U.S. Senate 107th
Congress First Session
Tie Broke By VP in Budget Debate
Senate Gives President's
Tax Plan a Setback
Small Tax Relief Approved
House of Representatives 107th Congress First Session
Tax Elimination by the House
Senate 107th Congress First Session
First Tie Broke
By VP in Budget Debate
On April 3, 2001, while supporting a plan to increase
Medicare spending by over $300 billion over 10 years, Vice President
Richard B. Cheney cast his first tie-breaking vote in the Senate,
protecting President Bush's $1.6 trillion tax cut.
By warning that defeat would essentially hand
over control of the Senate to Democrats, the Republican leadership
secured the support of most wavering party members.
Senator Larry E. Craig (Republican-Idaho) said,
"We have not spared that [argument] as part of our rhetoric with our
colleagues. It is the beginning of where [Mr. Bush] wants to take
For a prescription drug benefit under Medicare,
the amendment in question sets aside twice the amount proposed by
the President. However, compared with a Democratic amendment that
would have done the same but also reduced the President's $1.6 trillion
tax-cut plan by $150 billion to make up the difference, Republicans
considered their vote to decide a better alternative.
The Vice President's vote caused the amendment
to pass by a 51-50 vote.
In a second vote, the Democratic alternative failed
by a 50-50 tie that was broken by Vice President Cheney. The sole
party defectors on both sides were Senator Lincoln Chafee (Republican-Rhode
Island), who voted with Democrats and Senator Zell Miller (Democrat-Georgia),
who voted with Republicans.
For Fiscal 2002, the White House planned to limit
discretionary spending to a four percent increase over Fiscal 2001.
The Senate also debated a 10-year, $88 billion
entitlement program for farmers authored by Senator Grassley in addition
to the $150 billion added to the budget resolution for Medicare benefits.
Adding one of the deciding votes for the President's
plan was Senator Jeffords who was seeking about $180 billion over
10 years in special education spending.
Money that would not be counted against the four
percent discretionary spending limit set by the President would result
from declaring increases in agriculture and special education spending
Robert Bixby, executive director of the Concord
Coalition said, "That is a very bad idea. It is very pernicious."
Bixby said the problem with mandatory programs, or entitlements is
that they go on auto pilot; spending for discretionary programs must
be appropriated annually.
He said the President's goal of four percent is
"reasonable" but if Congress is going to break it, it would be far
better to do so "up front so you can see it."
(John Godfrey and Dave Boyer, "Cheney breaks first
tie in Senate," The Washington Times, April 4, 2001)
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Gives President's Tax Plan a Setback
Three dissenting Republicans who joined Democrats
in voting to reduce the size of the 10-year, $1.6 trillion tax cut,
handed President Bush a setback on April 4, 2001. To reduce the size
of the tax cut by about $450 billion over ten years and to divide
the money between education and debt reduction, the Senate voted 53-47
against the current form of the President's ten-year tax cut. (To
see how your senators voted,
A leading moderate Republican, Senator Jim Jeffords
of Vermont, made a dramatic break with the administration just moments
before the vote. To support a bipartisan plan that would reduce the
tax cut to $1.25 trillion, Jeffords joined Democrats and a previous
GOP defector, Senator Lincoln Chafee (Rhode Island). By offering more
money for special education, GOP leaders worked into the night trying
to change Jefford's mind.
The key Senate vote came following a proposal
by Senator Tom Harkin (Democrat-Iowa) to redirect $225 billion to
federal education programs and $225 billion to debt repayment. To
educate children with disabilities, Jeffords had demanded that the
Bush administration provide $180 billion more over the next ten years.
Voting for the amendment and against the President
were Jefford, Chafee and a third moderate GOP Senator Arlen Specter
(William M. Welch, "Bush's tax plan takes hit,"
USA Today, April 5, 2001)
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Small Tax Relief
Approved by Senate
For this year, by a vote of 94 to 6, the Senate
approved an $85 billion tax cut on April 5, 2001, (To see how your
senators voted, visit http://www.senate.gov/legislative/vote1071/vote_00080.html)
which is significantly more than the $60 billion upon which both parties
had seemed to agree. The party's disagreement came over how this money
would be returned to taxpayers - as a rebate check, for instance,
or in the form of lower taxes withheld from paychecks in the last
half of 2001.
