Bush wields tax package for political advantage

November 27, 1991|By Peter Osterlund | Peter Osterlund,Washington Bureau of The Sun

WASHINGTON -- Having opposed a scheme advanced by House Republicans to cut taxes and jump-start the economy, President Bush reversed course yesterday, wholeheartedly embracing a plan his advisers had once tried to kill.

"Put me down as enthusiastically for it," Mr. Bush said.

"Congress has been here all year long," he continued. "If they want to pass this, let them pass it today."

Of course, Congress had no intention of even considering, let alone passing, the House Republican plan yesterday -- a fact of ** which Mr. Bush's advisers and the plan's authors on Capitol Hill were well-aware even as they continued to bang the drum for their package.

Even a few Republicans voiced confusion and consternation at this latest twist of events, saying that the administration did not really want this package to pass because the president plans to lay out his own economy-boosting program in next year's State of the Union address.

"It's not a Republican growth package that's been agreed to by Senate Republicans," said Senate Minority Leader Bob Dole of Kansas. "We haven't met with the president. He hasn't insisted to us we vote on a growth package before we adjourn. The message I get is to the contrary."

But the announcement had its intended effect: It bridged a gap that had opened between the president and conservative Republicans calling for swift action on the economic front, and it put the Democrats on the defensive in the final, politically charged hours of this year's congressional session.

Whether the president's about-face would have any affect on another matter of grave concern to White House officials -- the nose dive in his popularity ratings -- remained to be seen, however.

"You can argue that the best thing to do about the economy right now is to do nothing, and you can have the combined economic faculties of Harvard, Chicago and Stanford [universities] weighing in on your side," one White House aide said. "But as long as people expect us in the government to do something -- anything -- it's fatal to ignore them."

So Mr. Bush announced his support for a package of Individual Retirement Account enhancements, capital gains tax cuts and child tax credits that had no chance of becoming law.

Instead, the plan had become a political tool in a wholly unrelated battle over a bill to replenish the Resolution Trust Corp. fund insuring savings-and-loan deposits.

Yesterday, House Republicans pressed to attach their tax-cut package to the RTC bill -- because of its $80 billion price tag, perhaps the most unpopular bill to come down the congressional pike. The House's Democratic leadership, however, expressed no intention of allowing the minority Republicans a vote on their package.

The Democratic leadership's position contained no small irony: They opposed the House Republican effort largely out of fear that the $20 billion plan could win a majority and launch an expensive, pre-election scramble to slash all manner of taxes -- the very reason Mr. Bush had once opposed the idea.

Republican champions of the bill, however, contended that they would withdraw their support for the RTC bill unless offered a chance to vote on their package.

That threat triggered a predictable response from many Democrats, who said they wouldn't support the RTC bill unless the Republicans would.

With the solvency of the Resolution Trust Corp. -- and the safety of millions of S&L deposits -- at stake, Democratic leaders spent yesterday afternoon in a desperate search for the bare 218-vote majority needed to assure passage in the House.

House Speaker Thomas S. Foley, D-Wash., threw a counter-challenge at Mr. Bush, offering to keep the House in session to consider a tax cut -- if that's what the president really wanted.

"The time has come for an end to the gamesmanship," Mr. Foley said, adding that the Republican proposal "has no shred of sincerity about it."

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