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GOP Ways and Means Members Oppose Some of Clinton's Capital Market Provisions

Friday, March 21, 1997

Deloitte & Touche OnLine

House Ways and Means Committee Republicans March 19 sent a letter to committee Chairman Bill Archer, R-Texas, objecting to several of the financial market provisions in President Clinton's fiscal 1998 budget request.

"These proposals would raise the cost of financing new investment in research and development, plant and equipment, and other job-creating assets," said the group led by Philip English, R-Pa.

The group specifically objected to the proposals to eliminate the deductibility of interest for original issue discount on debt instruments with maturities greater than 40 years, defer original issue discount on convertible debt, reduce the dividends-received deduction to 50 percent, and eliminate the deduction for certain types of preferred stock.

Joining English in signing the letter were Reps. Jim Bunning, R-Ky.; Jon Christensen, R-Neb.; Jennifer Dunn, R-Wash.; John Ensign, R-Nev.; J.D. Hayworth, R-Ariz.; Amo Houghton, R-N.Y.; Samuel Johnson, R-Texas; Jim McCrery, R-La.; E. Clay Shaw, R-Fla.; Wes Watkins, R-Okla.; and Jerry Weller, R-Ill.

Though many of the proposals in the President's budget raised strong concerns among members of Congress, some revenue-raising provisions probably will have to be included in any tax-cut package to offset the revenue loss, or to balance the bill politically.

GOP Senators Want Tax Cuts Now: Seventeen GOP senators wrote a letter to Senate Majority Leader Trent Lott, R-Miss., urging him to stand by his commitment to pass a balance budget package that includes tax cuts.

Among the signatories are Senate Finance Committee members Phil Gramm, R-Texas; Connie Mack, R-Fla.; and Don Nickles, R-Okla.

Led by Spencer Abraham, R-Mich., the 17 senators told Lott they were reaffirming their commitment to a balanced budget "in light of recent comments regarding the budget." House Speaker Newt Gingrich, R-Ga., recently suggested that tax cuts should be put off until the budget is balanced.

Gingrich's statement prompted President Clinton to invite GOP congressional leaders to the White House to reinvigorate budget talks. The Speaker's remark however met a mixed reaction on Capitol Hill, where a group of House Republicans also have expressed opposition to delaying tax cuts.