Here is the news analysis provided by the Washington Post, on the tax bill votes:
Analysis
Bush Retreat Eased Bill's Advance
By Dana Milbank and Jim VandeHei
Washington Post Staff Writers
Friday, May 23, 2003; Page A05
In brokering and celebrating a $350 billion tax-and-spending package he derided less than a month earlier, President Bush and top aides this week made the calculation that it was more important to have a tax cut than to stand on principle over its size and content.
In Ohio last month, Bush said senators "might have some explaining to do" for approving "a little bitty tax relief package" of $350 billion. "The package ought to be at least $550 billion in size over a 10-year period in order to make sure that the economy grows," he said.
But it was a different Bush who appeared in the Capitol yesterday to congratulate lawmakers for reaching agreement on a $350 billion plan with $318 billion of tax cuts over 10 years.
"I look forward to signing the economic recovery bill soon," he said. "This bill I'm going to sign is good for American workers, it is good for American families, it is good for American investors and it's good for American entrepreneurs and small-business owners."
How did Bush go from dismissing a tax cut of this magnitude to hailing it? Bush and his aides, realizing that Republican lawmakers who control both chambers of Congress were in danger of leaving for the Memorial Day recess without a tax agreement, made clear that the president would accept any deal.
"Politically, it was essential," a Senate GOP aide said. "The president and the Republicans couldn't go into Memorial Day with nothing to show on the economy."
Reaching the holiday deadline meant making sacrifices. After Bush railed in speech after speech against the strategy of making tax cuts temporary and phasing them in over time, Vice President Cheney negotiated a tax package that is temporary and phased in. Nor does it eliminate the dividend tax, as Bush proposed. More importantly, by playing such a prominent role in brokering the tax deal, the White House may have diminished its ability to blame Congress for passing insufficient legislation if the economy does not improve.
Along the way, the White House alienated a number of key Republican lawmakers. The White House aggravated GOP senators by pushing them to support the full dividend tax cut and then retreating . And, until two days before the agreement was reached, Bush aides were privately disparaging House Ways and Means Chairman Bill Thomas's tax proposal -- then reversed course to accept it as the basis of the final deal.
"It was a sign that politics was dominating," said economist Kevin A. Hassett of the American Enterprise Institute.
Of course, Bush still has reason to claim victory. The $350 billion package may wind up being much bigger than that if the tax cuts are extended when they expire in 2007, which conservatives expect. "This was a very shrewd package, because it's bigger than it looks," said Steve Moore of the anti-tax Club for Growth.
Bush, with Cheney in attendance, delivered an unequivocal message to GOP congressional leaders Monday on the Truman Balcony at the White House: finish the tax bill this week -- period. He left most of the details up to Republican tax writers but only after making it abundantly clear he would not tolerate tax increases to pay for tax cuts. "It was a monologue," said one Republican briefed on the meeting.
Still Bush got a firsthand look at the internal tensions complicating his mission. At the meeting, Speaker J. Dennis Hastert (R-Ill.) ripped into Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) for agreeing weeks earlier to cap that tax cut at $350 billion.
House conservatives loathed the idea of a $350 billion tax cut, insisting it was so small it would have no effect on the economy. Before the meeting with Bush, Majority Leader Tom DeLay (R-Tex.) and others were advocating a more confrontational approach that involved circumventing the normal legislative process as a way to pressure moderate Republicans to back Bush. The president nixed the idea.
"The president, with his determination to get this done and move forward, had a very helpful impact on letting members know how important this was" to him, House Majority Whip Roy Blunt (R-Mo.) said.
While leaving most of the details to Congress, Bush dictated the tempo. When it looked as if the House and Senate were at an impasse over how to reduce the dividends tax, Bush on Tuesday undercut Senate Republicans -- and his own plan -- by embracing the House-backed plan to trim taxes on capital gains and dividends. In doing so, Bush made it impossible for Republicans to reach his original goal of ending the "double taxation of dividends."
