Welcome to the Feud

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Dennis Hastert doesn't ruffle easily in public. The bulky House Republican leader looks more likely to hug than harangue. But last week when a reporter poked him about the difficulty Republicans in the House and Senate were having reconciling their differences on the president's tax cut package, comfy uncle Denny snapped. "You know what?" he said, "I'm tired of trying to fit the Senate. We have moved in the House. We have done what the president says. We have compromised from 726 down to 550. And if the Senate can't get its work done that's too bad."

So much for a supposed mandate.  After the 2002 elections sighing editorial writers and nervous Democrats fretted that the Republican Congress would merely rubber stamp policies being minted out of the White House. But the House and Senate always have issues about ego and power-sharing and righteousness. What is surprising though, is all the public fussing from Republicans who are usually known for maintaining Rockette-like precision compared to their Democratic counterparts. The House is bickering with the Senate, both are exchanging sniping fire with the White House and Republican moderates are off dancing to their own tune. The last couple weeks, admits one weary GOP congressman, "have been a little messy."

So why is the popular and victorious Fighter Pilot-and-Chief not able to get his own party in line for the war dividend he really wants—a $726 billion tax cut centered around an elimination of the tax on dividends? Well, the moderates, despite approving of Bush's handling of the war, don't support his plan for reviving the economy and despite the political benefit Bush won from his carrier display, moderates worry there are no coat-tails on a flight suit. "The Moderates are emboldened," says a White House adviser. "They're from states where there are cutbacks and where the politics have always been close and where people are hurting. This is going to be a constant problem for the White House."

Republicans on the Hill blame the Bush team for inadequately selling the president's plan. "They didn't work members on the front end," complains a senior Republican Senate aide. "They only started talking to them after senators had taken their positions. That won't do." They also complain that the administration relied too heavily on the president's war popularity as the magic element that would push the plan through. Several Republicans took note of an ABC poll last week that says that 57 percent of those asked said that the president's plan favors the rich.

White House aides dismiss the criticism as the usual whining of a messy and undisciplined Congress. Senate Finance Chairman Chuck Grassley, who insisted on the smaller $350 billion price tag for any tax package that comes out of his tax-writing committee, is dismissed as a headline hound. Majority Leader Frist, who allowed the budget to pass that limits the size of the cut, is portrayed as a newbie rolled by his more experienced colleagues. " (Budget Chairman Don) Nickles wanted a budget before recess" says a White House official involved in selling the tax plan, "and Frist gave it to him." Wise GOP Senate hands shoot back that the votes were never there for the full Bush plan and Frist took what he could get before the package lost more support.

It wasn't a crazy bet thinking Bush could muscle his full plate of tax breaks into law. Even though tax fights are notoriously sticky, Bush won 62 votes in the Senate for his $1.35 trillion package in 2001 when he had a far lower approval rating and lingering Democratic animosity over the closely fought election. But the president's popularity has its limits, and his muscle does too. When Grassley said the chances weren't great for passage of the dividend tax elimination, the president personally leaned on him in a meeting at the White House. "He's back on the reservation," a senior administration aide said afterwards. Grassley did look pale after he emerged from the Bush treatment,  but the color came back quickly. The Iowan helped ink a quiet side deal in early April that limited the size of the tax cut to $350 billion in the Senate and that caused Hastert to fog his glasses.

Two weeks ago, Bush tried to squeeze Ohio Senator George Voinovich, another clinging to that $350 billion number, by stumping for the plan in the Republican's state. Behind the scenes, officials from the Commerce and Treasury departments contacted businesses in the Buckeye state suggesting that they explain how much they would like the Senator to support the president. Administration aides boasted that the money men who support Voinovich were getting to him. They didn't get far. Now White House aides are saying they never thought they'd convince the first term Senator though others in the administration say they are still looking to find spending cuts that will satisfy the lifelong deficit hawk. Last week, Federal Reserve Chairman Alan Greenspan, whom Bush has promised another term, echoed Voinovich's position that taxes could only be cut if equal spending reductions are also proposed.

Upset at the Senate's inability to find a way to scrap the smaller figure or accommodate the president's wishes within the smaller price tag, the House went off on its own way creating its own plan that shaves down the size of the Bush dividend cut and adds a reduction in capital gains taxes, something the president did not propose. "The Senate is stuck in the mud at $350 billion," said Ohio Congresswoman Deborah Price, who chairs the House Republican Conference. Though the chief tax writer in the House, Ways and Means Chairman Bill Thomas, embraced much of the White House plan, some in the administration slammed him as "imperious" and "impossible," for not sticking behind Bush's full elimination of the dividend tax. One official called the House plan for a capital gains reduction a "rhetorical kick in the head," that would embolden Democrats to further charge that the breaks mainly benefit the wealthy.

In the coming weeks as lawmakers from the House and Senate reconcile their different tax bills, the White House will try to convince them to move back towards the Bush plan. So by the end of the week, the White House was working to regroup with their Republican allies in the hopes that where pressure didn't work, cajoling might. They heralded the House alternative tax plan as a move in the right direction and stowed their complaints about Senate leaders. But out on the stump, the president was still putting on the rhetorical pressure. As the unemployment rate reached 6 percent, upping the political stakes for all Republicans, he took several swipes at Congress. "I urge the United States Congress to look at the unemployment numbers that came out today, and pass a tax relief plan that will matter," he said arguing for his plan, "a tax relief plan robust enough so that the people of this country who are looking for work can find a job."

Running against Congress is a well-worn presidential strategy, but something of a surprise since not long before the speech, a top White House aide was making the case that the president could no longer beat up on Congress the way he had when the Senate was in Democratic hands.  "We can't do that now," says the aide. "Though the distinction is lost on people about how close the Congress is, it's now a Republican Congress." —With reporting by Doug Waller, Washington bureau