GOP Tax-Cut Plan Faces Opposition In Its Own Ranks

ONE of the keynote promises of House Republicans -- a broad package of tax cuts for families and businesses -- is in trouble less than a week after passing out of committee.

A growing number of GOP members in the House are arguing that deficit reduction is more important than tax cuts, unraveling the remarkable seams of party unity that have characterized the first three months in the lower chamber. Across the Rotunda, several senior Republican senators vow to vote against the package for the same reason.

The split, says Henry Aaron, director of economic studies at the Brookings Institution in Washington, reflects the pressures of holding the majority on Capitol Hill.

''There is a great difference between preelection sloganeering and post-election governing,'' he says. ''It was part of a very effective anti-Washington message to emphasize cutting taxes. Now the outsiders are the 'us'; the Republicans have the responsibility to govern.''

That's not quite how David Mason, an analyst at the Heritage Foundation, sees it.

''The shift is evidence of the public's priority on deficit reduction,'' he says.

Last week, the Ways and Means Committee, the House taxwriting committee, approved a $189 billion package of tax cuts, including a $500 per-child tax credit for qualifying families; a one-third reduction in individual and corporate capital-gains taxes; and expanded individual retirement accounts that allow limited tax-exempted withdrawals.

Proponents, including Ways and Means Chairman Rep. Bill Archer (R) of Texas and Budget Committee Chairman John Kasich (R) of Ohio, argue the tax cuts will be fully paid for and spur economic growth.

Republican opponents in the House argue variously that the tax credit for families should not be available for high-income families and that the tax package makes balancing the budget much more difficult.

The Treasury Department estimates that the House package will cost roughly $630 billion over 10 years. Mr. Archer says the Treasury estimates are inconsequential since he eventually hopes to replace the income tax with a consumption-based tax.

On the Senate side, Senate Finance Chairman Robert Packwood (R) of Oregon has vowed to reject any tax cuts that are not paid for, and argues that deficit reduction and income-tax reform should be higher priorities. He is joined by such colleagues as Sen. John Chafee (R) of Rhode Island and Sen. Nancy Kassebaum (R) of Kansas.

In a further sign that the House tax package faces trouble on the floor, Democrats on the Ways and Means Committee offered only one amendment before voting unanimously to reject the proposal. The package was too flawed, they argued, to fix.

Moreover, a group of some 27 Democrats, including several conservatives who have voted with the Republicans on a number of bills, has signed a resolution calling for savings from spending cuts to be put toward deficit reduction.

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