House OKs tax-cut plan

Partisan $1-trillion package faces stiff test in Senate 

BY JACKIE KOSZCZUK
and RUBY L. BAILEY
FREE PRESS WASHINGTON STAFF

WASHINGTON -- President George W. Bush won his first big victory in Congress on Thursday when the House approved the biggest tax cut since President Ronald Reagan's in 1981 -- a nearly $1-trillion plan that would slash income-tax rates for people in every income bracket.

Republicans delivered Bush's win on a largely party-line vote of 230-198. But their strong-arm tactics left Democrats embittered and Bush without the broad, bipartisan support he says he wants. Ten Democrats and one independent joined the solid Republican bloc in favor of the bill. Eight of Michigan's nine Democrats voted against the plan. Rep. Bart Stupak of Menominee did not vote.

Bush's income-tax cut faces a more difficult test in the Senate, where Democrats and Republicans are split 50-50.

Though a partisan vote is expected in the Senate, Michigan Sen. Carl Levin didn't rule out Republicans voting against the plan.

Levin, a Detroit Democrat, said the Senate will likely vote on the plan in late April or early May. 

House GOP leaders were triumphant.

"We now have the largest tax surplus in American history. That means people are paying too much," said House Speaker Dennis Hastert, R-Ill. 

But Rep. Carolyn Cheeks Kilpatrick, D-Detroit, said Bush's tax cut is based on projected surpluses during the next decade that may not be there. 

"It's really unrealistic," Kilpatrick said Thursday. "Some will get nothing under this plan. That's the reality."

GOP Rep. Nick Smith of Addison dismissed Democratic criticism that the tax cuts benefit rich people, pointing to government data showing that wealthy Americans pay the largest chunk of their income in taxes. 

Democrats said they, too, think Americans deserve a tax cut, but a smaller one. They proposed a $586-billion alternative, but it failed Thursday, 273-155.

Citing government forecasts that tax surpluses will total $5.6 trillion over the next 10 years, Republicans said it is high time to begin returning some of that windfall to the taxpayers.

One sign of trouble ahead for Bush's plan came Thursday when Sen. Charles Grassley, R-Iowa, the chairman of the Finance Committee, announced that he will accept a modification to the tax-cut proposal even though Bush opposes it. The Finance Committee writes tax law.

Grassley said he would go along with a bipartisan group of 11 Senate centrists who said Wednesday that they would vote for Bush's tax cut only if its annual installments are made contingent upon annual revenue surpluses materializing as projected. The device is called a trigger.