Congressional Budget Writers May Curtail Some Tax Cuts

by Mike Godfrey, Tax-News.com, Washington

23 February 2004

Wary of the growing unease over the budget deficit, Congressional budget writers may curtail many of President Bush’s tax cuts when they come to draft the government’s tax and spending plans for the years ahead, according to the Washington Post.

Many of the President's cuts have been legislated for just a ten-year period, after which the measures expire. In the interest of making the government’s finances look a little healthier, Republican lawmakers are hoping to reduce this timeframe from a decade to five years.

Removing the 10-year 'sunset' provisions results in budget deficit projections unacceptable to conservatives; on the other hand, allowing the tax cuts to expire will significantly improve the deficit figures, although it will deny one the President’s core economic policies.

However, a Democratic filibuster in the Senate requiring 60 votes to block may put paid to the five year proposals, leaving Republicans to mull another option: revert back to the ten year plan and extend only the politically popular tax measures, such as the 10% lower tax bracket, increased child tax credit and the ‘marriage penalty’ cut.

By doing this, the Republicans will effectively force the Democrats to either oppose an extension of tax cuts aimed primarily at the less well off and middle classes, or support a budget containing tight spending constraints.

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