|THE TAX VOTE|
JIM LEHRER: Kwame Holman has our tax story.
KWAME HOLMAN: Republican leaders spent much of last evening begging and cajoling about a dozen party moderates, stressing the importance of party loyalty and the Speaker's credibility, and even twisting a few arms. The leaders finally succeeded in convincing a handful of those moderates to support nearly $800 billion in tax cuts, just enough to ensure the cuts would survive a vote on the floor of the House today.
SPOKESMAN: The House will be in order.
KWAME HOLMAN: The House Republican tax bill includes: A 10 percent across-the-board cut in tax rates on individuals over the next ten years; a reduction in the so-called marriage penalty tax; a cut in the capital gains tax; phase-out of estate taxes; and a cut in the alternative minimum tax. The money to pay for the tax cuts would come from the $3 trillion budget surplus projected over the next ten years.
REP. CHRISTOPHER SHAYS, (R) Connecticut: Two trillion of those dollars, we're setting aside for Social Security, Medicare, and we are going to pay down debt. $1 trillion you might call the true surplus outside the trust funds, and that's what we're debating.
KWAME HOLMAN: But Republicans hold only a slim 11-vote majority in the House. Democrats were expected to reject the GOP tax plan overwhelmingly, if not unanimously. So Republican leaders believed they needed a near-unanimous vote among Republicans as well, including those moderates who complained the tax cut was too large.
SPOKESMAN: Mr. Speaker, I yield a minute and a half.
KWAME HOLMAN: In hopes of attracting their votes, Ways and Means Chairman Bill Archer added a provision to the legislation that conditions implementation of the 10 percent tax cut on annual progress in reducing the national debt. Archer got the idea for the enforcement mechanism from Michigan Republican Vernon Ehlers.
REP. VERNON EHLERS, (R) Michigan: I am grateful that the chairman has agreed to insert my debt reduction amendment into this bill. With my amendment in place, we will accomplish both of our goals: Tax refunds and debt reduction. The language of my amendment sets this Congress on a course to reduce the amount of publicly held debt from $3.6 trillion in fiscal year 1999 to $1.6 trillion in fiscal year 2009, a reduction of over 55 percent in ten years.
KWAME HOLMAN: New Jersey's Marge Roukema was one of the moderates who needed convincing. And this morning an exchange she had with Federal Reserve Board Chairman Alan Greenspan just minutes before at a Banking Committee Hearing had convinced her.
REP. MARGE ROUKEMA, (R) New Jersey: I asked him specifically about the provision on the trigger that is related to the debt reduction. I don't want to go into every bit of the tax cut question, and I know there's going to be a lot of questions on both sides here, but we shouldn't be having the tax cut, some portions of the tax cut if we're not able to demonstrate a reduction in the debt; therefore, we had integrated into the tax bill a proposal that anything for the first, I think it's six or seven years -- and it's defined in the language - the -- it would trigger a delay or a postponement of the across-the-board tax cut.
ALAN GREENSPAN: A trigger is a very useful device in this particular problem, which I must admit is really sort of a highly favorable type of problem to be confronted with considering all the years we've been trying to confront a deficit.
REP. MARGE ROUKEMA: The Federal Reserve Board Chairman agrees the trigger is a very good idea.
KWAME HOLMAN: Democrats, who yesterday stood by and watched as the Republican drama played out, today criticized Republican leaders for their desperate efforts to persuade their membership.
REP. RICHARD NEAL, (D) Massachusetts: The Republican slogan today is clear: Extremism in the pursuit of a tax cut is no vice. This priority is a reckless tax bill based upon certain economic projections and based on unlikely assumptions about draconian cuts in the future of government spending -- programs like law enforcement, farm aid, education, veteran's programs, to name just a few. They almost couldn't even get this tax bill to the floor because the moderates in their own party are suspicious of where this legislation will take us.
REP. JOHN LEWIS, (D) Georgia: Most working Americans will receive little or nothing under the Republican tax bill. It does nothing, not one thing to protect Social Security and Medicare, nothing, but nothing to reduce the national debt! Thousands for the rich, pocket change for working Americans!
KWAME HOLMAN: Iowa Republican Jim Nussel tried to break down the debate into simple terms.
REP. JIM NUSSLE, (R) Iowa: Number one, whose money is this? Whose money are we talking about? It's not yours, and it's not mine. It's not the Democrats. It's not the Republicans. It's not the Ways and Means Committee, it's not the House of Representatives. This is not the government's money. These people who work so hard in your district, in my district, to send that money to Washington it's their money, number one. Number two, we're not giving the money back. We're saying keep it.
KWAME HOLMAN: New York's Charles Rangel offered a package on behalf of House Democrats that totaled $250 billion. House Minority Whip Tom DeLay said that plan actually raised taxes.
REP. TOM Delay, Majority Whip: The joint tax committee has determined that this do-nothing Democrat amendment would actually increase taxes by $4 million -- amazing.
KWAME HOLMAN: Rangel was quick to respond.
SPOKESMAN: The gentleman from New York.
REP. CHARLES RANGEL: I was just waiting, Mr. Speaker, for somebody to point out that this revenue raises in our bill. I didn't think it would be the distinguished majority whip. He says we that raise $4 million. Oh, no, it's $4 billion is the figure that he's looking for. And how did we do it? We did it by closing the Republican loophole for those corporate tax shelters that we're talking about.
KWAME HOLMAN: However, the Democratic plan was rejected by a wide margin. The vote on the Republican plan was much closer. Four Republican moderates, Ganske of Iowa, Morella of Maryland, Castle of Delaware, and Quinn of New York cast their votes against it. But six Democrats voted for the Republican plan, giving GOP leaders a cushioned margin of victory. Most likely, it's a temporary victory. President Clinton has vowed to veto any bill that contains tax cuts as large as in the Republican plan.