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House Passes Tax Bill, Senate Expected to Approve Measure Friday

Thursday, June 26, 1997

The House June 26 approved 253 to 179 the fiscal 1998 tax bill (H.R. 2014) after Republicans and Democrats engaged in modest amounts of partisan debate on the measure.

The Senate is expected to approve its version of the bill (S. 949) June 27.

During the debate, House and Senate Republicans emphasized that the bills will help Americans by giving them the largest tax cut since 1981 and will ensure that individuals and businesses have adequate resources to help the economy grow.

House and Senate Democrats separately offered alternative bills that were defeated, but the debate gave them the opportunity to question the fairness of the bills written by GOP leaders.

"We think that you can make [the bill] far more practical, far more accessible, and far more meaningful to middle-income taxpayers. To provide a golden windfall to the wealthiest in our country is not the way we ought to be writing tax law," Senate Minority Leader Tom Daschle, D-S.D, said.

Defending the GOP bill, Senate Finance Committee Chairman William Roth, R-Del., said the Democratic substitute "does not provide immediate tax relief for middle class American families....It does not promote meaningful savings, investment and economic growth. And it was not crafted in a cooperative way that draws the best each party has to offer in the debate over tax relief."

The Democratic amendment was defeated in the Senate 61 to 38 and a similar amendment was defeated 235 to 197 in the House. Despite the partisanship, several Democrats decided to vote against the substitute offered by Rep. Charles Rangel, D-N.Y., who is the ranking Democrat on the House Ways and Means Committee, and by Daschle.

Other Defeated Senate Amendments

Other amendments also were defeated in the Senate.

A proposal by Sen. Dale Bumpers, D-Ark, to repeal the percentage depletion allowance for hard rock mining on public land was defeated in a procedural vote 63 to 33.

Two amendments offered by Sen. Byron Dorgan, D-S.D., also were defeated. One amendment, which failed 75 to 24, would have limited an individual’s capital gains relief over the person’s lifetime and the other, which failed 64 to 34, would have required that the bill’s capital gains relief and the expanded individual retirement accounts be suspended, if certain deficit targets were not met.

Administration Prefers Senate Bill

The administration is pleased, but not completely satisfied, with the Senate bill, which "moves in the direction of the principles underlying the bipartisan budget agreement," according to Treasury Secretary Robert Rubin.

Raising the tax fairness issue in a letter to Senate Majority Leader Trent Lott, R-Miss., Rubin wrote, "We believe that the benefits of the tax cut package should be distributed equitably."

The current bill’s education package is insufficient and unfair to lower-income students, the bill prevents certain low-income individuals from receiving the new child credit, and the back-loaded IRAs are not properly targeted, Rubin wrote.

Similar complaints were made in a letter sent to House Speaker Newt Gingrich, R-Ga..

Court Overturns Line-Item Veto Challenge

The Supreme Court June 26 ruled 7 to 2 that the members of Congress who challenged the new line-item veto law do not have legal standing.

The constitutionality of the law can be considered only when someone proves they have been injured, the Supreme Court held.

The "appellees have alleged no injury to themselves as individuals, [and] the institutional injury they allege is wholly abstract and widely disperse," Chief Judge William Rehnquist wrote in the opinion.

Sens. Robert Byrd, D-W.Va., Carl Levin, D-Mich., and Daniel Patrick Moynihan, D-N.Y., and Reps. David Skaggs, D-Colo., and Henry Waxman, D-Calif., challenged the law on the grounds that it deprived Congress of its constitutional powers. Former Sen. Mark Hatfield, R-Ore., also joined the suit.

President Clinton praised the court’s decision and said he would use it to eliminate government waste. "I intend to use it whenever appropriate and I look forward to using it widely," Clinton said in a statement issued after the high court decision.