the corporate world that are doing a lot of strange and creative things to avoid taxation that were not intended by the tax code. We would intend to close some of those loopholes."
He identified "corporate sheltering" and "going offshore to avoid paying income tax for corporations" as some of the practices that need to be re-examined.
Mr. Grassley said it would be "entirely impossible to get much beyond $50 billion" through that approach. "And I don't have a laundry list of things that would reduce expenditures," he said.
"I think some of those reductions in expenditures would have to come outside of my committee's jurisdiction, because in the areas of Social Security, Medicaid and Medicare, we're not going to be making any cuts."
Mr. Grassley said he recognizes that it won't be easy to find ways to free revenue for a larger tax cut. He called it "very unrealistic" and "intellectually dishonest" to talk about cutting an additional $200 billion in taxes.
But he said he agrees that Mr. Bush's larger tax-cut proposal will help boost the struggling economy. "But we've got a divided government, and we have to operate within the realities of a Senate that is divided 51 to 49. … It takes 50 votes to get anything through the United States Senate."
Still, Mr. Grassley said, Mr. Bush is showing leadership and "is doing the right thing."
In fact, he said, "Maybe President Bush, with his leadership, will be able to convince Voinovich and Snowe and other people, even hopefully some Democrats, that the economy can really be helped by a much more mammoth tax cut.
"With the president convincing them to go beyond $350 billion, we might really be able to do something really big and good," Mr. Grassley said.
But Sen. Bob Graham, Florida Democrat and a presidential candidate in 2004, said he would like to "eliminate the tax cut President Bush is currently proposing."
"We're in a hole largely because of the president's tax cuts of 2001. We don't want to repeat that mistake in 2003. … To start the recovery process, don't dig the hole any deeper," he said.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide