‘Marriage Penalty’ Unites Parties, but for How Long?

Here’s a real test of whether Congress can avoid the do-nothing label and get any laws written this election year: Can it pass a bill that’s a top priority for Republicans, endorsed by President Clinton in his State of the Union address and favored by oodles of Democrats?

At issue is legislation, unveiled by House Republicans on Monday, that would reduce the so-called marriage penalty--a quirk in the tax code that forces millions of couples to pay higher taxes simply because they took a stroll down the aisle.

Proposals to eliminate or reduce the penalty have proliferated both in Congress and on the presidential campaign trail. Republicans are making it the first big bill to hit the House floor this year. The issue got a big boost last week when Clinton embraced it in his annual address. If a greased pig like this can’t slip through Congress, what can?

“There’s no excuse why this shouldn’t be done this year,” said House Ways and Means Chairman Bill Archer (R-Texas).

However, there are plenty of obstacles--mostly political, some substantive, many procedural--that could keep “marriage penalty” rhetoric from becoming real relief. The rocky road facing this bill provides a glimpse of how hard it will be for Congress to get anything enacted this political year.

On tax cuts and other issues, some Republicans are eager to enact popular laws to burnish their record of accomplishment. But some party strategists argue that they should not muddy the differences between the parties on this core GOP issue by cutting a deal with Clinton. Some Democrats, meanwhile, want to embrace such a popular measure--but others fear that may give Republicans bragging rights for a tax cut that could help the GOP keep control of the House in the November elections.

Buffeted by those crosscurrents is the marriage penalty: An estimated 25 million couples--about 42% of all joint filers--pay an average $1,400 more in federal taxes than they would if they had remained single and filed separately. The cause of the discrepancy is not a single feature in the tax code that can be easily eliminated, but has roots in many aspects of the law.

One reason married people pay more is because the tax code is riddled with breaks that provide married couples less than twice the benefits available to single tax payers. For example, the standard deduction for a single taxpayer is $4,400; for married couples it is $7,350.

None of the pending bills or proposals from presidential candidates would completely eliminate the penalty, which would be expensive and complicated to do. But pending proposals would cut taxes on married couples to partly compensate for the penalty.

The marriage penalty bill unveiled Monday by Archer is expected to go to the House floor for a vote as early as next week. The bill would increase the standard deduction for joint filers to double the amount allowed for single filers (for 2000, that would increase the deduction from $7,350 to $8,800). The bill also would expand the number of people who qualify for the 15% tax bracket (the code’s lowest rate) by gradually raising from $43,850 to $52,500 the amount of money a couple can earn before being pushed into the next tax bracket.

Finally, the bill would provide benefits to working poor couples that benefit from the earned-income tax credit. The Archer bill would increase by $2,000 the income cutoff for eligibility for the credit, which now stands at $30,580 for a family with two children.

All told, the Republican plan would cost $180 billion over 10 years--far more than the proposals Clinton has endorsed, which would provide $45 billion in relief for married couples over 10 years. Clinton and other Democrats have also endorsed the ideas of doubling the standard deduction and expanding the earned income credit for couples but would do so more gradually than the Republicans. And Clinton would not change the 15% tax bracket.

Despite their common ground, Democrats and Clinton have not been stampeding to embrace the GOP proposal. They argue that the marriage penalty tax cut should not be considered in isolation from broader budget issues--specifically, how much of the growing budget surplus will go to tax cuts rather than to Clinton’s top priorities of shoring up Social Security and Medicare and reducing the national debt.

“Our willingness to look at any Republican proposal is going to hinge on their willingness to confront some of the larger issues,” said Jake Siewert, a White House spokesman.

House Minority Leader Richard A. Gephardt (D-Mo.) said that he would be wary of voting for Republicans’ marriage penalty bill before the House had settled on a complete budget. And Charles B. Rangel (D-N.Y.) said the fact that Archer did not seek bipartisan support for his bill was a signal that “Republican leaders do not want to work with us.”

Still, some Democrats may support the GOP bill, welcoming the chance to vote for a tax cut and take the issue away from Republicans in this fall’s election. That makes some Republicans less eager to press ahead for action this year.

“There’s probably quite a few Democrats who would like that not to be a focus of the campaign,” said a top Senate GOP leadership aide. “They can say I voted for it, too.”

This aide said that, unlike House Republicans, many Senate Republicans are “lukewarm” about acting on the separate marriage penalty tax bill this year. That is in part because of procedural differences between the House and Senate: While the House’s strict rules can force relatively quick, clean action on a bill, the Senate allows unlimited debate and lots of amendments that could tie up the chamber for weeks.