WASHINGTON — Citing the drooping economy, Senate Republicans say they want to rush $60 billion in tax cuts to Americans this year on top of the $1.6 trillion, 10-year reduction that President Bush has championed.
GOP senators said Thursday they would try to write a bill this spring that couples an immediate $60 billion cut with a 10-year, $983 billion reduction in income tax rates, the heart of Bush's tax proposal.
Their decision underlined how the weaker economy and the stock markets' recent swoon have created sudden bipartisan momentum for sizable tax cuts for 2001. Bush's tax package, which he says will help spark the economy, contained virtually no reductions until next year.
"If anybody has a better plan to help the American economy, I'd like to see it," said Senate Budget Committee Chairman Pete Domenici, R-N.M., after GOP senators huddled privately on their tax plans.
Senate Minority Leader Tom Daschle, D-S.D., said Friday that he supports $60 billion in immediate tax relief, but not if it is linked to the GOP's income tax rate reduction. Democrats prefer cutting taxes over the next decade by about half what Bush wants and say the Republicans' across-the-board rate cut is too tilted toward the wealthy.
"Why not take what we already agree on, in the name of expeditious response to the economic concerns raised by leaders in both parties," Daschle said.
Daschle has offered a plan to cut the bottom 15 percent income tax rate to 10 percent immediately, which could cost $35 billion this year. Sen. Max Baucus of Montana, senior Democrat on the Senate Finance Committee, has proposed a three-year, $200 billion income tax cut with up to $70 billion in cuts this year.
Domenici said no decisions would be made on the form of this year's tax reductions until the Senate Finance Committee writes the bill in coming weeks.
But Senate Majority Leader Trent Lott, R-Miss., said it would not involve a one-time rebate in which every taxpayer would get the same-size reduction. Sen. Phil Gramm, R-Texas, predicted it would be achieved by having the Internal Revenue Service reduce the amount of money withheld from paychecks.
"This is still about cutting taxes for people who pay taxes," Lott told reporters. "We've got to base it on rate cuts rather than a specific amount."
Domenici said the Senate could work on a second package later in the year containing the remainder of Bush's proposed tax cuts, including relief from the marriage penalty and an easing of the estate tax.
Senate GOP leaders still face the problem of rounding up enough votes to pass their tax cuts, which until now they had said would be done with a single, huge bill. With the Senate divided 50-50 between the parties, only one Democrat has expressed support for the GOP tax plan while two Republican moderates — and perhaps others — have said Bush's package is too expensive and too generous to the rich.
Even so, the Senate GOP's decision Thursday was the most concrete sign to date that congressional Republicans might exceed Bush's $1.6 trillion tax-cutting price tag. Though Bush has said he supports accelerating tax cuts into this year, he has also repeatedly said his figure is the right size.
Participants in Thursday's meeting of GOP senators said White House budget chief Mitchell Daniels attended and did not object to their plans.
In the House, the Ways and Means Committee voted 26-13 Thursday for its $399.2 billion version of Bush's plan to ease taxes on married couples and gradually double the $500-per-child tax credit — including a $100 increase in the credit that would apply in 2001.
But that bill, and a $958 billion income tax cut already pushed through the House, would provide less than $6 billion in tax cuts this year.
"It's a drop in an ever-expanding ocean of problems," said Rep. Sander Levin, D-Mich.
Apparently sensitive to such criticisms — and eager for bigger tax cuts — House GOP leaders said the 2001 reduction would grow.
In an interview, House Majority Whip Tom DeLay, R-Texas, called the House tax bills "place holders," adding: "The only thing that's important is what we put on the president's desk."
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