"The economic slowdown that began last year is having a negative impact on federal revenue, especially corporate income taxes. This means we have less room for deviation from the budget resolution on spending. Unlike the past several years, when appropriations have exceeded the budget limits, this year we'll need to observe those spending limits.
"Unfortunately, some in Washington are using the budget update to criticize the recently-enacted bipartisan tax relief legislation. These critics charge it will ?raid' Social Security and Medicare. Nothing could be further from the truth. The bipartisan tax relief legislation will not affect the balance in the Social Security and Medicare trust funds.
"Ironically, today's tax relief critics were yesterday's tax relief advocates. On three separate occasions*, the harshest critics of the bipartisan tax relief legislation voted for their own tax cuts or voted to maintain the current tax relief plan. If we'd followed their advice, we'd be in roughly the same position as we are today. Apparently, the critics didn't really support the tax relief they were advocating."
* According to the Joint Committee on Taxation, the recently-enacted bipartisan tax cut legislation will result in a revenue loss of $112 billion for fiscal year 2001 and 2002.
On March 27, 2001, Senator Daschle, most of the Senate Democratic leadership, and the current chairman of the Budget Committee, Senator Conrad, introduced the "Economic Stimulus Tax Act of 2001." With a press conference and much fanfare, they argued for a large current year tax cut. They advocated $60 billion for the current year and were critical of the President's proposal because it was not sufficiently front-loaded. According to Joint Tax, Senator Daschle's bill would have resulted in a revenue loss of roughly $100 billion for the first two fiscal years.
On May 21, 2001, the Senate voted on a Democratic alternative amendment offered by Senators Daschle and Carnahan. That amendment, which drew the vote of 48 of the 49 Democratic senators, would have also cost roughly $100 billion in the first two years.
The third event occurred on July 10, 2001, when the Senate voted on an amendment offered by Senator Hollings. That amendment would have repealed the stimulative tax relief for 2001. The Senate rejected the Hollings amendment by a vote of 94 to 3.