Advertisement
  1. Archive

Senate vote on budget likely today

With the end of the budget ordeal in sight, bleary-eyed lawmakers worked on the last pieces of the compromise tax-and-spending package Thursday night in hopes of sending it to the Senate for a vote today. The White House endorsed the package, more or less. Marlin Fitzwater, President Bush's press secretary, said the president was satisfiedwith the overall measure, which is supposed to cut the deficit by $40-billion this fiscal year.

But a senior White House official trying to regain the political offensive 12 days before the congressional elections, called reporters into the Roosevelt Room to rail against Democrats for forcing the president to raise taxes. The official spoke on the condition that he not be identified.

In the Capitol, Rep. Dan Rostenkowski, D-Ill., who heads the Ways and Means Committee, and Sen. Lloyd Bentsen of Texas, the chairman of the Finance Committee, worked into the night to put actual numbers on the tax provisions _ how much money would have to be earned, for instance, before deductions and exemptions were reduced and what would be the precise size of the gasoline tax increase.

These last-minute adjustments are typical of major legislation and do not mean the package is in jeopardy.

Down the hall, legislators settled on Medicare benefits far more generous to the elderly than what had emerged last month from negotiations between the White House and congressional leaders, although benefits would be reduced below the current level.

In another room, more legislators wrapped up the final aspects of child-care legislation, and elsewhere, still others worked on procedures to make it difficult to raise spending or cut taxes in

the years ahead.

The major items were basically locked up, including:

A top tax rate of 31 percent, up from 28 percent now, on taxable income above about $80,000 for couples.

Two provisions to push the tax rate of the wealthy above 31 percent on a portion of their income, even though no taxpayers will pay more than 31 percent of their total income in taxes. Itemized deductions would be lowered on incomes above about $100,000. Personal exemptions would be phased out for individuals with taxable income above $100,000 and for couples with incomes above $150,000. In addition, the alternative minimum tax would be raised to 23 percent from 21 percent for affluent taxpayers with many deductions.

Capital gains would be taxed at a top rate of 28 percent, even for well-off taxpayers who would be paying more than 31 percent on a portion of their income.

The gasoline tax would rise by at least 5 or 6 cents a gallon above the current 9 cents.

The wages on which the 1.45 percent Medicare tax would be applied would rise to at least $125,000 from $51,300 now.

New luxury taxes would be levied on expensive cars, boats, planes, furs and jewelry, and the taxes on tobacco products and alcoholic beverages would be increased substantially.

But the details were still being negotiated Thursday night.

The Senate wants an even higher tax in years to come if fuel prices fall below their current level.

The House wants to cut itemized deductions by 3 percent of total income above $100,000, or by $300 for every $10,000 of income over $100,000. The Senate would reduce deductions by 4 percent of income above $125,000.

The House would phase out personal exemptions at a rate of 2 percent for each $2,500 of income above $100,000 for single taxpayers and $150,000 for couples filing jointly. The Senate would phase them out at a 1 percent rate, meaning that the exemptions would not be completely phased out until a couple's income reached $400,000.

These disagreements did not seem likely to derail the agreement. Asked if he saw important deals coming unstuck, Rep. William Gray of Pennsylvania, the Democratic whip, said, "No snags."

Even before they were enacted, some of the basic aspects of the compromise seemed fragile.

For example, the senior White House official who offered views to reporters Thursday said that one of the first pieces of legislation the president would offer next year would be one to cut the capital gains tax rate.

And Democrats promised that the first bill introduced in the new Congress in January would place a surtax on millionaires. They were forced to drop the surtax idea this year as the price of support from Bush and Senate Republicans.

Amid these developments, party whips and the White House were working to round up votes for the compromise.

While they would not disclose their tallies, the smiles of Democratic whips in the House and those of both parties in the Senate indicated that enough votes were available to enact the package.

Bush had several Republicans to the White House Thursday and dispatched John Sununu, the White House chief of staff, and Richard Darman, the budget director, to Capitol Hill to meet with an assembly of all House Republicans.

YOU MIGHT ALSO LIKE

Advertisement
Advertisement