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GOP Withdraws Tax Cut, Will Work Towards Debt Reduction

By Eric Pianin

With limited public appetite for their number one priority, congressional Republican leaders Thursday conceded defeat in their quest for a big tax cut this year and shifted to a more modest strategy aimed at keeping spending down and taking credit for reducing the national debt.

Faced with a certain veto of their $792 billion tax cut plan, GOP leaders indicated they have little interest in trying to negotiate a compromise package with President Clinton in which they would trade an increase in spending for Medicare and other domestic programs for a smaller tax cut.

Instead they said they will focus largely on passing routine spending bills and locking in future budget surpluses to protect Social Security and begin paying down the $5.6 trillion accumulated national debt.

This change in strategy reflects a calculation by Republicans that it would be politically risky to engage Clinton in complicated eleventh-hour negotiations, as they have in the past with often disastrous results. Instead, Republicans have concluded they will be better off getting out of town as soon as possible and preparing for next year’s election.

It also reflects their lack of success in convincing the public to support a tax cut many rank as low on their list of priorities. A new Washington Post-ABC News poll shows Americans want Congress to use any budget surplus to increase spending on education and health care programs before they cut taxes or reduce the national debt.

“We don’t feel we need a tax cut to survive,” said Rep. Thomas M. Davis III (Va.), chairman of the National Republican Congressional Committee. “Our challenge to the president is, “If you don’t use the surplus for tax cuts, don’t use it for more spending.’ ”

The White House and congressional Democrats insist there is still time for an agreement this year on a smaller tax package in the range of $250 billion to $300 billion targeted to the middle class.

Clinton told reporters Thursday that “I’m willing to work” with the Republicans to provide a modest tax cut this year that will not undermine efforts to buttress Social Security or reduce the debt.