Tax Cut War Heats Up
A fight over sweeping tax reductions is taking shape, pitting President Clinton against congressional Republicans. But Mr. Clinton says he is optimistic that a compromise can be reached that would avoid a budgetary train wreck this fall. CBS News White House Correspondent Bill Plante reports.
Congressional Republicans say they're willing to fund the government at current levels for as much as a year until a budget agreement with the White House can be worked out, but they plan to pressure President Clinton into signing their $792 billion tax cut package.
The president and the Congress are arguing over a tax cut that may never come to pass, probably will never be written into law. Mr. Clinton has threatened to veto it.
The president was on the road in the battle over taxes Sunday in St. Louis where he addressed the nation's governors. Mr. Clinton told the governors who are predominantly Republican that while the GOP tax cut plan has some merit, in the long run it is not in their best interest.
"The money is not there yet!" Mr. Clinton said. "This is all projected surplus."
And that projection of $1 trillion over the next ten years, Mr. Clinton warned, is not the same as money in the bank.
"If you have a tax cut this big and an economy that is doing this well, there will be higher interest rates and the people will lose," Mr. Clinton said.
It's that forecast of economic hardship down the road that Republicans say is dead wrong. Instead, they say the time is right.
"If you have a $3 trillion surplus, if you don't give a tax cut now, when are you going to give it?" said Sen. Don Nickles, R-Okla. "Basically the president is saying, we want more money so we can spend more money."
The budget talks and tax cuts are linked politically as each party strives for support from voters next year, when the presidency and House control hinge on the November elections.
Meanwhile, Republicans are concerned about the possibility of another government shutdown.
The last time the government shut down -- twice during the 1995 budget standoff --the public blame landed squarely on the Republicans, and the party is eager to avoid a repetition if current talks collapse before the Oct. 1 start of the new fiscal year.
While the highlight of Mr. Clinton's day will be when he presents the Medal of Freedom to former president Jimmy Carter and to his wife, Rosalyn Carter, the president has several other appearances Monday, during which he is expected to talk about his opposition to the Republican tax cuts.