The Kindest Cuts: Bush goes after tax relief - George W. Bush - Brief Article

National Review, Feb 5, 2001 by Kate O'Beirne

In a meeting last month to discuss the congressional agenda, President Bush reminded the Senate's Republican leaders that the new player in town would have plenty to say about legislative strategy. "The ball's in my court, now," Bush said, and he declared that he wanted his tax-relief plan to be an early priority. Congressional aides report that in planning sessions transition officials echo Bush's intent to push his tax-cut bill "early and hard." But it will be an uphill push: Early discussions on Capitol Hill about the timing and structure of the tax bill reflect the difficulties Bush will face as he tries to deliver on this key campaign promise.

As president-elect, Bush took every opportunity to emphasize his resolve to enact significant tax relief. During the campaign, he had argued that a portion of the surplus ought to be returned to taxpayers as a matter of fairness, and also to serve as a brake on Washington spending. Since the election, in the face of gloomy economic indicators, he has called his tax-relief package an "economic-recovery plan," featuring rate cuts to stimulate growth and to offset the rising cost of energy to consumers.

In private conversations at last month's conference with business leaders, Bush said that the media's repeated questioning of his intentions on taxes reflected the journalists' surprise that he actually meant what he said in the campaign. But the media aren't alone in misjudging his resolve on taxes: Each expression of his firm intent has been greeted with skepticism even by friendly forces in Congress. House Speaker Denny Hastert, for example, has recommended enacting separate bills with targeted tax cuts instead of a single, comprehensive tax-cut bill. Within hours of becoming the new chairman of the House Ways and Means Committee, Bill Thomas asserted his own indispensability-by treating the new president's detailed $1.3 trillion tax-cut plan as merely an opener for discussions. "President-elect Bush ran on some particular ideas about the tax code. We're going to share our ideas," Thomas explained.

Despite this early lack of enthusiasm, a Senate leadership aide predicts that GOP senators will get with the Bush program: "The president will plant his flag in the ground, and they will rally around it." And conservatives have already begun to solidify their support. House majority leader Dick Armey has saluted the Bush tax-cut plan, in a memo to Republican members that details the evidence of an economic slowdown. "It's imperative that we cut tax rates quickly to bolster our economy," wrote Armey. He also expressed his concern that a phased-in tax cut that won't take effect until 2002 wouldn't be enough to turn the economy around; he recommended that tax cuts be made retroactive to the beginning of the year. Bush responded positively to Armey's proposal, saying: "We would consider all options. What I won't consider is trying to diminish the size of the tax-relief package."

Other House conservatives also plan to rally behind the Bush plan. At a recent retreat of the conservative Republican Study Committee, its chairman, Rep. John Shadegg of Arizona, gave a few dozen members a ten-page list of policy positions taken by Candidate Bush, and recommended that they select proposals to advance on Bush's behalf. Tax cuts were the top priority. According to Shadegg, "If anyone is going to give the president a honeymoon, it should be us, and it should be on this issue."

Pennsylvania Republican Pat Toomey reports that conservative members believed they could be most helpful to President Bush on tax cuts by "not only being out pushing aggressively . . . but by being to his right to maximize his bargaining position." Toomey points out that since the campaign ended, the surplus has grown and the economy has softened-strengthening the case for tax cuts.

The case is strong enough to convince even Democrats that they don't want to be seen as opposing tax relief. Sen. Max Baucus of Montana, the senior Democrat on the Senate Finance Committee, acknowledges a "growing sentiment" for a tax cut, and minority leader Tom Daschle has suggested that a reasonable compromise with President Bush could be in the neighborhood of $700 billion. (Conservative Republicans fear that some of their moderate colleagues will be comfortable only in Mr. Daschle's neighborhood, which they've visited in the past.)

Just as important as the overall dollar figure for the tax cuts is the question of legislative strategy. In the summer of 1999, facing a certain presidential veto, Congress passed a $700 billion tax-cut bill, including elimination of the marriage penalty and the death tax. Some Republicans are suggesting that these two reforms should now be enacted separately-but transition aides indicated that President Bush would insist on a single package. Bush's fellow Texan, Sen. Phil Gramm, explains why across-the-board rate cuts should be in a comprehensive package with other popular reforms: "When you bake a cake, do you take the sugar out and serve it separately, or do you mix it in with the batter?"