Site Presented By
Saturday, Jul 4, 2009
Resistance from McCain, Snowe, Chafee and others could spell trouble for the president's radical proposal.
Jan 9, 2003 | One day after President Bush proposed a $674 billion tax cut that would principally benefit the affluent, a corps of moderate Republicans delivered a curt response: In a time of imminent war and rising deficits, the tax cut is too big and will not pass without significant change.
The unusual public opposition from moderates in his own party and from centrist Democrats who supported his 2001 tax cut appeared to get the attention of the White House, and spokesman Ari Fleischer was already signaling Wednesday that Bush was ready to compromise. And while some analysts had suggested that Bush's first draft was designed mainly to score points with big GOP contributors, some past allies in the Senate said Bush had no choice but to back down.
Sen. Olympia Snowe, R-Maine, a member of the Senate Finance Committee, said she was pleased with some of the smaller-ticket items in the Bush plan, like the acceleration of the child-care tax credit and some targeted business cuts. But she balked at the $364 billion centerpiece of Bush's plan -- the elimination of the tax on corporate dividends -- citing the worrisome federal deficit.
"We must seek the balance needed to build bipartisan support on a stimulus plan that will stimulate the economy while also remaining fiscally responsible," she said. "At a time of growing federal deficits, it is especially important that this plan be right-sized without putting our future at risk."
Snowe was among the 60 senators who supported Bush's $1.3 trillion tax cut in May 2001, handing the president one of his first major legislative victories. That cut sailed through Congress, with 12 Democrats joining 48 Republicans in voting for the bill. But the initial resistance on Capitol Hill to Bush's new stimulus package may be the best measure of just how dramatically the country's economic and political landscapes have changed in two years.
The events of Sept. 11, 2001, triggered enormous spikes in defense spending and the largest reorganization of the federal government since the New Deal. Though the nation had enjoyed a $127 billion budget surplus in 2001, expenses shot past revenues to create an expected deficit of $165 billion in the current budget year. And many moderate Democrats who last fall seemed cowed by the threat of tough election battles now seem to be liberated and willing to criticize the president's new tax-cut package openly. Self-inflicted wounds from the 2002 midterm elections also remain fresh, and Senate Democrats seem more eager to draw sharp differences between themselves and the White House, particularly on domestic policy.
One influential Bush critic -- this one a Republican -- appeared ready to vote against another Bush tax-cut plan. "It is middle-income Americans that have kept our economy afloat by buying houses and automobiles," said Sen. John McCain of Arizona on MSNBC's "Hardball." "I believe that they deserve the majority of the break, not the higher-income level of Americans."
Sen. Lincoln Chafee, R-R.I., has scheduled a press conference Thursday to announce his opposition to the president's proposal to accelerate the 2001 tax cuts. That may not come as a huge surprise since Chafee and McCain were the only two Republicans to vote against the 2001 Bush tax cut.
"I would like to see a more balanced approach than the plan laid out by the president today," said Sen. Jim Jeffords, I-Vt., who voted for the 2001 tax cut, his last vote before bolting the GOP. "We need a plan that focuses more on the needs of people on Main Street rather than the needs of Wall Street."
Similar concerns were voiced by Sen. John Breaux, D-La., who also supported the 2001 cuts. Breaux cited the effect the new tax cuts would have on the federal deficit as his reason for balking at the new proposal.
"Bear in mind tax cuts are not free," Breaux told the Los Angeles Times. "We have to pay for them by increasing the size of the deficit. And we have a lot of other competing demands for dollars this year. Who knows what Iraq is going to cost? Who knows what Medicare reform and prescription drugs are going to cost?"
In reality, Bush has a little cushion to work with. The tax-cut bill will only need 50 votes to pass, and with 51 Republicans in the Senate, he can afford to lose some of the Democrats who voted for the 2001 tax cut. But opposition from Snowe and other Republicans is a more pressing problem for the White House.
"The president understands that we have a system in our country -- the president proposes, and it's Congress's responsibility to the American people to discuss it, to hold hearings and to exercise its judgment on the president's package," Fleischer said Wednesday. "I think he has shown over the last two years a very successful track record of fighting for what he believes in and working well with Congress to get it enacted. And that's exactly what he intends to do this time."
