President Claims Gop’s Proposal Results In A ‘Back-Door’ Tax Boost Republicans Accuse Clinton Of Mounting ‘Scare Campaign’

As Republicans in Congress prepare for a crucial stage in their effort to cut taxes on businesses and families, President Clinton on Saturday accused GOP lawmakers of lacing their proposed federal budget with $148 billion in “back-door” tax increases for the middle class.

“Buried deep within their plan is a vast collection of tax increases and other costs on working people,” Clinton said in his weekly radio address. He cited new fees on student loans, increased out-of-pocket expenses for Medicare and new curbs on tax credits for the working poor.

Clinton’s argument represents a new tack in his criticism of GOP budget plans. Until now, the administration has focused on attacking Republicans for pushing tax breaks for the wealthy while cutting spending for the less affluent. Now he is pointing to increased costs faced by middle-class taxpayers despite GOP lawmakers’ claims that they are not raising taxes.

In a prerecorded response to the president’s address, Sen. Trent Lott, R-Miss., accused Clinton of having “a deep-seated hostility toward significant tax relief for the American people.”

“He’d rather pit one group against the other, playing to the politics of envy,” said Lott, the Senate majority whip.

Lott also complained that Clinton was sitting on the sidelines and mounting a “scare campaign” while Republicans try to revamp Medicare and make other changes to balance the federal budget.

“President Clinton is an excellent campaigner, but this isn’t a campaign for personal office,” he said. “It’s a crusade to restore and renew our system of government.”

The president’s fresh line of attack comes just as Senate Republicans are preparing to take another major step in crafting a centerpiece of the GOP legislative agenda: a plan to cut taxes by $245 billion over seven years, including a reduction in capital gains taxes and credits for families with children.

The Senate Finance Committee is expected to meet this week to draft its version of the tax-cut legislation. The House last March passed a $354 billion tax cut, which must be pared back to fit the $245 billion target set by the seven-year budget-balancing plan Congress adopted in May.

Despite comments by Senate Majority Leader Bob Dole, R-Kan., last weekend that GOP enthusiasm for a tax cut that large may be waning, he and other Republicans have insisted since then that they remain committed to the cut.

Senate Finance Committee Chairman William V. Roth Jr., R-Del., will unveil his tax-cut recommendations this week. They are expected to include at least the capital gains cut, a $500-per-child credit for families, liberalized tax treatment of individual retirement accounts and estate-tax relief for farmers and business.

Most of the GOP proposals criticized by Clinton in his Saturday address would not in fact affect families’ taxes. But Clinton said they amounted to a tax hike because they drained taxpayers’ resources.

“In Washington they may not call it a tax increase, but when government makes a working family pay more, it sure feels like a tax to them,” he said in an address delivered from Martha’s Vineyard, Mass., where the first family went for the weekend to attend the wedding of Hollywood celebrities Mary Steenburgen - a friend of the Clintons from Arkansas - and Ted Danson.

Clinton cited Republican proposals that would require state agencies to charge single parents a fee for government help in collecting child-support payments. “That’s a tax hike on responsible mothers and their children, which will lower their already modest incomes,” Clinton said.

He also took the GOP to task for proposals to increase the fees and interest payments charged to students and their families for college loans.

House and Senate committees have proposed eliminating or scaling back the interest subsidy the government now provides for six months after a borrower leaves school. Another GOP proposal would impose a new fee on colleges, which even its proponents predict will be passed on to students through higher tuition charges.