|  Home   |  Site Search   |  Tax News & Views  |

Archer Aims to Meet Net Tax-Cut Goal

Friday, May 16, 1997

OnLine

House Ways and Means Committee Chairman Bill Archer, R-Texas, praised the balanced budget agreement and indicated he would focus on the net $85 billion tax-cut figures when crafting the tax bill that implements the deal finalized last night.

"My goal is to produce a tax relief bill that can be passed by a majority of my committee and signed into law," Archer said in a statement issued May 16. Work on a tax bill, which will implement the budget resolution that the House and Senate are expected to consider next week, could begin as early as June in the House Ways and Means Committee.

"I intend to do my best to balance the competing interests and desires in crafting the tax legislation, within the context of the net tax reduction goals which have been adopted, while at the same time protecting the interests of taxpayers," Archer said, paraphrasing language in the letter on the agreement congressional leaders sent to President Clinton late May 15.

Archer expressed concern during the negotiations that he would not be able to raise the revenue needed to produce a net tax cut of $85 billion, if the parties agreed to a gross tax cut of $135 billion.

Extending the airline ticket tax, curtailing tax-free spin-offs under Section 355, and a few other revenue-raising items would be acceptable offsets, but reaching consensus on the President’s and others’ tax-increase proposals would be difficult, the chairman said earlier in the week.

Budget Resolution Adopted: The House Budget Committee approved, 31-7, the budget resolution May 16 with all Republicans and more than half of the Democrats supporting the measure.

The budget resolution does not implement specific policy changes; instead, it outlines the tax and spending goals for the year. The specific policy changes needed to carry out the goals will be made as part of the reconciliation process later in the year.

Voting along party lines, the committee rejected several tax-related amendments, including a proposal to ensure the "equitable distributions of tax cuts" and one to protect the low-income housing and earned income tax credits.

Amendments offered by Democrats indicate where opposition to the budget resolution from the left may come from when the resolution reaches the House floor next week.

House Ways and Means Committee ranking Democrat Rep. Charles Rangel, D-N.Y., predicted that a majority of Democrats will oppose the budget resolution when it reaches the House floor. Rangel’s initial reaction to the agreement is that too much of the tax cut is targeted toward the rich, and not enough is targeted to the poor through such proposals as refundable tax education cuts.

The key question that will be answered next week is how many anti-tax Republicans may oppose the agreement and vote against the budget resolution. If enough oppose it, this could derail the budget process. Based on the solid support that the resolution received in the committee, it appears it will be approved on the floor, but nothing is certain.