Politics

Bush Budget Clears House

By CBSNews.com staff CBSNews.com staff

March 26, 2001 / 2:16 PM EST / CBS

Republicans pushed a $1.94 trillion budget for 2002 through the House on Wednesday, as President Bush's blueprint for tax cuts and curtailed spending cleared its first major congressional hurdle.

The vote was a near party-line 222-205. Though devoid of suspense because of the GOP's thin but unified majority, Republicans hailed their victory as a triumph for their view of government.

"The choice is between two visions," said House Majority Leader Dick Armey, R-Texas. "A vision of bigger and bigger government, a choice between larger and larger taxes or a choice of smaller government that trusts the people."

The House roll call, though, was but a warmup for a rougher test next week in the evenly divided Senate. There, the GOP not only faces near-lockstep Democratic opposition, but some moderate Republicans have said Mr. Bush's 10-year, $1.6 trillion tax cut is too big and his proposed spending restraints too stingy.

Even so, Mr. Bush said the House action made Wednesday "a big day" and said the budget's centerpiece — an across-the-board cut in income tax rates — would help all Americans.

"We need to cut all rates so that there's certainty in our economy when people plan, and I'm confident we can get this done," he said before meeting with GOP congressional leaders at the White House.

Hoping to claim the economic stimulus argument as their own, House Democrats joined their Senate colleagues and said they wanted a $60 billion tax reduction effective this year. If moved as a separate bill — instead of attached to Mr. Bush's big tax cuts, as Republicans insist — the measure could zip through Congress in a day, Democrats said.

"But they refuse to do it because they have an obsession with a year-old tax plan, like a dog after a bone," House Minority Leader Dick Gephardt, D-Mo., said at a news conference, referring to Mr. Bush's plan.

Senate Republicans have said they favor a $60 billion tax cut for this year, but have yet to determine all the details. House GOP leaders remain undecided on the size and shape of a package meant to stimulate the economy. A final figure will be set in the final congressional budget, which House-Senate bargainers hope to complete next month.

Besides its tax reduction, the House GOP budget envisions $2.3 trillion in debt reduction over the coming decade, using parts of the Social Security and Medicare surpluses to overhaul both programs, and limiting many programs to 4 percent growth next year. That would be half this year's increase.

Along with Democratic fire, Mr. Bush's fiscal plans have prompted calls from some Republicans for deeper tax cuts and added spending for defense, farms and special education. But participants in Wednesday's White House session said that while Bush seemed open to changing details of his budget and tax plan, he was sticking to its basic principles, including the $1.6 trillion tax cut.

House Speaker Denns Hastert, R-Ill., described Mr. Bush's message to the lawmakers: "Stay the route. Get this thing done."

Democrats said the GOP budget would squander the $5.6 trillion federal surplus projected over the next decade, largely to cut taxes for the rich. They said it would shortchange other priorities like schools and new prescription drug coverage, risk a return to budget deficits, and do nothing to buttress Social Security and Medicare for the retirement of baby boomers in the coming decade.

"That's not only a budgetary problem, I think it's a moral problem," said Rep. John Spratt, D-S.C.

Republicans said their plan was a sound use of federal resources and would lay the groundwork for overdue tax cuts.

"Clear and simple, it's about tax cuts," said Rep. John Sununu, R-N.H. He said that for years, Democrats "have found every reason under the sun to oppose budget resolutions that have tax relief in them."

Congress' budget maps broad tax and spending goals and does not need the president's signature. Tax cuts and spending changes are enacted in later, more detailed bills. This budget covers fiscal 2002, which begins Oct. 1.

The Bush Tax Plan

What's In It For Me? Find out how much you could save this year and once the tax plan has been fully implemented.

Earlier, the House used a near party-line 243-183 roll call to reject an alternative by Democratic leaders that would have trimmed the tax cut to about $750 billion and set aside more than Mr. Bush would have for domestic and defense programs and reducing the debt.

The chamber also defeated an effort by conservative Republicans to increase the tax cut to $2.2 trillion while limiting spending growth to 2.9 percent.

Meanwhile, the House planned to pass a $399 billion bill Thursday that would gradually reduce the extra taxes paid by millions of married, two-income couples, while doubling the $500 child tax credit.

Another measure to eliminate the estate tax over the next decade, at a cost sponsors estimated at below $200 billion, was likely to win approval Thursday in the House Ways and Means Committee.

The House has already approved the focus of Bush's tax plan, a 10-year, $958 billion cut in all income tax rates.

The Senate does not plan to start writing tax bill until after Congress completes its budget, perhaps by late April.