Clinton Slays Giant Tax Cut. Next?

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With his usual splash of ceremony, President Clinton set up in the Rose Garden on Thursday and hit the $792 billion slow pitch. He vetoed the Republicans’ tax bill and ritually disparaged it as a measure that would "turn us back to the failed policies of the past" at a time when the economy – read, his economy – is running like a dream. And although part of the show demanded that Clinton grab some high ground with a call for compromise – a rejiggered cut of, say, $300 billion "would be a good bill I would happily sign" – the tax cut of the century is looking more and more like a problem for the next one. Compromise? "I don't see it as practical this year," Senate leader Trent Lott told reporters afterward. "The President says he wants to work with us, but he has not."

Congress has plenty of work to do already, getting its vision of next year’s budget ready for the annual brouhaha with White House negotiators. So far, the Republicans have sent Clinton just four of the 13 spending bills for the coming fiscal year, and the White House has threatened vetoes of six of the others. Desperate for cash that won’t bust the spending caps and eat into the surplus (although that will certainly happen eventually), they’ve tapped $3 billion in unused state welfare money to make some ends meet, which has governors and Democrats screaming mugging. With an October 1 due date for all 13 bills, GOPers are scrambling to draft a stopgap spending bill (to avoid a shutdown) and get those bills on the White House desk in any form – then at least Republicans can take the fight to him. Initiative like that might have helped with the tax cut, says TIME White House correspondent Jay Branegan. "Before the Republicans were able to agree on anything, Clinton was standing there with the veto pen in his hand," he says. "He and the Democrats were able to talk people out of a big tax cut before it ever got started." This year, say the polls, the suspicion is that the cut would favor the rich and squander the surplus. Next year? Voters ought to be surprised if there’s still a surplus to fight over.