Republicans preserve most of Bush's new tax cuts

WASHINGTON -- The GOP's $2.2 trillion budgets struggled for majority support in the House and Senate, but Republicans appealed for wartime unity, exploited disunity among their opponents and beat back most attacks on President Bush's proposed tax cuts.

The budgets offer only nonbinding guidelines for future legislation, however, and war and deficits weighed heavily on the minds of many Friday.

"No one is really certain how much the war with Iraq will actually cost, but we can be certain that a war will not be free," said Sen. Russ Feingold, D-Wis.

In the meantime, Feingold won a surprise 52-47 vote to divert $100 billion of the $726 billion earmarked for Bush's new tax cuts to pay for the war in Iraq. Republican Sens. Lincoln Chafee of Rhode Island, Susan Collins of Maine and John McCain of Arizona gave Feingold his winning margin.

Bush wants to boost the economy by accelerating scheduled income tax cuts and reducing taxes on corporate dividends. Republicans said troops returning from war need more than patriotic support.

Want a growing economy

"When those men and women come home from the battlefield, we want a growing economy so that those folks will have jobs," said Sen. Charles E. Grassley, R-Iowa, chairman of the tax-writing Senate Finance Committee.

Other senators worried about years of red ink after an expensive war and a new tax cut. The White House will tell congressional leaders how much the battles will cost on Monday, and the Senate will finish its budget work a few days later.

The tax cut survived its most serious challenge Friday -- a failed thrust by moderates to cut it in half. The centrists championing the cause lost when they could not get one of two strong-willed senators to join them. Those two, McCain and Ernest Hollings, D-S.C., opposed all tax cuts and plan to vote against the entire budget.

"It is perplexing that so many senators who purport to support smaller tax cuts did not join our effort, which would have actually accomplished that goal," said Sen. Olympia Snowe, R-Maine.

Sen. John Breaux , D-La., said the defeat means Bush will win most, if not all, of his tax plan. "By voting against the $350 billion tax cut, you were in effect making possible the $726 billion tax cut to pass the Senate," he said.

The House Ways and Means Committee will start drafting a $726 billion tax cut as soon as next week. Breaux and Snowe sit on the Finance Committee and will have some influence over that tax bill's final form.

Moderate Republicans in the House also voiced displeasure over the budget. Twelve voted with Democrats early Friday when the House approved its spending plan, 215-212.

Republicans won the vote after promising to drop planned cuts to veterans benefits and match the Senate's $1.8 billion increase. Those changes will come when the House and Senate meet to negotiate a single budget to govern spending for the year beginning Oct. 1