Tuesday March 13 10:22 AM ET
Senate Budget Chief Voices Concern

By ALAN FRAM, Associated Press Writer

WASHINGTON (AP) - The chairman of the Senate Budget Committee questioned whether President Bush's proposed fiscal 2002 budget could pass the Senate without adding more spending than the president wants.

Sen. Pete Domenici, R-N.M., told reporters Tuesday that just as there still aren't enough votes to push Bush's proposed 10-year, $1.6 trillion tax cut through the Senate, ``the same thing holds'' for Bush's plan to finance the tax reduction by limiting next year's spending increase for many federal programs to 4 percent.

``I'm going to do my best to hold the line'' on spending said Domenici, adding, ``I'm also going to do my best to work with the leadership to get 51 votes'' so the Senate can pass a budget.

The House is expected to vote on a budget similar to Bush's $1.96 trillion spending plan later this month. Senate debate is expected in the first week of April.

With the Senate divided 50-50 between the two parties, Domenici in effect was saying he would hand the problem of forging a majority for a budget to Senate Majority Leader Trent Lott, R-Miss., and other GOP leaders. Many Democrats have said Bush's proposal would not allow enough spending, and few if any of them will be expected to vote for his budget.

Domenici, who two weeks ago said he did not believe the 4 percent increase is sufficient, said he would fight for Bush's budget. But he said he still believes Bush's plan would not provide enough money for energy programs, which are prominent in his state, and said other senators might feel similarly about other programs.

``Four percent is not a nothing increase,'' Domenici said at a breakfast with reporters sponsored by the Republican Leadership Council, a group of centrist Republicans. ``It's a pretty significant one, and it accomplishes an awful lot of things for lots of interests.''

But he said Bush's plan provides less for some other programs, ``and that's where Congress is going to have to take a hard look and see what it's going to do about that.''

The 4 percent increase would apply to discretionary programs, the one-third of the $1.96 trillion budget that Congress must approve every year. It covers warplane purchases, cultural programs and everything else but automatically paid benefits like Social Security.

Discretionary programs have grown at an average annual rate of 6 percent over the past three years, including an 8.5 percent boost this year. Fiscal 2002 begins on Oct. 1.

Domenici says tax plan will get trigger
Tuesday, 13 March 2001 12:12 (ET)

By PETER ROFF, UPI National Political Analyst

WASHINGTON, March 13 (UPI) -- The powerful chairman of the Senate Budget Committee said Tuesday that the president's tax plan would include some type of trigger mechanism when it finally emerges from the Senate.

Speaking at a breakfast sponsored by the independent Republican Leadership Council, Sen. Pete Domenici, R-N.M., ruled out a yearly measure tied to the continued implementation of the tax cut over 10 years. Such a measure would, he said, eliminate the pro-growth aspects of the marginal rate deductions that make up the core of the White House proposal.

What is more likely, Domenici said, is some type of mid-course correction measure -- informally known as a trigger -- that allows the tax cut to be evaluated against government spending, debt retirement and the general level of economic growth.

Domenici's remarks signaled that senators intend to place their own stamp on the president's tax and budget proposals and that the White House -- though it would likely get its way on the key issues -- may be forced to accept some changes in the way the tax cuts and spending are allocated.

Domenici said such a trigger would have to be written into the tax cut bill rather than the budget resolution that his committee would produce. The committee would likely include wording that reflects the type of trigger contemplated when developing the budget numbers as a guide for the Finance Committee to follow when writing the tax bill.

Adding the trigger is part of the effort to gain 51 votes in the Senate for the White House economic package. The key provisions of the tax cut comfortably passed the House last week, but faces tough sledding in the evenly divided Senate.

Domenici also indicated that the size of the tax cut, $1.6 trillion over 10 years, was not too big and that any tax relief would have to fit inside that number.

Domenici said because projected tax revenues over the next 10 years for the federal government are $28 trillion and that the surplus as currently forecast is $5.6 trillion, "We are asking that $1.6 trillion not be collected from the American people over the same period."

Not collecting 6 percent of the total tax take over 10 years is "not too big," he said.

The tax cut is needed to fuel the lagging economy, Domenici said. The proposed marginal rate cut is "good for the economy and good for morale," he said.

Any tax relief could only total $1.6 trillion, unless proponents of additional tax relief want to do another budget resolution or the surplus is greater than expected, making more money available, Domenici said.

He repeatedly referenced growing sentiment on Capitol Hill for some reform of the Alternative Minimum Tax, which would cost somewhere between $200 billion and $300 billion to fix over 10 years.

The most likely source of revenue for such a fix would come from a modification of Bush death tax proposal along the lines proposed by Sen. Jon Kyl, R-Ariz. The Kyl plan, which scores out at $110 billion and was passed by the Senate in the last Congress, allows for inherited assets to be passed along subject instead to the capital gains tax.

Domenici said he expects the budget resolution, the blueprint for how the federal government would bring in and spend money, to be completed by Easter so that the conference committee could meet over the recess. The budget that Domenici intends to report out of committee would closely mirror the White House plan, including the 4 percent increase in spending.

"I'm going to do my best to hold the line on 4 percent and I'm going to do my best to get 50 or 51 votes to pass the budget resolution," Domenici said.

He said he felt that some Senate members might feel that spending amounts were not high enough in four or five function area.

-- Copyright 2001 by United Press International. All rights reserved. --