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House is ready to vote on tax cut

GOP expects bill to pass; fate in Senate is uncertain

WASHINGTON — Trying to build momentum for President Bush's $1.6 trillion tax relief package, Republicans sought a quick House victory Thursday on a bill that would cut income taxes for every American who pays them.

"These across-the-board tax reductions are not the end, but only the beginning, for tax relief and tax fairness," said Rep. J.C. Watts of Oklahoma, the fourth-ranking House Republican.

While most Democrats were opposed, majority Republicans predicted the 10-year, $958 billion income tax cut would pass and move to the Senate, where its fate is less assured and little action is expected until May.

Bush, who has spent much of his young presidency campaigning for tax cuts, said the projected $5.6 trillion budget surplus over the next decade is more than ample to meet government obligations, pay down public debt and still return money to overburdened taxpayers.

"The message is slowly but surely getting out that we've got enough money coming into the Treasury to meet important obligations, but we've also got enough money to remember who paid the bills in the first place, and those are the working folks, the people who paid the taxes," Bush said Wednesday at the Treasury Department.

The White House is also selling the tax cut as a tonic for the ailing economy. Treasury Secretary Paul O'Neill, who gave House Republicans a pep talk Wednesday at a private caucus, said millions of taxpayers would begin seeing less tax withheld from paychecks a few weeks after the president signs the bill into law.

"As we look at the economic statistics, we feel it is important to get money flowing back to the American people as fast as we can," O'Neill said.

The House bill would gradually shrink and compress the current rates of 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent. In 2006, the new rates would be 10 percent, 15 percent, 25 percent and 33 percent. A temporary 12 percent bracket would be created, retroactive to Jan. 1, 2001, to give all taxpayers an immediate break.

Seeking to augment the administration's contention that lower- and middle-income people benefit most, the Treasury Department released an analysis Thursday showing that the share of income tax relief in Bush's overall plan when fully phased in for taxpayers earning less than $100,000 is greater than their share of federal taxes.

But the same administration analysis also shows that 45 percent of the total tax cuts would go to people earning more than $100,000 a year — including 25 percent for those earning over $200,000.

Most Democrats oppose the tax cut. They contend the Republicans are moving too fast, without a budget blueprint that clearly shows whether enough money is available to cut taxes, meet national spending priorities such as education and defense and guarantee Social Security and Medicare.

"Before we enact a tax cut, the American people deserve to know what the tax cut means for other priorities that are important to them," said Rep. Charles Stenholm, D-Texas.

House Republicans plan to continue moving parts of Bush's overall tax plan in pieces during the coming weeks. Other provisions would address the marriage penalty, double the $500 child tax credit, repeal the estate tax and boost tax breaks for charitable giving.

But the real battle on the entire package is likely to occur in the Senate, where the 50 Republicans have a bare majority over 50 Democrats thanks to Vice President Dick Cheney. Senators of both parties say the overall plan wouldn't pass if the vote were taken now.