Congressional Republicans officially launched their drive to enact President Bush's 10-year, $637 billion tax cut plan yesterday in the face of rising budget deficits, looming war and growing unease about the administration's handling of the economy.
House and Senate Republicans -- backed by one Democrat, Sen. Zell Miller (Ga.) -- introduced the president's package in legislative form, hailing it as the medicine the economy needs to emerge from the doldrums and to stay healthy over the long haul. But beneath yesterday's relatively low-key festivities was unease about its prospects for passage.
"Some people think there are cons to the president's plans, and some folks believe that while the concept is good, there may be some alternatives," said House Ways and Means Chairman Bill Thomas (R-Calif.).
Don Nickles (R-Okla.), who is chairman of the Senate Budget Committee, said, "It's bound to be altered to some extent -- minor, I would hope."
Unveiled with fanfare nearly two months ago, Bush's economic plan has run into a stiff head wind from Democrats who say it is skewed to the rich and from some moderate Republicans who question its size and stimulative effect. But business groups have begun falling into line behind the plan, and the White House has proven adept at keeping GOP dissent muffled.
The plan's centerpiece would slash taxes on corporate dividends at a cost to the Treasury of $335 billion through 2012. It also calls for immediately implementing income tax cuts that are scheduled for a gradual phase-in, as well as accelerating tax breaks for married couples and couples with children. The package would expand the value of purchases that small businesses can deduct from their taxes.
"There can't be any doubt about the fact that the American economy needs a boost," said Treasury Secretary John W. Snow, "and there can't be any doubt that this package will provide that boost."
But Democratic leaders immediately raised doubts, and attacked the plan as a boon to the rich that would drive up the deficit just as the nation prepares for possible war. Senate Minority Leader Thomas A. Daschle (D-S.D.) dismissed it as "a sham, wrapped in spin, shrouded in deception. . . . I've not found a time yet where we've contemplated a war and had a president that advocated tax cuts, especially of this magnitude."
Snow responded: "The president is seeking to avoid war. He is seeking to give Saddam Hussein a way to end his terrorist activities."
If war ensues, the first shots could be fired just as the legislative battle over the tax cuts begins. Thomas said he plans to hold the last hearing on the package March 11 and draft a final bill that month. Nickles said he hopes to complete a budget blueprint that makes room for the Bush tax cut by April 15.
So far, Democrats' efforts to undermine the tax cut with talk of war have not greatly worried Republicans, a senior GOP aide said. But if the administration drops a $95 billion war-funding request on Congress just as it is drafting the tax cut, it could be problematic, the aide said.
For now, Republican sources say, the biggest concerns are the deficit -- projected by the White House to reach $304 billion this year before war costs are considered -- and the president's standing on economic issues. A new poll by the nonpartisan Pew Research Center found this week that 43 percent of those polled support Bush's handling of the economy, and 42 percent support his tax policies.
With Democratic confidence rising, Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) signaled yesterday he would seek a compromise on the Bush dividend tax cut, though he predicted the plan's other elements "should draw immediate bipartisan support."
So far, bipartisanship exists in the guise of a Democrat, Miller, who also co-sponsored the president's 10-year, $1.35 trillion tax cut that passed in 2001. Just as Democratic support grew for that plan as it neared passage, Miller predicted a repeat performance in 2003.
"As the line in that old hymn says, when the roll is called up yonder on the president's tax cut, I will not be the only Democrat voting for it," Miller said. "I guarantee it."
But with budget surpluses transformed into deficits and the economy still ailing after two successive rounds of "stimulative" tax cuts, Daschle insisted this year will be different. He predicted "a bipartisan coalition in opposition for the first time since this president came to office."