GOP leaders struggle to whip moderates into line on tax cut

Hastert team delays late vote in House, works to muster a majority

July 22, 1999|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON -- Lacking the votes to pass their $792 billion tax cut, House Republican leaders delayed bringing it to the floor last night as they worked to overcome opposition from recalcitrant moderates in their own party.

Working behind closed doors late into the evening, they were making last-minute changes in an effort to soften GOP resistance to the bill, the centerpiece of the Republican agenda for this Congress.

With only a 222-to-211 margin over the Democrats who are united in opposition to the measure, House Speaker Dennis Hastert and his lieutenants could not afford more than a handful of defections. Nor could they afford another embarrassing defeat that would call into question their ability to lead the House.

They leaned hard on their troops.

"You always know how many horses you have in the herd; it's just a question of how long it takes to get them into the barn," said House Majority Leader Dick Armey.

Highlighting the House GOP tax bill is a 10 percent across-the-board reduction in individual income tax rates. In addition, the measure would cut the rate on the capital gains tax and reduce the "marriage penalty" on two-income couples.

The bill includes an array of other tax cuts and credits for businesses and individuals, including breaks for retirement and education savings, and deductions for health insurance premiums. It would phase out the estate tax over the next decade.

"We want to make sure dollars, decisions and freedoms stay in the hands of every American," said Hastert, who worked nearly around the clock to keep his rebellious troops in line.

President Clinton has vowed to veto the bill, which would be the biggest tax cut since early in the Reagan administration, if it reaches his desk.

"I will not allow a risky plan to become law," Clinton said at a news conference yesterday.

A stubborn band of Republican moderates, including Rep. Constance A. Morella of Montgomery County, agreed with Clinton that the tax cut would be much too large. They say it would gobble up nearly all the $1 trillion surplus, leaving too little for government spending and paying down the debt.

Some of the moderates have been pressing for a tax cut of $500 billion.

In a last-minute concession to secure moderate votes, House leaders worked on a plan last night that would condition annual increments in the 10 percent rate cut, which would be phased in over a decade, on year-by-year progress on debt reduction.

But as the Republican campaign went on, Clinton stepped up his arguments that the GOP cut would be not only too deep, it would be too risky if the economy soured.

"It's helpful to remember the recent past," the president told reporters, recalling that six years ago the federal budget was in the red by $290 billion and the unemployment rate was averaging about 7 percent.

Now, with a general fund surplus estimated at $1 trillion over the next decade, Clinton said the choice was "whether to move forward with fiscal discipline or return to the kind of risk-taking that put us under recessions and deficits before."

Republicans responded with a new Congressional Budget Office study that found their proposal would reduce the debt more than the $250 billion tax cut plan Clinton proposed and would produce larger surpluses even while cutting taxes more deeply.

The Republicans and the White House would use all of a nearly $2 trillion surplus in Social Security taxes to reduce national debt held by the public. In theory, the savings on interest payments would be used for Social Security benefits when necessary. Each side questions the other's intentions.

"If the White House would like to have a knock-down, drag-out war with us, we are very pleased to have a war," declared Republican Sen. Pete V. Domenici of New Mexico.

The Senate Finance Committee approved its version of a $792 billion tax cut bill yesterday, picking up support from all the committee Republicans and two Democrats.

Clinton also contended that the GOP tax cut would take so much of the surplus that Congress would be unable to lift the spending ceilings imposed in 1997 that are squeezing the budget so tightly GOP leaders can't pass appropriations bills within those limits.

The 1997 balanced budget law, passed at a time of substantial deficits, requires spending ceilings to continue dropping each year, despite the sudden development of the growing surplus.

What's more, Clinton said the Republican plan does nothing to shore up Social Security for the drain expected when baby boomers begin to retire, or to provide prescription drugs benefits for Medicare beneficiaries.

As GOP leaders tried yesterday to return their rebels to the fold, they made the pitch that the bill would be much changed before the process ends.

"Everyone understands that this is only an opening gambit," said Maryland Rep. Robert L. Ehrlich Jr., a Baltimore County Republican who is part of the GOP whip operation, which is trying to win over moderates who supported a tax cut in the range of $500 billion.

"We want to start out with the strongest possible negotiating position," Ehrlich said.

That logic didn't work with Morella, who said she would not support a bill with the larger price tag in expectation that the compromise would be much lower.

"It wouldn't be honest for me to do that, and it wouldn't work in my district," she said. In affluent Montgomery, she said, there is less enthusiasm for tax cuts than for government spending.

"In my district, they think, `If you're cutting taxes, you must be depriving us of something,' " Morella said.

Pub Date: 7/22/99

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