Key GOP Senators Balk at Bush Tax Cut Plan

The first signs of trouble for President Bush’s tax cut measure have surfaced on Capitol Hill, as moderate Republican lawmakers have begun breaking ranks to oppose cutting taxes as deeply as Bush has proposed.

The two most prominent defectors are Sens. James M. Jeffords of Vermont and Lincoln Chafee of Rhode Island, who argued that Bush’s plan to slash taxes by $1.6 trillion over 10 years is too skewed to the wealthy and would leave too little margin for error if projected budget surpluses do not become reality.

In a White House meeting Thursday, Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) cautioned Bush that he is now at least two votes short of being able to pass the tax cut plan in the Senate.

Before the meeting with Domenici and other GOP budget writers, Bush acknowledged that “I’ve got a lot of work to do” in selling the tax cut plan.

The fissures in GOP unity on the issue were hailed by Democrats, who sought Thursday to focus attention on their push for a smaller tax cut geared more to middle- and lower-income taxpayers.

“There is a real possibility we could actually win this fight,” Senate Minority Leader Tom Daschle (D-S.D.) said.

Still, some GOP leaders voiced confidence that moderate Republicans would fall in line and vote for Bush’s tax bill in the end--just as they did in producing unanimous GOP support for the controversial nomination of John Ashcroft as attorney general.

“This is not the beginning of a crack,” Senate Majority Leader Trent Lott (R-Miss.) said. “When the time comes, there will be more than enough votes there.”

At the least, the early GOP defections are a sign that obtaining party unity on taxes is going to prove harder than on the Ashcroft vote. And in a Senate split 50-50 between the parties, losing support from just Jeffords and Chafee could cause trouble for Bush’s tax plan, given that so far only one Democrat, Sen. Zell Miller of Georgia, has announced his support for it.

The initial GOP objections to the Bush tax cut come from a predictable quarter: Republicans representing the Northeast tend to be more moderate and less ardent in their desire to shrink the size of government.

Jeffords signaled his qualms about the Bush plan in an interview this week with a home state newspaper. He said that he opposes the proposal in part because “there’s not enough for low-income people.”

“I don’t think there’s any question he [Bush] is going to have to change the bill,” Jeffords told the Burlington Free Press.

GOP leaders knew of Jeffords’ objections, but they were surprised that he went public with them. Jeffords also looms as particularly important in the debate: He sits on the Senate Finance Committee, the panel that oversees tax cut measures. The panel consists of 10 Republicans and 10 Democrats.

Chafee expressed his concerns about Bush’s plan after meeting this week with White House Chief of Staff Andrew H. Card Jr. “I think $1.6 trillion is too big,” Chafee said. “We’ve got an exceptional opportunity here. . . . The public doesn’t want us to do anything too radical.” Other moderate Republicans have been less blunt in their public comments, but they are pushing for changes in Bush’s plan.

Sen. Olympia J. Snowe (R-Maine) wants the measure to include a “trigger” provision that would allow the full tax cut to take effect only if projected surpluses actually occur. That idea has gained currency among members of both parties, who fear a return to budget deficits if surplus projections prove too optimistic.

Sen. Arlen Specter (R-Pa.) joined Chafee and three moderate Democrats in signing a recent letter to Bush urging him to accept a trigger mechanism.

But White House spokesman Ari Fleischer said that Bush does not support the trigger concept. “He’s not going to budge,” Fleischer said.

Lott and other Republican leaders also oppose the idea, saying that it would be difficult to implement. Other critics argue that the economic impact of the tax cut would be undermined if taxpayers were unsure whether it would take full effect.

Many of the reservations expressed by moderate Republicans are shared by Democratic leaders, who have touted the broad principles--though not the details--of their party’s alternative to the Bush tax cut.

Democrats want only a third of the surplus that is not earmarked for Social Security or Medicare to go to tax cuts. They also would set aside a third for debt reduction and a third for spending.

That would produce tax cuts of $750 billion over 10 years--plus an additional $150 billion in interest-cost savings on the reduced debt.

Democrats did not provide details on how they would target their tax cuts--in part because they have not yet built consensus within the party behind any one plan.

“This debate is not the Democratic tax cut versus the Republican tax cut,” Daschle said. “This debate is about Republican priorities versus Democratic priorities.”

To dramatize the difference in those priorities, House Minority Leader Richard A. Gephardt (D-Mo.) and Daschle were joined at their news conference by a Pennsylvania woman who earns $22,400 a year. They stressed that their goal is to give her a bigger tax break than the Bush plan would provide.

Also appearing at the news conference was Sen. Jon Corzine (D-N.J.), a former Wall Street investment banker who spent more than $60 million of his own money to win election in November. “While the Bush plan would be a great windfall for me, it’s wrong for our country,” Corzine said. “That’s why I strongly oppose it.”

Sen. Hillary Rodham Clinton (D-N.Y.), in a speech on the Senate floor, joined the chorus of Democratic complaints that it is too risky for the White House to base its tax plan on 10-year budget projections.

In scolding the plan, Clinton played off Bush’s push to ease restrictions on churches using federal funds to provide social services.

“I know and respect that President Bush supports faith-based programs, but his tax plan should not be one of them,” she said. “Going forward with a huge tax proposal now is like getting a letter from Ed McMahon and going out to buy a yacht.”

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Times staff writer James Gerstenzang contributed to this story.