WEEK ENDING JULY 22, 1999

Archer pares down tax bill to appease moderates. Earlier this week, House GOP moderates threatened to oppose the bill because of its size and its failure to address the national debt. House Ways and Means Committee Chairman Bill Archer (R-TX) worked out an agreement to decrease the size of the package from $864 billion to $792 billion. Archer also included a provision that would not enact the tax cuts unless certain debt reductions have been met. "This made all the difference in the world," said moderate Fred Upton (R-MI).

Clinton veto expected. On Wednesday, President Clinton indicated that he opposed the Republican tax cut bills and would veto the legislation. "We face a critical choice," Clinton said. "Whether to move forward with the fiscal discipline that got us where we are today or return to the kind of risk-taking that got us into recessions and deficits before."

Senate Finance Committee passes tax bill including minor estate tax relief. Unlike the partisan wrangling in the House, Senate Finance Committee Chairman Bill Roth (R-DE) passed out his $792 billion tax cut bill by a 13 to 7 vote, including two Democrats. The Roth bill is similar to the Archer tax bill in that it includes marriage penalty tax relief and some individual rate relief for those in the 15 percent tax bracket. However, Roth provides no capital gains tax relief and would reduce but not repeal estate/death taxes. The Roth bill is scheduled for Senate floor action on Wednesday, July 28.

Finance Committee rejects package including estate tax repeal. Sen. Phil Gramm (R-TX) offered an amendment to the Roth bill which would have reduced income tax rates by 10 percent across the board, repealed the estate tax, reduced the marriage penalty and made certain health care costs tax deductible. The Committee rejected the amendment by a vote of 13 to 7.