Senators Consider Extending Tax Cuts
{{#rendered}} {{/rendered}}A bipartisan group of senators wants Republican leaders to consider extending three of President Bush's (search) most popular tax cuts without forcing the federal budget deeper into red ink.
The group plans to propose extending tax cuts for wage earners, married couples and parents for a year. They would cover the $30 billion cost of preserving those tax cuts by ending abusive tax shelters and extending customs service fees, aides to the senators said. They spoke on condition of anonymity because the senators planned to announce their proposal later Monday.
President Bush asked Congress to push through an extension this week before the Democratic and Republican parties hold their presidential nominating conventions. If lawmakers don't act this year to preserve those tax cuts, taxpayers can expect to pay $50 more in income taxes and lose up to $300 in a child tax benefit next year.
{{#rendered}} {{/rendered}}House Speaker Dennis Hastert (search), R-Ill., told reporters last week that the president wants the Republican-led Congress to preserve his tax cuts without cutting spending or increasing taxes to cover the cost.
Republican leaders have considered extending the tax cuts for as long as 5 years, which would cost roughly $120 billion.
The senators urging lawmakers to back a shorter extension without worsening deficits (search) include Max Baucus, D-Mont.; Olympia Snowe, R-Maine; Lincoln Chafee, R-R.I.; and John McCain, R-Ariz.
{{#rendered}} {{/rendered}}They propose keeping for one year tax cuts that widened the bottom, 10 percent tax bracket; increased the child tax credit (search) to $1,000; and reduced taxes for some married couples who pay more than they would as two single individuals.
The senators also want Republican leaders to consider smaller changes that would allow low-income and military families to get a bigger child tax credit this year, and to replace the five definitions of a child in tax laws with a single definition.
The government's deficit ballooned to $326.6 billion in the first nine months of the 2004 budget year. That was more than 20 percent larger than the $269.7 billion shortfall for the corresponding period last year.