Senate budget debate shows decline in tax cut appeal | NevadaAppeal.com

Senate budget debate shows decline in tax cut appeal

by Associated Press

WASHINGTON – The Senate began a weeklong debate Tuesday on a Republican-written, $1.83 trillion budget for fiscal 2001 that illustrates how some of the political sheen of big tax cuts has faded.

In ways subtle and explicit, the budget debate underlines how Republicans have sought to de-emphasize the size of their tax cuts. That contrasts with the big price tags Republicans proudly tacked to their tax reductions in the early 1980s under President Reagan and, in the 1990s, under former House Speaker Newt Gingrich, R-Ga.

Cutting taxes remains a signature issue for GOP lawmakers, who have spent much of the year trying to do just that.

Sen. Harry Reid, D-Nev., will join other Democratic Senate leaders to fight the proposed Republican budget plan.

“The Republican budget resolution does nothing to protect Social Security and Medicare,” said Reid. “In fact, their risky tax scheme blows the non-Social Security surplus and threatens economic prosperity.”

Reid, assistant minority leader, Democratic Leader Tom Daschle, D-S.Dak., and Frank Lautenberg, D-N.J., will lead the battle during consideration of the budget plan. Reid said they want to provide seniors with prescription drug benefits and protect Social Security and Medicare as well as invest in education.

“Are we going to stand up for America’s seniors who are in dire need of a prescription drug benefit or are we going to pass an unnecessary tax cut – skewed to benefit the richest in America – that will eat up the hard-won surplus?” Reid asked.

He said the GOP plan also slashes education to pay for the tax cut.

Reid said there is room for a targeted tax cut but that Democrats want to address key priorities and prevent spending the surplus on tax cuts for the wealthy.

Their budget envisions at least $150 billion in tax cuts through 2005, while their likely presidential candidate, George W. Bush, wants $483 billion in tax cuts from 2002 through 2006. Congress’ budget, which is not signed by the president, sets overall tax and spending limits but saves specific decisions for later bills.

”That money ought to be looked at very carefully,” said Senate Budget Committee Chairman Pete Domenici, R-N.M., regarding the budget surpluses that would pay for the tax cuts. ”Because it’s the American people who are overpaying their taxes.”

GOP leaders also plan a Senate vote next week on reducing taxes by $248 billion over 10 years for married couples, including millions who face the so-called marriage penalty because they owe higher levies than they would if single.

Even so, much of the GOP’s budget rhetoric emphasizes cutting taxes less than other priorities like protecting Social Security surpluses, debt reduction and financing defense and education. That could reflect polls showing that most voters enjoying today’s healthy economy prefer bolstering Social Security, Medicare and education to a dramatic effort to cut taxes.

For example, Domenici said the spending plan he wrote has a ”modest tax reduction” and contains $13 billion in debt reduction for every $1 in tax cuts. And the Republican report accompanying the budget describing the plan’s ”general principles” lists tax cuts ninth – right behind emergency aid for farmers.

In addition, this year’s GOP budget covers five years instead of the 10 years their plan covered last year, partly to show a smaller total tax-cut figure. Many of them believe President Clinton won last year’s tax battle when he vetoed their 10-year, $792 billion reduction because he focused the debate on the dollar amount, not the types of taxes to be cut.

Democrats said the GOP plan translated to at least $750 billion over the next decade, similar to last year’s vetoed package. Republicans said it would be $450 billion over 10 years.

Meanwhile, Democrats planned a frontal assault on the GOP tax cuts, including amendments that would shrink the tax cut and use the money instead for debt reduction, enforcing antigun laws, and other items. They said the GOP tax cuts were paid for only by assuming unacceptably deep cuts in domestic spending.

”Neither Republicans nor Democrats will tolerate these cuts,” said Sen. Frank Lautenberg, D-N.J.

One Democratic amendment designed to embarrass Republicans would state opposition to rolling back the 18.4-cent per gallon federal tax on gasoline. Senate Majority Leader Trent Lott, R-Miss., proposed the idea, but it has been criticized by some for jeopardizing money for popular highway projects.

Another would force a vote on including Bush’s larger tax cut in the budget. Most GOP lawmakers would rather avoid that because it would probably erode Social Security surpluses both parties want to leave alone.

Yet another would require that a prescription drug benefit be created before taxes are cut. The GOP budget included up to $40 billion over five years for such a drug plan but omitted details.

Clinton’s budget called for $99 billion in tax reductions through 2005, nearly offset by $96 billion in increased taxes on cigarettes and some businesses.