Congress Approves a Bill to Extend Bush's Tax Cuts

By EDMUND L. ANDREWS

New York Times

September 24, 2004

WASHINGTON, Sept. 23 - The Republican-controlled Congress easily passed legislation on Thursday that would extend expiring provisions of last year's tax cuts for families as well as about 20 business tax cuts, at a cost of about $146 billion over 10 years.

Even though Democrats protested that the tax cuts would worsen the federal deficit and should be paid for with spending cuts or other tax increases, party leaders gave their members free rein to vote for the bill rather than incur the wrath of voters just a few weeks before Election Day.

Rushing the bill to a final vote on the floor after reaching agreement in a conference committee late Thursday night, House lawmakers approved it 339 to 65, with most Democrats joining the Republicans.

In the Senate, the tax bill was approved 92 to 3, with two Republicans, Olympia J. Snowe of Maine and Lincoln Chafee of Rhode Island, and one Democrat, Ernest F. Hollings of South Carolina, opposing it.

Republican lawmakers praised the bill as preventing tax increases on middle-income families, and all but dared Democrats to vote against it.

"Anybody who votes against this is voting for a tax increase on the middle class because almost all these provisions benefit the middle class,'' said Representative Jim McCrery, Republican of Louisiana. "If you vote for this bill, you are allowing taxes on the middle class to remain low, and if you vote against this bill, you are voting to increase taxes on the middle class.''

The bill extends several individual tax cuts that were set to expire at the end of this year: a $1,000 child tax credit, which would have declined to $700 under current law; tax breaks for two-income married couples intended to reduce the so-called marriage penalty; and an expansion of the lowest, 10-percent tax bracket to cover more taxpayers.

Democrats had made it clear they would vote to extend the tax cuts, but they tried during the conference committee to attach amendments that would have paid for them with either a surcharge on families with incomes above $1 million or by closing some corporate tax shelters.

The Republican majority easily rejected those amendments, and they also rejected amendments that would have extended the child tax credit to families with incomes just above $10,000 a year.

Representative Steny Hoyer, Democrat of Maryland, said the overall package would increase the federal deficit, which is expected to reach $420 billion this year and is expected to remain high for the rest of the decade.

"Continuing to run up the national debt will ensure that our children and grandchildren will face higher debt taxes for the rest of their lives,'' Mr. Hoyer said.

Democrats also released new estimates by the nonpartisan Congressional Budget Office, which showed that the federal deficit would remain above $300 billion a year for the next 10 years if Mr. Bush's tax cuts were made permanent and if military costs in Iraq continued at modest levels for the next several years.

But even Democratic leaders found it hard to ignore the political dangers of voting against the tax cuts and, in effect, for tax increases that would have affected millions of households. Among those who reluctantly voted for the bill was Representative Charles B. Rangel of New York, the ranking Democrat on the House Ways and Means Committee, who had proposed paying for the tax cuts by imposing a surtax on families with incomes above $1 million.

"It's timely,'' Mr. Rangel said in debate on the House floor. "It's on the eve of an election.''