Senators Prevent Road Block to Tax Cuts

The Senate killed one move Tuesday to make it harder for Congress to approve tax cuts, but another effort was afoot that could imperil President Bush's drive to make his tax cuts permanent.

As the Senate debated a Republican-written $2.36 trillion budget (search) for next year, Democrats were crafting a proposal that would require 60 senators to support tax cuts or boosts in benefits like Medicare not paid for with other budget savings. GOP deficit hawks were writing a similar plan, though it was unclear if they would support each other.

Sixty votes can be hard to get in the 100-member chamber - especially with the GOP controlling it with just 51 seats. Related but weaker constraints are already in effect.

The idea's fate was uncertain in a Senate where every vote is colored by the approach of November's presidential and congressional elections.

But the behind-the-scenes work - and the intense opposition it was attracting from the White House and Senate GOP leaders - illustrated the political potency that record federal deficits (search) have gained as they approach an expected $500 billion for this year.

"We've got deficits and we have to begin to grapple with that," said Sen. Olympia Snowe, R-Maine, a moderate considering supporting the move to make it harder to cut taxes. "That's for everybody, the executive branch and legislative branch."

Sen. Russell Feingold, D-Wis., was pushing a plan that would take effect immediately. It would cover three popular tax cuts that Congress is expected to approve this year - cuts he said he favored enacting - and others with less support, like eliminating the estate tax in 2009, a year early.

Sen. Pete Domenici, R-N.M., was shopping a proposal that would take effect next year - not affecting this year's tax cuts. Both men are respected for deficit-reduction efforts over the years, particularly Domenici, a former longtime budget committee chairman.

Support also came from some conservatives, who say controlling deficits would make it easier to afford future tax cuts. They also liked proposed constraints on spending.

The move underlined the stakes for a president who has made the permanent extension of tax cuts enacted in 2001 and 2003 the focus of his election-year plan for energizing the economy.

In a letter to congressional leaders, White House budget chief Joshua Bolten said extending the tax cuts would mean "American families and workers are not hit with tax increases that slow economic growth and job creation."

The GOP budget would extend tax reductions due to expire next year. They include the recent expansion of the bottom 10 percent income tax bracket to cover more people; the easing of taxes on married couples; and the $1,000 per child tax credit that would drop to $700 without action.

Those are so popular that they are expected to be renewed, whether or not 60 votes are required.

But most tax cuts Bush wants extended will expire later this decade, mostly after 2010. He has proposed extending tax cuts worth $1.1 trillion over the next decade, $1 trillion of which expire after 2009.

By a mostly party-line 51-46 tally, senators rejected a provision by Sen. Kent Conrad, D-N.D., throwing the same 60-vote procedural hurdle in front of any new tax cuts or increases in benefit programs.

The requirement would have been waived if the government stops using cash collected by Social Security's trust funds for other programs. That probably won't happen for years because of today's enormous federal deficits.

By law, the trust fund's huge surpluses are invested in Treasury bills. With few exceptions, the cash has been routinely used for other programs for many years.

Republicans rallied against Conrad's plan, bristling at his juxtaposition of calls by Bush and the GOP for more tax cuts with the shaky long-term solvency of the huge pension program. Conrad said today's mammoth deficits made the restrictions necessary.

The Senate also rejected a Democratic attempt to reduce the budget's $144 billion in five-year tax cuts by $5.4 billion, using the money for veterans' health care and deficit reduction.

Senate Budget Committee Chairman Don Nickles, R-Okla., predicted the chamber would approve a move by pro-defense Republicans to restore a $7 billion cut he proposed from Bush's plan to spend $421 billion for defense next year.

Republicans hope to muscle their budget through the Senate by week's end. They plan to push a similar plan through the House Budget Committee later this week.