WASHINGTON (AP) - Moderate Democrats joined with most Republicans to preserve a compromise 11-year, $1.35 trillion Senate tax bill Thursday, voting down attempts by Democratic critics to reduce the bill's income tax and estate tax cuts.
Eight Democrats joined most Republicans in voting 56-44 against an amendment by Sen. Kent Conrad, D-N.D., to reduce the bill's tax cuts for upper-income people so more middle-class married couples would get tax relief sooner.
A few hours later, seven Democrats sided with most GOP senators in defeating, 55-43, an effort by Sen. Charles Schumer, D-N.Y., to trim the bill's estate tax cuts in favor of enhancing its proposed college tuition tax deduction.
Senate Finance Committee Chairman Charles Grassley, R-Iowa, called the estate tax vote in particular a ``critical test'' of the measure's bipartisan balance, one that should signal to the House and President Bush that major changes will be difficult in a Senate divided between 50 Democrats and 50 Republicans.
``It preserves the basic elements of the bipartisan compromise,'' said Grassley, chief co-sponsor along with the Finance Committee's ranking Democrat, Sen. Max Baucus of Montana.
A final Senate vote on the bipartisan package was likely by Monday night. That would set up a showdown conference next week with the House, which has passed tax cuts closer to Bush's 10-year, $1.6 trillion plan. Bush and GOP leaders want a bill on the president's desk by Memorial Day, May 28.
Republicans characterized the tax cut as a fair return of a portion of the huge 10-year, $5.6 trillion projected budget surplus to taxpayers. The cut, they said, would still allow government to meet its spending priorities and fix inequities in the tax code such as the penalty on many two-income married couples.
Bush, promoting his energy proposals Thursday in Nevada, Iowa, again urged Congress to pass the tax cuts ``as quickly as possible.''
``We need to start getting some of that surplus in the hands of the hardworking American people to provide a second wind to our economy,'' the president said.
A group of moderate Democrats is backing the bill; others say it would grow to $4 trillion in the second decade, just as the baby boom generation begins retiring and straining Social Security and Medicare.
Democratic critics said it would give huge tax breaks to the rich and little to middle- and lower-income people. Conrad said that 33 percent of the tax cut would go to the wealthiest 1 percent of taxpayers, with only 15 percent going to the bottom 60 percent.
``This thing is weighted toward the very top, the very wealthiest among us,'' said Conrad, ranking Democrat on the Budget Committee. ``It's not fair.''
Democrats also are seeking an expanded college tuition tax deduction than now in the bill; a quick tax rebate as an economic stimulus; and a delay of planned reductions in the top income tax rate until a Medicare prescription drug benefit is approved by Congress. They also developed a comprehensive $900 billion tax cut alternative.
Republicans planned to offer some amendments of their own, including one that would make the temporary corporate research and development tax credit permanent.
The main bill would cut income taxes across the board, including a reduction in the top 39.6 percent rate to 36 percent - higher than the 33 percent Bush and House Republicans want. It would also create a new 10 percent rate on the first portion of every taxpayer's income and reduce other rates by three percentage points by 2007.
GOP leaders say they will attempt to win Bush's 33 percent top tax rate in the House-Senate conference.
``I am confident we can, and we will, because we must,'' said House Majority Leader Dick Armey, R-Texas.
Moderate Democrats and Republicans, however, said such major changes could jeopardize the bill's chances in a Senate divided 50-50 between the parties. They were meeting privately to draft a joint position aimed at setting bottom-line conditions on any changes.
``There's a lot of moderates that can't be counted on to vote for anything,'' said Sen. John Breaux, D-La.
The new 10 percent rate would be retroactive to Jan. 1, giving individual taxpayers $300 and married couples $600 through lower paycheck withholding as an economic stimulus this year.
The measure would also gradually repeal the estate tax and raise exemption amounts to $4 million; double the $500 child tax credit by 2010 and allow more low-income people to claim part of it; allow a tax deduction for college tuition; and permit larger contributions to IRAs and 401(k)-type plans.
©The Associated Press May 17 2001 10:00PM