President Clinton will propose a package of
tightly targeted tax cuts resembling the five-year, $36 billion
plan that congressional Republicans rejected last year, a top aide
"I think you can expect the president to propose a tax cut in
his budget and in his State of the Union" address, White House
chief of staff John Podesta said Sunday on CBS' "Face the
Nation." "I think that it will be about the size that we proposed
Pushing aside Clinton's relatively modest proposal, the GOP-led
Congress passed a 10-year, $792 billion package that included
across-the board tax cuts, elimination of the so-called marriage
penalty and estate taxes and reduction in capital gains levies.
But that package fell victim to a Clinton veto. The president
contended that the Republican measure would eat into a projected
budget surplus without making adequate provisions for preserving
Medicare and Social Security. He also argued that it gave too much
relief to the wealthy.
Podesta said Sunday the fiscal 2001 Clinton tax cut proposal
would be similar is scope to last year's package.
"The reason for that is, as we said over and over again last
year, that ... we've got an important opportunity now to make
investments in Social Security, in Medicare, in modernizing and
improving our military, in education, in these other priorities,"
"But we do think there's room for a tax cut targeted at the
middle class, and we'll be putting forward one." While it will be
similar to the 1999 package, "I think we may have some new ideas
in that regard, Podesta said.
"Most of the net tax cut that we put forward last year went to
increasing savings, and we're going to continue with a tax relief
in that area so that people can save for their retirement along
with extending the solvency of Social Security. That's an important
goal that we have," he continued.
"But I think we may manage to change the package a little bit
to invest in some other important priorities, like expanding health
insurance coverage and investing and making sure that the people at
the bottom end of the income scale get a fair break in the tax
Podesta declined to give further details or figures, saying
Clinton would lay them out in his State of the Union address later
Clinton's proposals last year consisted of about three dozen
measures tightly targeted to benefit specific groups, but no broad
overall relief. The various credits totaled $36.2 billion over five
For example, the president sought a $1,000 tax credit to defray
the costs of caring for a disabled or chronically ill relative and
another $1,000 credit for disabled workers to offset the extra
costs they sometimes face in holding a job.
A third middle-class credit proposed last year was aimed at
encouraging small employers to provide health insurance for
In the end, the only tax bill to be enacted last year was an
extension of some relatively small provisions that were set to