- The Washington Times - Thursday, May 13, 2004

The House yesterday approved the second of three bills that would make permanent a portion of President Bush’s 2001 tax relief — part of an election-year strategy of forcing Democrats to vote repeatedly on tax-cut bills.

The measure, which passed 344-76 with the support of 219 Republicans and 124 Democrats, would permanently extend the new low 10 percent income-tax bracket created by the 2001 tax package. Before 2001, the lowest bracket was 15 percent.

“This legislation is about one thing — allowing hardworking Americans to keep more of what they earn,” said Rep. Mark Green, Wisconsin Republican. “It’s an enormous help to low- and middle-income tax filers.”

The new 10 percent bracket created in 2001 lowered taxes on the first $6,000 that a single worker earns and the first $12,000 that a couple earns. In 2003, Congress changed those levels to $7,000 for single workers and $14,000 for couples, but they are set to revert to the 2001 levels in 2005 and then expire them completely after 2010.

The bill approved yesterday would prevent this by permanently extending the 10 percent bracket and setting the levels at $7,000 for single workers and $14,000 for couples.

The bill would help 73 million tax filers, including many low-income families, and is estimated to reduce government revenues by $218 billion over 10 years.

“If a member of Congress comes to the floor and votes against this bill, they are voting to increase taxes on 23 million low-income workers,” Rep. Paul D. Ryan, Wisconsin Republican, said before the vote.

But many Democrats said while they support the idea of extending the 10 percent bracket, Republicans are being fiscally irresponsible by spending so much and by not offsetting their numerous tax cuts.

They also said Republicans are playing politics by pushing their tax-relief bills through Congress to score political points.

“Republicans … will go home with their press release under their arm saying ‘I helped you,’” said Rep. Jim McDermott, Washington Democrat.

“What they don’t tell is how it affects long-term debt,” he said. “All we are saying is don’t take credit for extending the tax cuts on the one hand when you are breaking your promise to balance the budget for your children.”

Democrats also argued that any benefit to middle America in the bill would be wiped out by the alternative minimum tax (AMT), which applies to more middle-class Americans each year. The House last week passed a one-year fix for the AMT problem, but Democrats said this needs to be made permanent.

Along with that one-year bill, the House also recently approved a bill that would make permanent the 2001 tax relief for married couples. It is set to take up a third tax-relief extension bill next week to extend permanently the child tax credit.

Democrats yesterday offered a substitute tax bill, which failed 227-190. It would have extended the 10 percent tax bracket through 2010, at which point it would only remain if Congress could balance the budget by 2014.

The Democrats’ bill also would have fixed the AMT problem and offset all this by increasing taxes on wealthier people.

Politics played heavily into yesterday’s debate, with some Democrats saying the country needs a change from Republicans in Congress and the White House ruining the economy with unwise fiscal policies of big spending, borrowing from foreign countries and cutting taxes without offsetting budget cuts or tax increases.

“Since President Bush took office, … they have borrowed $1.1 billion every day. If one were running a private enterprise like that, the stockholders would fire them,” said Rep. John Tanner, Tennessee Democrat.

Republicans shot back that they had to spend money because of the September 11 terrorist attacks, but that Mr. Bush and Republicans have saved a struggling economy with wise fiscal policies — chief among them, tax cuts.

“If it were not for the Bush tax cuts we would have bottomed out,” said Rep. E. Clay Shaw Jr., Florida Republican.

They warned voters that the Democrats’ ultimate answer always is to raise taxes.

“If the Democrats were running the show, we’d be talking tax and spend,” said Rep. Marsha Blackburn, Tennessee Republican, who warned that “liberals would rather spend your money for you.”

The tax issue has already emerged as a flash point in some congressional races. The sponsor of yesterday’s tax-relief bill is Rep. Pete Sessions, Texas Republican, who has been redistricted into a tough re-election race with Rep. Martin Frost, Texas Democrat.

Yesterday, Mr. Sessions’ campaign accused Mr. Frost of flip-flopping and supporting tax relief bills now, when he had opposed such relief in the past. Mr. Frost voted in favor of yesterday’s bill, in favor of the AMT bill last week and in favor of the recently passed tax-relief extension for married couples. But the Sessions team said Mr. Frost voted numerous times against all of these over the past several years.

“Martin Frost is pulling a classic election year flip-flop because he knows his 26-year record of taxing everything and anyone with an income won’t wash with voters,” said Chris Homan, campaign manager for Mr. Sessions.

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