Marriage tax cut gets Senate OK

Republicans daring Clinton to make good on veto threat

Bill goes to joint panel

Parties are locked in showdown over spending of surplus

July 19, 2000|By Karen Hosler | Karen Hosler,SUN NATIONAL STAFF

WASHINGTON - Poised for an election-year showdown with President Clinton over how to spend the budget surplus, the Republican-led Senate voted yesterday to cut taxes for all married couples - and dared Clinton to carry out his threat to veto the bill.

Eight Democrats joined all 53 Republicans present on the 61-38 tally, which sent the measure on to a committee to reconcile differences with similar legislation passed by the House. A final bill is expected to be sent to the president by the end of the week.

"Families today have many, many financial challenges - getting married should not be one of them," said Sen. William V. Roth Jr., the Delaware Republican who is chairman of the Finance Committee. "It's only fair to let families keep more of what they earn."

Republicans have maneuvered to force Clinton to veto the bill around the time of the Republican National Convention, which begins July 31, so they can showcase one of their campaign themes: that Republicans favor broad tax cuts and Democrats don't.

Clinton must act within 10 days of receiving the bill.

For years a centerpiece of the Republican tax cut agenda, the measure is intended primarily to ease the so-called "marriage penalty," which requires roughly 25 million two-earner couples to pay higher taxes than they would if they were single.

The bill would raise the standard deduction and expand tax brackets so the 21 million couples who are not subject to the marriage penalty would also get a break.

Under the measure, a two-earner couple with a joint income of $73,000 and two children would save $1,700 in federal taxes, according to lawmakers. A family of four with one parent working and income of $22,000 would receive a tax break of $500.

Clinton and many Democrats complained that the Republican bill, which would cost $248 billion over 10 years, is too generous, providing benefits to many wealthy Americans who don't need them.

They also contend it would create a new penalty in the tax code for single taxpayers.

"While I strongly support targeted marriage penalty relief, the marriage penalty bill put forth by the majority in Congress is one part of a fiscally irresponsible, poorly targeted and regressive tax plan," Clinton said in a statement.

Sens. Paul S. Sarbanes and Barbara A. Mikulski of Maryland voted with most of their Democratic colleagues against the bill.

Clinton repeated his earlier offers to negotiate with the Republicans to produce a bargain that would combine relief of the marriage penalty with a Medicare prescription drug benefit. But the Republicans want to put as much pressure on him as possible.

"This is one of the most offensive of all of the unfair provisions in the tax code, and this is a serious effort to get rid of it," said Majority Leader Trent Lott. "I predict the president will sign this because it's going to be pretty hard to explain why he doesn't want to eliminate the marriage penalty tax."

Republicans hope a Clinton veto would help make their case that the Democrats are unwilling to return excess tax revenue to the American people, despite estimates that the federal budget surplus will exceed $2 trillion over the next decade, excluding money collected for Social Security.

To highlight the issue, Republican leaders decided yesterday to withhold from Clinton - perhaps until fall - the tax cut measure enacted last week that would eliminate the federal estate tax over the next decade.

The president has also threatened to veto that bill, contending that it would help only the top 2 percent of taxpayers wealthy enough to be affected by it.

Congressional Democrats have already begun a rhetorical blitz, combining the estate tax with the marriage penalty and other Republican-sponsored tax measures that Democrats say would help mainly the rich.

"The Republican Party is up to its same old tricks, pushing yet another reckless tax scheme that favors the wealthiest Americans and leaves little money for issues people care most about: strengthening Social Security and Medicare, real education reform and a reliable prescription medicine benefit," House Democratic leader Richard A. Gephardt said yesterday.

The Republicans won't send the estate tax bill to the president until after he deals with the marriage penalty measure "so he can't declare class warfare," said Senate Republican Whip Don Nickles. "The estate tax bill is easier for him to demagogue."

With new estimates projecting that the budget surplus will be almost twice as large over 10 years as had been expected at the beginning of this year, the debate over how to spend the money is moving to center stage as the election campaigns intensify.

No public outcry arose last summer, when Clinton vetoed a sweeping 10-year, $792 billion Republican tax cut bill, calling it a risky proposal that threatened important government programs such as Social Security.

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