WASHINGTON – Republican tax-writers are studying the possibility of amending the tax code to bring President Bush closer to his goal of cutting taxes by $726 billion over the next decade.
They have had little luck convincing a pivotal group of moderates who are worried about deficits and the cost of war to accept more than $350 billion in tax cuts.
Senate Finance Committee Chairman Charles Grassley, R-Iowa, said Thursday that changing tax laws will save some money, but not enough to cover the $500 to $550 billion tax cut still in the sights of many Republicans.
"You can easily maybe find $20 billion of offsets," Grassley said. "With a little bit of hard work, you might find $50 billion."
Moderate Republican George Voinovich of Ohio, who joined with Democrats to slash the president's tax cut by more than half, said Congress should consider increasing taxes in areas with less impact on the economy to offset the cost of tax cuts with a more stimulative effect.
"Let's sit down and, like I did when I was governor, looking at the tax code and seeing where we can make some adjustments," he said.
Voinovich and Sens. Olympia Snowe of Maine and Lincoln Chafee of Rhode Island voted with Democrats to cut the president's $726 billion tax cut to $350 billion.
The president proposed the $726 billion cut to accelerate already scheduled income tax reductions and to lower taxes on corporate dividends. The House included the entire tax cut in its budget, but the Senate chopped it to $350 billion.
White House officials and Republican leaders have had little success convincing the moderates to change their minds. Republicans control the Senate by a very narrow margin.
The chairmen of the House and Senate tax-writing committees say they can fit most of the president's policy proposals into a $500 billion to $550 billion tax cut, but the administration says it wants the whole package, no compromises.
"We are urging Congress to pass this plan in its original form, true to its intentions," said Treasury Secretary John Snow, promoting the economic plan in Florida.
The deadlock has slowed negotiations over next year's $2.2 trillion budget. Lawmakers want to negotiate a budget outline by an April 15 deadline so they can turn their attention to the spending bills for fiscal year 2004 that begins Oct. 1.