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News & Views |Clinton Vetoes Tax BillThursday, September 23, 1999 OnLine Ending months of political jockeying, President Clinton September 23 vetoed the $792 billion tax cut bill (H.R. 2448), virtually closing the door on major tax cuts for this year. Clinton said he rejected the tax bill on the grounds it would "turn us back to the failed policies of the past" at a time when the country is enjoying economic prosperity. Protecting Social Security, Medicare, education spending, and cutting the national debt should be higher priorities, he said. Clinton did not completely rule out a smaller tax cut this year, saying he hopes elected officials can develop a bipartisan agreement between now and when Congress adjourns late October or mid-November. "Many in Congress are ready to throw in the towel. That would be a disservice to the American people," Clinton said at the White House. View from Congress GOP lawmakers also have left the door open a crack for a tax cut this year. They say Americans pay too much in taxes and the time is ripe for cuts. "If he vetoes our tax bill, he will in effect have increased taxes on the American
people by $792 billion," said House Ways and Means Committee Chairman Bill Archer,
R-Texas. "We should not be increasing people's taxes." |
Extenders Bill House lawmakers are preparing a bill to extend the research and development tax credit, and the exceptions from subpart F income for active financing income for five years. The exclusion for undergraduate education under Section 127, the work opportunity tax credit, and the welfare-to-work tax credit would be extended for 2 1/2 years. Alternative minimum tax filers would be able to rely on the nonrefundable tax credits permanently. Excluded from the package are tax-exempt bond provisions intended to facilitate school construction, congressional staff said. The panel’s ranking Democrat, Rep. Charles Rangel, D-N.Y., strongly favors these provisions. The measure would not include revenue offsets and would be paid for in the first year
out of the non-Social Security budget surplus. Archer told reporters that $3 billion would
cover the bill’s cost in 2000, and Senate Finance Committee Chairman William Roth,
R-Del., said $4 billion would be needed from the surplus. The administration is concerned
about using the budget surplus to pay for the tax cuts. |
Earlier, congressional aides were skeptical that Roth would go along with using the surplus, which requires lawmakers to overcome various procedural hurdles. Over the long-term, the measure that the House tax panel hopes to markup in the next week or so would cost $25 billion over five years and $57 billion over ten years, according to congressional staff. The revenue estimates and the details of the legislation are not yet final. Archer also wants to keep a developing package of small business tax relief and a
minimum wage hike out of the extenders bills to ensure that it remains non-controversial. |
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