Debate on tax-cut plan to begin

Sen. Voinovich said he will support the cuts if they don't exceed $350 billion.
WASHINGTON (AP) -- Republicans are ready to push a $350 billion package of tax cuts and spending through Congress after abandoning President Bush's plan to eliminate taxes on corporate dividends and after shrinking the measure to satisfy moderate lawmakers.
The tax-cut plan is a major priority for Bush and the GOP, who say it will help spark an economy that has spent more than two years in the doldrums. The president planned a trip to the Capitol today to claim victory, shortly before legislators were to begin debating the bill.
"This package will help ease economic anxiety," Senate Finance Committee Chairman Charles Grassley, R-Iowa, said in a written statement. "It'll pump up our consumer-driven economy. It'll put more money in individuals' and families' pockets."
The bill contained many of the elements of Bush's original plan, which called for $726 billion in tax reductions through 2013. But the scaled-back congressional version would cut taxes by $330 billion for stockholders, individual taxpayers, couples and businesses, while including $20 billion for financially strapped states, a provision Bush did not seek.
GOP efforts
To squeeze the tax reductions into the $330 billion package, Republicans relied on budget gimmickry.
Many of the cuts are scheduled to expire after a few years, despite the overwhelming likelihood that lawmakers never would let that occur and be accused of raising taxes. A reduction in the taxes people pay on corporate dividends and capital gains would end in 2009; other cuts in individuals' income taxes would last only through 2004.
As they have all year, Democrats criticized the plan as a giveaway to the well-off. They have offered alternative plans roughly one-third the size of the final GOP bill.
"This bill misses a real opportunity to get the economy back on track and help Americans who are struggling," Senate Minority Leader Tom Daschle, D-S.D., said in a statement. "Instead, it gives away billions to those who need it least and does very little for those who need it most."
Moderates
The measure reached its final shape after moderate Sen. George Voinovich, R-Ohio, a pivotal vote in the closely divided Senate, met Wednesday with Vice President Dick Cheney and House Ways and Means Chairman Bill Thomas, R-Calif. Support from Voinovich and several other moderates of both parties hinged, in part, on keeping the bill's price tag at no more than $350 billion.
"If they stay within the 350, I'm fine," Voinovich said in a brief interview with The Associated Press. "I appreciate the fact that they've been trying to honor my concerns and make me an honest man."
The GOP may need Cheney's tie-breaking vote if other wavering moderates oppose the bill. Senate leaders count Democrats Ben Nelson of Nebraska and Zell Miller of Georgia as votes for the bill, but lost the support of three Republicans -- Lincoln Chafee of Rhode Island, John McCain of Arizona and Olympia Snowe of Maine.
Passage seems all but certain by week's end, when lawmakers begin a weeklong Memorial Day break.
Under the legislation, the top tax rate on dividends and capital gains would fall to 15 percent this year. Low-income taxpayers would pay 5 percent, falling to zero in 2008. Barring further congressional action, today's higher rates would return the following year.
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