Under GOP pressure, Daschle guarantees Senate vote on making estate tax repeal permanent

Tuesday, April 23rd 2002, 12:00 am
By: News On 6

WASHINGTON (AP) _ Under pressure from Republicans, Senate Democrats agreed Tuesday to guarantee a vote by June 28 on permanent repeal of inheritance taxes.

The move announced by Senate Majority Leader Tom Daschle, D-S.D., could clear the way for passage later this week of major energy legislation that Republicans had used for leverage to force an estate tax repeal vote.

``What we have done in this case is agree to a debate on the estate tax issue,'' Daschle said.

The deal also ensured that $16 billion in tax incentives for such things as hybrid vehicles and energy-efficient buildings would be attached to the energy legislation. After dealing with a handful of remaining amendments, the Senate appeared likely to finish the energy bill as early as Thursday after weeks of debate.

``It is time to bring this to a conclusion,'' said Senate Minority Leader Trent Lott, R-Miss.

Eliminating the estate tax, at a 10-year cost of $100 billion, is a priority of President Bush and could emerge as an issue in the fall congressional campaigns.

Sens. Phil Gramm, R-Texas, and Jon Kyl, R-Ariz., object to finishing the energy bill unless a vote on estate tax repeal is guaranteed. The estate tax phaseout was part of the 10-year, $1.35 trillion tax cut passed last year under a Senate budget rule causing all its provisions to expire on Dec. 31, 2010 _ meaning the estate tax would be resurrected in 2011.

``Nine years from now, it is all going to spring back full blown,'' Gramm said Monday.

The vote Tuesday also could determine the fate of $16 billion in energy tax breaks for such things as hybrid vehicles and energy-efficient buildings. Several senators said the bill would be hardly worth passing without them; a competing House version has $33 billion in tax incentives.

``I know there are many people who want to finish this (energy) bill,'' Gramm said. ``But I don't know of anything that is more important than making repeal of the death tax permanent.''

Although lawmakers have years to rectify the situation, Kyl said the uncertainty confuses estate planning and could force people to spend thousands of dollars unnecessarily on insurance and lawyers.

``People have to plan ahead to deal with the death tax,'' Kyl said.

The issue also has political overtones. For Democrats who represent rural states where farmers and ranchers are ardent estate tax opponents, Republicans could contend that a vote against making repeal permanent amounts to support for a huge future tax increase.

Democrats see their own political opportunities. Sen. Dick Durbin, D-Ill., said Republicans' fixation on the estate tax demonstrates that their sympathies ``start at the top with people who are worth megamillions.'' The Senate's focus, he said, should be on such middle-class priorities as a prescription drug benefit for Medicare, health care insurance and an increase in the minimum wage.

``It's the reason there are two different political parties,'' Durbin said. ``There are other issues of equal moral heft that we ought to be considering.''

The Republican-led House last week passed a bill removing the 2010 ``sunset'' provision from the entire tax cut at a cost of $374 billion over the next decade. Daschle said Democrats will not bring that measure to the Senate floor.

The House also has passed its own energy bill, complete with $33 billion in tax breaks that are more generous to oil, electricity and other industries than those proposed in the Senate. That means an energy tax package could still survive negotiations later this year between the House and Senate on a final bill.