Tax-Cut Tango

President Bush won a big victory last week when the Senate voted to trim only $100 billion from his tax-cut package. The upper chamber rejected a much larger threat to Mr. Bush's plan, an amendment to reduce his $726 billion in cuts by more than half.

The votes mean the president will likely get most, if not all, of the tax reductions he sees as the core of his program to ensure steady economic growth. About half his package would repeal the tax on corporate dividends, which would help investors and push companies to share profits. The remainder would speed up other tax cuts approved earlier that were to take effect in the years ahead.

The plan's passage is crucial for the president, who must convince voters he is acting to jump-start the economy out of its current stagnation. It's also important to the GOP: The party wants to show that, with control of the White House and both chambers of Congress, it can effectively govern.

In reducing the administration's proposal, senators agreed with Sen. Russell Feingold (D) of Wisconsin, who argued the budget must include Iraq-war costs. Those costs became clearer over the weekend, when White House officials said the president would ask for some $80 billion in funding for the war.

The Senate set a final vote on its overall budget resolution for Wednesday. While actual tax cuts will require separate bills, the budget resolution is essential to allow the cuts to pass by a simple majority vote of 51, rather than the 60 votes normally needed to end Senate debate.

The House earlier approved its version of the budget, including the president's entire tax-cut proposal. The administration and GOP leaders hope the House version will prevail in a House-Senate conference committee over the next few weeks. But first they will have to persuade moderate GOP senators to vote for the Senate resolution this week.

The Senate should stick with the carve-out to pay for the war. While tax cuts will help the economy, thus increasing federal revenues, Congress must still practice fiscal discipline. In addition to tax cuts, spending reductions and Medicare reform are needed to keep the budget on a responsible course toward being balanced.

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