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Voinovich Now Backs Pay-as-You-Go Budget

Amendment Aims to Finance Future Tax Cuts

By Jonathan Weisman
Washington Post Staff Writer
Tuesday, March 15, 2005; Page A04

As the Senate took up a budget resolution yesterday for the coming fiscal year, Sen. George V. Voinovich (R-Ohio) threw his weight behind an amendment that would force future tax cuts to be financed by spending reductions or other revenue hikes.

The "pay-as-you-go" amendment, which Voinovich opposed last year, could come to a vote as early as Wednesday. Last year, the same amendment squeaked through the Senate with the backing of virtually every Democrat and four Republicans -- Olympia J. Snowe and Susan Collins of Maine, John McCain (Ariz.) and Lincoln D. Chafee (R.I.). But President Bush and House Republicans refused to go along, and Congress failed for the second time in three years to complete a budget plan.

Sen. George V. Voinovich (R-Ohio) changed his stand based on an improved economy and who benefited from the tax breaks. (Ray Lustig--The Washington Post)

With a GOP Senate majority that is four seats larger, supporters of the pay-as-you-go amendment conceded they will need more than Voinovich's support to win passage. Voinovich opposed the measure last year because economic growth was still fragile and the tax cuts that were set to expire in 2004 largely benefited the middle class, spokesman Scott Milburn said.

This year, the Senate budget measure has set aside $70 billion in tax cuts over the next five years, using parliamentary language that would ensure those cuts could pass the Senate with a simple, 51-vote majority, not the 60 votes needed to cut off a filibuster. But this time, the economy is growing smartly, Milburn said, and the largest of the tax measures to be extended are major reductions in capital gains and dividend tax rates that disproportionately benefit the affluent. "He sees the whole geography as different," Milburn said of his boss.

Voinovich will meet with moderate Republicans today to plead for support.

Other budget flash points are also expected to flare by midweek. Democrats, with some GOP support, will try to strip out of the budget language that would effectively bar a filibuster against legislation to open Alaska's Arctic National Wildlife Refuge to oil exploration and drilling.

Senate Finance Committee members Gordon Smith (R-Ore.) and Jeff Bingaman (D-N.M.) will try to strip out language instructing the tax-writing committee to draft legislation yielding $15 billion in savings from entitlement programs under its jurisdiction. Most of those cuts would likely come from Medicaid, the federal health insurance program for the poor.

Gearing up for that amendment, Senate Budget Committee Chairman Judd Gregg (R-N.H.) yesterday characterized the savings he is seeking as "a marginal change at best," saying Congress has to come to grips with soaring entitlement spending.

"If you deny this change, you are basically denying that you're willing to take on your responsibility to govern," Gregg said. "And you're going to kick that can down the road. And at some point we're simply not going to be able to kick any farther. It's going to end up being a bill passed on to our kids."

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