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Sparring Over Tax Cuts

GOP tries to shape tax cut debate, after disaster relief fiasco

WASHINGTON (AllPolitics, June 16) -- After last week's embarrassing defeat on the disaster relief bill, congressional Republicans are determined to shape the debate over a proposed $85 billion tax cut package.

"Beginning [today] we are going on the offensive in trying to explain what's in the [tax] bill, why it's important to working Americans and what the president is up to," Senate Majority Leader Trent Lott (R-Miss.) said Sunday on ABC's "This Week."

Lott compared President Bill Clinton to a "spoiled brat." "He thinks he's got to have it his way or no way," Lott said. In response, White House economic advisor Gene Sperling said Lott should quit the name-calling and discuss the merits of the GOP tax proposals.

At issue are the provisions of a tax cut package approved by the House Ways and Means Committee last week. The White House has complained that the GOP proposal lacks $35 billion in education tax breaks and favors the wealthy over the working poor.

Under the GOP plan, a $500-per-child tax credit would only be available to those who make enough money to pay income taxes. It would not go to lower-income families, who already qualify for the earned income tax credit.

The tax package is part of the balanced budget agreement between the administration and Congress that calls for $85 billion in net tax cuts over the next five years. But the battle over specific tax cuts will be another test for the Republicans, who found themselves outflanked and on the defensive last week over the disaster relief spending bill. An emphatic Clinton warned he would veto a bill that included unrelated provisions on government shutdowns and the 2000 census, along with money for disaster relief.

Republicans sent the bill to him anyway, figuring Clinton could not politically afford to veto disaster relief, but he did. And as with the 1995 government shutdown, it was the Republicans, not Clinton, who ended up looking like obstructionists.

Despite that setback, Republicans did make advances last week in retooling Medicare and Medicaid to inject more competition into the health care programs.

The goal is to control costs more effectively by expanding managed care options for Medicare recipients, and by giving states more authority to move Medicaid patients into managed care.