Senate poised to vote on tax relief legislation
WASHINGTON (CNN) -- Senators prepared late Monday afternoon to cast their final votes on a bipartisan, $1.35 trillion across-the-board tax cut plan later in the evening.
Senators returned to Washington on Monday to once again tackle the bill, with much of the day's debate time consumed by discussions of a variety of amendments, all of which were to be voted upon before final passage on Monday evening.
The upper chamber opened debate on its version of an 11-year tax cut proposal last week. The Senate's bill would lower all income tax brackets, including dropping the lowest rate from 15 percent to 10 percent and reducing the top rate from 39.6 percent to 36 percent.
Senate Majority Leader Trent Lott, R-Mississippi, predicted the bill would pass with the assistance of as many as 10 Democrats.
"It will pass ... I believe overwhelmingly," Lott said Sunday on NBC's "Meet the Press."
"The main thing is, this is a broad-based tax relief package for working Americans. It'll help the economy. It'll help families with children," Lott said. "We should do it and the Senate should have it done by about sundown Monday."
The plan also calls for the full repeal of the estate tax, a gradual doubling of the child tax credit to $1,000, a reduction in the "marriage penalty" paid by some married couples where both spouses work, and an increase in the contributions individuals can make to their retirement plans.
If the tax cut plan passes the Senate, it will need to be reconciled with a vastly different plan passed by the House that approved tax cuts closer to the president's proposal of $1.6 trillion. The House has called for a 10-year package of cuts.
Low-level negotiations have already begun between House and Senate members as the Senate inched closer to its final vote. GOP leaders in both chambers expressed hope that the numerous gulfs between the bills could be bridged quickly.
The Republican leaders are trying to get a final bill to the president's desk for his signature before Memorial Day, May 28. Some members of Bush's administration were already trumpeting victory.
"This is the week that President Bush's proposal will become law," Treasury Secretary Paul O'Neill told a bankers conference, according to the Associated Press.
Sens. Olympia Snowe, R-Maine, and Evan Bayh, D-Indiana, are pushing an amendment to the bill that would require delays in scheduled tax cuts and new spending if targets are not met for reducing the nation's $3 trillion deficit.
Their amendment is one of the many that will be granted a vote toward the end of the Senate's business day, just before final passage.
Moderates from both parties have supported similar so-called "trigger" efforts, but the White House has not.
The amendment's sponsors said they were concerned the projected 10-year $5.6 trillion budget surplus, which includes Social Security, might not materialize. If it doe not, they argue, there would not be enough money in federal coffers to pay down the public debt as it comes due.
Sen. Charles Grassley, R-Iowa, chairman of the tax-writing Senate Finance Committee and the bill's sponsor, argued Monday the surpluses would indeed materialize.
"We can fund our priorities, we can give tax relief, we can preserve the Social Security and Medicare trust funds, and we can pay down every dollar of the national debt," Grassley said.
But Sen. Kent Conrad, D-North Dakota, replied the Republicans were not working from final numbers, because the administration had yet to set its defense funding priorities for the next fiscal year and beyond, and Bush has not issued any ideas to shore up Social Security as the retirement of the Baby Boomers looms.
"This tax bill is an abdication of fiscal responsibility," Conrad said. "We're now headed back to deficits, back to debt, based on rosy scenarios, based on this tax cut. We don't have the defense numbers, and don't have the money to fix Social Security."
Snowe and Bayh's trigger would have no effect on spending or on tax cuts already in effect when the trigger kicks in. If debt reduction targets are not met, however, future new spending and phased-in tax cuts would be put on hold until debt reduction efforts are set right.
Reuters reported Monday that Sens. Debbie Stabenow, D-Michigan, and Mary Landrieu, D-Louisiana, said the provision could help win Democratic support for the tax-cut package in the evenly divided chamber.
But Sen. Max Baucus, D-Montana, said the trigger amendment would add uncertainty to the tax package.
Baucus, the highest-ranking Democrat on the Finance Committee, and Grassley crafted the tax bill together, touting it as a bipartisan compromise when it was produced by the panel earlier this month.
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