Congress likely to pass tax cut budget outlining tax cuts


Congress was expected on Thursday to approve a budget plan that lays the foundation for US$1.35 trillion in tax cuts, advancing President George W. Bush’s agenda of tax relief and limits on government growth.

In an anticipated tight vote, the evenly divided Senate was expected to pass a US$1.97 trillion fiscal 2002 budget plan that sets up 11 years of tax cuts that fall short of the US$1.6 trillion in 10-year cuts Bush sought.

The Republican-led House of Representatives passed the budget on Wednesday on an almost straight party-line vote.

“If people are good to their word, we’ve got the votes,” a White House official said late on Wednesday, after days of negotiations with moderate Democrats to lure swing votes needed to pass the measure in the Senate, which is split 50-50 between the parties.

The handful of Senate moderates who were open to the Republican budget were not tipping their hands. But Senate aides said they thought at least three Democrats would join Republicans, offsetting expected defections from Republican Sens. James Jeffords of Vermont and Lincoln Chafee of Rhode Island.

That would mark a significant splintering of a centrist coalition of about 15 lawmakers led by Sen. John Breaux, a Louisiana Democrat, which tried to broker a more bipartisan compromise.

Most Democrats have blasted the budget plan, saying it would sacrifice resources needed for schools, health care and other priorities to finance tax cuts that would mostly benefit the wealthy.

But Republicans said it was an effort to get federal spending under control and return a share of projected surpluses to taxpayers.

“The president has made it a top priority to reduce the tax burden to allow working Americans to keep more of what they earn,” Treasury Secretary Paul O’Neill said in a statement.

O’Neill urged Congress to “put legislation enacting substantial tax relief for all taxpayers on the president’s desk by the end of this month.”

The budget is not binding, but it would give procedural protections to US$1.35 trillion tax-cutting legislation that would fit under it. That means the legislation would need just a simple majority to pass, not the usual 60 votes that would be almost impossible to muster in the divided Senate.

Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, said he hoped to work out details by the end of the week of the US$1.35 trillion bill that will include rate cuts, marriage penalty relief, estate tax repeal and a bigger child tax credit.