House passes $792 bln tax cut
By CURT ANDERSON, AP
WASHINGTON (AP), Sounding themes of smaller government and lower taxes,
Republicans won narrow House passage Thursday of a $792 billion, 10-year tax cut that
would be the largest since President Reagan's in 1981.
Brushing aside a veto threat from President Clinton, the GOP-led House passed
the bill on a 223-208 vote, with four Republicans breaking ranks and six Democrats joining
them in favor. Triumphant Republicans said passage of the centerpiece of their
congressional agenda sends a clear message to voters about GOP priorities.
``It is our mission in this city to ship power, money and influence back to the
people,'' said Budget Committee Chairman John Kasich, R-Ohio. ``The more money we have in
our pockets, the more power we have.''
The legislation goes to the Senate, where a much different GOP tax cut that also
totals $792 billion over 10 years is pending. Action on that bill is expected as
early as next week. Both sides hope to work out a compromise version in August.
House Speaker Dennis Hastert, in an interview after the vote, expressed a willingness to
be flexible on the ultimate size of any tax cut.
``We've got room to work with the president. If we're going to get something
signed, we're going to have to sit down and work something out,'' Hastert said. ``If the
president wants to do anything at all, as part of his legacy, he needs to start getting
serious about sitting down to talk about it.''
The House bill would gradually cut income tax rates 10 percent across the board,
phase down and repeal estate taxes and the alternative minimum tax, reduce capital gains
taxes, ease the ``marriage penalty'' affecting many two-income couples and give numerous
tax breaks for education, health care and businesses large and small.
The bill would use up most of the projected $2.9 trillion budget surplus over
the next 10 years that is not set aside for Social Security. Republicans insisted the
surplus will be large enough to accommodate a refund to taxpayers and guarantee Social
Security and Medicare for the baby boomers, but should not usher in a new era of big
government spending.
``If this money is left in Washington, the politicians will spend every dime of
it on more government programs,'' said Rep. Bill Archer, R-Texas, the Ways and Means
Committee chairman and primary sponsor of the tax cut. ``Let's start today and give it
back.''
The vote came less than 24 hours after Speaker Dennis Hastert, R-Ill., and
fellow GOP leaders successfully quelled a revolt by a dozen Republican moderates. Most of
them came aboard when language was included that the gradual 10 percent income tax cut
will take effect only if interest on the national debt drops each year from 2002 to 2009.
``This is a pretty big victory for our party and for the speaker,'' said Rep.
Ray LaHood, R-Ill., one of the moderates. The four Republicans who voted no are all
moderates: Reps. Greg Ganske of Iowa, Constance Morella of Maryland, Jack Quinn of New
York and Mike Castle of Delaware.
In Lansing, Mich., Clinton pledged to veto the bill if it ever reaches his desk.
``This plan being voted on in Washington will not enable us to pay off our debt. It will
not do anything to add to the life of Social Security and Medicare,'' he said.
House Democrats characterized the tax cut as a political document intended
mainly to energize Republican voters as the two parties prepare to battle for House
control in the 2000 elections. ``It's a Christmas tree. It's decorated with every
cut that you can get for your Republican supporters,'' said Rep. Charles Rangel, D-N.Y.
``Your bill is what we call in Harlem a trip to nowhere.''
Democrats also contended the tax cut primarily benefits the wealthy and would
jeopardize Social Security because it would balloon to $3 trillion in cost in the decade
beginning in 2010. They say it depends on uncertain surplus projections and would
drain away money for critical government programs such as defense, education and
environmental protection.
``This bill is a backloaded, budget-busting, billionaire bonanza,'' said Rep.
Edward Markey, D-Mass. Although about half the total tax benefits would go to
taxpayers with incomes over $300,000, Republicans pointed out that the richest 2 percent
of taxpayers also contribute 40 percent of income taxes that flow into the government.
``You shouldn't pay more than we need,'' said Majority Leader Dick Armey,
R-Texas.
Democrats offered a modest $250 billion tax cut focused on the marriage penalty
and permanent extension of the research and development tax credit sought by high-tech
business, but it was defeated, 258-173.
Clinton has indicated he would sign a tax cut of up to $300 billion if its
benefits are targeted at the middle class and the other priorities are met.
Ultimately, whether any of the surplus is used to cut taxes depends on
negotiations later this year between Clinton and the Republicans. They are to discuss how
to fix Social Security and Medicare and whether to lift restrictive government spending
caps that helped produce the balanced budget but are now seen by many as not sustainable.
In that light, the two $792 billion tax bills moving through Congress amount to
an opening marker by the GOP in this larger debate. Lawmakers from both parties have
introduced potential compromises that would cut taxes by about $500 billion over 10 years,
but neither side is inclined to embrace a deal yet. ``This is our movement
forward,'' Hastert told reporters.
The bill is H.R. 2488.
