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Clinton Adviser: No Major Tax Cut In 1998

Tax Cut

WASHINGTON (AllPolitics, Dec. 28) -- President Bill Clinton will not propose any across-the-board tax cut or push for any major overhaul of the tax system in his 1998 budget, a senior White House adviser said Sunday.

But speaking on NBC's "Meet The Press," Rahm Emanuel also said that Clinton would not necessarily veto any tax cut sent to the White House by Congress, provided it didn't bust an existing spending agreement that would balance the budget by 2002.

"If others have an approach, we'd love to see it," he said. "(But) where are they going to pay for it? Are they talking about cuts in health care? Are they talking about cuts in senior programs?"

Some Wall Street analysts have forecast a surplus of as much as $40 billion in the current fiscal year, which runs through September 30 -- a surplus that proponents of a tax cut say could be used to pay for it.

Emanuel

But Emanuel said the White House believes that no decisions about what to do with the surplus should be made until a surplus actually materializes.

"Washington should not return to its bad habits of spending money it doesn't have," he said. "That's what got us into trouble in the first place in the 1980s."

In addition to tax cuts, a number of Republicans, including House Majority Leader Dick Armey and 1996 presidential candidate Steve Forbes, have also proposed so-called "flat tax" plans that would radically alter the income tax system. Others want to replace income tax entirely with a national sales tax.

Even Democratic House Minority Leader Dick Gephardt has a modified "flat tax" plan that would simplify the system and reduce tax rates for middle and lower income taxpayers.

But Sunday, Emanuel made it clear the White House wasn't looking to make any such radical changes in the tax code in 1998.

"We finally have gotten the deficit under wraps and lifted it off the back of the economy," he said. "We shouldn't do anything reckless or irresponsible."

However, Clinton will propose new tax credits targeted toward helping middle-class families pay for child care, Emanuel said.


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