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Senate to trim tax cut

WASHINGTON/(AP) -- President Bush's proposed 10-year, $1.6 trillion tax cut suffered a double body blow Wednesday as the Senate tentatively sliced it by $450 billion and a crucial Republican senator threatened to oppose it as too costly.

White House officials and GOP leaders immediately launched an all-out effort to revive Bush's cherished tax package. The pivotal lawmaker, moderate Sen. James Jeffords, R-Vt., emerged from a meeting with other Republicans to say, "I think I have an agreement with them" in which education spending would be increased for the mentally and physically disabled.

Jeffords provided no details, and emphasized that nothing was final. Even so, the day's events raised Democratic hopes that they would force Bush to make his tax plan smaller.

"The president's original proposal, as far as the Senate goes, for all intents and purposes appears to be over," crowed Senate Minority Leader Tom Daschle, D-S.D., after the Senate voted 53-47 to siphon $450 billion from Bush's cherished tax package and split it evenly between education and debt reduction.

Minutes before that vote, Jeffords said he was inclined to vote against a $1.94 trillion budget for 2002 the Senate was debating that embraces Bush's tax cut. Jeffords said the $1.6 trillion tax reduction would shortchange education spending for the mentally and physically disabled.

"Unless a miracle occurs, I fear I'm bending in that direction," Jeffords told reporters.

Wednesday's double setback made it the worst day yet for Bush's budget and his tax proposal, which has been the centerpiece of his economic program ever since he unfurled it during his battle for the GOP presidential nomination in December 1999. The House easily approved a similar Republican-written budget last week.

Despite competing efforts by lawmakers to make it bigger and smaller, Bush has repeatedly insisted that its $1.6 trillion size is "just right." Daschle said that with Wednesday's vote, he hoped the administration would agree to bipartisan budget negotiations.

Behind the scenes, Bush aides were trying to determine how to sway Jeffords and suggested there were other votes up for grabs that could save the $1.6 trillion package. Still, a senior adviser conceded the vote was a major legislative setback and public relations blow heading into next week, when the details of Bush's budget cuts will be revealed.

White House spokesman Ari Fleischer said lawmakers sometimes reverse their votes and said, "The president looks forward to continuing his work with the Senate to provide real, meaningful tax relief to the American people as he proposed in his budget."

With the Senate divided 50-50 between the two parties and Sens. Lincoln Chafee, R-R.I., and Zell Miller, D-Ga., considered the only senators certain to cross party lines, a Jeffords defection could be a backbreaker for the administration.

The education vote and Jeffords' remarks could pressure the White House to either meet Jeffords' demands or negotiate with Democrats over the size of the tax package.

Jeffords, who said he would continue bargaining with the administration, wants to increase special education spending by $180 billion over the next decade. It is receiving $6.3 billion this year. In talks, Republicans have offered him more than $100 billion.

Senate GOP leaders, who met privately to decide their next move, emerged with upbeat words.

"We're going to have a tax cut in the $1.6 trillion range," predicted Senate Majority Leader Trent Lott, R-Miss. "Along the way, there'll be some bumps in the road. It's typical, Congress has always added more spending."

Lott switched his vote on the Democratic education amendment to "yes" at the last minute. Under Senate rules, he can demand a second roll call after GOP leaders try finding two senators to change their votes. With a 50-50 roll call, Republicans could use Vice President Dick Cheney's tie-breaking vote to carry the day for Bush.

Chafee, Jeffords and Sen. Arlen Specter, R-Pa., joined Lott in voting for the Democratic amendment, which was sponsored by Sen. Tom Harkin, D-Iowa. Miller was the only Democrat to oppose it.

Congress' budget is a guide that sets overall tax and spending limits. The details are set in separate, later bills, but budget battles are fierce because they let each party make statements about their priorities.

Daschle, for example, told reporters that a pile of Democratic amendments aimed at shifting money from Bush's tax cut to other programs were designed to "define the Republicans for what I think they truly are, harsh and right-wing, with absolutely no indication of an appreciation for compassion."

Jeffords spoke at a news conference with a group of moderate Democratic senators led by Sen. John Breaux, D-La., and Chafee. There, they embraced an alternative $1.25 trillion tax cut, which falls between Bush's proposal and a $750 billion package supported by Democratic leaders.

Earlier Wednesday, Republicans barely escaped another setback when they fended off a Democratic effort to shrink the tax reduction by $88 billion and divert it to farm programs. The near party-line vote was 51-49.

Republicans prevailed only after keeping one roll call vote open for 50 minutes -- 35 minutes longer than scheduled -- and persuading three GOP senators to switch their votes. They were Sens. John McCain and Jon Kyl of Arizona and George Voinovich of Ohio.

(c) 2001 Associated Press

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