Daschle proposes immediate tax cut

Daschle

WASHINGTON (CNN) -- Senate Democratic Leader Tom Daschle, D-SD, wrote President Bush Monday proposing an immediate cut in the 15 percent tax rate paid by all Americans who pay taxes in order to help jump start the slumping economy.

"I propose that we seize the opportunity to provide immediate tax relief aimed at middle class families by enacting that tax cut as soon as possible," wrote Daschle.

"Prompt action on this proposal would put money in the hands of American families across the country, and as you have suggested, it could provide a boost to the economy. With your support, we could have this tax cut on your desk to sign by May 1, 2001."

DOCUMENT President Bush's tax proposal Documents in PDF format require Adobe Acrobat Reader for viewing.     RESOURCE Whitehouse.gov: President Bush's budget blueprint     INTERACTIVE How will Bush's proposal affect your tax bracket? Compare: 2001 budget vs. Bush's proposed 2002 budget     IN-DEPTH CNNfn: Tax Time     MESSAGE BOARD Taxing and spending

Daschle's proposal would bring the 15 percent tax bracket down to 10 percent, putting an average of $600 in the pockets of couples.

It would cost a total of $450 billion over 10 years, according to a Daschle spokeswoman.

"It's just a first step - something we can all agree on - before we start debating the other rate cuts, marriage penalty and other tax cut issues," said Daschle spokeswoman Ranit Schmelzer.

The South Dakota Democrat wrote Bush that if he agrees to this compromise, it will prove lawmakers from both parties can work together, and suggested an early deal could help lure Democratic support on other elements of his tax bill. Pulling in Democratic support in an evenly split Senate is crucial for Bush in passing his centerpiece tax cut proposal, especially since a handful of moderate Republicans are already skeptical of Bush's 10 year $1.6 trillion tax plan.

"Once we take this first step together, it will surely be easier to reach agreement on a variety of other tax cuts during this session of the 107th Congress," wrote Daschle.

Senate Majority Leader Trent Lott, R-Miss., said earlier Monday that the economy is having an effect on the tax cut debate, giving it a greater sense of urgency.

"I think the greater emphasis may now be on how do you put more of it at the beginning and have an effect on this year, both in terms of when rates are cut, and also, can we do something that can have the benefit for farmers and small-business men and women on the death tax sooner," said Lott. With regard to Daschle's proposal, which he first floated Sunday, Lott said he would "entertain the prospect," but reminded reporters, that the only way to actually move a tax bill early without the threat of filibuster is to get the consent of all senators.

Critics of the Bush tax proposal from both sides of the aisle complain that his proposal was never intended to spur the economy, and because most of the tax cuts do not kick in until the five years from now, it will not act as an economic stimulus.

But unlike his counterparts in the House who argue for a larger tax cut, Lott has supported the Bush proposal and warned Bush not to agree to any compromises to his tax cut plan that "may weaken" it.

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Senator Tom Daschle - South Dakota Democrat
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