House Panel Approves Tax Cut on Partisan Vote

By JANET HOOK

March 2, 2001 12 AM PT

TIMES STAFF WRITER

WASHINGTON — House Republicans gave President Bush’s domestic agenda its first legislative victory Thursday as the House Ways and Means Committee approved a cut in income tax rates that is the crown jewel of his economic and budget policy.

But in a likely portent of things to come for him on Capitol Hill, the committee action reflected an absence of the bipartisan spirit that Bush promised to build around his presidency.

The tax cut was approved on a strict party-line vote, 23 to 15. House Republicans rammed the bill through the committee on short notice and voted in lock-step to crush a Democratic alternative that would have provided a smaller tax cut, more targeted to middle-income people.

“The president talks all the time about having a bipartisan relationship,” House Democratic leader Richard A. Gephardt (D-Mo.) said. “What the House Republicans are doing is against everything he has said we ought to be doing.”

Gephardt and other Democrats objected to the speedy action on the tax cut bill, arguing that lawmakers should not consider it until after they pass a budget agreement that balances reductions in taxes against other priorities.

Still, some Bush allies remain optimistic that some Democrats will come around to supporting the tax cut as it makes it way through Congress.

“It may look a little less bipartisan than it should today,” said Rep. Rob Portman (R-Ohio), a Ways and Means member who is close to the Bush administration. “I’m still very hopeful that as the bill works its way through the process, it will become more bipartisan.”

Portman said he expected five to 10 Democrats to support the measure when it comes to a House vote next week. One Democrat Bush can count on is Rep. Ralph M. Hall (D-Texas)--a conservative who was the only Democrat in Congress to endorse him for president. Hall’s spokeswoman said Thursday that he would vote for the tax cut bill.

As approved by the committee, the bill would reduce taxes by $958 billion over 10 years by cutting income tax rates across the board. It would go beyond Bush’s proposal by speeding up the cut in the lowest tax rate and applying the change to 2001 tax bills, a year earlier than Bush proposed.

The bill would drop the lowest rate from 15% to 12% for the first $6,000 of income for individuals ($12,000 for couples) in 2001. That new bottom rate would drop to 10% by 2006. Tax rates in higher income brackets would be gradually reduced over five years, beginning in 2002.

The bill is the first of a series of measures House GOP leaders will be pushing that would enact different pieces of the Bush agenda, including repeal of the estate tax and cuts in taxes on married couples.

After weeks of opposing the Bush tax cut package with no detailed alternative of their own, Democrat leaders unveiled a measure that would cut taxes by $585 billion over 10 years. It would provide a smaller income tax cut, dropping only the bottom rate to 12% on income up to $20,000. It also would reduce taxes on married couples and increase and expand tax credits for the working poor.

Democrats argued their alternative would leave more of the federal budget surplus for other priorities, including paying down the national debt. The alternative was rejected by the Ways and Means Committee on a largely party line vote of 26-12.

Democratic strategists said it was important for the party to offer an alternative to allow their party’s members to demonstrate that they support cutting taxes--just not as much as Bush wants. However, House Republican leaders may impose rules for next week’s floor debate that would prevent Democrats from offering their alternative. That, Republicans say, would make it much more politically difficult for Democrats to vote against the Bush tax cut.

But Gephardt said such a maneuver “tells you in the clearest possible terms there is no willingness to run this place, this government, in a bipartisan way.”

The pressure to support the tax cut will be particularly intense on conservative Democrats--especially from districts that voted for Bush. However, many of the party’s rank-and-file are rallying behind their leaders’ argument that, regardless of their position on tax cuts, lawmakers should not be voting on a tax cut before Congress passes a broader budget measure that allocates the surplus among competing priorities.

Even some conservative Democrats who would seem to be Bush’s natural allies were angered by what they believed was the railroading of the tax cut.

“When you try to jam in a [committee vote] 24 hours after you give us a bill . . . it is grotesquely unfair,” said Rep. John S. Tanner (D-Tenn.).

But House Ways and Means Chairman William M. Thomas (R-Bakersfield) said the committee had to act quickly to provide immediate tax relief in a flagging economy. He said the Democrats’ bitter reaction was inevitable--not because of the way the bill was handled but because the cuts in income tax rates are the most divisive part of the Bush tax plan.

“I don’t think anyone should be shocked . . . that we didn’t have a love-in,” Thomas said.