As J. Dennis Hastert labored last week to save the Republican leadership's tax bill and perhaps his speakership, Rep. Lindsey Graham of South Carolina surprised lobbyists gathered at the Capitol Hill Club to raise campaign funds for him. A certified bomb-thrower from the rambunctious Republican Class of '94, Graham sounded like he was proposing a smaller tax cut than Hastert wanted.
Graham, right-wing scourge of Newt Gingrich and Bill Clinton, had not succumbed to Potomac Fever. Rather, he was arguing that the American people would be better off if a tax reduction actually were signed by President Clinton rather than vetoed by him -- and so would the Republican Party. Graham has been working quietly behind the scenes for a bipartisan plan.
On the surface, Graham seems to be pushing a miniaturized version ($345 billion over 10 years) of the Republican bill ($792 billion) passed by the House last Thursday. But that judgment would assess a tax bill's value by adding up the estimated revenue loss of its component parts. In truth, the House bill is flawed and provides a weaker boost to the economy than the bipartisan measure Graham backed. The bill that might conceivably be approved by Clinton in many ways is preferable to the measure he surely would veto.
Despite what he sometimes confides to campaign donors, the president always has been adamantly against serious tax reduction and clearly prefers to use the surplus for additional spending. He is confident that the White House spin machine can deploy the rhetoric of class warfare to castigate the Republican Congress for helping the rich.
Clinton can easily demagogue the House bill, but the bipartisan measure promoted by Graham is another matter. It proposes tax-free capital gains up to $5,000 and tax-free interest up to $10,000, while nearly 35 million middle-income Americans would be moved into a lower tax bracket.
This proposal originated in the Senate, where Robert Torricelli of New Jersey, chairman of the Democratic Senatorial Campaign Committee, co-sponsored it with Paul Coverdell of Georgia, a member of the Senate GOP leadership. Torricelli for weeks has been talking about lining up 15 Democratic senators.
In the House, Graham's Democratic co-sponsors are Reps. Robert Wexler, a Florida liberal, and Rep. William Jefferson, who seeks to become Louisiana's first African-American governor. Such bipartisan backing might still Clinton's veto pen.
To supply-sider Jude Wanniski, the Coverdell-Torricelli proposal is not only cheaper than the House bill but also better for encouraging growth. One trouble with the GOP measures in both Senate and House is the end of the marriage penalty demanded by social conservatives. It provides only 12 cents of extra growth per dollar of static revenue loss, according to an analysis by Gary and Aldona Robbins. The same study shows a comparable growth figure of $16.87 for capital gains tax cuts.
But to end up with a bipartisan result, the House first had to pass the Republican bill crafted by Ways and Means Committee Chairman Bill Archer -- a feat nearly prevented by fourth-term Rep. Michael Castle.
A former governor of Delaware, Castle has exerted inordinate influence in the closely divided House by leading moderate Republicans. He had gathered enough votes last week to torpedo the Archer bill.
At that point, Archer agreed to make the tax cut conditional on progress in reducing the national debt (a dubious stunt that may be ruled out of order in the Senate). Hastert then put himself on the line. He turned around two anti-tax cut fellow Illinoisans -- John Edward Porter and Ray LaHood -- as well as Sherwood Boehlert of New York, one of the most liberal GOP members of Congress, and Fred Upton of Michigan. When Hastert finished, Castle had only three other Republicans voting no.
But the debate roars on behind locked Republican doors. Should Congress hand the president a bill that, however unsatisfying to purists, still guarantees a Clinton veto? Or should it follow Graham's course to make it as hard as possible for the president to say no to a modest, effective tax cut? In short, do the Republicans really want to cut taxes this year?
(C) 1999, Creators Syndicate Inc.