Senate Republican Conference Chair and Finance Committee member Rick Santorum, R-Pa., told reporters on September 30 that, with deficits mounting, he believes the money to extend capital gains and dividends tax cuts would be better spent on Gulf Coast recovery.Now, I'm waiting for the White House to suggest something more constructive to encourage conservation than car-pooling and turning your computer off at night (a suggestion probably aimed more at reining-in liberal bloggers). Anyone for a good stiff gasoline tax?
"In my opinion, that’s where we should be focused," he said.
Democratic complaints and the growing costs of Hurricane Katrina have already left several other Republicans squeamish about moving this fall's $70 billion tax package, but Santorum is the first defector from among the 51 Republicans who voted for the budget in the first place.
The reconciliation instructions provided in the budget allow for the Senate to move the tax package with only a majority vote, but without Santorum, even 50 votes could be a stretch. Centrist Sens. Susan M. Collins, R-Maine, and Olympia J. Snowe, R-Maine -- often bellwethers for the prospects of controversial tax and budget issues -- both voted for the budget in the spring but are now questioning the proposed tax bill. Collins recently told Tax Analysts that she plans to "take a hard look" at the deficit outlook before deciding whether to support tax cut extensions, while an aide for Snowe said "everything is open right now."
Santorum argued that because the rate cuts on capital gains and dividends do not expire until 2008, the limited resources available this year should be used on more pressing issues. He made clear that he still supports the tax cuts, but that there is plenty of time to extend them before they expire. Senate Finance Committee Chair Chuck Grassley, R-Iowa, has been pushing to include two-year extensions of the capital gains and dividend cuts in the tax bill to put them on a parallel track with the other 2001 and 2003 tax cuts set to expire in 2010.
Even without Santorum, however, Grassley is placing hurdles in the path of his own tax bill. He has repeatedly warned that if the senators blocking his Katrina healthcare bill kill the measure, he will not have the votes to move a separate spending reconciliation bill.
"He figures there’s no sense bringing up a bill that will go down in flames," a Senate Finance Committee spokeswoman told Tax Analysts.
Saturday, October 01, 2005
Reality Seeps In
Apparently, the reality of the budget situation is beginning to sink in even on the true believers. This from Tax Analysts: