The Tech - Online EditionMIT's oldest and largest
newspaper & the first
newspaper published
on the web
Boston Weather: 86.0°F | Mostly Cloudy

House, Senate Heading Toward Showdowns Over Tax Proposals

By Helen Dewar and Juliet Eilperin

The House and Senate Thursday night advanced toward separate showdowns over President Bush’s proposal to cut taxes by $726 billion over 10 years, with the White House facing a particularly serious bipartisan challenge in the Senate.

The House, where Republicans hold 24 more seats than Democrats, appeared on track for late-night approval of a budget bill that would accommodate the president’s tax-cut plan, the heart of his domestic agenda. Prospects were much less certain in the narrowly divided Senate, where Bush’s tax proposal has been on thin ice since its introduction earlier this year.

His plan will face its toughest test in a Senate vote expected Friday, as moderates of both parties -- with support from Democratic leaders -- are pushing to shave the tax-cut package to $350 billion. Senators predicted a close vote, with the outcome hinging on decisions by one Republican (Lincoln Chafee of Rhode Island) and several Democrats who oppose any tax cuts, especially in wartime.

Chafee has indicated he may support the proposal, but one or more Democrats were resisting Thursday night. Party colleagues had urged the wavering Democrats to support the $350 billion proposal as the only viable alternative to Bush’s much larger tax-cut plan.

Anyone who votes against the moderates’ proposal is “voting for a $726 billion tax cut,” Sen. John Breaux, D-La., said as he introduced the measure on the Senate floor. If all the undecided votes break their way, the moderates can win, Breaux told reporters. Also spearheading the effort to halve Bush’s tax cut were Sens. Olympia Snowe, R-Maine, George Voinovich, R-Ohio, and Max Baucus, D-Mont.

The House and Senate budget resolutions will set overall limits on revenues and expenditures, leaving final tax and spending decisions to legislation enacted later in the year. But an early vote to slash the size of the tax cut could slow momentum for Bush’s entire domestic agenda.

In the House yesterday, Republicans and Democrats debated a GOP tax-and-spending plan that backers claimed would balance the federal budget over nine years -- an assertion Democrats hotly rejected.

Republican leaders said their plan -- which would retain all of Bush’s $726 billion tax cut while imposing spending cuts in environmental, educational, agricultural and poverty programs -- would give lawmakers a realistic road map for years to come. Lawmakers expected to vote on the plan late last night or early this morning.

But Democrats said the GOP plan would drive the federal deficit even higher, by draining revenues and ignoring costs of the war with Iraq. They said it was reckless to cut taxes deeply when the economy was struggling and the military budget growing.