The Senate provided a modest improvement in the tax-cut climate last week. During debate on the budget, a number of Senate Republicans protested that the tax cuts included in the budget resolution -- just $ 30 billion -- were too small. John Ashcroft, Jim Inhofe, Bob Smith, Sam Brownback, and Rod Grams all threatened to vote against the resolution, which would have killed it, if the GOP leadership couldn't find a way to provide more tax relief. The senators settled for a promise from Senate GOP leaders Trent Lott and Don Nickles that they will push for higher tax cuts when the House and Senate negotiators meet in a conference committee to iron out differences in their respective budget resolutions. A chief stumbling block on the tax front has been Pete Domenici, the tight-fisted chairman of the Senate Budget Committee.
Domenici and the House-Senate conferees might want to take a second look at an alternative budget resolution providing Reagan-style tax cuts. GOP senators Paul Coverdell and John McCain put forward a proposal providing for nearly $ 200 billion in tax relief, while also advancing the goal of creating a flatter, fairer, simpler tax code. Rather than provide Clinton-style targeted tax cuts, Coverdell and McCain want to adjust the tax brackets, allowing more income to fall under the 15 percent tax rate, rather than the more punitive 28 percent rate. The resolution received 38 Republican votes -- more than expected.
Private polls show the Coverdell/McCain proposal is more popular than any of the other GOP tax-reform proposals being discussed. With few compelling issues to run on in the midterm elections, Coverdell/McCain offers a useful blueprint to budget negotiators, many of whom seem to have forgotten that sweeping tax cuts are supposed to be a priority of the Republican Congress.