If the Republican-sponsored plan pulls through, it would eliminate current federal estate taxes. The cost: a cool $105 billion. Repealing the so-called "death tax" has been a critical issue for congressional GOP members, and they insist the expense of this cut would be covered by the polymorphous and always controversial budget "surplus." The Democrats' plan, with a slimmer $22 billion price tag, was geared toward providing "targeted" estate tax relief for family farmers and small business owners. And where would the extra $88 billion provided for in the GOP plan end up? In the bank vaults of America's wealthiest families. In other words, says Branegan, everyone involved in this debate was out to please someone. "The Democrats wanted a cut that would benefit Democrats, and the Republicans were pushing for a plan that would appeal to their core constituents," he says. "Namely, the rich."
Thanks to the energetic support of House Majority Leader Dick Armey, the rich may be poised to get a whole lot richer and congressional Democrats could be staring at an election year gold mine. Friday, the GOP-controlled House, with the help of 65 rogue Democrats, passed a bill that would repeal estate taxes by the year 2010 a far more sweeping (and expensive) tax break than the version favored by most Democrats, including President Clinton. And while Clinton has vowed to stand in the way of the bill, the Republicans are only 11 votes short of those needed to overcome a veto (it is unclear what form an upcoming Senate bill will take). In the long run, however, this GOP victory may play right into Democrats' campaign plans, says TIME White House correspondent Jay Branegan. "The Democrats are thrilled to have the Republicans sign something like this tax cut," he explains. Reason: It gives Dems a golden opportunity to paint the GOP as having a disregard for the middle class.