House approves Bush tax cut plan

This story appeared in the Antelope Valley Press March 9, 2001.

By DAVID ESPO
Associated Press Writer

WASHINGTON - The Republican-controlled House voted Thursday for an across-the-board tax cut of nearly $1 trillion over the next decade, handing President George W. Bush a major victory only 48 days into his term.

The vote was 230 to 198, largely along party lines, in favor of the reductions at the heart of the president's economic program, and came over the objections of Democrats who said the cut was too big and aimed at upper-income taxpayers.

"One house down, and now the Senate to go," Bush exulted a few moments after the vote as he delivered the news to an audience in North Dakota. "The American people had a victory today. The American family had a victory today. The American entrepreneur had a victory today."

Approval of Bush's plan sent the bill to an uncertain fate in the Senate, where a pivotal bipartisan group of lawmakers has expressed concern about the $958 billion price tag. Bush's overall tax cut proposal runs to $1.6 trillion over the next 10 years.

"Who among us can say that the economy doesn't need a little encouragement?" asked Speaker Dennis Hastert, R-Ill., as the House debated the first priority piece of legislation of the new president. In addition, he said, cutting taxes "will give consumers more money to pay off credit card bills. It will give families more money to pay off high energy bills. It will give parents more money to pay for education expenses."

House Democratic Leader Dick Gephardt of Missouri countered that the plan was so big it would complicate efforts to pay down the national debt and make it more difficult to safeguard programs such as Medicare and Social Security. Underscoring Democratic complaints the GOP was favoring upper-income taxpayers, he added, "If we're going to deliver tax relief, let's deliver it to people who need it."

The legislation would gradually reduce and condense the current five graduated income tax rates of 15%, 28%, 31%, 36% and 39.6%. By 2006, rates would be pegged at 10%, 15%, 25% and 33%.

To provide relief immediately, the measure also would create an interim 12% bracket, retroactive to Jan. 1, 2001, applied to the first $12,000 of taxable income for couples and $6,000 of taxable income for individuals.

Officials said that would mean a maximum tax cut this year of $360 for a couple and $180 for an individual.

Beyond that, the administration says that, when the plan is fully phased in, 6 million families who now pay taxes would no longer be required to.

At the direction of Hastert and other GOP leaders, House Republicans are expected to advance other elements of Bush's larger tax cut program to the floor over the next several weeks, including "marriage penalty" relief, a child tax credit and estate tax relief or repeal.

In a striking show of unity, all 219 Republicans who voted did so in support of Bush's plan. Ten Democrats, mostly Southerners, crossed the aisle to vote with them. One independent also supported the measure.

In opposition were 197 Democrats and one independent.

House Democrats crafted an alternative, knowing in advance it was doomed to defeat but eager to highlight competing budget priorities. It was rejected on a vote of 273 to 155.

It called for $586 billion in tax cuts over 10 years, little more than one-third the size of the GOP measure. It would lower the tax rate from 15% to 12% on the first $20,000 of income for a couple, and provide marriage penalty relief and an additional break for lower-wage earners. Unlike the GOP measure, it includes no reductions in the income tax rates that apply further up the income ladder.

At the same time, it provided more money for national debt reduction than the GOP measure - a priority that consistently rates high in public polling.

Democrats forced a series of time-consuming votes on parliamentary motions early in the day, part of their effort to protest the Republicans' decision to advance the tax cut before completing work on an overall tax and spending plan.

Moderate and conservative Democrats led the argument on that point, saying they are ready to support higher tax cuts than other members of their party, but only if they fit into a plan that also continues to reduce the debt and cover other obligations.

"I know of no prudent businessperson" who would follow the example of the Republicans, said Rep. John Tanner, D-Tenn.

"But we have a surplus this year, and we want to help American taxpayers this year," countered Rep. Tom DeLay, R-Texas, the GOP whip.

Much of the day was consumed with debate that contained echoes of the presidential campaign, in which Bush argued that the surplus belongs to the taxpayers, not the government.

"The government shouldn't spend money it doesn't have or give away money it might need," said Rep. Dennis Kucinich, D-Ohio, at one point.

Rep. Clay Shaw, R-Fla., was on his feet within minutes, arguing, "This is the taxpayers' money. It's not the government's money." He added, "It is our obligation to let American taxpayers keep more of what they earn."

The legislation is unlikely to move quickly in the Senate, which is divided 50-50 along party lines. To avoid subjecting the measure to a filibuster by Democrats, Republicans must first win approval of the type of overall tax and spending plan that House Democrats sought.

Bush faces a challenge beyond that, though. Nine senators, five Democrats and four Republicans, called a news conference on Wednesday to endorse the idea of a "trigger" that would make tax cuts conditional on progress in paying down the debt. The administration has promised to fight that idea.