House Republicans Take Up Bush Call for Tax Relief

By Jim Burns | July 7, 2008 | 8:27 PM EDT

Washington ( - Tax relief is on the way, House Republican leaders assured the American public Wednesday, one day before President Bush sends his tax cut plan to Congress.

Talking up the proposal at a Capitol Hill news conference, House Speaker Dennis Hastert (R-Ill.) vowed that Congress plans to infuse the tax code "with a good dose of common sense."

As for reports that congressional Republicans may push for an even bigger tax cut than President Bush wants, Hastert said Republicans "will work with the president."

President Bush's plan calls for a reduction in the so-called marriage penalty. Hastert would like to eliminate the tax code quirk that forces many married couples to pay more in taxes while filing a joint return than if each spouse filed an individual return.

When asked if there was a conflict between the president and himself on the marriage penalty, Hastert said, "We're going to work together. I think there's a lot of ground in there and we can take a look at this. If you take the average family, reduce the marriage penalty, give them an across-the-board tax cut and give them a child tax credit, that really helps them."

In a memo to Members of Congress Tuesday, House Majority Leader Dick Armey (R-Texas) urged immediate action to "pass a tax reduction package at least as large as the $1.6 trillion tax cut President Bush has proposed. Returning $1.6 trillion or even $2.6 trillion to the people who earned the money is not unreasonable."

Armey also said the growing federal budget surplus belongs to the American people and not to politicians in Washington.

"We might leave it here but could we trust them to spend it wisely. History says probably not. It is our position that we are the best judge, you and me, Mr. and Mrs. Working American. We're smart enough to earn it. Leave it in our hands. We'll demonstrate that we are smart enough to spend it and spend it wisely," Armey said.

President Bush has stuck to his proposed $1.6 trillion tax cut - no more and no less.

Everybody benefits when taxes are cut, Hastert said Wednesday. "A tax cut will add more fuel to our economy by adding dollars to the wallets of consumers and by giving entrepreneurs more money to expand small businesses and create jobs. And we'll still have the surplus money left over to pay off the national debt, strengthen Social Security and Medicare, and increase resources for priorities such as education, health research, and defense."

The Republican rally included "hardworking families" from a local Baptist church home school support group.

House Republican Whip Tom DeLay (R-Texas) told them "the liberation of the taxpayer has begun."

"Over the past few years," Delay said, "attempts at tax relief and tax fairness died at the other end of Pennsylvania Avenue. Today, times have changed. The American people, a strong congressional majority, and our president finally agree. The tax code must change. It must be simpler, fairer, flatter, and less burdensome."

"It is time to remove the tollgate to the middle class," said Rep. J.C. Watts (R-Okla.).

All of the Republicans speaking at the event promised that the marriage penalty and the inheritance tax, also known as the "death tax", would be eliminated. "The House Republican leadership has now started a funeral procession to get rid of the death tax," said Rep. Jennifer Dunn (R-Wash.).

While Republican lawmakers rally around a tax cut, and while President Bush holds daily "photo opportunities" to press the plan he outlined during his campaign, Democrats are working on a plan that would scale back the size of the cut.

House Minority Leader Dick Gephardt (D-Mo.) said Democrats are looking at ideas that don't reward the wealthy. He would lower the bottom tax rate (currently 15 percent) and provide a tax credit to low-income Americans who pay Social Security payroll taxes.

Senate Democrats are considering a plan that would devote a third of the non-Social Security surplus to tax cuts; a third to new spending; and a third to paying down the debt.

In his memo to Congress Tuesday, Rep. Armey argued against such a plan because, he said, it "will result in the federal government buying up large portions of the private economy."

According to Armey, the Democrats' plan to use more of the surplus for debt reduction would soon force the government to buy private assets (stocks, bonds), undermining the economy's stability. That, he said, "would lead to a consequence utterly without precedent in American life."