GOP Pushes Social Security Tax Bill

Thursday, July 27th 2000, 12:00 am

By: News On 6

WASHINGTON (AP) â€” Legislation to repeal a 1993 tax increase on the Social Security benefits of millions of senior citizens is up next for tax-cutting House Republicans, even as President Clinton admonished the GOP to ``stop passing tax bills you know I'll veto.''

The House was to vote Thursday on the bill, which would reduce taxes on Social Security for people with certain incomes â€” above $34,000 for individuals and above $44,000 for married couples â€” from 85 percent of benefits to the pre-1993 level of 50 percent. The bill's cost was estimated at $100 billion over 10 years.

Rep. Bill Archer, chairman of the House Ways and Means Committee, said the original purpose of the tax increase â€” reducing the federal budget deficit â€” has disappeared now that projections indicate surpluses of $2 trillion over the next decade, not counting Social Security.

``The budget surplus is real, not imagined, and it means that the tax is no longer needed,'' Archer, R-Texas, said Wednesday in a letter to Treasury Secretary Lawrence Summers.

In addition, money would be transferred out of the general budget surplus to make up for any losses in Medicare, where the tax proceeds are now transferred. About 9 million senior citizens now pay the higher tax rate, a number expected to reach 13 million by 2010.

Democrats say the bill's promise to use general tax revenue for Medicare could come up short if the surplus projections are wrong. They planned to offer an alternative that would cut the Social Security tax for all but those beneficiaries with incomes above $100,000 â€” but only if the surplus actually materializes.

The GOP bill, Summers said in his own letter, ``is the latest in a series of costly and poorly targeted tax proposals'' to emerge in Congress, reinforcing Clinton's comments at a news conference Wednesday that this summer's series of tax cuts wasn't the wisest use of the surplus.

``I say to Congress: Stop passing tax bills you know I'll veto,'' Clinton told reporters at the White House. ``Start working with us on a balanced budget that cuts taxes for middle-class families, continues to pay off the national debt and invest in America's future.''

The president repeated his charge that the combined cost of all GOP tax bills over the past two years â€” some of which are duplicates â€” would all but consume the $2 trillion in budget surpluses projected over the next decade, not counting money for Social Security.

``In good conscience, I cannot sign one of these tax breaks after another without any coherent strategy for safeguarding our future and meeting other national priorities,'' Clinton said.

GOP leaders also intended, as early as Thursday, to send the president the marriage penalty bill passed last week that would reduce income taxes by $292 billion over 10 years for millions of married couples, including the 25 million who pay higher rates than they would if single.

Both bills have drawn veto threats, as has a bill to gradually repeal inheritance taxes at a cost of $104 billion over 10 years. House Majority Whip Tom DeLay, R-Texas, said Republicans believe the individual tax cuts are winners politically, especially if voters think the surplus would otherwise be spent on government programs.

If Clinton vetoes the marriage penalty bill, DeLay said an attempt to override the veto with a two-thirds House vote would be ``the first order of business'' when lawmakers return in September from their summer recess. The estate tax repeal bill, DeLay said, will not reach Clinton's desk until September to allow voters a chance during August to ``raise the pressure'' on the president to sign the bill.

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On the Net:

White House: http://www.whitehouse.gov

House Majority Whip: http://majoritywhip.house.gov

Joint Committee on Taxation: http://www.house.gov/jct