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Expect Budget Resolution in Early May, GOP House Leaders Say

Thursday, March 6, 1997

OnLine

The House probably will vote on a budget resolution in early May, House Majority Leader Dick Armey, R-Texas, said at a March 6 press conference where House Republicans presented their legislative agenda for the 105th Congress.

Delaying action on the budget resolution until May means the date of first committee action on the tax portions of the budget probably will occur in late May or early June. President Clinton’s budget recommended that some of his tax proposals go into effect on the date of first committee action.

The budget act requires the House by April 15 to pass a budget resolution, which is a non-binding spending plan Congress uses to map its legislative course for subsequent tax and spending bills.

"I hope and anticipate that [the budget resolution] will be one where you will find a good deal of consensus that includes the House and Senate--the minority, the majority, and the White House," Armey said.

Cut taxes, balance budget

The GOP agenda calls for balancing the federal budget by 2002, providing a middle-class tax cut, lowering the capital gains tax rate, and enacting estate tax relief.

The agenda reflects the GOP belief that taxpayers want "to be protected from budgets that increase taxes, increase welfare spending, or are not in balance," House Ways and Means Committee Chairman Bill Archer, R-Texas, said.

The House GOP agenda calls for the following: eliminate or reduce the capitol gains tax; enact tax relief that strengthens and encourages American families; repeal or reduce estate taxes; simplify tax laws; and reform the Internal Revenue Service.

Moynihan Questions Merits of IRA Expansion: Increasing the nation’s savings rate would be achieved more efficiently by reducing the federal deficit rather than through revenue-losing initiatives, such as expanding individual retirement accounts, Senate Finance Committee ranking Democrat Daniel Patrick Moynihan, D-N.Y., told the committee March 6.

Moynihan’s comment indicates there is not unanimous support among Democrats for all of the tax cuts contained in President Clinton’s budget request. President Clinton proposed expanding existing deductible IRAs and creating new back-loaded IRAs. House and Senate GOP leaders also have expressed support for expanding IRAs.

By questioning the merits of expanding IRAs, Moynihan is aligning himself with deficit hawks, such as the so-called "Blue Dog" Democrats, who said eliminating the budget deficit is more important than cutting taxes.

Also at the Senate Finance Committee hearing, Deputy Treasury Secretary Lawrence Summers said tax-savings incentives such as IRAs can be used to increase the nation’s savings rate. "The administration is committed to meeting the challenges of insuring adequate retirement saving by the baby boom and subsequent generations," Summers said.

Capital Gains Hearing Announced: The Senate Finance Committee will hold a hearing March 13 on capital gains taxes. Former GOP presidential candidate Jack Kemp, and former Federal Reserve Chairman Paul Volker are scheduled to testify.