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[Tvoivozhd <tvoivozd AT infionline.net>]

The pseudo-cosnservative no-taxers are ideologically opposed to 
pay-as-you go in any and all circumstances, including this "war time" 
economy.


The New York Times
------------------------------------------------------------------------


         September 23, 2004


   Deal in Congress to Keep Tax Cuts, Widening Deficit

*By EDMUND L. ANDREWS*

WASHINGTON, Sept. 22 - Putting aside efforts to control the federal 
deficit before the elections, Republican and Democratic leaders agreed 
Wednesday to extend $145 billion worth of tax cuts sought by President 
Bush 
<http://www.nytimes.com/top/news/washington/campaign2004/candidates/georgewbush/index.html?inline=nyt-per-pol> 
without trying to pay for them.

At a House-Senate conference committee, Democratic lawmakers abandoned 
efforts to pay for the measures by either imposing a surcharge on 
wealthy families or closing corporate tax shelters.

"I wish we could pay for them, but this is a political problem and we 
have people up for re-election,'' said Representative Charles B. Rangel 
of New York, the senior Democrat on the House Ways and Means Committee. 
"If you have to explain that you voted for these tax cuts because they 
benefit the middle class and against them because of the deficit, you've 
got a problem.''

Fearful of being attacked as supporters of higher taxes, Democrats said 
they would go along with an unpaid five-year extension of the $1,000 
child tax credit; a four-year extension of tax breaks intended to reduce 
the so-called marriage penalty on two-income families; and a six-year 
extension of a provision that allowed more people to qualify for the 
lowest tax rate of 10 percent.

Even as they pushed for the cuts that will add to the federal budget 
deficit, House Republican lawmakers said Wednesday that they hoped to 
have a vote soon on a constitutional amendment that would require the 
government to balance the budget by 2010, except if the country is at war.

That proposed amendment has no chance of becoming law, but it would 
conflict with even the Bush administration's rosiest goals for reducing 
the deficit, which is expected to hit $420 billion this year, a record. 
Mr. Bush has promised only to cut the deficit in half by 2009.

Approval of the tax cut package is a significant victory for Mr. Bush, 
who champions the extension of the cuts at every campaign stop but whose 
wishes had been thwarted by Democrats and a handful of Republican 
moderates in the Senate.

As recently as July, the moderates demanded that such tax cuts be paid 
for either with budget cuts or with higher taxes in other areas. By 
teaming up with Democrats, the Republican moderates prevented their own 
party leaders and the Bush administration from getting their way.

But with the election nearing, Congressional Democrats said they would 
not let themselves be branded as supporters of tax increases, which 
would occur if the expiring provisions were not renewed.

Senator John Kerry 
<http://www.nytimes.com/top/news/washington/campaign2004/candidates/johnfkerry/index.html?inline=nyt-per-pol>, 
their party's presidential nominee, has said he supports extension of 
the tax reductions, though he would roll back Mr. Bush's tax cuts for 
the top 2 percent of income earners, families with annual incomes above 
$200,000.

Senator Tom Daschle of South Dakota, the Senate Democratic leader, 
announced this week that he would support a five-year extension of the 
cuts even if they were not paid for.

With Democrats capitulating to the Republican majorities in both the 
House and Senate, the handful of Republican holdouts have quietly 
surrendered as well.

The Republican rebels - Senators John McCain of Arizona, Lincoln Chafee 
of Rhode Island and Olympia J. Snowe and Susan Collins of Maine - 
infuriated Mr. Bush and many Republican leaders. But their ability to 
block action evaporated without the votes of Democrats.

The result of the reversal on the part of the Democrats and the 
Republican moderates is likely to be a tax measure that will last longer 
and increase federal deficits more than a two-year extension that 
Republican Senate leaders offered this summer. The nonpartisan 
Congressional Budget Office has estimated that debt will climb by $2.3 
trillion over the next 10 years, and that making all Mr. Bush's tax cuts 
permanent would cost an additional $1.9 trillion by the end of 2014.

In the conference committee, House and Senate Republicans added about 
$13 billion worth of business tax breaks, the biggest of which was a 
renewal of the investment tax credit for research and development.

House Republican conferees also rejected a proposed amendment by Senator 
Blanche Lincoln, Democrat of Arkansas, that would expand the number of 
poor families eligible for a refundable child tax credit. That measure 
would have cost $7 billion over 10 years.

According to studies by Democrats on the Joint Economic Committee, four 
million low-income families will have reduced benefits from the child 
tax credit if the law is unchanged.

"These are working people we are trying to help," Senator Lincoln said, 
adding, "The higher-income taxpayers get enormous benefits from the tax 
code."

At issue in the case of the child tax credit was the extent to which it 
should be made available as a refundable payment to low-income families 
that have no federal tax liability.

To save money in last year's tax bill, Republican lawmakers decided to 
offer a refundable tax credit to families that earn at least $10,000. 
But that still left many poor families ineligible, and those numbers 
would increase because the current law raises the minimum income 
threshold each year in line with inflation.

"The tax credit is for taxpayers,'' said Senator Don Nickles, Republican 
of Oklahoma. "If you want to change the welfare system, then change the 
welfare system.''


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