TOPICS > Economy

Congress, Presidential Candidates Debate Tax Cuts

September 23, 2004 at 12:00 AM EDT

TRANSCRIPT

KWAME HOLMAN: Concern in Congress last spring about the mounting federal deficit prompted a move by Democrats and some moderate Republicans to prevent any more tax cuts unless Congress found a way to pay for them first. At the time, Wisconsin Sen. Russ Feingold tried to resurrect an old budget rule known as pay-go,

SEN. RUSS FEINGOLD: Reinstating the pay-go rule makes it harder for this body to make the deficit worse. It doesn’t prohibit these tax cuts; it doesn’t make it impossible to have a tax cut; it just makes it a little harder. Mr. President, that’s as it should be.

KWAME HOLMAN: Feingold’s effort failed, the mission abandoned, and today in the House of Representatives, a series of middle class tax cuts scheduled to expire at the end of the year appeared certain to be extended, at a cost of nearly $150 billion. A few Democrats stood to protest.

REP. CHARLES RANGEL: Who pays for these tax cuts?

SPOKESMAN: Where does this end?

KWAME HOLMAN: But a substantial package of tax cuts for the middle class just a few weeks before Election Day was not difficult for most members to get behind. New York Republican Tom Reynolds:

REP. THOMAS REYNOLDS: Mr. Speaker, a yes vote today seizes on the momentum we have created towards a strong economy, and job creation, and sends a clear message that this Congress supports putting real dollars back where they belong, into the hands of hard working men and women.

KWAME HOLMAN: In detail, the middle class tax cut legislation on the floor today would extend for six years the expansion of the 10 percent income tax bracket, extend for five years the $1,000-per-child tax credit, extend for four years the standard deduction for married couples at two times the deduction for single taxpayers, and extend for one-year current relief from the alternative minimum tax.

The bill also would extend for a year some two dozen business tax breaks, for a total cost of more than $146 billion. Pennsylvania Republican Melissa Hart:

REP. MELISSA HART: If we allow these taxes, those tax cuts to be removed, meaning increased taxes, we do not help our economy.

We certainly will do the opposite. In fact we’ll put a number of families in a difficult situation as well as a number of businesses.

KWAME HOLMAN: But the bill does not preserve a child tax refund for poor families who no longer meet an income threshold that’s been adjusted upward for inflation.

Tennessee Democrat Harold Ford said some four million poor families would lose benefits.

REP. HAROLD FORD: What it means is we’re raising taxes on people who earn $11,000,000. So if you’re watching, if can you afford a TV or know somebody who earns 11,000 a year, they’re raising taxes on you this afternoon.

KWAME HOLMAN: And New York’s Tom Reynolds had this exchange with Texas Democrat Charles Stenholm.

REP. CHARLES STENHOLM: To my friend from New York, let me remind you it took our country 204 years to borrow the first one trillion dollars. 204 years, we’re borrowing one trillion every year and a half under the policies, you’ve got the guts to stand up here and say we ought to keep following it.

Then vote for increasing the debt spending and tell the American people before Nov. 2 this is the result of the policies, we’re borrowing the money to have the policies that we’re giving to you. Vote for us.

REP. THOMAS REYNOLDS: There they go again. Have a plan where we’re going to sell a loaf of bread that says we’re going to cut middle class taxes, but then again I don’t really have a plan how to do it.

But you know, I’ve been in the minority before getting here, and serving in the majority from the day I got here, but that majority of the previous 40 years has nicely gotten trenched in the minority because they have a lot of rhetoric but they haven’t put much action plan as to how to get the job done.

They want to come up and say I’m for cutting the middle class tax, but I don’t see this, I don’t see that, but there’s never a solution.

SPOKESMAN: The House will be in order.

KWAME HOLMAN: Still, an overwhelming House vote in favor of the middle class tax cuts is expected later tonight. The Senate is likely to do the same before the week is out.