KWAME HOLMAN: With the war winding down, the president now plans to focus a great deal of his time on his economic plan.
PRES. GEORGE W. BUSH: Here in Washington, we're now determining the size and the shape of a package to promote growth and jobs. It's not if we have a package; it's how big will the package be?
KWAME HOLMAN: Mr. Bush's extremely high public approval rating in the wake of successes in Iraq is expected to only enhance his bargaining power with a Congress already controlled by Republicans. But as the war was being waged, Congress weighed in on many of the president's priorities, including his plan to cut taxes. The president wanted more than $720 billion in tax cuts over ten years. The House gave him most of that -- $550 billion.
But in the Senate, a handful of moderate Republicans slowed the tax cut momentum even more. Fearful of rising deficits and mounting war costs, the moderates joined Democrats to slice the president's tax cut plan to $350 billion. The action enraged House Republicans, who believed their Senate colleagues also had agreed on the $550 billion number. Democrats were amused by the intra-party spat. Nancy Pelosi is House minority leader.
REP. NANCY PELOSI: Right now, it seems the Republicans are having enough difficulty on their own without the Democrats weighing in there. I think the message is clear enough without the Democrats intervening, and the message is, is that the Republicans, as I say, have irreconcilable differences.
KWAME HOLMAN: Ultimately, however, the House and Senate will have to agree on one common tax cut number, but for now, the two chambers have agreed to disagree. The Senate will write its own $350 billion tax cut bill. The House will write a version that could slightly exceed the $550 billion figure they approved. Zach Wamp is a Tennessee Republican.
REP ZACH WAMP: So the president has really got to have a domestic agenda that encourages growth, that stimulates the economy. That's why I think a good solid compromise where the president can encourage victory but the Congress puts its stamp on this tax stimulus package
KWAME HOLMAN: David Obey is the House Democrats' longtime leader on the Appropriations Committee. He says members in both parties worry that too large a tax cut will force sharp spending cuts in domestic programs from education to veteran's benefits.
REP. DAVID OBEY: In my view, we can't afford any of these tax cuts so long as we're having these huge deficits, so long as we don't know what the cost of the war is going to be, and we ought to suspend action on these tax cuts until we know what the economic situation is and the war costs.
KWAME HOLMAN: The fiscal disputes don't end with tax cuts.
SPOKESMAN: So we did address items and we passed our bill before you did.
KWAME HOLMAN: That was evident when House and Senate negotiators tried to work through the president's $75 billion request to pay for the war in Iraq. Mr. Bush wanted full Pentagon control over spending most of the money. Congress balked, agreeing to allow flexibility over only $15 billion. Even members of the president's own party said determining how money is spent is Congress' responsibility.
SEN. JOHN McCAIN: In this particular situation, it's very tough for all of us, because you want the President of the United States to have the flexibility to do what's necessary to fund a conflict. At the same time you don't want Congress to lose its oversight responsibility, so this discussion is not so much about pork barreling. It's how much money and authority the president will be granted without having to report to or be under the supervision or the management of Congress.
KWAME HOLMAN: The president also wanted Congress not to add any extra money to the war funding package. But some members, especially in the Senate, couldn't resist, adding dozens of home-state spending projects to the bill. House leaders were furious. Ohio's David Hobson:
REP. DAVID HOBSON: Now, I restrained everybody on our side from doing just exactly this, and we didn't do this, and I had requests from this. One of the members sitting at this table just asked me again, and we said no.
KWAME HOLMAN: But Vermont's Patrick Leahy defended $3.3 billion to repair a leaky dam in his state.
SEN. PATRICK LEAHY: I read all the things about if this is not repaired, how it's going to wipe out a large segment of central Vermont from our state police headquarters to part of our capital, literally. That's the government's own report. The Corps of Engineers strongly supports it. I face a grave danger where I live. I'll put my cards on the table on this, but the corps tells me they want to get it, but there is that frost, that window is a very short one for this type of construction in Vermont. Now it's thawing and they've got about - just a matter of weeks before they can start working. I have a violin too, Mr. Chairman.
KWAME HOLMAN: House appropriations chairman Bill Young suggested both sides drop any special projects. The response from the Senate side of the room surprised him.
REP. C.W. BILL YOUNG: It would be my recommendation that we drop ours and you drop yours because both of us...
SPOKESMAN: Was there an objection on this side?
KWAME HOLMAN: In the end, the emergency bill to pay for the war was approved without money for Senator Leahy's dam. But many other add-on projects survived, raising the total to $79 billion, $4 billion more than the president requested. President Bush also was blocked in his effort to permit oil drilling in Alaska's Arctic National Wildlife Refuge, known as ANWR.
Again, Republican moderates were instrumental in blocking the president. Meanwhile, Senate Democrats have stalled confirmation of two of Mr. Bush's most prominent judicial nominees-- Miguel Estrada and Priscilla Owen.
And when the White House asked Congress not to pass any more funding to aid the ailing airline industry, it was Republicans who backed a $3 billion assistance package. Senate Democratic Leader Tom Daschle said it was another example of Republicans feeling strongly enough about an issue to join Democrats in opposing the president.
SEN. TOM DASCHLE: That happened on ANWR, it happened again on the tax policy. It's happened on several occasions this year so far. And I believe that's really it. I think what the American people want is good, common sense mainstream proposals. And in some cases, the administration's positions don't fit that definition.
KWAME HOLMAN: But Mr. Bush generally got his way on major legislation during his first two years as president, even with a Democratic-controlled Senate. Tennessee's Zach Wamp says his party and his president are stronger for having independent- minded Republicans.
REP. ZACH WAMP: It serves the administration well that we're not all just a bunch of prototype clones. I mean, I don't think the country wants their representatives in the House or the Senate to actually just follow the lead of anyone other than the wishes of their home state or their home district. And that may not always be exactly in lockstep.
KWAME HOLMAN: While Congress remains on recess until the end of the month, President Bush is sending administration officials to 26 different states to promote his tax plan, ahead of crucial votes on the issue when Congress returns.