By
Associated Press
WASHINGTON - Congressional Democrats unveiled yesterday a $900 billion tax cut plan they said makes better fiscal sense than the more ambitious proposal that is the cornerstone of the Bush administration agenda.
"Our plan is more balanced than the president's. It's more responsible. And it's fairer," said Senate Democratic leader Tom Daschle of South Dakota.
The Democratic plan, which lowers the bottom-bracket income tax rate from 15 percent to 12 percent, was introduced as the House Ways and Means Committee took up the administration's proposal for an across-the-board rate cut, the most expensive part of the president's 10-year, $1.6 trillion tax cut.
The GOP plan is expected to go before the full House next week. House Democratic leader Dick Gephardt of Missouri said Democrats would offer their alternative while questioning the GOP decision to rush the tax bill through before Congress votes on a budget for next year.
"The president talks all the time about having a bipartisan relationship. What the House Republicans are doing is against everything he has said we ought to be doing," Gephardt said.
The Democrats' 10-year plan would provide $460 billion for the new 12 percent rate that would cut taxes for everyone who pays federal income taxes. Another $60 billion would expand the earned income tax credit so lower income families who may not pay income taxes get relief from payroll taxes.
It allots $65 billion to help married couples who, under current law, may pay higher taxes than if they were single; and $40 billion to reduce those estates liable for federal estate taxes from the current 2 percent to 0.6 percent.
It includes $175 billion for additional debt service caused by the tax cut and $100 billion for yet unspecified tax cuts.
The Republican plan, which Democrats say would extend well beyond $2 trillion when extra interest payments and other factors are added in, would eliminate the estate tax, provide more extensive "marriage penalty" relief and lower the tax rates for all income brackets.
Bush stresses that growing federal surpluses make it possible to give Americans greater tax relief and still protect Social Security and Medicare and meet spending priorities.
Democrats say the Bush plan is far too risky because it assumes steady economic growth and, because it takes several years to be phased in, would do little to reverse the current economic slowdown.
Daschle said a family of four earning $50,000 would save $525 under the Democratic plan in 2002, compared to $320 under the Bush plan, and $2,235 in the 2001-2004 period under the Democratic plan, compared to $1,920 under the Bush plan.
The Democrats say they are using a formula of dividing the projected non-Social Security surplus in three equal parts, with one-third to pay down the public debt, one-third to meet priorities such as education and prescription drugs for seniors, and one-third for tax cuts.
