Tax-cut outcome heralds the rise of Senate moderates

After weeks of intense negotiation, Congress is closing in on the biggest tax cut in a generation - and a new appreciation of how a 50-50 Senate is changing the rules of Washington.

This week's deal on a budget resolution marks a rare victory for Senate moderates, who proved that a small group in the middle can determine the outcome - if they all stay together.

In years past, the centrists were often the ones that didn't count. They'd make their case, then fall back into the party line when the big votes were counted. And no vote is as big as the budget vote.

The difference this year is that the stragglers didn't yield. They said they would not accept the $1.6 trillion, 10-year tax cut that President Bush and the House proposed, or anything like it. They forced the Senate to scale it back to $1.18 trillion last month. And they held their ground while lawmakers negotiated in a conference committee, which did not - as was expected - just split the difference between House and Senate versions.

Instead, negotiators bumped up the Senate version of the 10-year tax cut to $1.25 trillion - or $1.35 trillion over 11 years, including a retroactive reduction for 2001. That's the number that a critical mass of centrists said they would accept. And without their votes, the resolution wouldn't make it though the Senate when the compromise version is voted on.

"It does make a difference when moderates can hold together. And we did," says Sen. Ben Nelson (D) of Nebraska.

But it could prove something of a hollow victory, as this compromise "blueprint" for taxing and spending in the next fiscal year is by no means the final word. Already, lawmakers in both parties are signaling plans to legislate around it.

The changes anticipated in the fiscal 2002 budget, for instance, include an across-the-board reduction in income tax rates, as well as repeal (or relief) of the estate tax and marriage penalty, and a doubling of the child tax credit to $1,000. GOP leaders already concede all that can't be accomplished within the new guidelines.

If the marriage penalty is only eased but not eliminated under the new budget agreement, Senate GOP sponsors are calling for an additional tax bill to complete the job. Similarly, House GOP leaders opened debate this week on a bill that would increase the amount workers can put into 401(k) programs. And lawmakers from both sides are calling for additional legislation to adjust the alternative minimum tax and provide business tax relief.

Moreover, critics say, the White House has not provided for the financing needed to save Medicare and Social Security or reform the military - all very big ticket items over the next 10 years.

"We're looking at a year where, once again, the appropriations process could burst out of the constraints of the budget process," says Rep. David Price (D) of North Carolina.

It's a prospect that especially concerns Senate moderates. "There should be one tax bill this year, not more than one," says Sen. Max Baucus (D) of Montana, ranking member of the Finance Committee. "Otherwise ... we start to lose control over the fiscal affairs of our country."

Senator Baucus is one of 15 Senate Democrats who broke party ranks to vote for a higher tax cut than the party leadership endorsed. On the Republican side, Senators James Jeffords of Vermont and Lincoln Chafee of Rhode Island dissented from the White House line on tax cuts.

The moderate group, led by Sen. John Breaux (D) of Louisiana, kept in close contact as the budget negotiations progressed. Five of the centrist Democrats were invited to the White House last week for talks with Mr. Bush. Senator Breaux was invited on his own.

Republican mavericks weren't treated quite as cordially. When a Vermont teacher won Teacher of the Year last month, Senator Jeffords was conspicuously not invited to the White House ceremony. It looked like a warning shot - the kind that hard-ball presidents like Lyndon Johnson mastered in dealing with party dissenters.

But Jeffords says his banishment was short-lived. "My White House tickets are back, and my phone calls are now being answered," he says.

"Somebody must have sat down and remembered it's a 50-50 Senate."

(c) Copyright 2001. The Christian Science Monitor