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Senate To Pass Big Tax Cut

US Capitol building and 1040 US Income Tax form on flag texture.
AP
The Senate is set to vote on a Republican-backed tax cut today.

Senators will debate the $1.35 trillion, 11-year tax cut, which would reduce rates across the board and taxpayers a break this year. But debate is likely to end by this evening. Senate Majority Leader Trent Lott Sunday predicted easy passage, aided by the support of 10 or more Democrats.

"It will pass," the Mississippi Republican told NBC. "I believe overwhelmingly."

The bill's sponsors have been striving to keep a fragile coalition of backers from fracturing and have warned lawmakers against making major changes in the bill.

But Friday a group of U.S. senators said they would — seek to tie the tax cut package to new spending initiatives to reducing the nation's debt.

Sen. Olympia Snowe, a Maine Republican and Sen. Evan Bayh, an Indiana Democrat, said they would offer an amendment to the tax package pending in the Senate that would "trigger" a delay in scheduled tax cuts and new spending programs if targets for reducing the nation's $3 trillion public debt were not met.

The amendment's sponsors said they were concerned the projected 10-year $5.6 trillion budget surplus, which includes Social Security, might not materialize.

The trigger would have no affect on spending or tax cuts already into effect. But if debt reduction targets were not met, future new spending and phased in tax cuts would be delayed until debt reduction was back on track.

Democratic Senators Debbie Stabenow of Michigan and Mary Landrieu of Louisiana said the provision could help win Democratic support for the tax-cut package.

However, Sen. Max Baucus, a Montana Democrat, said the trigger amendment would add uncertainty to the tax package.

Baucus, who sits on the Finance Committee, and committee Chairman Charles Grassley, an Iowa Republican, helped forge the compromise tax package under consideration in the Senate.

The Senate compromise bill would lower income tax rates across the board, including cutting the top 39.6 percent rate to 36 percent. That is a far smaller reduction than the 33 percent top rate sought by President Bush in his original $1.6 trillion tax cut proposal. Conservative Republicans have vowed to push for the president's request.

The House — has passed Bush's tax package along the lines of his original proposal and conservative Republicans hope to win a deeper cut in the top tax rate when the two bodies get together next week to work out differences.

If the tax-cut plan passes, it would eat up nearly a third of a project $5.6 billion budget surplus over 10 years.

Republicans are hoping to send the bill to Mr. Bush by Memorial Day.

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