The votes were for a budget resolution. Although
the measure would never become law, it serves as a planning tool for
lawmakers, setting the outline for how much can be allotted for taxes
and spending in legislation over the rest of the year.
Often ignored when the actual legislation is considered
is the amounts in budget resolutions.
For education, an addition of $70 billion over
10 years was approved. Most Republicans were opposed and almost all
the Democrats voted for the extra money.
The Senate approved a budget on April 6, 2001,
by a vote of 65-35 in favor of a blueprint that leaves room for a
tax cut of about $1.2 trillion (To see how your senators votes, http://www.senate.gov/legislative/
The smaller package still represents "meaningful,
real tax relief" and the President is pleased with the vote. President
Bush said at an awards presentation in the White House East Room,
"The fact that both houses of Congress have committed to finding significant
relief is good for the American people and good for the economy. I
applaud today's action and congratulate the Republicans and Democrats
who helped make it happen."
In negotiations with the House, which has already
approved a budget along the lines that the President sought, GOP officials
said they would attempt to increase the tax cuts.
Vice President Dick Cheney told reporters moments
after the vote, "I would emphasize, this is one step among many."
In days of negotiations, the Vice President made
no mention of the $1.6 trillion that he had tried to salvage. However,
the Senate's action would lead to "a significant reduction in taxes
for the American people as well as the approval of important spending
programs going forward," said the Vice President. While all 35 no
votes were cast by Democrats, a total of 50 Republicans and 15 Democrats
supported the proposal that passed.
A proposal by Senator Dick Durbin (Democrat-Illinois)
to provide an immediate $60 billion tax cut stimulus to help the faltering
economy was defeated by the Senate by a vote of 61 to 39. (To see
how your senators voted, visit visit
http://www.senate.gov/legislative/vote1071/ vote_00076.html) Also,
close to the figure, Democrats say is most appropriate if the government
is to pay down public debt while meeting spending priorities, it would
have sanctioned additional tax cuts over the next ten years of about
(Jim Abrams, "Senate Approves Smaller Tax Cuts,"
The Associated Press, April 6, 2001; David E. Rosenbaum, "Senate G.O.P.
Leaders Cite Lack of Votes for Bush's Full Tax Plan," The New York
Times, April 6, 2001)
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House of Representatives 107th Congress First Session
Elimination by the House
Legislation that would repeal the estate and gift
tax (H.R. 8) over the next ten years was passed in the House by a
vote of 274-154. (To see how your representative voted, see
Through the measure passed by the House, beneficiaries
would save approximately $186 billion through 2011. However, in the
decade after, the measure would save nearly six times that amount.
Representative Philip M. Crane (Republican-Illinois)
said, "This is the most unfair, obscene and immoral tax. No American
should have to pay 55 percent of his or her savings, business or farm
when he or she dies."
On over $675,000 in estate assets, the estate
tax effectively starts at 37 percent and builds to 55 percent for
assets over $3 million. In any given year, about two percent of all
estates will owe taxes.
Those hurt hardest are families in the middle.
Even Republicans agree that the very wealthy might be able to afford
Often, children are forced to sell the small businesses
and farms created by their parents, representing an unfair tax on
money and assets that have already been taxed before according to
The House defeated the Democratic alternative
plan on a 227-201 vote that would immediately increase the current
$675,000 estate-tax exemption to $2 million for an individual, $4
million for a married couple. (To see how your representative voted,
According to the Democrats, their plan provides more relief for smaller
estates than the Republican plan, which begins to phase in the tax
by lowering the top rates first.
Since it leaves the estate tax in place, the Democratic
plan ultimately fails argue Republican supporters. House Majority
Whip Tom Delay (Republican-Texas) said, "Without full repeal, any
death tax measure is a placebo. You've got to kill it by ending it
once and for all."
In 2002, the measure would be worth about $4 million
and in 2011 would be about $49 billion.
(John Godfrey, "House approves repeal of estate
tax," The Washington Times, April 5, 2001; Curt Anderson, "House Eliminates
Estate Tax by 2011," The Associated Press, April 4, 2001)
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