US Administration Steps Up Lobbying Over Tax Cuts

by Mike Godfrey, Tax-News.com, New York

22 April 2003

With Congress divided over President Bush's tax-cut package, Treasury Secretary John Snow has become the administration's point man for pushing through the maximum package of cuts that can be achieved. During Secretary Snow's 10 weeks on the job, he has traveled to New York, Ohio, Michigan, Pennsylvania, Florida, Indiana, and Louisiana to advance the President's economic agenda. Now, with Congress on a 2-week Easter recess, 14 treasury officials will fan out over 17 states to participate in 39 events in 26 cities to promote the jobs and growth plan.

In an interview with the Wall Street Journal, Mr Snow suggested different ways of reaching cuts of $550bn, the level that the President has said he will accept in place of the original $726bn package. The Treasury Secretary said the administration would settle for half the dividend-tax break originally proposed for this year if Congress would agree to eliminate the tax entirely over the rest of the decade. Alternatively, Mr Snow said he would consider delaying the proposed cut to the top rate of income tax this year if other rates were cut.

Although the Republican-dominated House passed a budget resolution which included provision for up to $550bn of cuts, Chairman of the Senate Finance Committee, Charles Grassley of Iowa, has promised to keep the size of the package to $350 billion - hence the pressure being exercised on key 'swing' senate votes. Mr Snow plans to call members of tax-writing committees this week while he's traveling in Latin America.

Mr Bush's original $726 billion plan has faced determined opposition from Democrats and moderate Republicans alike, who feel that the timing of tax cuts on such a grand scale is questionable given the escalating budget deficit, recent recession, and a costly war in Iraq. Proposals to phase in tax cuts don't go far enough, in the opinion of critics, since they merely delay a rise in the budget deficit. Mr Snow told the WSJ that his lobbying has helped firm up support among Republican lawmakers, but he acknowledged that he doesn't know of "any who changed their minds" and decided to back the full Bush plan.

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