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House votes to eliminate marriage tax penalty

Presidential veto certain for GOP bill

February 10, 2000
Web posted at: 5:46 p.m. EST (2246 GMT)

WASHINGTON (CNN) -- In a gesture of fiscal romance just four days before Valentine's Day, the House of Representatives overwhelmingly passed a GOP-sponsored bill Thursday intended to eliminate the so-called "marriage penalty" -- the additional income tax paid by many two-income, married couples.

The Marriage Tax Elimination Act -- which would cost the federal government an estimated $182 billion -- passed by a vote of 268 to 158, after hours of debate and the defeat of a substitute bill offered by Rep. Charles Rangel (D-New York), the ranking member on the House Ways and Means Committee.

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The U.S. Treasury Department estimates that 48 percent of joint filers currently endure a marriage tax penalty, the average of which is $1,141 yearly.

President Bill Clinton has already promised to veto the legislation should it wind its way through both houses of Congress. The veto threat didn't seem to matter much to Republicans on Thursday.

"Today the House has a chance to give 25 million married couples the best Valentine's Day gift possible, elimination from the most unfair of taxes, the marriage tax penalty," bill sponsor Jerry Weller (R-Illinois) said as he waved a heart-shaped prop on the House floor.

Weller
Rep. Jerry Weller  

"There's only one marriage (the bill) would strengthen, and that's the longstanding romance between the Republican leadership and those who are most well off in this country," said House Minority Whip David Bonior (D-Michigan). Bonior described the bill as a "two-fisted assault on the U.S. Treasury."

Eliminating the marriage penalty is a popular concept among both Democrats and Republicans, and the vast majority of American married couples. But the House floor debate Thursday was marked by what has become a classic division between the two parties: whether to provide immediate tax relief, or to phase-in a tax cut only after paying down the debt and shoring up Social Security and Medicare.

House Minority Leader Richard Gephardt (D-Missouri) called the GOP bill a "marketing scheme designed to make last year's unpopular tax cut more palatable."

Throughout the day's four-hour floor debate, both Republicans and Democrats proffered examples of just who would benefit from either bill, and the rhetoric quickly became a numbers game.

"By doubling the bracket all we're doing is helping school teachers, waitresses, police, store managers, those kind of hardworking Americans and I'm proud to do it," Rep. Nancy Johnson (R-Connecticut) said of the Republican bill.

But "Blue Dog" conservative Democrat Charles Stenholm, a member from Texas who has often voted with the GOP on fiscal measures, said that the Republican leadership "is not serious about establishing a plan to eliminate the public debt or strengthen Social Security and Medicare.

"I want to provide relief to the 57,000 married couples in my district, but I also care about the 67,000 households that depend on Social Security and the 250,000 children who deserve a future," Stenholm said.

"We need a tax code that recognizes that working families need help," House Speaker Dennis Hastert (R-Illinois) countered. "They don't need the federal government picking their pocket and taking money out of their account just because they're married."

The bill eventually passed by a bipartisan majority. It would:

  • provide $182 billion in tax relief over a 10-year period;
  • increase the standard deduction for married couples filing jointly by $1,400, up to $8,800 beginning in 2001;
  • double the standard deduction for married couples to twice that of single filers by 2001;
  • expand the lowest tax bracket -- 15 percent -- from $43,050 to $51,500.
  • increase the Earned Income Tax Credit by $2,000 to include those who make $32,580 per year; and,
  • provide relief for households in which one adult is not working.

    Archer
    Rep. William Archer  

    House Democrats opposed to the measure claim that under the bill, Americans in upper tax brackets would pay less money, and that any tax relief should be targeted to the lower- and middle-income brackets.

    "I know the Republicans want to have a political gimmick to have on Valentine's day, and that's what this is about," Rangel said. "It's not too late for us to work together. There's enough things for us to argue about come November, but I would think that the American people would want us to work together."

    The Democrats' $95 billion proposal closely mirrored the one President Clinton included in his fiscal year 2001 budget, which was presented to Congress earlier this week, but would not take effect until the Social Security and Medicare trust funds were solvent -- perhaps by the year 2050. It would have doubled the standard deduction and expanded the EITC, but did not expand the 15 percent tax bracket.

    "Their substitute does nothing for anyone," House Ways and Means Committee Chairman Bill Archer (R-Texas) said during the House Floor debate. "What we are doing here is providing relief for all married couples, but we are accentuating the elimination of the marriage tax penalty."

    "Our plan provides more tax relief targeted to low and moderate income Americans and makes sure that more American families can take advantage of the EITC," said Rosa DeLauro (D-Connecticut).

    Several Democrats on the house floor complained that the GOP bill was rammed through the House without a hearing, and before Congress presented its own budget proposal.

    DeLauro
    Rep. Rosa DeLauro  

    "Instead of diving in a tax cut feeding frenzy, Republicans should first put together a budget proposal which outlines their priorities and the context in which any tax cut must be placed," Gephardt said.

    "We're squandering a golden opportunity for future generations," he added. "We need to use the surplus for all of our needs and leave a reasonable piece for tax cuts after we pay off the debt, after we strengthen social security and medicare and after we provide prescription drug plan for seniors. "

    To even consider the bill, the House first had to agree to waive the budget rules, as the House has not yet presented its budget blueprint for Fiscal Year 2001.

    "It's the first chapter in a book and the Republicans won't tell us the rest of it," said Rep. Sander Levin (D-Michigan). "You talk about a Valentine, that isn't a Valentine. That is a veto." The president is going to veto this with red ink because that is where this would lead to."

    "I'm disappointed in my Democratic colleagues," Johnson said. "We know that by starting this tax bill now, by the time it wends its way through the process we will have a budget resolution."

    Remarking that last year, the Congress passed a near-trillion dollar tax cut that was subsequently vetoed by the president, Stenholm said: "Here we go again. Same argument, same debate, same mischaracterization of everybody's position. I will gladly join with you as I have joined those on the other side of the aisle, but getting a budget first makes a lot more sense to the American people."


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    Thursday, February 10, 2000

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