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White House Says Tax Compromise Unacceptable

But negotiations will continue to reach agreement on tax cuts, spending plan

tax cut

WASHINGTON (AllPolitics, July 23) -- The White House says the tax bill compromise worked out between House and Senate Republicans is not acceptable to President Bill Clinton.

House and Senate conferees resolved most of their remaining differences Tuesday night. But their compromise version includes several provisions unacceptable to the Clinton Administration. One would index a cut in capital gains taxes to changes in inflation, which the administration believes would cut too deeply into government revenues in years to come.

The White House also objects to proposed eligibility rules for a new $500-a-child tax credit. The GOP proposal would deny the credit to most lower-income families who already get the Earned Income Tax Credit and who do not pay income tax because they don't earn enough.

"They clearly did not write the final version of tax legislation [Tuesday] night," White House Press Secretary Mike McCurry told reporters.

McCurry said administration officials are scheduled to meet with congressional budget writers on Capitol Hill later today to continue budget discussions. The meeting is designed to discuss spending provisions of the budget bill, but McCurry said it was likely the tax aspects would come up as well.

Meanwhile, Clinton plans to make a strong statement today in support of the 20-cent-a-pack cigarette tax increase included in the Senate version of the budget.

McCurry said Clinton would push the tobacco tax increase during an afternoon event designed to highlight progress in improving child immunization rates.


The House is reluctant to go along with the tax increase, but McCurry said the money, if earmarked to childrens' health programs, "would assure coverage to millions of children who currently lack health insurance. That would be a significant achievement of the bipartisan balanced budget agreement."

McCurry was careful not to issue veto threats and said the president is actively involved in encouraging his negotiators. "This bill is a long way from finished," he said.

Treasury Secretary Robert Rubin said today the president wants to get a tax bill done, but there are serious issues to resolve. He said the president would not sign a bill that included indexing of capitol gains tax cuts. (352K wav sound)

CNN's Wolf Blitzer and John King contributed to this report.

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