GOP to Press for Tax Relief

As taxpayers approach their annual day of reckoning, House Republicans plan to act on two bills in the next two weeks that would bolster taxpayer rights and make permanent last year’s major tax cuts.

The votes, on either side of April 15, will enable the GOP to spotlight its stance on taxes in an election year when many voters are worried about a still-fragile economy.

Both bills are favored to win approval in the Republican-led House, though the vote on tax cuts could be close. But while the taxpayer-rights bill attracts broad bipartisan support with such provisions as a 15-day deadline extension for taxpayers who file electronically, the tax cut bill is likely to hit a brick wall in the Democrat-controlled Senate.

Most congressional Democrats contend that the federal budget should not sustain any more significant losses of revenue after last year’s 10-year, $1.35-trillion tax cut championed by President Bush.

In addition to the partisan conflict over taxes, Congress faces debates over energy, trade, election reform and other bills when it returns next week from spring break.

With both chambers narrowly divided and lawmakers increasingly distracted by the congressional elections in November, many substantial bills face a steep climb to win enactment.

Congress has passed two major bills this year that won Bush’s signature. One extended unemployment benefits and widened business tax breaks; the second overhauled federal campaign law for the first time in a generation.

Others could break through. The Senate is close to passing legislation to revamp voting systems nationwide, a response to the 2000 election controversies. The House passed a similar bill late last year, and Bush is pushing for accord.

Trade legislation is also nearing Senate action. But at least two obstacles confront a bill Bush wants to enhance his trade negotiating power. First, Senate Democrats want to expand aid to workers in domestic industries harmed by international trade. And second, two House Republicans--Reps. Dana Rohrabacher of Huntington Beach and Duncan Hunter of Alpine--who supported Bush in a narrow one-vote victory on the trade bill in December are signaling that they would probably vote against his position if the question comes up again.

On energy, the Senate has nearly exhausted itself after weeks of debate. Republicans may push for a vote on a controversial oil-drilling proposal in Alaska, but the effort is expected to fail. It also remains unclear whether the Senate and the House will be able to reconcile key differences on energy production and conservation.

Other issues likely to get congressional scrutiny in coming weeks include pension reform, wartime spending, immigration, domestic security and human cloning.

For Republicans, the coming tax deadline provides a platform to promote their vision of taxpayer relief.

The taxpayer-rights bill, approved by the House Ways and Means Committee on a bipartisan 34-6 vote, is expected to come to the floor by Thursday.

The bill would give taxpayers new safeguards against what critics of the IRS call unfair collection procedures, take steps to protect the privacy of tax records and authorize new funding for low-income tax assistance clinics.

It also would encourage more taxpayers to file returns and pay bills electronically instead of through paper mail, by extending the deadline for “e-filers” to April 30, from next year onward.

Rep. William M. Thomas (R-Bakersfield), chairman of the Ways and Means Committee, said the revision was not expected to cost the government any money and would promote its goal of paperless tax filing. Currently, about 45 million federal income tax returns are filed electronically out of a total of 132 million returns. “You’ve got to get them to try it once to see if they’ll do it again,” Thomas said.

The bill also would ease reporting requirements for some tax-exempt state and local political groups, changing a 2000 law that aimed to shine a light on certain political entities perceived as “stealth” operators. Some proponents of that law are criticizing the new move as a rollback of campaign reform, but Thomas said his proposal would ensure disclosure at the federal, state or local levels.

In the following week, Republican leaders plan to move another bill to make the Bush tax cut permanent, said Terry Holt, spokesman for House Majority Leader Dick Armey (R-Texas).

That cut included across-the-board reductions in income tax rates, tax reductions for married couples, a phaseout of the estate tax and other breaks. But under the law, crafted to meet congressional rules that allowed a simple majority Senate vote for passage, all of the cuts expire Dec. 31, 2010.

Now Republicans aim to kill that sunset clause. “It’s a big issue for Republicans and the president,” Holt said, “and an even bigger issue for the economy overall.”

Democrats protest that extending the cuts will force the government to use funds meant for Social Security and Medicare. “It’s a ‘pay-me-now or pay-me-later’ scenario,” said Rep. Xavier Becerra (D-Los Angeles), a member of the Ways and Means Committee. “We don’t have the money. We’re in deficit. It’s a matter of fiscal prudence.”