House passes $189 billion in tax cuts THE TAX-CUT VOTE

April 06, 1995|By Karen Hosler | Karen Hosler,Washington Bureau of The Sun

WASHINGTON -- With support from a bipartisan majority, the House approved a $189 billion package of tax cuts for families and businesses last night, fulfilling the final pledge of the Republicans' "Contract with America."

By a vote of 246-188, the House sent the tax-cut measure to the Senate, where it is likely to be scaled back considerably and folded into a budget package to be voted on in the fall.

House Speaker Newt Gingrich, greeted by boisterous applause from his GOP troops, took the floor late last night to thank members of both parties for their hard work and long hours as Republicans rushed to meet the 100-day deadline promised by their contract.

The speaker also made a pitch for the last, and surprisingly controversial, contract item -- dubbed the "American Dream Restoration Act" -- which reversed some of the tax increases approved by the Democrats two years ago at the request of President Clinton.

"I urge every member to ask yourself," Mr. Gingrich said, "in your constituents' lives, won't a little less money for government and a little more money for families be a good thing?"

But many Democrats protested that the tax package directs its benefits to the rich and would be financed either at the expense of government programs for the poor or by further increasing the budget deficit.

"It's reckless," said Rep. Sam M. Gibbons, a Florida Democrat. "It's bad policy for the American economy; it's bad policy for the American people."

Rep. Constance A. Morella of Montgomery County was the only Maryland Republican voting against the measure.

Three other Republicans from the state supported it; all four Maryland Democrats opposed it.

Of 230 Republicans in the House, 219 supported the bill; 27 Democrats joined them in voting for it.

The 176 Democrats who opposed the bill were joined by 11 Republicans and the House's one independent, Bernard Sanders of Vermont.

The Democrats attempted a last-minute maneuver to defeat the tax-cut bill on the contention that one of its more obscure provisions raises taxes in some circumstances. Thus, they argued, its passage should require a three-fifths vote, under House rules that Republicans pushed through on the first day of the congressional session.

But Republicans controlling the parliamentary rulings decided that the complaint lacked merit.

"For too long, we have taken money from hard-working Americans and sent it to Washington," said House Majority Leader Dick Armey of Texas, urging support for the tax-cut measure.

"It's time to send something back. . . . Starting today, relief is on the way."

President Clinton has refrained from explicitly threatening to veto the legislation. But he said yesterday, "We don't need to be cutting education and investment in our future to give tax relief to people who don't really need it."

Senate Majority Leader Bob Dole has promised only that he will not allow the bill to be sacrificed in favor of deficit reduction.

"We're going to cut taxes, we're going to look at the capital gains area of reduction, we're going to look at tax credits [for families with children]," he told reporters last week.

"We're not backing away from the tax cuts."

The House bill would provide a broad array of tax breaks for families earning up to $200,000 a year and business tax incentives that are intended to boost savings and investment and create jobs.

Families would benefit chiefly from a $500-per-child credit, and breaks for married couples, for families who care for elderly relatives, and from an expanded use of tax-free retirement savings accounts.

Businesses would gain mostly from a 50 percent reduction of the tax rate on capital gains and from increased deductions for the purchase of plants and equipment.

The vote on the tax-cut measure in the House was the Republicans' final step in the "Contract with America."

With House approval of the measure, nine of the 10 major items the Republicans had promised to bring to a House vote in the first 100 days of Congress have passed the House.

Only a proposal to impose term limits on members of Congress went down to defeat.

In the hours leading up to the vote, GOP leaders had to muscle and cajole many of their own members who had threatened to block the bill from coming to a vote.

"It's a little more difficult than I would expect," Mr. Gingrich told reporters yesterday after a meeting with Republican lawmakers to make a final pitch for votes.

Most of the rebellious Republicans were resisting a provision to reduce federal employee pension benefits and require larger employee contributions to the pension fund.

That provision would be used, in part, to offset the cost of tax cuts.

Rep. Robert L. Ehrlich Jr. of Baltimore County and Mrs. Morella were among 11 Republican moderates who opposed the bill on the key procedural vote that passed 228-204.

Both said federal workers would wind up with a net tax increase.

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