But it prodded Ways and Means Chairman Thomas (R-Calif.), who frequently irritated his GOP colleagues, to move quickly on cramming the policy ideas backed by most Republicans into the $350 billion box. The biggest impediment to a deal was the growing tension between House and Senate Republicans. Senate Republicans felt that Thomas was arrogant and ignorant of the difficulties Senate Majority Leader Bill Frist (R-Tenn.) faced in winning passage. House Republicans saw Senate Republicans as afraid to fight for more of Bush's priorities.
Thomas stormed out of at least one meeting, and Grassley left several stung by Thomas's ways. So Bush turned to an old congressional hand -- Cheney -- to muscle through the deadlock.
Cheney set up shop on Capitol Hill, armed with his policy advisers and the White House legislative affairs team. Cheney, who spent hours on the Senate floor hobnobbing before last week's vote on the Senate version of the tax cut, went to Capitol Hill on Tuesday, Wednesday and Thursday.
"He knows what needs to be done and how to do it," Blunt said. When Thomas refused to shrink the tax cut enough, Cheney called him in and convinced him to lop off a substantial amount. He then walked over to the Senate side to assure Sen. George V. Voinovich (R-Ohio) that Thomas would meet his demand of no tax cut bigger than $350 billion. Soon after, a deal appeared at hand. Yet Cheney's work was not finished.
Before shaking hands on the deal, Grassley demanded a letter from Bush vowing more Medicare funds for rural hospitals. Bush, who supports the policy, gladly agreed, only to learn that Thomas was furious. In came Cheney. Cheney spent much of yesterday trying to appease Thomas and put out fires. By day's end, it appeared he had.
Cheney canceled a trip to Louisiana scheduled for today, in case he is needed to break a tie in the Senate on the tax compromise.
washingtonpost.com
NEWS ANALYSIS
A Tax Cut Without End
By DAVID E. ROSENBAUM
ASHINGTON, Friday, May 23 — True, the price tag on the tax bill the House approved this morning is officially only $320 billion over 10 years, barely two-fifths of the $726 billion President Bush proposed in February.
True too, it is even smaller than the $350 billion measure initially passed by the Senate that Mr. Bush ridiculed as "little bitty."
But the $320 billion figure, which is expected to clear the Senate today, is artificial.
No one expects that tax breaks for married couples and a bigger tax credit for children, popular features of the bill, will be allowed to expire after next year. This is what lawmakers call a sunset. It was put into the measure to hold down the 10-year cost.
Nor, barring a political upheaval that puts Democrats in the White House and in control of Congress, is it likely that the lower tax rates on dividends and capital gains will be allowed to expire after 2008, another sunset in the bill.
If these elements of the tax cut are calculated on a 10-year basis, the cost in lost revenue stands to be over $800 billion, more than what the president proposed, according to the first analysis by the Center on Budget and Policy Priority, a liberal research institute.
More important, the tax reduction this year and next year under the Congressional agreement is significantly larger than what the president originally proposed.
The Congressional tax staff estimated that the agreement would lead to a tax cut of $61 billion in the 2003 fiscal year, which ends on Sept. 30, and $149 billion in 2004.
The Congressional Budget Office reported that the president's plan would have lowered taxes by $35 billion in 2003 and $117 billion in 2004.
If, as the president says, the main purpose of the tax cut is to get the economy moving, the measure before Congress may provide more stimulus than Mr. Bush's proposal.
So for a president who seems to favor the largest possible tax cut in every circumstance — whether the economy is strong or weak, whether the budget is running a surplus or a deficit — this legislation was a substantial accomplishment.
Before this week's agreement, all the stars seemed aligned against another large tax cut.
The budget deficit, long the bugaboo of Republicans, could reach $400 billion this year, by far, the largest in history in dollar terms and growing with each new estimate.
The public is not clamoring for lower taxes. Just Thursday, The Wall Street Journal/NBC News poll showed that only 29 percent of the public believes "tax cuts are the best way to increase economic growth and create jobs," while 64 percent said there were "better ways."
A survey this month by Deloitte & Touche, the accounting firm, found that few business executives thought a reduction in the tax on stock dividends, the centerpiece of the president's plan, would particularly help their businesses or the economy.
