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Tax Bills Open Way for Policy Initiatives

By Helen Dewar
Washington Post Staff Writer
Monday, June 30, 1997; Page A04

Sen. Orrin G. Hatch (R-Utah) saw his chance and took it.

It was late in the Senate Finance Committee's grueling task of putting together the largest tax cut in nearly two decades, and members had latched onto the idea of raising the cigarette tax to help finance some corporate tax breaks and other favored causes. But, for Hatch, something was missing: funds for the crusade he was waging with Sen. Edward M. Kennedy (D-Mass.) to subsidize health insurance for low-income children from the proceeds of a cigarette tax increase.

So he made a fervent appeal to the conscience, collegiality and political survival instincts of his colleagues and walked away with half the bounty, or about $8 billion over five years.

"Most people [on the committee] wanted to seize this opportunity to do things that they weren't able to do before in a bipartisan way," Hatch observed later. "I just seized the moment . . . and it worked."

Hatch was far from alone in seeking to expand the huge tax and spending bills that won initial approval from the House and Senate last week to include major policy initiatives that go far beyond the original deal between President Clinton and congressional leaders to balance the federal budget within five years.

From every corner of Capitol Hill, lawmakers mounted solo operations as well as joint ventures across party lines to include proposals touching on issues ranging from abortion and medical malpractice lawsuits to tobacco, children's health insurance and a major restructuring of Medicare.

Many of these ideas appeared suddenly in the midst of the process, seemingly out of nowhere – although their roots can be traced back months if not years, through several failed efforts that gradually produced a consensus for action. More often than not, their success resulted from deals struck by key lawmakers from both parties that could command broad bipartisan support in one or both houses.

"It was the first time in a long time that there was an effort to be truly bipartisan," said Sen. Connie Mack (Fla.), chairman of the Senate Republican Conference. "Things were rejected in the past simply because they were offered by Republicans or Democrats. This is just not occurring here. People see an opportunity to get something done."

Some initiatives, such as the House proposal to write abortion funding restrictions into permanent law for the first time instead of attaching them to annual spending bills, were extensions of marathon fights that have bedeviled Congress for years.

Others, including another House proposal aimed at limiting malpractice damage suits, were tucked discreetly into the huge budget bills in hopes of avoiding the presidential vetoes that doomed them in the past.

Still others, such as raising the eligibility age for Medicare and requiring wealthier seniors to pay more for their care from doctors, broke new ground in defiance of old political taboos about the lethal consequences of tampering with big benefit programs, especially those that serve the elderly. Significant as they are by themselves, these proposals could help set the stage for more comprehensive reforms from a bipartisan commission that also would be created by the legislation.

Use of a tobacco tax increase to fund children's health insurance illustrated a different phenomenon: a serendipitous confluence of pressures to curb smoking and to assure health care for children whose families cannot afford insurance. At least in the Senate, it became powerful enough to overcome political objections to tax increases of any kind. Taxing tobacco to help kids had become politically correct.

Some or even many of these policies may not survive a House-Senate conference that will meet after Congress's July 4 recess to write a final version of the legislation. But, especially in the case of major initiatives like Medicare restructuring, they will have gained valuable ground – and a measure of political acceptability – for future battles. "It makes it easier the next time around," said Sen. John Breaux (D-La.).

Because of the normal array of legislative obstacles that can trip up individual bills, it has become almost routine for lawmakers to try to hitch their pet projects onto whatever train is moving down the track at a given time. Budget bills are especially appealing vehicles because they move under rules aimed at preventing obstruction and delay. Bills that are likely to be signed into law are virtually irresistible.

Sometimes it works, sometimes not. It failed with disastrous results when Republicans overreached in their 1995 budget-balancing bill, prompting a confrontation with Clinton that contributed to government shutdowns and a political embarrassment for the GOP. More recently, it failed again when Republicans added contentious policy proposals to a disaster relief bill but had to back down after Clinton vetoed the measure and accused the GOP of playing politics with flood aid.

A key difference in this latest effort is the extent of bipartisan cooperation, especially in the Senate but also in House deliberations over Medicare and some other issues – an aura that contrasts sharply with the highly partisan nature of other business, such as investigations into alleged campaign finance abuses.

The close cooperation started at the top with the budget-balancing framework established by Clinton and Republican leaders earlier in the year. But it also percolated up from rank-and-file lawmakers, some of whom have been working together for years on a wide array of issues.

A case in point was using the tobacco tax to promote children's health. Hatch, a conservative Republican, and Kennedy, a liberal Democrat, had been pushing the cause for months, and it became impossible to resist, especially when the Finance Committee had been planning to use the tax for things like relief for real estate interests.

By the end of a five-hour closed-door caucus to resolve the issue, the committee agreed to increase the cigarette tax from 24 to 44 cents a pack, with $8 billion of the $15 billion proceeds over five years going to children's health insurance. With $16 billion already provided in the bill for this purpose, the total was now $24 billion, covering 6 million of the estimated 10.5 million uninsured children.

Kennedy lost a fight to raise the tax by another 23 cents, but the Finance Committee's proposal sailed through the Senate without challenge.

Another example of a successful odd-couple operation was the cooperation between Sens. Phil Gramm (R-Tex.) and Bob Kerrey (D-Neb.) on Medicare overhaul, including means-testing and increasing the eligibility age from 65 to 67 over the next 30 years. Gramm had long been an advocate of taming the growth of entitlement programs, and so was Kerrey, although they had followed separate paths and were not personally close.

Soon after becoming chairman of the Finance Committee's health subcommittee, Gramm approached Kerrey about working together, and they agreed to do so.

"I viewed this as a real, honest-to-God crisis, and so did Bob," Gramm said last week. "These were things that everybody's been talking about in the cloakrooms for years, and they knew it had to be done sooner or later, so we just did them," added Kerrey.

Staff writers Clay Chandler and John E. Yang contributed to this report.

© Copyright 1997 The Washington Post Company

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