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DOW JONES BUSINESS NEWS: HOUSE GOP HUNTS FOR VOTES ON TAX BILL; SENATE
PANEL CLEARS VERSION
79% match; Dow Jones Online News - USA ; 21-Jul-1999 03:21:00 am ; 1214 words
By Mark H. Anderson, Staff Reporter
WASHINGTON -(Dow Jones)- The schedule for House debate on a $792 billion tax-cut bill
began to slip Wednesday as Republican leaders struggled to find enough votes for the
package to pass, even as the Senate Finance Committee cleared its version of the bill.
However, the Senate panel rejected, by a decisive bipartisan margin, a proposal to cut
income-tax rates by 10% across the board over a 10-year period.
In the House, GOP leaders have been working all week to get enough members of their party
to support the tax legislation, which was scaled back from $864 billion over 10 years this
week in an effort to get wavering moderate party members behind the bill. Most of the
reduction came from delaying the implementation of tax reductions. The measure still faces a
threatened White House veto.
Late in the day, it appeared the GOP leadership was within striking distance of the votes they
needed.
A spokesman for House Speaker Dennis Hastert (R., Ill.) said late Wednesday that Ways and
Means Committee Chairman Bill Archer (R., Texas) has agreed to modify the tax bill his
committee recently approved by agreeing to insert language that would condition his
proposed gradual 10% across-the-board cut in income tax rates to certain targets for
reducing outstanding federal debt. That provision would seek to mollify the moderates.
The deal Republican leaders are near reaching with moderates would ensure that at least
$375 billion of federal surpluses goes to debt reduction over the next 10 years, lawmakers
involved in the negotiations said.
The proposal would also tie enactment of the tax cuts to a reduction in interest costs on the
federal debt as a sort of enforcement mechanism to make certain the tax reductions don't
take place without debt savings.
To pacify conversatives, Archer also has agreed to add an additional $80 billion over 10
years in marriage penalty relief when the House negotiates a compromise tax bill with the
Senate. Conservative had been disappointed that the chairman's initial package didn't
completely repeal a collection of tax code provisions that discriminate against some married
couples.
Earlier in the day, GOP leaders insisted they were going to move ahead with debate on the bill
despite comments from rank-and-file Republicans that the party appeared ready to put the
measure on hold while they tried to salvage the bill.
House Majority Whip Tom Delay (R., Texas) said leaders remained short of the necessary
votes to pass the bill despite the intense arm-twisting through closed-door meetings with
various groups of lawmakers.
"We'll do it as soon as we've got the votes for it," Delay said. "Stay tuned."
The majority whip, who counts votes for the Republican party, said debate could begin by
later this week, depending on whether they can increase support for the bill.
Around a dozen moderate Republicans have been withholding their support for the bill
because they say it is too expensive over the next 10 years and takes precedence over the
reduction of outstanding federal debt. They are also upset with who will benefit from some of
the tax provisions and want legislation that does more for the middle-class.
As long as the moderates keep their ranks above five, it is difficult for the Republican
leadership to press forward and risk seeing the tax cut package on the House floor. The
Republican party has a five-vote majority over Democrats, who are expected to unanimously
or almost unanimously oppose the Republican bill.
The moderates are under a fair amount of pressure from party leadership to back the bill for
the good of the party. This is in part because changes to the bill to mollify moderates could
erode support from conservatives, who have expressed their own reservations with the
legislation.
House Ways And Means Chairman Bill Archer (R., Texas) said he believes his tax cut bill,
approved last week along party lines in his committee, is a good bill that should draw strong
support from his party.
"I thought we had put together a tax cut that was in the best interest of the country," Archer
said.
Senate Majority Leader Trent Lott (R., Miss.) said the Senate bill is likely to come up on the
floor for debate the middle of next week.
The tax-cut package was approved by the finance panel 13-7 with Democrats John Breaux
of Louisiana and Bob Kerrey of Nebraska joining all 11 panel Republicans in voting in favor of
the bill.
"I think it moves the process forward," said Breaux, explaining his vote in favor of the GOP
package that the White House has threatened to veto. Breaux said he expects Congress and
the White House to ultimately agree on a package including Medicare reform and tax cuts in
the neighborhood of $500 billion over the coming 10 years.
The vote rejecting the 10% income-tax cut was 13-7 against the measure, with Republican
Sens. John Chafee (R., R.I.), Charles Grassley (R., Iowa), Jim Jeffords (R., Vt.) and panel
chairman William Roth (R., Del.), joining all committee Democrats in opposing it.
The across-the-board cut was offered in conjunction with several other measures as an
amendment to the overall bill authored by Roth.
Roth said he was forced to vote against the across-the-board cut because it couldn't
command approval by a majority of his panel. "I am trying to put through legislation that will
actually result in a tax cut for the American people," he said.
Roth worked overnight to assure the smooth passage of his measure by accepting a number
of changes sought both by moderate Republicans and by Democrats willing to work with the
GOP in moving forward toward an ultimate compromise at some later point in the year.
The chairman, for instance, accepted a Breaux proposal that would, for the first time, permit
gold coins and other legal-tender coins to be invested in Individual Retirement Accounts
(IRAs).
Earlier, the committee, by voice vote, approved an amendment that would make a research
and experimentation, or R&E, tax credit permanent. The measure was sponsored by Sen.
Orrin Hatch (R., Utah).
The previous proposal extended the R&E credit for five years, as is the case in the tax bill
recently approved by the House Ways and Means Committee.
The cost of making the credit permanent was covered by scaling back proposed increases in
contribution limits for individual retirement accounts contained in the major tax package.
The committee also approved by voice vote an amendment sponsored by Sen. Kent Conrad
(D., N.D.) that would provide a 15-year recovery period for the depreciation of commercial
lease-hold improvements. At present such assets are depreciated over a period of 39 years.
The $2.7 billion, 10-year cost of the depreciation change was offset by delaying the
implementation of a measure that would permit U.S,. multinationals to allocate interest costs in
a more favorable manner for the purpose of determining foreign tax credits.
In yet another action, the committee approved by a vote of 13 to 7 an amendment offered by
Grassley that would expand the current biomass tax credit to include any solid,
nonhazardous, cellulose waste material derived from forest products, urban sources and
most agricultural by-products.
The $492 million 10-year cost was offset by scaling back a proposed increase in the gift-tax
exclusion contained in the underlying bill. |
