Clinton vetoes estate tax repeal; GOP sets override vote
WASHINGTON (CNN) -- President Clinton formally vetoed a Republican-backed repeal of the federal estate tax Thursday, saying it failed a basic test of fairness, as congressional Republicans vowed to try to override the veto.
Clinton killed the bill in a White House ceremony Thursday afternoon, calling it an irresponsible break for the rich at the expense of other taxpayers.
President Clinton vetoes a Republican-backed estate tax repeal Thursday
"This particular bill is wrong for our families and wrong for our
future," Clinton said. "It fails the test of the future both on grounds of fairness and fiscal responsibility."
House Speaker Dennis Hastert has scheduled an override vote for September 7, and other GOP leaders expressed outrage over Clinton's long-expected move.
"President Clinton has just given the back of his hand to working families who want to leave their hard-earned family farm, small business, or Internet startup to their children after they die," Senate Majority Leader Trent Lott said. "Apparently, even death can't protect you from the Clinton-Gore administration's insatiable desire for higher taxes."
But Democrats are confident that with some members absent and some Democrats changing their earlier votes, the attempt to override the veto will fail. House Democratic leader Richard Gephardt applauded the president's veto, saying the repeal "amounts to a windfall for the wealthy."
Under the current IRS tax code, estates worth $675,000 or more are subject to the tax, while family farms and businesses worth $1.3 million or more must pay the estate tax. The White House estimated that only 2 percent of all U.S. citizens would have been affected by the repeal.
The measure passed the House in June and the Senate in July, and Democrats in Congress said they were confident a Republican-led effort to override the veto would fail. Republicans call the levy the "death tax," arguing that it forces the sale of small, family-owned farms and businesses because the tax is based on the estate's value.
The measure would have repealed the estate tax gradually over the next 10 years. It would have cost the U.S. Treasury about $105 billion over that period, but the White House says the costs of removing the estate tax would have exploded after 2010.
Congress has passed several tax relief measures this year, and Clinton has either vetoed or threatened to veto most of them. He warned Thursday that the bills, taken as a whole, would bring back "the bad old days of deficits, high interest rates and having no money to invest in our common future."
"They have a strategy that in a way is more clever. It is like a snowball, and every piece of it sounds good," Clinton said.
"But when it keeps rolling it just keeps getting bigger, bigger and bigger and unless someone stops it, the snowball will turn into an avalanche ... A few moments ago, this bill suffered the inevitable fate of a snowball in August."
When the House originally voted on the estate tax measure, 46 Democrats crossed party lines to support it. In the Senate, nine Democrats voted with the Republican majority.
"When Congress returns to work next week, we will make an override of the president's death tax veto our first priority," Hastert, R-Illinois, said Thursday. "I call on those Democrats who supported us on this legislation as it passed the House to join us once again to override this senseless veto."
GOP officials say the Democrats are making a mistake that will hurt them in November. The Republicans' presidential standard-bearer, Texas Gov. George W. Bush, wasted no time in blasting Vice President Al Gore, Clinton's would-be successor, over the issue.
"Al Gore has shown weak leadership by standing by while his administration vetoed a bill that would help so many hard-working Americans and their families," Bush campaign spokeswoman Mindy Tucker said in a Thursday afternoon statement. "Al Gore says he wants to give selected tax cuts to the right people, but I guess farm families and small business owners just aren't the right people for him."
Added Hastert spokesman John Feehery, "They're underestimating how unpopular this tax really is."
CNN Correspondent Kate Snow and CNN.com Writer Matt Smith contributed to this report.