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Jonathan Karl: Showdowns loom on campaign-finance reform, tax cuts

Jonathan Karl
Jonathan Karl  

CNN Congressional Correspondent Jonathan Karl is reporting from Capitol Hill on the transition of President-elect George W. Bush.

Q: What are the immediate showdowns Bush faces once he's in office?

KARL: It looks as if almost immediately after George W. Bush is sworn in, he's going to face two significant battles on Capitol Hill. One will be over campaign-finance reform and the other, over tax cuts.

First, on campaign-finance reform. Trent Lott (R-Miss.) will meet with John McCain (R- Ariz.) Thursday at his Senate office. The agenda will be to discuss McCain's statements that he will move ahead immediately with his campaign-finance reform proposal after Bush takes office.

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Lott thinks this is a terrible idea, because he believes the Congress should start by considering initiatives that George W. Bush campaigned for, not initiatives he campaigned against. Obviously, Bush in the Republican primaries strongly opposed McCain's version of campaign-finance reform.

It will be very interesting to see how this plays out.

Both sides have tried to keep this meeting very quiet, but both Lott and McCain have been negotiating on this all week.

The second thing is tax cuts.

Democrats have already signaled that they think that the $1.3 trillion tax cut that George W. Bush campaigned on is too big. At most, they say they would be willing to consider a tax cut about half that size of about $700 billion.

But Republicans are already digging their heels in. Trent Lott is signaling that he thinks tax cuts should be one of the very first things that the Senate considers. And he is saying that the tax cut should also include a cut in capital gains tax. In other words, Lott is talking about a tax cut even bigger than the tax cut George W. Bush campaigned on.

Meanwhile, over on the House side, Dick Armey (R-Texas) has been out issuing a call to action to Republicans in the House, saying they should pass George W. Bush's tax cut and that they should make it retroactive. Lott also has endorsed that idea, making it retroactive to January 1 of this year.

What Lott and Armey are saying is that George W. Bush's tax cut needs to be phased in quicker and needs to be bigger, because the economy has slowed down and the passage of a significant and immediate tax cut would help bolster the economy.

Q: What is the likelihood of any tax cut getting passed, even if it is a compromised agreement?

KARL: Democrats would certainly support a more modest tax cut. They've signaled that. The problem here is that the Democrats and Republicans have very different ideas of not only how big the tax cut should be, but what it should be.

What the Republicans are saying is that these need to be cuts in tax rates across the board if they are to have any effect on the economy. What Democrats are saying is that across the board tax cuts benefit the wealthy and that instead Congress should pass targeted tax cuts that would benefit lower- and middle-income families.

So, they have very different visions of how to do that. And it's going to be very hard to reconcile.

But, what's significant here is that both sides are indeed talking about tax cuts. The thinking here on Capitol Hill is that there will be some kind of tax cut, but there is going to be a major partisan showdown on this before anything is enacted.

Q: What are Senate leaders saying about confirmation of Bush's Cabinet?

KARL: The confirmation battles continue. Trent Lott is saying he wants full Senate votes on George W. Bush's nominees immediately after Bush is sworn as president and Dick Cheney is sworn in as vice president.

Lott has told reporters he would actually like to see votes on the day of the inauguration, on Saturday January 20. When the Senate convenes on that day, Lott has said he wants votes on the nominees for Secretary of State, Treasury and perhaps more.

Lott wants to make sure the new president has his most important Cabinet nominees in place as full-fledged members of his staff as soon as he's sworn in.


Thursday, January 11, 2001


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