- The Washington Times - Thursday, May 11, 2006

The Senate yesterday approved $70 billion in tax-cut extensions, sending President Bush one of his top tax priorities and securing a key election-year accomplishment for Republicans fighting to keep control of Congress.

The Senate voted 54-44, mostly along party lines, with three Democrats voting yes and three Republicans voting no. The House approved the legislation Wednesday on a 244-185 vote.

Republican leaders were eager for voters to hear about the package.

“This is a defining day,” said Treasury Secretary John W. Snow, flanked by Senate Republicans, some of whom are in tough re-election fights. “The vote today will show the American people who supports lower taxes and who doesn’t.”

The tax measure extends for two years the lower 15 percent rate on capital gains and dividends income that was scheduled to expire in 2008. It also extends for one year relief for 15 million Americans from the alternative minimum tax (AMT), an income tax for the wealthy that has crept into the pockets of the middle class.

“We’re going to keep taxes low,” said Senate Majority Leader Bill Frist, Tennessee Republican. “These pro-growth tax policies work.”

Debate throughout the day was partisan and laced with dueling economic charts and election-year references. Republicans credited the tax cuts, enacted early in Mr. Bush’s first term, with spurring economic growth, creating jobs and increasing federal revenue. Democrats said cuts have been geared mostly to the rich and have helped plunge the nation into debt.

“This bill is a big gift to the wealthiest of the wealthy and an even bigger burden to the future generations of Americans,” said Senate Minority Leader Harry Reid, Nevada Democrat.

Sen. Charles E. Schumer, New York Democrat, said the Republican Party has “turned its back” on the middle class, and that Democrats will take that message to voters.

Republicans said Democrats were wrong in 2003 when they complained about the tax cuts and they are wrong now, because it is clear those cuts created jobs for the middle class and must be extended.

“I don’t say that. [Federal Reserve] Chairman [Alan] Greenspan says that tax cuts were responsible for turning the economy around and causing this growth,” said Senate Finance Committee Chairman Charles E. Grassley, Iowa Republican. “The truth is, it’s all Americans who will benefit from a strong, robust growing economy.”

He said, “What we’re doing in this bill is making sure you don’t get an automatic tax increase.”

Democrats said the bill failed to extend expiring tax relief for students paying college tuition, teachers buying classroom supplies and businesses conducting research. Those items were omitted from the final package in order to make room for the two signature items: AMT relief, favored by the Senate, and investment income relief, favored by the House.

The tax package had to stay within a $70 billion limit in order to be protected under budget rules from Senate filibuster, and Republicans said leftover items will be part of a second, smaller tax-cut package to emerge soon.

Mr. Schumer said Democrats will use the tax package as further proof that Republicans are out of step with voters. “We are confident that they will decide we need new leadership in Congress and the White House,” he said.

Republicans said they are eager to have that fight.

“They’re for higher taxes and we’ll be happy to have that debate,” said Sen. George Allen, a Virginia Republican running for re-election.

The three Democrats who voted yes were Bill Nelson of Florida, Ben Nelson of Nebraska and Mark Pryor of Arkansas. Republicans Lincoln Chafee of Rhode Island, Olympia J. Snowe of Maine and George V. Voinovich of Ohio voted no.

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