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House panel rushes tax plan to approval

Republicans on the tax-writing committee clear the way for a floor vote on the cut next week.


© St. Petersburg Times, published March 2, 2001

WASHINGTON -- Moving swiftly on the centerpiece of President Bush's agenda, a House committee on Thursday approved a $958-billion tax cut that could begin boosting paychecks this year.

The bill, approved by the Ways and Means Committee on a party-line vote, would immediately give most Americans a modest tax cut.

A typical single taxpayer would receive a $180 cut this year, while a married couple would receive $360. Larger cuts would be phased in over the next five years.

Republicans said the tax cut was needed quickly to ward off a recession.

"We'll be putting money in the pockets of Americans," said Rep. Bill Thomas, R-Calif., the committee's chairman.

Despite all the talk of bipartisanship recently, Thursday's vote was an exercise of Republican brute strength.

Although Republicans have a slim majority in the House, they have given themselves a solid 24-17 advantage on the powerful tax-writing committee, which allows them to block all Democratic bills. The Republicans didn't compromise on the Bush plan Thursday because they didn't have to.

Democrats complained they were being shut out and said they expect to encounter the same problem next week when the bill goes before the full House.

"There's been a lot of smiles and jokes, but I haven't seen any substantive bipartisanship, groused Rep. Charles Rangel, D-N.Y. He said Democrats did not even see the GOP tax bill until Thursday's meeting.

The bill would reduce rates for nearly everyone who pays income taxes. The five rate brackets would be collapsed into four. The top rate would be reduced from the current 39.6 percent to 33 percent by 2006. The bottom rate would be reduced from 15 percent to 10 percent by 2006.

The biggest benefits would go to the wealthiest taxpayers. Republicans say that's appropriate because they pay the most taxes. The wealthiest 1 percent of Americans pay 36 percent of the income taxes now and will actually pay a slightly larger share under the new plan, said Rep. Rob Portman, R-Ohio.

The bill approved Thursday is the first piece of Bush's tax plan. Other aspects of his proposal -- doubling the child credit, repealing the estate tax and reducing a quirk in the law that makes some married couples pay more than singles -- will be considered separately in the next few months.

The rate-cut bill is likely to be approved by the full House next week. The real showdown will come in the Senate, where Republicans appear to be at least one vote short. The full Senate may not consider the bill until this summer.

The tax cut could boost paychecks this year because the Bush administration is likely to adjust withholding rates quickly after a bill is signed into law.

President Bush on Thursday traveled from Arkansas to Georgia and back to Washington on the second day of a five-state swing to promote the tax cut and his budget plan.

"Republicans and Democrats took a look at what I proposed and realized it's fair," Bush told several hundred cheering supporters at the feet of a dinosaur skeleton in Atlanta's Fernbank Museum of Natural History.

Republicans said their bills are based on the idea that taxpayers created the budget surplus and deserve to get at least some of their money back. Bush came up with the tax plan when he was seeking the Republican nomination a year ago.

Now, Republicans are selling the plan as a tonic for the ailing economy. They say the immediate tax cut could lead to increased spending by consumers.

"This bill goes a long way to providing relief and will, in fact, be a stimulus to the economy," said Rep. Mark Foley, R-West Palm Beach.

Democrats scoffed at that idea Thursday, noting that this year's tax cut would be so small that it would have little effect on the gargantuan economy.

"You're talking about relatively small drops in a huge pool," said Rep. Sander Levin, D-Mich.

Democrats also warned that the Republican bill doesn't leave much money for other tax cuts. They said Congress still must make an adjustment to the Alternative Minimum Tax that will cost at least $290-billion over 10 years.

Thomas said that he would address that in a later bill but that it was important to pass the rate bill now to help the economy.

Republicans say they can approve the Bush plan and stay within his goal of a 10-year cost of $1.6-trillion. Democrats say the actual cost of his plan will be well over $2-trillion, leaving relatively little for other priorities.

Democrats offered their own $800-billion tax cut before the committee Thursday, but it failed to get a single Republican vote.

Three Democrats also opposed it, including Rep. Karen Thurman of Dunnellon. She said she supported her party's plan but felt it was wrong to pass any tax bill before the House approves a budget.

"I want to see how it all fits together," she said.

Florida delegation

Republicans: Bilirakis, Y; Crenshaw, Y; Diaz-Balart, Y; Foley, Y; Goss, Y; Keller, Y; Mica, Y; Miller, Y; Putnam, Y; Ros-Lehtinen, X; Scarborough, Y; Shaw, Y; Stearns, Y; Weldon, Y; Young, Y.

Democrats: Boyd, Y; Brown, Y; Davis, Y; Deutsch, Y; Hastings, Y; Meek, Y; Thurman, N; Wexler, N.

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