GOP promotes bill to make 10-year tax cut permanent

Wednesday, April 17, 2002

WASHINGTON -- The annual tax filing deadline formed the backdrop of a new effort by President Bush and Republican congressional leaders to make permanent the 10-year, $1.35 trillion tax cut enacted last year.

Under current law, the entire package will expire or "sunset" at the end of 2010, because of an arcane Senate rule that was invoked partly to control the long-term budget impact of the cuts. Bush said Monday that would mean a return to old, higher income tax rates and resurrection of the supposedly repealed estate tax.

"It's going to be hard to plan the future, if you think all of a sudden these things get kicked in full-time and then go away," the president said in remarks at a General Mills plant in Cedar Rapids, Iowa. "They need to make these tax cuts permanent."

House leaders plan to bring the bill that would make the cuts permanent to a vote Thursday. Senate Democrats, however, are cool to the idea and the legislation appears unlikely to win final approval this year.

Treasury Secretary Paul O'Neill, addressing the Economic Club of Grand Rapids, Mich., urged club members to lobby Congress in favor of the bill.

"Uncertainty stemming from the sunset clause will undermine investment, so the earlier we act on this, the better," O'Neill said.

On Capitol Hill, House Majority Leader Dick Armey, R-Texas, and other Republican lawmakers held what amounted to an hourlong televised infomercial on the bill. Using a town hall-style format, various "real people" were brought out to describe how different pieces of the tax cut had benefited them.

May pass more versions

Meeting separately with reporters, House Ways and Means Committee Chairman Bill Thomas, R-Calif., said if the Democratic-run Senate ignores the bill as expected the House may pass additional versions or try to make individual pieces permanent -- forcing Democrats into difficult votes in an election year.

"If at first you don't succeed," Thomas said.

Democrats were unbowed. They contended that making the tax cuts permanent would eat away further at federal revenue needed to bolster Social Security and Medicare while providing few future benefits for most middle- and lower-income people. Congressional estimates put the price tag at $373 billion through 2012, but Democrats say the cost could top $4 trillion in the second decade.

"They know their new proposal cannot possibly help our economy now, since their bill would not do anything until 2011," said Rep. Charles Rangel of New York, ranking Democrat on the Ways and Means Committee.

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