House Republicans gain upper hand with tax cut


WASHINGTON -- The House Republicans have passed a give-away-the-store tax bill that they know full well is going to be drastically cut back by the Senate. But in political terms, whatever happens in the Senate is essentially irrelevant.

The opinion polls regularly show that the voters would prefer a serious attempt to reduce the federal deficit rather than tax reduction. They seem to recognize the long-term economic reality that this is precisely the wrong time to be reducing taxes and adding to that debt.

But that is one finding of opinion surveys that politicians never believe. On the contrary, their experience tells them that when push comes to shove there is no substitute for being identified with tax cuts.

So the outlook is for a 1996 campaign in which the House Republicans will be able to present themselves as the agents of largesse and their Democratic opponents as the bad guys who resisted tax reduction for those middle-class taxpayers who would have received a $500 tax credit for each child in the family. The fact that the House action had a hollow quality isn't something the voters are likely to recall.

The political advantage seized by the Republicans might not have been available to them if President Clinton had defined the decision differently early in the year by declaring a commitment to deficit reduction and opposition to any tax cut.

But Clinton was in one of his me-too phases when the Republicans advanced their plan shortly after the Nov. 8 election -- and thus responded with one of his own targeted differently but still essentially an attempt to pander.

As a result, his threat now to veto the Republican plan has limited credibility. He is not putting himself forward as a leader determined to do the right thing while deficits continue to climb at the rate of $200 billion a year but instead as a politician ready to negotiate the terms of a tax reduction.

In fact, the White House knows full well that any tax plan that reaches the president's desk will be vastly different from the one the House has just approved. Such a change is ensured by the attitude of Senate Majority Leader Bob Dole and such leading Republicans as Bob Packwood of Oregon, chairman of the Finance Committee, and Pete Domenici of New Mexico, chairman of the Budget Committee.

But that doesn't mean that a different tax bill would make any more sense in light of the deficit, only that a different tax bill might be one that Clinton would be obliged politically to swallow.

In terms of 1996, the tax issue can be most important in the contest for the House of Representatives that will be second in significance only to the presidential campaign. Indeed, it could be argued that the outcome of the House elections will be even more important.

The Democrats need to gain 14 seats to recapture control and reduce Newt Gingrich to a sputtering minority leader once again.

Some Democratic professionals acknowledge that such a reversal may be difficult but they also understand that time is of the essence. If the Republicans are allowed to hold control for another two years, they will become increasingly entrenched -- just as the Democrats were for 40 years.

For the Democrats to pull it off, they need the right combination of candidates, money and issues. So the first imperative is to persuade their own incumbents to run again and to recruit strong challengers to the most vulnerable Republicans. And the second is to raise the money to make their campaigns viable.

But the Democrats also need to give voters reasons to vote for them. That obviously depends to some degree on the shape of the presidential campaign -- that is, whether Clinton can bounce back as a stronger candidate for a second term and whether the Republicans nominate a candidate with enough baggage to be beatable.

The issues are also important, however, and it isn't going to help the Democrats if they are put on the defensive on the tax reduction question. So what the Senate finally does about the tax bill probably doesn't matter a great deal. The House Republicans already have seized the political high ground.

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