Senate Democrats propose using surplus for one-time tax cut

WASHINGTON (CNN) -- Senate Democrats proposed an immediate tax cut Tuesday in an effort to "provide economic stimulus" to all taxpayers in the slowing economy.

The legislation would dedicate $60 billion of the fiscal year 2001 surplus to a one-time tax refund for all those who pay income and payroll taxes this year. It also would reduce the 15 percent income tax bracket to a new 10 percent tax bracket for all taxpayers.

Senate Minority Leader Tom Daschle said there has been Republican support for both of these proposals. "We should get this done now," he said.

Republicans have argued that no tax cut should be voted on until the president's full proposal is considered.

Daschle called this legislation the "first tax cut they don't like." The Democrats argued that the president's tax plan would not stimulate the slowing economy because it would not help tax payers this year.

Republicans are concerned that a tax rebate passed now could slow the momentum for the president's overall $1.6 trillion tax cut proposal later.

Daschle said he would "hate to hold hostage" an issue with strong support like the rebate, which he said the Senate could pass by the end of April.

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