Senate GOP Leaders Seek Tax-Cut Deal

Senate Republican leaders, searching for tax-cut support among reluctant GOP moderates, are suggesting a compromise $52 billion over five years, well below the amount being considered in the House.

Majority Leader Trent Lott (R-Miss.) this week approached at least one Republican moderate who has opposed dipping into projected budget surpluses for tax cuts and inquired about support for a “split-the-difference” figure, said a Senate aide who spoke Thursday on condition of anonymity.

Lott spokesman John Czwartacki declined to comment on any conversations between individual senators but did say the majority leader “continues to fight for the biggest tax cut he can possibly get.”

The amount would fall roughly in the middle of the $80 billion or so in cuts House Republicans are developing and the $30 billion contained in a budget resolution previously approved by the Senate. The $30 billion, however, would not use any of the $1.6-trillion surplus forecast over the next 10 years.

Five GOP senators, led by John H. Chafee (R-R.I.) told Lott in a recent letter that they opposed going further than $30 billion for tax cuts. Without them, Lott would have to depend on at least 10 Democrats to reach the 60 votes necessary under Senate rules to cut off floor debate on a potential tax bill.

Interviews with some Senate GOP moderates indicate that tax-cut advocates have hard work ahead of them. Sen. James M. Jeffords (R-Vt.) said he is “willing to look at some” ideas but does not support use of surplus money.

“I’m just very nervous about the economy,” Jeffords said. “I feel very strongly that we shouldn’t count on a surplus as being perpetual.”

Most talk in the House centers on the “Johnson & Johnson” measure, named for sponsoring GOP Reps. Nancy L. Johnson of Connecticut and Sam Johnson of Texas, which would reduce taxes by $78 billion over five years by spending a portion of the projected surplus.

The measure would benefit two-earner married couples who pay more taxes than they would if single; raise income limits on over-65 Social Security recipients; allow full deductibility of health insurance premiums for the self-employed and workers whose companies don’t cover the costs; and extend expiring tax credits for business. There may also be some tax relief for farmers.

President Clinton and most Democrats say the entire surplus should be reserved to preserve Social Security.