WASHINGTON -- A compromise 11-year, $1.35 trillion tax cut package remained unscathed in the Senate, paving the way for Congress next week to negotiate the final shape of President Bush's legislative centerpiece.
Most Senate Republicans, allied with a band of Democratic moderates, voted down amendments Thursday by Democratic critics that would have trimmed the estate and income tax cuts in favor of tax breaks for college tuition and married couples.
Senate Finance Committee Chairman Charles Grassley called the estate tax vote in particular a "critical test" of the measure's bipartisan balance, one that should signal to the House and Bush that major alterations will be difficult in a Senate divided between 50 Democrats and 50 Republicans.
"It preserves the basic elements of the bipartisan compromise," Grassley told reporters.
A final Senate vote on the bipartisan package was set for late Monday, but no votes on amendments were planned Friday. That would set up a showdown conference next week with the House, which has passed tax cuts closer to Bush's original 10-year, $1.6 trillion plan.
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.
Democrats who oppose the bill say it would explode in cost to $4 trillion in the second decade, just as the baby boom generation begins retiring and straining Social Security and Medicare. They said it would give huge tax breaks to the rich and relatively little to middle- and lower-income people.
"You've got real losers under this bill as it's currently written," said Senate Minority Leader Tom Daschle, D-S.D.
But the Senate voted 56-44 against an amendment by Sen. Kent Conrad, D-N.D., to reduce the bill's tax cuts for upper-income people so middle-class married couples would get more relief sooner. Eight Democrats voted to defeat that amendment.
Seven Democrats later joined most GOP senators in defeating, 55-43, an effort by Sen. Charles Schumer, D-N.Y., to scale back the bill's estate tax cuts in favor of enhancing its proposed college tuition tax deduction.
The next major test for the bill will come Monday evening on a Democratic amendment to reduce the 15 percent income tax rate to 14 percent and trim proposed cuts in upper-income rates. The bill leaves the 15 percent rate paid by 70 percent of taxpayers intact while creating a new 10 percent rate for an individual's first $6,000 in earnings, $12,000 for a married couple.
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.
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