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Tuesday, November 15, 2005

GOP Still Struggling to Pass Tax Cuts

It's a rare day in Washington when the Republican Party is having a difficult time passing tax cuts, but as Mary Dalrymple reports for the AP, Congressional Republicans are still unsuccessful in overcoming the dissent from within their own party.

Republicans labored to advance their tax cut agenda on Tuesday, with Senate tax writers unable to muster enough GOP support to extend tax cuts for capital gains and dividends beyond their 2008 expiration.

The House's top tax writer pushed to keep the 15 percent maximum rate on investment income alive for two more years, but dropped virtually every other extension of expiring tax breaks from a drafted bill.

[...]

Senate Finance Committee Chairman Charles Grassley, R-Iowa, abandoned plans to keep the tax breaks on capital gains and dividends in place for one extra year. Grassley was stymied by resistance from Sen. Olympia Snowe of Maine, a moderate Republican who wouldn't support the extension.

Without her vote, Grassley could not muster enough GOP support to pass his bill.

The new version of Grassley's bill cuts taxes, goes after tax shelters and tightens tax breaks for charitable deductions. Overall, it would cost the U.S. Treasury $59.6 billion over five years.
The budget reconciliation bill, which still does not have the votes to pass in the House, would make cuts less than the proposed tax cuts, meaning that the Republicans will once again add to the deficit. Given that the recent comments by the comptroller general of the United States on the crippling effect the federal debt will have on the government in the future, compounded by today's news that the Pension Benefit Guaranty Corporation is more than $22 billion in the hole this year, I'm not entirely certain how prudent intentionally adding to the deficit is.
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