Congress Oks $94 Billion Tax Cut Also Seeks To Balance The Budget By 2002; Vote Represents A Hard-Won Middle Ground
After years of bitter divisions over fiscal policy, Congress gave overwhelming bipartisan approval Thursday to a pair of bills embodying a landmark plan to cut taxes by $94 billion while balancing the federal budget by 2002.
Final approval of the five-year budget blueprint came as both the House and Senate completed action on a tax-cut bill that provides new breaks to families with children, people saving for college or retirement, property owners selling homes, investors selling securities, estate heirs, small businesses and big corporations.
The House vote on the tax-cut bill was 389-43, with only one Republican, 41 Democrats and one independent voting against it. The Senate approved it 92-8, with only Democrats in opposition. House Speaker Newt Gingrich, R-Ga., made a rare trip to the Senate floor to witness the climactic vote.
Earlier, the Senate approved and sent to President Clinton a companion bill, already approved Wednesday by the House, that provides the spending cuts needed to bring the budget into balance. The Senate vote was 85-15, with three Democrats and 12 Republicans voting against it.
Action on both measures represents a legislative milestone. Congress embarks for a monthlong August recess having ended, or at least declaring a truce in, the budget wars that have dominated Washington for the last 2-1/2 years.
The sweeping measures, the product of months of negotiations between Clinton and the GOP-controlled Congress, represent a hard-won middle ground on the most contentious issues between them: reforming Medicare, expanding health coverage for children, rewriting last year’s welfare reform bill, and cutting taxes.
“On both sides of the aisle and both ends of Pennsylvania Avenue, Republicans and Democrats, House and Senate and, yes, the president are all saying, ‘This is good for America,”’ declared Senate Republican Leader Trent Lott.
Clinton, who is certain to sign both measures, called passage of the balanced budget bill “the achievement of a generation and a triumph for every American.”
The tax bill provides the first major tax cut since Congress enacted Ronald Reagan’s supply-side income tax reduction in 1981. Passage was particularly sweet for Republicans, who made cutting taxes the crown jewel of the “Contract With America” agenda upon taking control of Congress in 1994.
But it was a bittersweet victory for some, because it was a pale shadow of the tax cuts of more than $200 billion that Republicans had originally sought. Clinton and his Democratic allies claimed victory in reshaping the tax cut to include his priorities, such as tax breaks for education and for working poor families.