Republicans Strategize on Bush Tax Cuts

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Top congressional Republicans say they plan to make President Bush's proposed tax cuts filibuster-proof in the Senate, but won't do the same for his plan to make permanent the huge tax cut enacted in 2001.

The strategy, described Tuesday by GOP lawmakers and aides, diminishes the prospects that the 2001 tax reductions will be made permanent this year. Those cuts in income tax rates, taxes paid by families with children and other reductions will otherwise expire after 2010.

The decision underlines a concern by Republicans that they might lack the votes for Senate passage of Bush's entire tax cut package. His overall tax plan would cost $1.57 trillion over the coming decade, according to new calculations released by Congress' Joint Committee on Taxation, $100 billion more than the White House had estimated.

Coming at a time of renewed federal deficits, the Bush tax package is opposed by nearly every Democrat and has gotten a lukewarm reception from moderate Republicans who question its size and some of its components. Since it was unveiled in January, administration officials have chiefly emphasized its economic growth portion, which would erase the corporate dividend tax and accelerate personal income tax rate reductions enacted in 2001 that have yet to take effect.

Republicans intend to split up the tax plan and bring the economic growth proposals to the Senate floor under rules that prohibit a filibuster. Any other tax bills would be subject to delaying tactics. Republicans have a 51-48 majority in the Senate, with one independent.

Senate Budget Committee Chairman Don Nickles, R-Okla., said if Republicans tried protecting Bush's entire plan against filibusters, "it might be a little more difficult to get the votes."

Asked why the economic plan would be protected, Nickles said, "That's the thing we're trying to do immediately to try to create jobs."

Bush's economic growth plan would cost $726 billion, the new figures showed, $31 billion higher than previously calculated by the White House. Nickles and others said lawmakers have not decided how much Congress' version of the economic package would cost.

At the House Ways and Means Committee's first hearing Tuesday on Bush's tax plans, Democrats challenged the administration's pursuit of tax cuts as a potentially costly war with Iraq may be about to begin.

"I just don't see how we can talk about a dramatic cut in taxes when we haven't got a clue about the cost of a war," said Rep. Charles Rangel, D-N.Y.

But Treasury Secretary John Snow said both were affordable and argued that the sputtering economy needs the spark the tax cuts would provide.

"Whether or not the president decides to authorize the use of force, it is vital that our country grow," Snow said.

"One reason the deficit is rising, has risen, is the fact that governmental revenues are coming in at a slower pace and the reason they're coming in at a slower pace is that the economy is not growing fast enough," he argued Wednesday on ABC's "Good Morning America."

"The economy can grow so much faster," he said. "The best way to deal with the deficit is to have rising government revenues from growth in the economy."

The GOP decision to protect the economic package from filibuster means they would need only 51 votes in the 100-member Senate to prevail.

The part of Bush's tax cuts not protected from filibuster would need 60 votes to overcome expected Democratic procedural delays. Most of that remaining portion of Bush's proposal would make permanent the huge 10-year tax cut enacted in 2001. Getting 60 votes would be a high hurdle for Senate Republicans.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, whose panel has jurisdiction over tax legislation, said the part of Bush's tax plan not exempted from filibuster "probably is not going to happen."

With House and Senate committees planning to begin writing budgets next week covering the next 10 years, both panels are hoping to craft plans that would be balanced by the end of the period, officials said.

Those goals reflect political pressures brought by Democrats and conservative Republicans, who have been critical of the revival of huge federal deficits after four years of annual surpluses. Democrats have blamed Bush and the $1.35 trillion, 10-year tax cut enacted in 2001, while Republicans have faulted the weak economy and costs of the fight against terrorism.

It was unclear where the needed savings would come from for a balanced budget.

Congressional Democrats said they, too, were working on budgets of their own that they hoped would be balanced or nearly so at the end of the decade.

Sen. Kent Conrad of North Dakota, the Senate Budget Committee's top Democrat, said his goal was for "a more fiscally responsible budget" than Bush. The president's plan, which mapped the next five years, ended with annual deficits near $200 billion.