Senate tax-writers began to put their imprint on a broad $85 billion tax-cut proposal Thursday, with senators expressing an interest in changing tax treatment on everything from real estate sales to cigarettes.
The Senate Finance Committee planned to begin voting on a tax proposal drafted by the panel's chairman, Sen. William Roth Jr., R-Del. A similar tax-cut package won approval of the House Ways and Means Committee last week following two grueling nights marked by sharp partisan exchanges.But Thursday Roth said, "We combined the best ideas from both sides of the aisle and both ends of Pennsylvania Avenue. I consider this the first in a series of steps that will lead to further tax cuts and bipartisan reform."
Sen. Daniel P. Moynihan of New York, the ranking Democrat on the finance committee, promised to work for bipartisan agreement while expressing misgiving about cutting taxes.
The tenor in the finance committee was expected to be more collegial than in the House. With no dissenting votes, the Senate panel approved major changes in the big Medicare and Medicaid health programs. The health package includes a first-time requirement that higher-income seniors pay a larger share of their doctor bills under Medicare.
But that doesn't mean the task will be easy. Finance committee aides estimated that about 150 amendments to the tax bill had been filed by Wednesday evening despite Roth's pleas to keep changes to a minimum.
The Roth bill calls for a $500-per-child credit and reductions in capital-gains and estate taxes. The bill differs significantly from the House version in several respects. For example, unlike the House bill, Roth's plan would not protect capital gains against inflation.
In an interview published Thursday, President Clinton warned Republicans that he would not sign a tax bill that indexes capital gains for inflation, saying it would cost the government too much in lost revenue.
Clinton told The Wall Street Journal that the Ways and Means bill would violate the budget agreement with Congress. He called GOP provisions "somewhat skewed to upper-income people if there is any kind of capital-gains-tax and estate-tax relief in it."