WASHINGTON -- As Congress gets down to the hard bargaining on President Bush's tax cut proposal, Sen. Lincoln D. Chafee pledged yesterday to oppose any tax cut at all.
"I don't approve of any new tax cuts" until more is done to reduce the federal deficit, Chafee said during an appearance on the CBS News program Face the Nation. Chafee, a Republican, also urged reconsideration of the tax cuts enacted two years ago, a step that only a few Democrats have espoused.
Chafee's position appears to ensure that he will remain outside the circle of influential deal-makers who will seal this year's crucial tax and budget decisions over the next few weeks.
But Chafee's appearance opposite Republican Sen. Lindsey Graham of South Carolina -- who pushed the White House argument that tax relief will create jobs and spur the economy -- also underscored the likelihood that Mr. Bush must settle for much less than the 10-year, $750-billion tax-cut package he wants.
After a two-week spring recess, the Senate and the House return this week to begin work on the package, each being guided by earlier-passed budget resolutions. The House Ways and Means Committee is contemplating a $550-billion tax cut package, the Senate Finance Committee a $350-billion plan. Both plans would run for 10 years. Under consideration are an increase in the child-care tax credit, from $600 to $1,000 per year; the elimination of income taxes on stock dividends; and tax incentives for small business, among other provisions.
"I don't know what it's like in Rhode Island," Graham said, noting that South Carolina's jobless rate is 6
percent or more. The Senate's smaller tax-cut package won't stimulate the economy enough to solve that problem nationwide, Graham said. He pledged to oppose anything smaller than the $550-billion tax cut the House seeks.
The path to a package that big is uphill. Besides Chafee, Senate Republicans John McCain of Arizona, George Voinovich of Ohio and Olympia Snowe of Maine joined the Democrats in securing a Senate budget resolution that would hold the tax cuts to $350 billion over 10 years.
The bargaining over that compromise centered on Voinovich and Finance Committee member Snowe because both have expressed a willingness to bargain for a substantial tax cut, though a smaller one than most of their fellow Republicans seek.
But Chafee reiterated yesterday that he voted for the $350-billion package only to get it passed and help the Senate secure a solid bargaining position for a tax cut substantially smaller than what the House wants. Chafee's pledge to oppose any tax cut will reduce his leverage in the full Senate's eventual consideration of this year's tax bill.
Chafee also accused conservative Republicans of abandoning the party's traditional opposition to deficit spending in order to force cuts in Medicare, Medicaid, Social Security and other popular programs.
"I just don't even think you believe" that a new round of tax cuts would help to create jobs and improve the economy, Chafee told Graham. In puzzling over why conservatives would forgo balanced budgets in favor of tax cuts, Chafee said he has concluded they want the federal deficit to rise sharply.
"If you get big deficits, then the pressure will be on" to cut social programs that pay for health care, pensions, education and housing for the poor, Chafee said. "I think that's the tactics" that conservative Republicans have chosen.
Once enacted, tax cuts are difficult to reverse through tax hikes, Chafee said, noting that Mr. Bush's father may have lost his bid for a second presidential term in 1992 because he broke a 1988 campaign pledge to seek "no new taxes."
Chafee also alluded to the Democratic loss of congressional majorities in 1994, after President Bill Clinton, a Democrat, had won tax hikes without any Republican votes.
Graham did not directly rebut Chafee's argument that the GOP is deliberately running up the federal deficit. But he made plain that he agrees with the White House argument that tax cuts will stimulate the economy if they are big enough.
From a better economy, the argument goes, higher tax revenues will flow.
But Graham also made clear that he opposes the recent efforts of some conservative groups to discredit Voinovich and Snowe for straying from the dominant Republican Party line. "I'll be the first to admit, Lincoln, that I couldn't get elected in Rhode Island" any more than Chafee could win election in conservative South Carolina. But as a Republican, Graham noted that his party needs moderate and liberal Republicans to hold their states -- and the GOP Senate majority.
