Bush, House GOP leaders disagree on tax strategy

WASHINGTON (CNN) -- House Speaker Dennis Hastert, R-Illinois, said Wednesday that he disagrees with President Bush on how to move tax relief legislation but that the disagreement is "not really a dispute, it's a discussion."

Hastert, who has advocated dividing Bush's $1.6 trillion tax package into smaller pieces, reiterated that position but said he is "open" to the president's views and "trying to find the best way to pass that bill."

Speaking to a reporters at a retreat for House GOP leaders at the Library of Congress, Hastert said, "we're going to work with the president to get it through in the best way possible."

John Feehery, Hastert's spokesman, said the Speaker believes that the strategy he employed last Congress -- moving the various tax relief proposals separately -- was successful from a public relations standpoint and that this year those same measures will be signed into law by Bush. Last year, several GOP-backed tax cuts, including reductions in the estate tax and so-called marriage penalty, won bipartisan support in Congress but fell short of the super-majority needed to override President Clinton's vetoes.

Feehery said the Speaker and new president discussed their differing approaches at a White House meeting on Monday night but he would not elaborate on what was said.

Republican House leaders are also split on how to proceed. Conference Chairman J.C. Watts, R-Oklahoma, agrees with Hastert while Majority Leader Dick Armey, R-Texas, sides with Bush. Majority Whip Tom DeLay, R-Texas, who is an influential conservative voice, has not settled on a strategy, his spokesman Jonathan Barron said.

Several Republican sources said House leaders will not decide on a legislative course until they can gauge the attitudes of rank and file members at a three-day organizational retreat early next month in Williamsburg, Virginia.

A third strategy is also being discussed, a leadership aide told CNN. That thinking has congress taking a dual-track approach: in the next two months, Congress would pass marriage penalty and estate tax relief, scoring early public relations victories for the GOP; at the same time, it would pass a broad budget framework -- typically a laborious and time-consuming effort -- that would include the $1.6 trillion tax package.

That package, known as reconciliation, could then be passed in both chambers by the summer.

"We all want the end result which is a good fair tax treatment for the American people," Hastert said describing the dispute as a disagreement over process not policy. "We have to assess what we can pass and how we can get it done."

CNN Capitol Hill producer Ted Barrett contributed to this report

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