Friday, February 09, 2001

Chabot among voices backing bigger tax cut

By Derrick DePledge
Enquirer Washington Bureau

        WASHINGTON — Several conservative Republicans want President Bush to consider a larger tax cut than the $1.6 trillion package the president turned over to Congress on Thursday.

        Rep. Steve Chabot, R-Cincinnati, said the estimated federal budget surplus is sufficient to sustain a $2.2 trillion break that reaches people sooner than Mr. Bush's 10-year proposal.

        The Congressional Budget Office has projected a $5.6 trillion surplus during the next decade, $1 trillion more than it anticipated in a report last summer.

        “I felt that we've needed tax relief sooner rather than later,” said Mr. Chabot, who will work with a handful of lawmakers on the House Republican Study Committee for additional tax relief. “The timing is certainly right. We've got an economy that is faltering.”

        The Bush administration has cautioned Republicans not to inflate his package and risk its prospects in Congress, where Democrats are ready to challenge the numbers. Mr. Chabot said he supports Mr. Bush's proposal but wants to expand and accelerate its scope.

        Mr. Chabot and other conservatives would, among other suggestions, enable taxpayers to deduct the cost of health-care premiums, expand annual Individual Retirement Account contribution limits, reduce capital-gains taxes, repeal a federal excise tax on telephone bills and enlarge the adoption tax credit.

        Some of these items, like the IRA and telephone-tax provisions, have been approved in the House in the past but were held up because of political or legislative disputes. Rep. Rob Portman, R-Terrace Park, who will help manage the Bush tax package in the House, has introduced a bill to repeal the telephone tax and soon will revisit IRA and pension reform.

        “I'm delighted that we're talking about whether the tax bill is big enough or not,” said Mr. Portman, who would like to see pension reform included in the Bush plan. “It shows there is a real interest in tax relief this year.”

        Other Republicans also are hoping to supplement the Bush package. Sen. Mitch McConnell, R-Ky., who was among several law makers to meet with the president on tax issues Thursday, wants to expand the tax deduction for charity. Taxpayers who file as singles would be able to deduct $500 in charitable donations, while couples filing jointly could deduct up to $1,000.

        Many Democrats received the Bush package warily.

        Rep. Baron Hill, D-Ind., who leads a task force on tax issues for the Blue Dogs conservative Democrats, said Mr. Bush is being too ambitious with a surplus that is only projected, not guaranteed.

        The Blue Dogs would devote half of any surplus to reduce the national debt, a quarter for new spending and a quarter for tax relief. Under that formula, Mr. Hill said, the government could afford about $700 billion in tax cuts.

        “People are in denial if they think we can do all of that,” he said of the Republican tax packages. “Before you start spending money on tax cuts, these surpluses have to materialize.”

        Sen. George Voinovich, R-Ohio, also has told Republican leaders not to rush tax breaks without debt reduction and spending controls.


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