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Separating Tax Cuts From Budget Deal Gaining Momentum

Monday, March 24, 1997

OnLine

Separating tax cuts from the effort to balance the federal budget deficit is gaining momentum now that some administration officials have told Democratic members of Congress they support the idea.

White House Chief of Staff Erskine Bowles told Democratic members of Congress that the administration would be willing to forgo temporarily cutting taxes if such a maneuver increased the chances of balancing the budget, according to published reports.

House Speaker Newt Gingrich, R-Ga., took the lead on delaying the tax cuts last week.

Bipartisan support

Also calling for a delay is a group of bipartisan House members who sent a letter to Gingrich offering him their support and assistance.

"While most of us believe that some form of tax relief should be considered this year, we wholeheartedly agree that a balanced budget agreement should come first," the group wrote on March 19.

Reps. Michael Castle, R-Del.; Charles Stenholm, D-Texas; John Tanner, D-Tenn.; and Fred Upton, R-Mich., led the bipartisan group that sent the letter to Gingrich.

Conservative Republicans object to the idea of separating the tax cuts from the effort to balance the budget. There is no reason why taxes cannot be reduced and the budget brought into balance the same year, the group argues.

The debate over delaying tax cuts most likely will continue for several months and could be a central part of this year’s budget negotiations between the White House and Congress, and even between different congressional factions.

Congressional Committee To Investigate IRS: Some Internal Revenue Service audits of tax-exempt organizations have been "politically motivated" and for that reason the Joint Committee on Taxation should review agency practices, the Republican chairmen and ranking Democrats on the House and Senate tax-writing committees wrote JCT Chief of Staff Ken Kies March 24

"We are troubled by recent reports alleging politically motivated treatment of certain tax-exempt organizations and individuals by the Internal Revenue Service," wrote Ways and Means Committee Chairman Bill Archer, R-Texas; ranking committee Democrat Charles Rangel, D-N.Y.; Senate Finance Committee Chairman Bill Roth, R-Del.; and ranking committee Democrat Daniel Patrick Moynihan, D-N.Y.

The leaders expect the JCT to complete its investigation and report to Congress by September 15, 1997, the letter said.

Bunning Looking At Higher Office: House Ways and Means member Rep. Jim Bunning, R-Ky., is considering a bid for the Senate. If nominated, Bunning would have to give up his seat in Congress and there would be an open Republican seat on the committee.