House and Senate Republican leaders reached agreement on a tax plan Wednesday afternoon. Now the plan heads to the floors of both legislative chambers for a full vote.
The bill, which is expected to cut taxes by $350 billion over a 10-year period, faces a close vote in the Senate where Vice President Dick Cheney is expected to be called upon to break a 50-50 tie. While some Senate Democrats have endorsed the plan, notably Senators Ben Nelsen (D-MD) and Zell Miller (D-GA), some Republicans have broken with the party on this vote.
Senators John McCain (R-AZ) and Lincoln Chafee (R-RI) have denounced the tax cuts saying they can't support the cuts in a year when the federal deficit is expected to exceed $300 billion. Senator Olympia Snowe (R-ME) is also expected to vote against the bill.
For the most part, Democrats have criticized the tax bill claiming it favors the rich and will add to the national debt. "It gives away billions to those who need it least and does very little for those who need it most," said Senate Minority Leader Tom Daschle (D-SD).
Details of the bill will be hammered out as the House and Senate enter their debate sessions, but expectations are that the final tax bill will contain provisions such as the following:
- Reduction in regular income tax rates
- Reduction in tax rates on capital gains and dividends
- Increase in child tax credit
- Reduction of the so-called marriage penalty
- Increase in the amount of equipment costs that small businesses can deduct each year
- Funding for state Medicaid and other programs
Both the House and Senate have agreed that they want to deliver a final version of the bill to President Bush before leaving Washington D.C. this weekend for their Memorial Day recess.