In the closely split Congress, Mr. Bush had almost no Democratic support and had to deal constantly with qualms of moderate Republicans.
So how did the president pull it off? How in the face of all these obstacles was he able to win Congressional approval of one of the largest tax cuts in history — on top of the $1.3 trillion, 10-year cut adopted just two years ago?
Part of the answer, of course, is Mr. Bush's popularity, rooted in his stand against terrorism and success in the war in Iraq. At every turn, the White House and allies in Congress insisted to Republican holdouts that challenging the president on tax cuts amounted to disloyalty to a wartime president.
But even more, the president succeeded because of a set of tactics that involved remaining flexible in his goals, taking advantage of division among Democrats, campaigning vigorously in the states of crucial senators and knocking the heads of Congressional leaders who often seemed more interested in pride of authorship than in enactment of legislation.
Then on Wednesday afternoon and again Thursday afternoon, Mr. Bush dispatched Vice President Dick Cheney to Capitol Hill to broker deals. On Wednesday, Mr. Cheney won the final votes needed for passage in the Senate. On Thursday, when a snag developed in the House, he brought recalcitrant Republican representatives aboard.
Come the election campaign next year, the president can credit his tax cuts if the economy has improved. If the economy is still flagging, he can blame Democrats for opposing his initial proposal.
The tax bill, said Senator Robert F. Bennett, Republican of Utah, was the latest example of Mr. Bush's talent as a political strategist. Mr. Bennett, chairman of the Congressional Joint Economic Committee, continued:
"The president looks at the economy and looks at the electorate and grasps that the electorate wants to see someone doing something. They don't care about the details. So here is Bush with the political smarts to understand that the best medicine is to be seen as a leader making bold strokes, moving out on an issue where others are temporizing."
In that vein, Mr. Bush remained focused on getting a bill passed, any bill, without fretting over the specifics. At first, he demanded a bill no smaller than $726 billion over 10 years. When that proved impossible, he lowered his sights to $550 billion, then to $350 billion and finally on Wednesday to the $320 billion that was agreed to.
As recently as Monday, when he called Congressional leaders to the White House, he was insisting that all taxes on dividends be eliminated, even if only briefly. When that proved not to fly, he quickly relented and accepted a measure that would reduce the tax rate on dividends and capital gains to 15 percent.
"By the force of his personality," Mr. Bennett said, "he stepped into the squabble between the House and the Senate and brought everyone into the room and said, `You're going to get this done before Memorial Day.' Clinton would have stood at a board with a Magic Marker and worked through the details. Bush was more interested in getting a bill than he was in what was in the bill."
Bill Clinton might also have framed the tax cut as a choice from two things. You can cut taxes, or you get prescription drug coverage under Medicare. You can cut taxes, or you can save Social Security. At least that is the way he succeeded in blocking Republican tax cuts during his presidency.
This year, Mr. Bush was helped by the fact that Democrats abandoned that approach and offered tax cuts of their own — smaller than Mr. Bush's, aimed at the middle class and not the wealthy, but tax cuts nonetheless. Democrats were never able to make the case that their way was the better way.
For sure, this is not the last Bush tax cut. Under the legislation, popular tax relief like the $1,000 tax credit for each child and tax bonus for married couples are to expire at the end of 2004. Congress will not want to let them lapse in an election year. So be prepared for another tax bill next year.
nytimes.com
The first analysis, in the Post, is balanced, and looks at the thing from various points of view. The second analysis, by the Times, is skewed, taking its main points from a liberal think tank, over- emphasizing the advantages to the president of having sunsets during an election year; over- emphasizes the scruples of moderate Republicans when most of the trouble on the House side was caused by conservatives wanting deeper cuts; includes extraneous material calculated to be argumentative against any cut; and using a derisive and inaccurate phrase about conservative fiscal policy. Most conservatives have not worried much about deficits since the '80s, and it is silly to call it a "bugaboo". The contrast between the pieces is pretty obvious, I just draw your attention to some main points...... |
