Posted on 09/20/2004 7:05:34 PM PDT by NormsRevenge
WASHINGTON - Republican leaders, eager to deliver a pre-election victory to President Bush (news - web sites), moved closer to agreement Monday night on legislation needed to extend three popular middle-class tax cuts that are set to expire this year.
Senate Finance Committee Chairman Charles Grassley announced that a joint House-Senate conference committee, which will work out differences between the two chambers, will meet on the tax legislation for the first time Tuesday. Officials reported agreement was close on the major provisions of the legislation.
Under one optimistic scenario, the conference committee will be able to reach agreement on a bill in time for the full House to vote on the measure Wednesday and for the Senate to vote on it Thursday.
Pressure is rising on lawmakers to act because if Congress does not approve extensions of the tax relief measures before it adjourns, three of the most popular parts of President Bush's tax cut program would expire at the end of this year.
The bottom 10 percent tax bracket would shrink, which would cause income taxes to rise for virtually all individual taxpayers. Before 2001, the first dollar of taxable income was taxed at 15 percent.
The child tax credit, currently at $1,000, is scheduled to drop back to $700 per child.
And married couples are scheduled to lose some of the tax breaks that offset the so-called marriage penalty, which causes some couples to pay higher taxes than they would if they were single.
Republicans are growing more optimistic that, even in the closely divided Senate, the legislation has a good chance of sailing through because of Democrats' unwillingness to be seen blocking popular tax cut provisions so close to an election.
"My strategy was to do this in September all the time because the closer you got to the election, the chances are you could do better policy without offsets," Grassley said.
A deal to extend the tax relief for two years evaporated in July when the Bush administration insisted Congress approve keeping the breaks on the books for another five years. That would result in a loss of $130 billion in tax revenue over the five years.
Grassley's decision to schedule a conference meeting came after a closed-door strategy session with Senate Majority Leader Bill Frist, R-Tenn.; Sens. Trent Lott, R-Miss., and Don Nickles, R-Okla., two other members of the conference committee; and House Ways and Means Committee Chairman Bill Thomas, R-Calif.
Officials said certain details remained to be worked out over the length of the extension, with the debate centering over whether it should be four years or five years for most provisions.
Republican moderates in the Senate had argued for a two-year time frame to hold down the costs of the tax extensions during a time of soaring budget deficits. They had also insisted that the cost of extending the tax cuts be offset with either spending cuts or increases in other taxes.
But GOP leaders are counting on growing pressure on Republican lawmakers to support Bush's call for a longer extension in order to give the president a victory on tax cuts, which he has made the centerpiece of his economic policy, in the remaining weeks before the Nov. 2 election.
The legislation being considered by the conference committee is expected to adopt the House position that it does not have to be offset with spending cuts or tax hikes elsewhere.
Grassley told reporters he still hopes to get separate tax legislation dealing with corporations through Congress before it adjourns for the year. However, House leaders are still looking for assurances that the wide differences between the two chambers on the corporate tax legislation can be narrowed before they give the go-ahead to move forward.
That legislation is needed to halt penalty tariffs on more than 1,600 U.S. exports to Europe. The higher tariffs are being imposed because Congress has not repealed current tax subsidies for U.S. exporters that the World Trade Organization (news - web sites) has ruled are illegal.
The corporate tax cut plan has passed both houses of Congress, but in sharply different versions. U.S. businesses and farm groups are worried that if Congress adjourns without passing new corporate tax legislation, they will lose millions of dollars in export sales to Europe as the penalty tariffs, now at 11 percent, keep rising by 1 percentage point each month to 17 percent next March.
This is a great election issue. A winner for Bush.
WooHoo!! First they let the AWN Sunset, now tackling the tax cuts and DC gun ban. This is the type of attitude I want from my representatives.
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