House GOP Skittish on Bush Tax Cut Proposal

Charting a different course than their presumptive presidential nominee, Republican congressional leaders are pushing a far less sweeping tax cut package than the plan being promoted by George W. Bush.

The House Budget Committee on Wednesday approved a blueprint for the next federal budget that earmarks $150 billion in tax cuts over the next five years--most of which would be targeted at specific groups such as married couples, small-business enterprises and elderly working people. Bush, by comparison, is pushing a five-year tax cut of $483 billion that would affect every taxpayer.

Congressional Democrats, eagerly seizing an opportunity to zing the Texas governor, said the committee action demonstrates that Bush’s tax plan is recklessly large--so large that even Republicans in Congress cannot build a balanced budget around it.

“Anybody who’s serious on this committee knows [the Bush proposal] is not possible.” said Rep. Jim McDermott (D-Wash.), who tried unsuccessfully to force a vote on it to put Republicans on the spot. “If you don’t support him, you’ve got to say it right now.”

GOP leaders scoffed at such a critique, saying that they viewed their plan as providing a “strong down payment” on Bush’s tax cut and that their more cautious approach reflects a pragmatic concession recognizing that President Clinton vetoed their much larger tax cut proposal last year.

“I’m not walking away from the Bush tax cut,” said House Budget Committee Chairman John R. Kasich (R-Ohio). “We can’t get all the way there with this president.”

Still, Republicans were skittish enough that they resorted to a parliamentary maneuver to avoid a committee vote on the Bush tax cut.

The divergence between Bush and congressional Republicans on the size of tax cuts offers a glimpse of how their basic political interests can set them on different paths in this election year.

As part of the drive to hold onto their wafer-thin House majority, some House Republicans want to work with Clinton to get even a small tax cut signed into law. Bush, on the other hand, wants to tout his far bigger tax cut plan as a way to clearly distinguish himself from Vice President Al Gore in the presidential contest. And some Bush supporters worry that compromising with Clinton will blur the issue.

Also, while Bush can promise to make the spending cuts needed to cut taxes and keep the budget in balance, House Republicans up for reelection this year are more reluctant to slash popular domestic programs to the degree it would take to make room for a Bush-sized tax cut.

A spokesman for Bush did not directly criticize the House Republican budget but said that it is fresh proof of why a tax cut is needed to constrain spending even by a GOP-controlled Congress.

“This underscores what happens if you leave too much money in Washington,” said Ari Fleischer, a Bush campaign spokesman. “Both parties will spend it.”

On another front of potential disagreement, Bush may propose a cut in the federal gas tax, a response to soaring prices at the pump that would put him squarely at odds with Gore. But it would also put him at odds with many House Republicans who have been backing away from a gas tax cut in part because it would threaten funding for highway construction and other projects so important to constituents--and their own political fortunes.

In a more pointed disagreement last year, Bush sharply criticized a House GOP proposal to reduce tax breaks for the working poor, saying that it amounted to balancing the budget “on the backs of the poor.” House GOP leaders fumed, then dropped the idea.

Both sides acknowledge that they will not always be in lock-step as they pursue their political objectives.

“We’re in contact with our friends on [Capitol] Hill and understand they will, from time to time, act differently than we do,” said Fleischer. “That is their prerogative. The governor is running for president of the whole country.”

Congress’ debate on a new budget opened Wednesday when the House Budget Committee approved a resolution that sets revenue targets and spending ceilings for broad categories of federal programs. The resolution, which sets the total budget at $1.8 trillion, is implemented later in the year with specific spending and tax bills.

The resolution sets in motion what has become an annual showdown with Clinton and both the House and Senate on spending. The measure allots about $597 billion for programs other than entitlements such as Social Security, significantly less than the $625 billion Clinton has requested. His aides have already lambasted the GOP budget, saying that it would force unacceptable cuts in domestic programs.

The resolution does set aside $40 billion for possible legislation to reform Medicare and provide prescription drug coverage for the elderly--a top Clinton priority--but big differences remain between the parties over how to fashion such a benefit. And the resolution’s proposal for $150 billion in tax cuts spread among the fiscal years of 2001 to 2005 is still about $50 billion more than Clinton wants.

The budget’s tax cut would total $10 billion in 2001. Kasich said that would translate into a tax cut for married couples, tax cuts for small businesses included in a bill to increase the minimum wage and health-care-related tax breaks included in legislation to tighten regulation of managed health care plans. It also would allow many Social Security recipients to continue working and not have their benefits reduced, a provision that the House recently passed.

Bush’s tax cut plan would not take effect until 2002 and would cost about $300 billion during its first three years. Kasich said he is hopeful that the budget congressional Republicans want to pass eventually would allow a tax cut closer to Bush’s because of a provision establishing a $60-billion “reserve fund” that may be used for reduction of the federal debt or further tax relief.

During Wednesday’s committee debate, McDermott said his calculations show that, if Bush’s tax cut had been incorporated into the Republican budget, the government would begin running in the red in 2003, rising to a $48-billion deficit in 2007. But Kasich argued that, if Bush were president, Congress would enact deeper spending cuts to keep the budget in balance.