March 14th 2003 - President Bush's proposal to spur the economy by cutting taxes $726 billion over the next decade was dealt a potentially serious setback today when two Republican senators said they would support no cut larger than $350 billion.
The Republicans, Olympia J. Snowe of Maine and George V. Voinovich of Ohio, joined two Democrats, Max Baucus of Montana and John B. Breaux of Louisiana, to send a letter to their parties' Senate leaders stating that they were committed to vote against any tax cut beyond $350 billion unless it was offset by tax increases elsewhere or specific spending decreases.
If the Republicans stick to the pledge, the Bush proposal probably cannot win Senate passage.
The Senate has 51 Republicans, 48 Democrats and 1 independent. One Democrat, Zell Miller of Georgia, supports Mr. Bush, but the other 47 and the independent, James M. Jeffords of Vermont, are believed to oppose the tax plan. One Republican, Lincoln D. Chafee of Rhode Island, has said he will not vote for a tax cut this year under any circumstance.
So if Ms. Snowe and Mr. Voinovich stand fast, at least 51 senators seem to be against Mr. Bush's proposal. Two other Republicans, John McCain of Arizona and Susan Collins of Maine, have also expressed strong reservations about the plan, but the pledge by Ms. Snowe and Mr. Voinovich seems to carry even more weight because it was written and signed. The two took the stand, they said in the letter, because of ''international uncertainties and debt and deficit projections.''
Senator Tom Daschle of South Dakota, the Democratic leader, proclaimed, ''The president's plan is now officially dead.''
But Claire Buchan, a White House spokeswoman, dismissed that notion.
''We saw the same thing in 2001,'' Ms. Buchan said. ''Just as in 2001, we are confident that the president's proposals to create jobs and growth will prevail.''
What Mr. Bush calls his growth plan has two main parts. The first would eliminate income taxes for individuals on most stock dividends. The other would put in place this year reductions in tax rates enacted in 2001 but not scheduled to go into effect until 2004 or 2006.
Tonight, the Senate Budget Committee voted along party lines to approve a budget that would accommodate the $726 billion in tax cuts and allow them to be considered in the Senate under a procedure that bars a filibuster.
The first test of Senate support for Mr. Bush's tax package could come next week when the budget reaches the floor. The plan, a budget resolution, does not carry the force of law, but it sets a framework for all tax and spending measures Congress will consider this year.
Mr. Voinovich said tonight that he might vote for the budget, but that if he did, he would make it clear he would vote against the tax-cut element if it came up in legislation.
The Senate budget would permit $800 billion in added tax cuts that the president wants over 10 years, including extension of the repeal of the federal estate tax. But these would be considered later and would not be protected against filibuster.
The budget President Bush sent Congress last month would require the government to run deficits for at least 10 years, the Congressional Budget Office has reported. The plan of the Senate Budget Committee shows a budget surplus in 2013.
The committee accomplished that through spending restraints from 2009 through 2013 that are much tougher than what the administration has contemplated.
Democrats on the committee offered amendments today to reduce the tax cuts and permit more spending, but all were defeated. One by Senator Kent Conrad of North Dakota would have blocked most legislation that would result in a higher deficit until Mr. Bush gave Congress a detailed estimate of the cost of a war with Iraq.
But the committee chairman, Senator Don Nickles of Oklahoma, asserted that no Congress had ever provided money for a war before it started and that it was impossible to estimate how much a war and its aftermath might cost.
The House Budget Committee approved its version of a budget at 1:30 this morning. The plan was revised after midnight so money would be available for Mr. Bush's proposal to set some prescription drug coverage under Medicare only if most of the money for it was found by cutting spending elsewhere in Medicare or other benefit programs.