Bush's Tax Cut Now Down to House-Senate Haggling

On C-SPAN, a lot of the tax-cut action in the Senate this week was played out to the soothing strains of classical music they play when the legislative body grounds to a halt for a quorum call. (C-SPAN definition: "Used most often as a device to temporarily halt Senate proceedings.") But make no mistake, the tone in Washington is getting very shrill.

"I believe with all my heart we will regret the day this passes," spat Tom Daschle said after the Senate, under Trent Lott's guidance for a few more days, readied its version of the Bush tax cut for conference-committee negotiation Wednesday afternoon by a 62-38 margin. All Republicans — including defector Jim Jeffords — were on board, and 12 Democrats besides. (Jeffords, by the way, says he has promised the president that he wouldn't attempt any post-defection shenanigans over the cut.)

It was the same bipartisan coalition that had formed around Jeffords and the Bush-friendly John Breaux back in March, but it had taken forever. For two days the Daschlecrats threw amendment after amendment at the Budget Act — at least 40 in all — and almost every one of them came with its own quorum call. Republicans knew the bill wasn't going to change. Democrats knew the bill wasn't going to change. This was the Daschle crowd's way of registering their opinion that King George has gone mad, and that it is time for every good American to start chaining themselves to the White House's favorite legislation.

"We don't intend to apologize to anyone for this relentless fight," Sen. Byron Dorgan, (D-ND) before the surrender. "This bill shortchanges working families in this country. This fiscal policy is in many ways not only unfair, but unwise."

Never mind that that the Breaux boys had already brokered a deal moderating Bush's plan and the House's — and Wednesday cemented their accomplishment by insisting, as the bill heads into conference negotiations with the GOP's bruisers from the House, that it not be altered much if they were to be expected to remain on board. The rate reductions, the group wrote to Senate negotiator Chuck Grassley, "should closely mirror the Senate bill."

That shouldn't be too tough. Before he jetted off to Vermont to bask in the glow of his home state's independent-minded love, Jeffords left word that his polarity-reversing move to the left side of the aisle was not to affect the tax cut, so the Republicans are still in charge of the haggling. And, seeing as how the whole darn Senate might be in Tom Daschle's care after the holiday weekend, the GOP will be motivated to find a way to apply the Senate's modest moderations (cutting the top marginal rate to 36 percent instead of the House and Bush's 33 percent, and some more tax credits for the middle class) to the House version and come out with something passable by Memorial Day.

The Senate bill would immediately establish a new 10 percent bracket on the first $6,000 of income for singles and $12,000 for couples, and boost the child credit from $500 to $600 — with the cuts in top rates to be phased in more slowly. Thus, any American who paid federal income taxes would receive $300 in relief this year, plus an extra $100 per child if a family didn't exceed certain income thresholds. That would mean $800 for a typical two-earner family with two children.

By 2010, the bill would raise the child credit to $1,000, and make it available for the first time to low-income families that effectively pay no taxes, and begin to ease the "marriage penalty" paid by half of married couples when they file joint tax returns, though not until 2005. It would also gradually reduce the estate tax over the next decade before repealing it in 2011.

So yes, America, there will be a tax cut passed this spring, and you may even see a couple of bucks as soon as the start of the new fiscal year in October. It may also be one of the last things you see out of Washington for some time. When all the barbecues have been doused and the country gets back to work Tuesday, the Republicans will still have the House, and George W. Bush will still be president. The Senate, on the other hand, will be under the control of a Democrat itching for revenge and a swath of centrists who may be a lot less inclined to stand in line with George W. Bush now that the new majority leader wouldn't set foot in Crawford, Texas, if his life depended on it.

Wonder if Wall Street still loves gridlock like it used to.