- The Washington Times - Wednesday, March 17, 2004

ASSOCIATED PRESS

The House Budget Committee voted yesterday to curb spending increases but not tax cuts, presaging an election-year fight with the Senate over whether to hinder President Bush’s push for more tax reductions.

The Republican-controlled panel, by voice vote, approved a bill requiring lawmakers to find spending cuts to pay for any boosts in benefit programs such as Social Security — but not for tax cuts. The Senate version of the provision would require budget savings for spending increases as well as tax cuts.

The House measure follows the strong wishes of the White House and Congress’ Republican leadership, who want to limit spending but leave their drive for lower taxes unfettered despite record federal deficits.

“The real challenge to the deficit long term is controlling the spending side,” said House Budget Chairman Jim Nussle, Iowa Republican.

Democrats say it is ludicrous for the restrictions to ignore tax reductions, arguing that the $1.7 trillion in 10-year tax cuts Mr. Bush has won as president have been a major reason for soaring budget shortfalls.

“It’s a veiled, cynical attempt of trying to pretend like you’re being fiscally responsible, but without having to make the hard choices,” Rep. Ron Kind, Wisconsin Democrat, said of the Republican plan.

A Democratic effort to impose the restrictions on tax cuts as well was rejected by a party-line 24-18 committee vote.

The panel also was expected to adopt a $2.41 trillion budget for 2005. The fiscal outline envisions lower spending, smaller tax reductions and faster deficit reduction than Mr. Bush has proposed, a testament to Republican worries over political fallout from soaring federal shortfalls.

The budget would hold most domestic programs to levels of last year and give Mr. Bush the boosts he wants for defense and domestic security. It also would allow $138 billion in five-year tax cuts, but would halve the record $477 billion deficit expected this year in four years, a year quicker than Mr. Bush proposed.

The budget panel’s meeting was a continuation from the past week, when it failed to finish work after committee Republicans demanded legislation controlling spending.

Last week, Democrats and four moderate Republicans prevailed as the Republican-led Senate voted to require budget savings to pay for benefit increases as well as tax reductions.

The move to require budget savings was prompted by expectations that the deficit this year will reach an unprecedented half-trillion dollars, just three years after huge surpluses were projected indefinitely. Many Republicans worry that could be a liability with voters come the presidential and congressional elections.

The dispute is crucial because Mr. Bush has proposed $1.3 trillion worth of tax reductions over the next decade, mostly to keep tax cuts enacted in 2001 and 2003 from expiring. The cuts are among his paramount domestic priorities, but it seems unlikely that lawmakers would be able to find enough spending cuts in the budget to pay for them.


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