Republican blood on the water Gingrich proposal: Speaker's sensible call for delay on tax cuts splits party.

March 31, 1997

TO THE DISMAY of Jack Kemp and other tax-cut myopes in the Republican Party, Speaker Newt Gingrich has emerged as the unlikely leader in an effort to put sanity into the balanced-budget debate. By proposing that any tax cuts be postponed until after Congress adopts a plan to wipe out deficit spending by 2002, Mr. Gingrich has opened the door for some serious legislating after Congress returns from its Easter holiday.

His key ally in this endeavor is House Budget Committee chairman John Kasich, who could emerge as a strong rival to Mr. Kemp in a race that has already begun for the next GOP presidential nomination.

If Mr. Kasich's committee comes up soon with a budget resolution along the lines of the Gingrich suggestion, he is guaranteed the backing of conservative Blue Dog Democrats and a number of lawmakers in his own party who now call themselves Blue Dog Republicans. These are people who believe spending cuts should come before tax cuts.

Two years ago, Mr. Gingrich might have been able to control the legislative agenda. He is not only right on substance but tactically right in trying to spare the GOP further Democratic DTC accusations that it would pay for tax cuts by being beastly to old folks on Medicare. But because of ethics problems that almost cost him the speakership (and still could), his call for a delay on tax cuts drew scathing hostility from conservatives who once cried "Newt, Newt, Newt." Majority Leader Dick Armey publicly rebuked Mr. Gingrich for going public. Rep. David McIntosh said the speaker was jettisoning "a fundamental Republican principle."

Actually, the Gingrich formula would not do away with fights over tax cuts. If Congress can pass a budget acceptable to President Clinton, that would be the time for tax cuts. Revenue losses would have to be paid for by closing tax loopholes (what Mr. Kasich once called "corporate welfare"), by slashing spending and, most important, by taking action to rein in Social Security and Medicare costs that are bound to escalate after 2002 with the aging of the Baby Boomers.

The key question is whether there are enough deficit hawks to prevail on Capitol Hill against liberal spenders and zealous tax cutters. On that the jury is still out.

Pub Date: 3/31/97

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