Senate and House Democratic leaders disagreed over tax strategy yesterday as Senate Majority Leader George J. Mitchell (D-Maine) said he hoped to push for a Social Security payroll tax reduction while House Speaker Thomas S. Foley (D-Wash.) expressed reservations about such a move.
In formally unveiling the Senate Democrats' legislative agenda for the 102nd Congress, Mitchell reiterated his opposition to President Bush's call for a capital gains tax cut, saying it would largely benefit the wealthy.
Mitchell said he favored tax relief for lower- and middle-income taxpayers by rolling back recent increases in the Social Security tax and believed that a "large number of Democratic senators" shared his view.
While Congress will have to consider such factors as the recession, "it is my belief we should proceed to engage in payroll tax reduction," Mitchell told reporters.
The Democratic agenda said Senate Democrats "intend to lessen the tax burden on working families while asking those with the ability to pay to bear a greater share of the income and Social Security tax responsibilities." It listed a proposal to roll back the Social Security tax rate, sponsored last year by Sen. Daniel Patrick Moynihan (D-N.Y.), as one option.
But Mitchell did not propose to raise taxes on the rich or spell out other steps he might recommend to offset the cost of a Social Security tax cut, as required under budget laws aimed at preventing deficit increases. Asked how he would finance the payroll tax cut, he said, "We'll deal with that when we get to the details of the program."
Meeting with reporters later in the day, Foley was asked if he shared Mitchell's view and responded that it was a "Senate Democratic priority" that House Democrats do not necessarily share.
He noted that the House has the responsibility under the Constitution to initiate tax legislation and added: "It is a divided issue here. There are people for it and those who are not so enthusiastic."
Foley said he had "reservations" about the proposal in light of its impact on the Social Security system and on tax revenues, which he said would suffer a "very, very substantial" loss if payroll taxes were cut.
"There is a question of whether we can move at this time in the midst of this war circumstance to make major changes," he said. "I think that is one we will have to consider."
The Senate Democratic agenda, as approved Tuesday by Democratic senators, sets out many goals articulated earlier by Mitchell, including improvements in education, health care, environmental protection and energy development. Mitchell said earlier priorities for action by the Senate included campaign finance reform, legislation to require employers to provide unpaid leave to workers with newborn infants or sick family members and a bill to restore anti-discrimination protections for workers.