Lawmakers Seek to Shift Focus to the Domestic Front
Congress returns to session this week with plans to mirror the White House’s strategy of shifting focus from war in Iraq to the domestic front.
In the four weeks before the Memorial Day recess, much of Capitol Hill’s political oxygen will be consumed by negotiations over the size and scope of President Bush’s tax-cut package, an issue that sparked some intraparty tension between House and Senate Republicans before lawmakers left town two weeks ago.
On Tuesday, top Republicans leaders from both chambers will travel to the White House to meet with Bush in the Cabinet Room, where the president is expected to lay out his desired domestic agenda with a heavy emphasis on the tax bill.
“That’s certainly going to be the focal point of our agenda as it relates to the month of May,” said Pete Jeffries, spokesman for Speaker Dennis Hastert (R-Ill.). “You will see mounting evidence of the White House’s lobbying efforts to get a strong jobs package.”
Republican leaders in both chambers need to calibrate bills that will attract enough support from both moderates and conservatives to stand a chance of passing.
Senate Republican aides have floated a couple of scenarios that could yield a tax-cut package out of the Finance Committee that would appease the deficit hawks — Sens. Olympia Snowe (R-Maine) and George Voinovich (R-Ohio) — as well as appeal to conservatives.
One idea is to find spending or tax offsets, allowing the size of the tax cut to rise above $350 billion but still remain around $350 billion in terms of its net impact on the budget. Snowe, in particular, has signaled a willingness to consider such a plan.
But so-called offsets are tricky — some other constituency would face a spending cut or a hike in its taxes or fees in order to increase the tax-cut size.
Another possibility would be to leave the package at $350 billion, but to take advantage of a provision in the budget resolution, written in by Senate Budget Chairman Don Nickles (R-Okla.) and House Budget Chairman Jim Nussle (R-Iowa), that allows for larger tax cuts in the first few years of the package than the White House originally sought.
Essentially, several Senate aides said, Republicans could front-load the tax cut in a way that maximizes a “robust growth and jobs package,” appealing to conservatives who otherwise are wary of supporting what they consider to be a too-meager $350 billion plan.
But Democrats plan to put up a big fight in the Finance Committee, a likely united front that would be quite different from the 2001 tax debate, when the committee’s top Democrat, Sen. Max Baucus (Mont.), worked with Grassley to craft a deal that eventually won support from a dozen Democrats on the floor.
One senior aide to a Finance Democrat said all 10 Democrats on the panel expect to meet early this week to map out their strategy. Some are pushing for Democrats to remain completely opposed to any reduction in the dividend tax, arguing that the House will in all likelihood pass a large or complete repeal of the dividend tax.
The lower the number the Senate approves, some Democrats contend, the better the Senate’s leverage will be in conference to keep the dividend tax provisions to their liking.
In the House, meanwhile, Republican leaders find themselves in the relatively rare position — one with which their Senate counterparts are more familiar — of trying to craft a bill that will quell potential rebellions on both their right and left flanks.
In fact, House GOP strategists are counting on conservatives to make noise about not supporting a bill that’s too small. Such complaints would help blunt those of moderates while also potentially giving House leaders more leverage when the bill goes to conference if House conferees can caution Senators that a pared-down package might not pass in the chamber.
“If we only get pressure from one side then clearly that’s the way you have to move,” said a House Republican leadership aide. “If there are people who feel that you have to have a larger tax relief package … then that helps us with the Senate.”
House Republican moderates have been vocal in their skepticism of a large tax cut since the debate began over the fiscal 2004 budget resolution. That measure passed by the slimmest of margins, and only after GOP leaders restored some proposed spending cuts at the 11th hour.
In that case, centrists’ concerns over the size of the tax cut contributed to the narrowness of the bill’s winning margin but was not enough to actually sink it. However, since that vote, the steadfastness of moderate Republicans in the Senate may have served to embolden their ideological kin in the House.
Events in the Senate have also been watched by House Republican conservatives, who have become increasingly dismayed by the prospect of a tax package that could end up becoming law at roughly half the size it was when the Bush administration first proposed it.
What both the centrists and the conservatives have in common as the House returns to session this week is that neither has yet drawn a clear line in the sand by announcing a number at which they absolutely won’t support the bill.
House Republican leaders believe that much of the opposition that might exist within the Conference will dissipate once it comes time to vote, as lawmakers will be wary of opposing concrete, politically popular proposals such as a child tax credit and repealing the so-called marriage penalty.
Jeffries said that beyond the tax cut, the Speaker’s biggest priorities for the month would be the defense authorization bill, possibly a charitable choice (or “faith-based”) bill and, time permitting, a Medicare modernization bill that includes a prescription drug benefit.
House Republicans saw the pre-recess period as an opportunity to clear big-ticket items such as the budget resolution, energy bill and wartime supplemental in order to clear the future schedule and, as one aide put it, “keep the trains running on time.”
That means there should be room on the calendar to get started on the president’s remaining priorities while also making an early effort to begin clearing appropriations bills.
On the Senate side, Majority Leader Bill Frist (R-Tenn.) expects to also focus strictly on big, domestic policy issues, moving from the tax debate to the Medicare/prescription drug issue and then to energy — a shift in emphasis that Democrats are welcoming, given the public’s strong support for Bush on anti-terror initiatives and other national security matters.
“This will be a time when we the Democrats will be speaking to the central concerns of families,” Sen. Edward Kennedy (D-Mass.) said last week.