GOP senator says Bush's tax cuts are a given
WASHINGTON – Sen. Charles Grassley, the chairman of the tax-writing Senate Finance Committee, thinks that Congress will enact most of President Bush's accelerated tax cuts within the next two months.
This isn't a Pollyanna prediction from a cockeyed optimist. The cunning Iowa lawmaker is a self-professed pessimist. "It's my nature," he says. But he is not only confident that Bush will get the core of his stimulus plan, he also says it probably will come up for a final vote sometime in late March or early April.
That should come as good news to the business community, investors and anyone who is looking for a job. With the economy barely growing in the past quarter, and Wall Street still in a funk over Iraq, House and Senate Republicans want to approve Bush's stimulus bill "sooner rather than later," Grassley says.
The Iowa Republican is so intent on moving swiftly on the tax cut bill in his committee that he plans to begin work on it while Ways and Means Committee chairman Bill Thomas is drafting and moving his own version through the House.
"That way, we will be well along our way by the time the House votes and passes its bill," Grassley told me in a wide-ranging interview this week.
Washington, of course, is full of naysayers, on Capitol Hill and among the pundits. They are speculating that the bulk of Bush's plan – including elimination of the stock dividends tax and cutting all the top rates this year – will not survive or lawmakers will water it down.
That's what they said about the president's $1.35 trillion tax cut plan in 2001, but Bush got most of what he wanted. Grassley thinks that's what will happen this time, perhaps with some exceptions.
Likely to carry is "anything that is refundable, anything that is going to put money in people's pockets because Democrats like that," according to Grassley. That means doubling the child tax credit to $1,000, eliminating the marriage tax penalty and implementing most of the administration's previously enacted income tax rate cuts this year.
However, abolishing the entire dividend tax and dropping the top tax rate to 35 percent remain problematic, Grassley says. He is for the whole plan, but getting these two provisions through a narrowly divided Senate "will be tough."
The early thinking in the party's inner sanctum is that the dividend tax cut and possibly the top rate cut may have to go to win a couple of Democratic swing votes.
Grassley had just returned from the Republican weekend retreat at the posh Greenbrier Resort in White Sulphur Springs, W.Va., where lawmakers plotted strategy behind closed doors to overcome Democratic opposition to deeper and faster tax cuts.
"There was some concern about the deficit," but the overriding feeling "was that the deficit is less of a problem if we stimulate the economy and get the tax cuts right now," says Grassley. "Most of the tax rates will be accelerated," along with deeper expensing and depreciation write-offs for small businesses, he told me.
Copyright 2003, United Feature Syndicate, Inc.