The $189 billion tax cut crafted by House Republicans is likely to get nowhere in the Senate, Sen. Bob Packwood said Sunday, urging his fellow Republicans to concentrate on reducing the deficit.
Packwood, who chairs the Senate Finance Committee which oversees tax legislation, said any tax cut bill must be accompanied by specific plans for cutting federal spending.
“Short of that, I don’t think we would consider them at all.”
The Oregon senator, speaking on ABC’s “This Week With David Brinkley,” said both Republicans and Democrats on his committee feel their first job is to reduce the deficit.
“The best thing we can do for the taxpayers of this country is to try to move toward deficit reduction, and if that gets their mortgage interest rates down a point or two, that is more important than anything else we can do for them,” he said.
Meanwhile, a senior Democrat on Packwood’s committee, Sen. Bill Bradley of New Jersey, said he finds it “very difficult to believe the Senate will support” the House tax cut plan. “I think it’s a political document and that’s all,” he said on NBC’s “Meet the Press.”
The House bill, which cleared the Ways and Means Committee last week, meets a GOP “Contract With America” promise by providing families with a $500-a-child tax credit, reducing capital gains taxes and expanding Individual Retirement Account savings plans. It would cut federal revenues by $189 billion over five years and, according to U.S. Treasury estimates, $630 billion over 10 years.
Rep. John Kasich, R-Ohio, chairman of the House Budget Committee, promised a comprehensive plan by May for slashing the budget deficit while cutting taxes.
“At the end of the day, we’re going to be able to show you that American families can have tax relief, that we need to grow the economy with risk-taking incentives, capital gains tax, and, in fact, we can balance the budget,” Kasich said on NBC.
Kasich’s committee laid down plans last week to cut $100 billion in federal spending over five years as part of the effort to come up with the more than $1 trillion in cuts that would be needed to balance the budget by 2002.
Democrats say that plan - as well as $17 billion in cuts for the current year pushed through the House last week - is unfairly hard on the poor while the GOP’s tax cuts would benefit mainly the rich.
“The biggest cuts in education since 1981 are being proposed to pay for a tax cut, 20 percent of which goes to the top 1 percent of the income distribution,” Laura D’Andrea Tyson, chairwoman of the president’s National Economic Council, said on NBC.
At the same time, Tyson defended the Clinton administration’s “very modest” tax cut proposal which would provide relief for middle-income families at a cost of about $63 billion over five years.
And House Minority Leader Richard Gephardt, D-Mo., who has come up with his own plan similar to that of the White House, agreed on CBS’ “Face the Nation” that a tax cut focused on the middle class is “the right thing to do.”
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