GOP Agenda in Congress May Be at Risk

By Jonathan Weisman
Washington Post Staff Writer
Sunday, September 4, 2005

Republican leaders intended to return to work with a dream agenda for small-government conservatives: permanent repeal of the estate tax, an extension of deep cuts to capital gains and dividend taxes, the first entitlement spending cuts in nearly a decade, and the advent of private investment accounts for Social Security.

But Congress and the White House are on the spot to respond to Hurricane Katrina's historic Gulf Coast destruction and skyrocketing gasoline prices, and the leadership is feeling pressure to set aside or jettison parts of that well-laid agenda.

The federal budget already is stretched by spending on the war in Iraq and a nearly $11 billion emergency hurricane relief package that was rushed through Congress late this week. GOP leaders will have to justify additional tax relief for upper-income people at a time of civil and economic crisis.

"How do you do tax cuts when your budget is straining to save lives?" asked Rep. Mark Foley (R-Fla). The Ways and Means Committee on which Foley serves had been set to pass a package of tax cuts and spending cuts by the end of September, followed by broad, controversial Social Security legislation. Katrina "is going to have a tremendous impact," he added.

House Majority Whip Roy Blunt (Mo.) said he has every intention of pushing forward with the tax and spending cuts and Social Security legislation. Hurricane-related legislation will not be controversial and "may mean we work on a Friday or two," he said.

Asked at a news conference whether tax cuts are wise when the government is pouring billions of dollars into emergency aid, Blunt replied: "I think we need to look at what we need to do to be sure that the economy isn't affected more than it needs to. . . . We'll be thinking about that."

Senate Minority Leader Harry M. Reid (Nev.) implored Republicans late last week to drop plans to take up permanent repeal of the estate tax soon after Congress returns to work. "With thousands presumed dead after Hurricane Katrina and families uprooted all along the Gulf Coast, giving tax breaks to millionaires should be the last thing on the Senate's agenda," Reid said.

Marshall Wittmann, a former Republican political strategist now with the centrist Democratic Leadership Council, said the GOP agenda looks like "political suicide."

"The entire fiscal landscape has been transformed in the last week," Wittmann said. "The entire Republican agenda of tax cuts, Social Security reform and big spending on pet Republican projects is over. Events do eventually have an impact on Capitol Hill."

With the government's response to the hurricane disaster fast becoming a sensitive political issue, Republicans are responding cautiously to Democratic criticism. Amy Call, a spokeswoman for Senate Majority Leader Bill Frist (Tenn.) said the plan is still to move to legislation repealing the estate tax this week. "However, we remain willing and able to return to Katrina business at any time," she said.

Eric Ueland, another Frist aide, said that Frist, a surgeon, planned to spend the weekend assisting medical and relief personnel in the Gulf Coast region "so he can bring the best judgment to bear with how to proceed to keep moving Senate business forward while being able to respond to critical Katrina needs."

This week, the House will move on a variety of hurricane-related items including allowing the federal court in New Orleans to reconvene on dry land and allowing Louisiana food-stamp recipients to claim assistance in Texas, Blunt said.

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