Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) is urging GOP leaders to put off a final vote on a $792 billion tax bill to avert a showdown with President Clinton that would likely result in no major tax legislation this year.
Domenici has argued privately that Republican leaders should delay final action until they can "smoke out Clinton" and determine whether there are grounds for a comprehensive deal on taxes, Medicare and additional domestic spending.
But House Speaker J. Dennis Hastert (R-Ill.) and Senate Majority Leader Trent Lott (R-Miss.) are pressing for a vote on a compromise GOP plan this week, despite repeated administration veto threats.
Negotiators from the two chambers began meeting yesterday to try to iron out their differences.
In a brief 20-minute opening statement session, House Ways and Means Committee Chairman Bill Archer (R-Tex.) reiterated the Republicans' determination to move forward with the measure, publicly pleading with Clinton not to veto it. "Please reconsider your staunch opposition to giving the people their money back," Archer implored the president. "Please resist the temptation to spend this budget surplus on more government programs."
But Rep. Charles B. Rangel (D-N.Y.), the top Democrat on the Ways and Means Committee, complained that Democrats will be excluded entirely from most of the negotiations -- which will be behind closed doors between Republicans from the House and Senate. He said the GOP aims not to produce a tax policy bill but a political document, rushing to finish its tax package so that later this summer Republicans can use it to begin "Campaign 2000."
The price tag of the rival GOP tax plans is more than twice what Clinton and most congressional Democrats say is acceptable. Both the Senate and House versions use future surpluses to provide $792 billion of tax benefits over 10 years, but the two plans differ greatly in their detail.
Perhaps the biggest difference is over ways of providing broad-based tax relief: The Senate would reduce the lowest tax rate from 15 percent to 14 percent and expand the number of Americans who pay that rate, while the House would gradually cut rates by 10 percent across the board.
The momentum appears to be shifting toward the House in this dispute. Lott and other Senate GOP leaders prefer the across-the-board tax cut approach and are pressuring Senate Finance Committee Chairman William V. Roth Jr. (R-Del.) to go along.
Among the other differences, the Senate has a stronger provision than the House to eliminate the marriage tax penalty; the House would phase out the estate tax while the Senate would only reduce the rates; and the House would cut rates on capital gains while the Senate would exempt as much as $1,000 of gains from taxes for individuals or married couples filing jointly.
Archer and Roth began talks in midafternoon and negotiators planned to work late into the night with a goal of trying to complete work by today. Lott and Hastert are keeping tight control of the process and to speed it up, the negotiating teams were kept small.
The Senate is entering the talks with divisions among the Republicans. Moderates are unhappy with the GOP plan and favor a smaller, $500 billion alternative. Sen. John H. Chafee (R-R.I.), a moderate on the Finance Committee, was denied a seat on the conference. "I know they [the leadership] are trying to put a good face on it of everybody being united, but it is a pretty fractured scenario right now," said Chafee spokesman Nicholas Graham.
Domenici is concerned that the leadership may end up with an issue but no legislation. At Domenici's behest, a senior GOP aide yesterday circulated an alternative compromise scenario that would avoid a veto and leave open the possibility for a comprehensive deal this fall including $500 billion of tax cuts, Medicare reform and increased domestic spending.
Instead of sending the bill to the president, the aide suggested that the GOP hold a "mock veto ceremony" to make their points. The aide cautioned that, under this year's budget resolution, the tax bill is the only measure that will be afforded special protections against a filibuster. "Absent [that] Republicans are likely to achieve no tax cut at all while still succumbing to the inevitable pressures to modify Medicare" and increase domestic spending beyond the budget caps, the aide said.