Military

DATE=3-26-03

TYPE=CORRESPONDENT REPORT

TITLE=CONGRESS / BUDGET (L)

NUMBER=2-301359(CQ)

BYLINE=DEBORAH TATE

DATELINE=CAPITOL HILL

CONTENT=

VOICED AT:

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INTRO: The U-S Senate Wednesday approved (by a 56 to 44 vote) President Bush's two-point-two trillion dollar budget plan for next year, but with only half the tax cut package he proposed. Correspondent Deborah Tate reports from Capitol Hill.

TEXT: The budget proposal is a blueprint for overall tax and spending plans, which will be put into effect by other bills later in the year.

Senate Majority Leader Bill Frist of Tennessee expressed satisfaction with the measure passed by his chamber:

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It accommodates the necessary funding for our national defense and our homeland security, and it increases funding broadly for important domestic initiatives, like education.

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But not all lawmakers are happy with the package.

The chairman of the Budget Committee, Republican Senator Don Nickles of Oklahoma, is disappointed the Senate voted to cut in half Mr. Bush's 726 billion dollar tax cut over 10 years.

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I will readily admit this growth package is not what I want. It is about half a loaf.

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Concerned about the financial cost of the U-S-led war to disarm Iraq, the Senate dealt a legislative blow to Mr. Bush Tuesday and voted to cut the tax package to 350 billion dollars. Democrats and moderate Republicans rejected efforts Wednesday to restore some of the tax package.

The president has made his tax cut plan the centerpiece of his effort to stimulate the sluggish U-S economy.

But some lawmakers do not believe any tax cuts are appropriate at a time of increasing budget deficits and uncertainties over the cost of the war.

Senator Kent Conrad of North Dakota is the top Democrat on the Budget Committee:

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I believe it threatens the long-term economic situation of our country, I do not believe it will grow the economy.

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/// START OPT /// Some Republicans, including Senator John McCain of Arizona, agree:

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Should continued negligible economic growth require the stimulus offered by tax cuts later in this Congress after, for lack of a better metaphor, "the dust has settled somewhat" in our operations in Iraq, the Congress and the administration have a better understanding of the costs of war and peace incurred by the United States, Senators can consider changes to fiscal policy at that time.

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The House passed the budget blueprint last week, including Mr. Bush's full seven-hundred-26 billion dollar tax cut package.

House and Senate versions of the measure will have to be reconciled before a final bill is sent to the president for his signature.

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Earlier this week, President Bush sent Congress a request for a separate 75 billion dollars to pay for the initial costs of the war in Iraq. (signed)

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