GOP lawmaker to push tax-relief package through House
WASHINGTON (AP) – A senior Republican lawmaker announced plans on Tuesday to push tax relief legislation through the House by the end of March, setting the stage for a quick test of President Bush’s call for $1.3 trillion in new cuts over the next decade. “We need to act soon,” said Rep. Bill Thomas, R-Calif., the chairman of the tax-writing House Ways and Means Committee. He cited a need to put more money into the hands of consumers and create jobs in a time of slow economic growth.
Thomas laid out a timetable for action on tax cut legislation as Treasury Secretary John Snow and Budget Director Mitchell Daniels parried criticism from congressional Democrats over the record deficits envisioned in the administration’s day-old budget.
“Deficits matter. They are never welcome. But there are times, such as these, when they are unavoidable, particularly when we are compelled to address critical national needs,” said Snow, a former railroad executive sworn into office on Monday.
“It is important to remember, even without the president’s economic growth and jobs package, homeland security and the war on terrorism, we would have deficits now,” he added.
Daniels, testifying before a different committee, said “a balanced budget is a high priority … but it cannot be the only priority of government, at least in the president’s view.” Chief among the other priorities, he said, is the “sacred responsibility for the physical safety of Americans.”
In his remarks, Thomas did not say what elements would be included in the legislation that eventually emerges from his committee and reaches the floor. Bush has proposed accelerating the tax cuts originally passed in 2001, as well as making them permanent.
Many Republicans favor proposals along those lines. The House approved legislation last year to make the 2001 cuts permanent, only to see it die in the Senate, then under Democratic control.
In addition, Bush recommended slashing taxes on corporate dividends at a 10-year cost of $385 billion, a provision that has drawn sharp criticism from Democrats and little detectable enthusiasm from congressional Republicans.
Thomas said the committee he chairs would hold two or three weeks of hearings on Bush’s proposals during March, and approve legislation that would “go to the floor and pass the House of Representatives prior to the beginning of April.”
Even assuming approval on that timetable, final congressional action would come months later, given the need for the Senate to act and the two houses to agree with the administration on a final compromise measure.
Democrats lined up during the day to criticize the president’s economic proposals, accusing him of proposing ill-advised tax cuts as part of a budget that envisions record deficits.
Bush’s budget predicted deficits of $307 billion this year and $304 billion next year, eclipsing the record $290 billion established in 1992 under the first President Bush.
“I look forward to your testimony to see what optimistic spin you can give to this,” Rep. Charles Rangel, D-N.Y., told Snow.
Snow forcefully defended Bush’s proposed tax cuts, including his call to eliminate the income tax on most corporate dividends. “I haven’t met one economist who hasn’t said, “This is good, strong economic policy that promotes growth.”‘
That drew a tart rebuttal from Rep. Sander Levin, D-Mich. “I’ll send you a list” of dissenting economists, he said.
Daniels, too, was buffeted by Democratic criticism.
“I don’t see any effort here to develop a plan that will get us out of a hole that’s being dug,” said Rep. John Spratt, D-S.C. “Where’s the solution?”
Rep. Dennis Moore, D-Kan., noted he had voted for Bush’s tax cuts in 2001, but said deficits threatened to saddle Americans with a “debt tax,” because they increase the cost of borrowing to the federal government. He also said Bush’s tax cuts would hurt many states that are experiencing budget difficulties of their own.
Rep. Jim Nussle, R-Iowa, expressed support for the administration’s priorities. “What matters is that we don’t lose control of spending,” he said. “We must not commit to strategies that win popular support today, only to balloon in costs that will be imposed on our own children.”
Not all Republicans were as supportive.
“This is a tough pill to swallow,” Rep. Gil Gutnecht, R-Minn., told Daniels, citing the deficits, and the plan’s call for a 4 percent growth in overall spending as well as tax cuts. “I’m not sure my average taxpayer out there says, ‘You know, what I really need is another $300 in tax relief.'”