Tax cuts losing force as rallying cry on the Hill

WASHINGTON -- Support for tax cuts -- a signature campaign issue for congressional Republicans -- is waning on Capitol Hill, with the GOP-led Congress reaching its Independence Day recess with no tax-trimming victories to tout in home districts.

Senate majority leader Bill Frist last week was forced to withdraw a measure to cut the estate tax, which foes derisively call the ``death tax," because there was not enough support for it.

Income tax cuts and credits -- including an expansion of the very popular child tax credit -- are still due to expire at the end of the decade, but Congress has not been able to agree on a proposal to make them permanent. Congress also has failed to fix the Alternative Minimum Tax, which was meant to target wealthy people but which is increasingly encroaching on middle-class Americans.

Some lawmakers said their constituents, who once clamored for tax cuts, have recently begun quizzing them about the deficit and questioning whether the tax cuts were doing more for wealthier Americans than the middle class.

Senator Olympia Snowe , Republican of Maine and a member of the Senate Finance Committee, said proposals both to eliminate the estate tax and cut taxes on capital gains and dividends would help the wealthy, a fact that more of her constituents seem to emphasize as she campaigns for a third term.

``That's a misallocation of our precious resources," said Snowe, who had supported an outright repeal of the estate tax in 2001, when the country had a budget surplus, but has since modified her view. ``It's certainly a misallocation of our priorities" at a time when the nation is facing a large budget deficit and record national debt, she said.

Representative Mark Foley , Republican of Florida, said his constituents have begun to demand answers about the country's fiscal shape. ``They are asking the question -- how did you let this get out of control?" Foley said.

Conservative Republicans accuse their colleagues in both parties of being unwilling to cut taxes more because they want more to spend. Frustration has been mounting among Congress's fiscal conservatives, who had expected to be able to greatly reduce the size of government and the level of taxes with a Republican president and GOP majority in both chambers of Congress.

Instead, the conservative lawmakers complain, they have watched as their colleagues created an entirely new federal agency, expanded Medicare significantly to include government subsidies of prescription drugs, and run up the national debt to unprecedented levels.

Nor do Republicans seem to be able to control their spending, said C. L. ``Butch" Otter , Republican of Idaho, denouncing what he called unnecessary spending on local projects. ``There are too many people who vote for a living" who are spending the taxes of those ``who work for a living," Otter said.

Brian Riedl, a budget analyst with the Heritage Foundation, lamented that ``unfortunately, even Republicans are starting to support tax increases. So many lawmakers have become addicted to spending and as the budget deficit grows, their solution is to find more taxes to pay for more spending," said Riedl, whose group advocates lower taxes. ``Lawmakers are prioritizing runaway spending over tax relief."

Politics is also interfering with efforts to extend the current tax cuts or enact new ones. The departure of former House majority leader Tom DeLay has led to a weaker party loyalty among House Republicans, several lawmakers said, and GOP members are less afraid to break with leadership on legislation.

Democrats -- many of whom supported the income tax cuts at the beginning of Bush's term and were wary of confirming the ``tax-and-spend Democrat" label their GOP opponents attached to them -- are now rejecting more tax cuts, eager to portray the Republicans as a party determined to cut taxes for the rich while depleting services for the poor and middle class.

``The coalition of conservative and moderate Republicans has broken apart. As a result, the Republicans may have a numerical majority on paper, but they don't have a working majority," said Stan Collender , a budget expert with Qorvis Communications. ``A lot of the tax cuts went through because Republican moderates thought they couldn't go against the majority," but ``the president's popularity is in the tank and the Republican moderates are feeling their oats," Collender said.

On the Senate side, where the threat of a filibuster means that 60 votes are required to pass controversial legislation, GOP moderates are balking at adding to the deficit and debt. And while tax cuts are generally popular in an election year, the Senate last month failed to stop a filibuster of a proposal to kill the estate tax completely.

Senator Lincoln Chafee , a Rhode Island Republican facing a tough reelection battle this fall, voted against repealing the estate tax in that procedural vote.

Senator Norm Coleman , Republican of Minnesota, said it was difficult to explain to voters that tax cuts can bring in more revenue by creating jobs and encouraging investment. ``We have to do a better selling job" for the Senate to succeed at enacting more tax cuts, he said.

Unable to make headway on the defining issue of taxes, Republicans have been pushing a series of measures on such hot-button issues as gay marriage, flag burning and gun control. House Republicans have dubbed their package the ``American Values Agenda," and plan to take it up when lawmakers return July 10.

So far, the GOP has not been successful at passing the bills; the Senate failed to approve a constitutional amendment to ban flag-burning last week, and a House panel later failed to approve legislation barring federal courts from hearing challenges to the Pledge of Allegiance.

But the bills are widely seen as symbolic, and meant to draw attention to the issues and energize conservative voters. ``They were in danger of losing their hard-core supporters, and they don't have anything else," Collender said.