Senate Approves Tax Relief
July 7, 2008 - 8:24 PM
(CNS) - The Senate Friday approved a $792 billion tax relief package that differs from a similar version passed by the House, setting the stage for a conference committee to iron out the differences between the two bills and produce a single proposal the president has promised to kill with a veto.
While the Senate version includes the same total amount of tax relief as the earlier-passed House tax cut plan, it does not include the 10 percent across-the-board tax cuts approved by the House. Instead, the Senate plan would reduce taxes for those in the 15 percent tax bracket to 14 percent.
Other provisions in the Senate bill would ease the so-called marriage penalty tax for working couples; increase the number of taxpayers eligible for the new 14 percent tax bracket; increase the amount of money people can contribute tax-free to retirement funds; create tax deductions for certain health insurance costs and long-term care; and decrease the death tax on assets received by heirs to an estate.
Differences between the House and Senate versions are expected to be reconciled over the August recess, giving supporters and opponents time to make their case before voters in their home districts. President Clinton and many congressional Democrats have said they favor smaller tax cuts and have called the GOP package "large and risky." The administration is also warning that reducing taxes would lead to deficits because Clinton wants to create an estimated 81 new spending programs.
The debate pitting tax relief supporters against those wanting new government programs hinges on an estimated budget surplus of nearly $3 trillion over the next decade. Most Republicans have argued that some of the excess money should be given back to taxpayers, while keeping enough of the presumed surplus to maintain the future solvency of the Social Security and Medicare programs.
But many Democrats have countered by saying that projections of future surpluses could be wrong, and reiterated the president's claim that even if the surpluses are realized, they should be used for debt reduction and financing new government programs.
Senate Majority Leader Sen. Trent Lott told reporters shortly after the vote "We want to cut taxes and the president wants to spend it. That's what the fighting is all about."
"We've got a veto threat but we've also got a responsibility to the American taxpayer," said Sen. Frank Murkowski (R-AK), a member of the Senate Finance Committee that crafted the legislation.