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Bill would link tax cuts to surplus

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WASHINGTON (CNN) -- A bipartisan group of House and Senate lawmakers unveiled legislation Wednesday for a "trigger" mechanism to curb any tax cut Congress passes if projected budget surpluses do not materialize.

The "trigger" would delay implementation of tax cuts and spending proposals if debt-reduction goals are not met in any given year. It would not, however, repeal or cancel earlier tax cuts or spending.

The plan was offered on the eve of a scheduled House vote on President Bush's proposed across-the-board cut in income tax rates, which is a major part of the his $1.6 trillion tax-cut package.

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The tax cut is the first major Bush initiative to face a vote in Congress. The measure is expected to pass the House without Democratic support, but face a tougher time in the Senate.

Eleven Senators -- six Democrats and five Republicans -- and twelve House members, make up the "centrist coalition," which sponsored the trigger proposal.

Led by Sen. Olympia Snowe, R-Maine, and Sen. Evan Bayh, D-Indiana, the coalition said its plan would link tax cuts to future efforts to reduce the national debt.

"We are here today because we want to be responsible stewards of the surplus," said Snowe.

"We think it would be prudent and wise that we lay out a set of principles today upon which we can devise a legislative mechanism for a trigger concept so that our tax cut and new spending initiative policies are actually based on hard reliable numbers and outcomes," she added.

President Bush and Republicans -- and some Democrats -- oppose curbing any tax cut because they see it as a way to spur the economy. Those critics say if Americans don't feel the tax cuts will continue, that uncertainty will prevent them from spending the money needed to create an economic stimulus.

The trigger plan sponsors challenged that criticism by citing Federal Reserve Chairman Alan Greenspan's endorsement of the idea as a way to ensure fiscal responsibility.

Another criticism of a trigger is that once Congress enacts a tax cut, it is politically untenable to raise taxes again.

Snowe said although the group has not worked out the details, she was hoping to make the trigger automatic so lawmakers would not have to cast difficult votes.

Although Snowe made it clear a trigger mechanism is important to her, she would not say she would vote against President Bush's $1.6 trillion tax cut without it.

But Pennsylvania Republican Sen. Arlen Specter was not enthusiastic about Bush's tax plan.

"I'm not sure that $1.6 trillion is precisely the right figure, perhaps it is if more of that was devoted to the lower income groups, but I do feel very strongly that when a question of a conditionality raises a question as to whether the tax cut will occur, that uncertainty, is far preferable as to the uncertainty as to whether the surpluses will be maintained," said Specter.

By the same token, Democrats said the trigger addresses one of many concerns they have with Bush's tax cut: uncertain surplus projections. They said they still oppose other aspects of Bush's plan in terms of size and its skew toward the wealthy.

Of the 11 Senate co-sponsors of the trigger, two also serve on the tax-writing Finance Committee, something one Democrat warned should not be lost on the Bush administration.

"If the vote were held today [in the Finance Committee] it would fail," said Sen. Robert Torricelli, D-New Jersey. "It is notable that there is bipartisan representation here today for a trigger by members of the finance committee itself."

CNN Capitol Hill Producer Dana Bash and Reuters contributed to this report.



RELATED STORIES:
House set to vote on tax rate reductions
March 7, 2001
Bush prepares to campaign once more for tax cuts
March 5, 2001
House plunges ahead with tax-relief bill
March 1, 2001

RELATED SITES:
President George W. Bush
Board of Governors of the Federal Reserve System

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