GOP Lawmakers Want Tax Cuts Changes


Tuesday, February 6th 2001, 12:00 am
By: News On 6


WASHINGTON (AP) — Congressional Republicans and lobbyists say they like President Bush's proposed tax cut, but they won't back down from plans to add their own priorities, even though Bush is promising to defend his proposal ``mightily.''

``There will be some changes as we go through the process,'' Senate Majority Leader Trent Lott, R-Miss., told reporters Tuesday. ``I don't have a problem with that, and I don't think the president does.''

Beginning a week of selling his tax plan, Bush was visiting a Washington-area small business Tuesday to spotlight his argument that his proposal would spark greater economic growth.

Bush plans to send Congress an outline of his package Thursday, and it is expected to mirror the $1.6 trillion, 10-year tax reduction program he offered during his campaign for the White House. On Monday, Bush defended it against Democrats who would shrink the measure and Republicans who would like to expand or otherwise alter it.

``I want the members of Congress and the American people to hear loud and clear: This is the right-sized plan, it is the right approach, and I'm going to defend it mightily,'' he said at a White House appearance.

Democrats called Bush's plan too expensive, too tilted toward the rich and too risky. They said it would deplete projected federal budget surpluses without leaving adequate funds for a proposed Medicare prescription drug benefit, defense increases and other proposals.

``Let us not repeat the mistakes of the past,'' Senate Minority Leader Tom Daschle, D-S.D., said, citing Reagan-era tax cuts that helped produce record federal deficits. ``If we do, shame on all of us.''

Bush's plan would collapse the five current income-tax rates into four, and lower them. They currently range between 15 percent and 39.6 percent; the new rates would be between 10 percent and 33 percent.

The president also would expand child credits, ease the so-called marriage penalty and gradually repeal estate taxes. And Monday, he said that to ``help get money into the people's pockets quicker,'' he would like his package to be retroactive to Jan. 1.

``It's tax relief for everybody who pays taxes. That's what the times and basic fairness demand,'' Bush said.

But with Congress only beginning its year, even GOP lawmakers said they were not ready to simply rubber-stamp his plan. But their plans were clearly still evolving.

Lott said cutting income-tax rates is ``the top priority,'' and added, ``I think we could probably do more than $1.6 trillion, but we shouldn't start off by loading it up with every good idea that's out there.''

Senate Majority Whip Don Nickles, R-Okla., said there seemed to be a consensus among GOP senators attending a retreat last weekend in Williamsburg, Va., to live within Bush's $1.6 trillion figure and to pass its major components, such as the cut in income-tax rates.

But from there, Nickles said, congressional proposals will compete with Bush's ideas.

``Obviously, there's going to be some compromises,'' he said.

Nickles said he would like to see the top capital-gains tax rate individuals pay on some investment income cut from its current 20 percent to 15 percent, and other reductions for health care costs and other items.

House Majority Leader Dick Armey, R-Texas, said he believes that with the Congressional Budget Office upping its estimate of the federal surplus last week to $5.6 trillion over 10 years, the tax cut should get bigger. He also favors easing the alternative minimum tax and enhancing tax breaks for contributions to pensions and 401(k) savings plans.

``You sit down as you're moving the bill through the process and you review the situation in light of the new numbers,'' Armey said in an interview. ``And it would be our job to persuade the president.''

Further underlining that the tax fight is just beginning, a group of House conservatives led by Rep. Patrick Toomey, R-Pa., plans to unveil a tax cut Wednesday with a 10-year price tag exceeding $2 trillion.

Their plan will include all of Bush's proposals but expand on them, such as accelerating the president's plans for trimming income-tax rates and phasing out the estate tax and the marriage penalty, the higher taxes that fall on many two-earner couples after they marry.

``This is what the whole process is all about,'' Toomey said. ``The president proposes and Congress disposes. We'll see where we go.''

Business and conservative lobbyists also have their own ideas of what the tax cut should look like.

``The fact is this tax cut is not the right size. It's too small given the latest budget surplus and the size of the economy,'' said Stephen Moore, president of the Club for Growth, a group of conservatives that advocate deep tax reductions.

Moore said Bush's current plan ``could actually fail in resuscitating the economy if it is not sped up and made larger.''

The National Association of Manufacturers supports Bush's proposals, but also wants repeal of the corporate alternative minimum tax and a permanent extension of the research and development tax credit, said Dorothy Coleman, the association's vice president for tax policy.

``We do think additional tax relief is needed for the business community this year,'' she said.