GOP Fights to Get More Bush Tax Cuts Into Budget

The battle over tax cuts continues today in the Senate as Republicans fight to get a bigger chunk of President Bush's proposal into the budget. The GOP is also trying to change the way Congress keeps "score" of taxes.

The situation seemed settled when the Senate voted Tuesday to include $350 billion in tax cuts in its budget resolution -- although even that surprise move left many wondering what the final tax bill will look like, because this allotment is far short of the $626 billion the Senate had approved on Friday. (Friday's resolution sliced $100 billion off the president's requested $726 billion and earmarked it for costs associated with the war in Iraq.)

Republicans have until 4 p.m. today to attach an amendment to the resolution in an effort to increase the amount of the budget devoted to tax cuts. "It's pretty unlikely any effort like that would succeed, though," says Tom Oschenschlager, a tax partner with Grant Thornton in Washington. "The fact that yesterday's resolution was for half of what President Bush asked for is pretty meaningful, since about half of his package was devoted to the dividend tax cut."

Because of the various mechanics of the legislative system, it's pivotal to the Republicans that as much of the desired tax cut gets into the budget. That's largely why the president's huge bill is being debated now, as part of the budget, rather than as a separate bill.

Any bill that will affect the federal budget more than 10 years needs 60 votes in the Senate to pass. (A budget resolution needs only a simple majority to pass.) While the Republicans have a majority in both houses, they don't hold quite that much sway in the Senate. That's why President Bush's tax cut of 2001 is scheduled to expire in 2010; the administration didn't have the votes in the Senate to pass a permanent tax cut. The administration is currently pushing to make those cuts permanent in addition to the proposed $726 billion in new tax cuts.