GOP panel embraces deficit reduction, tax cut

? Congressional Republicans are engaged in a complicated political two-step, pursuing both tax cuts and deficit reduction in an election year when record federal shortfalls are starting to draw the public’s attention.

Ignoring Democrats and deficit hawks who said the two policies were contradictory, the GOP-run House Budget Committee embraced both goals Wednesday by approving a pair of measures.

The committee, by voice vote, approved a bill making it harder for lawmakers to expand benefits for programs such as Medicare unless they are paid for with spending cuts. Unlike the Senate-passed version, tax cuts would not have to be paid for, protecting a priority that President Bush and GOP lawmakers have retained even as this year’s deficit nears an unprecedented $500 billion.

“New spending and new tax cuts are not equivalent. New spending does not help maximize economic growth and tax cuts do,” said Rep. Patrick Toomey, R-Pa.

By a party-line 24-19 vote, the committee also approved a $2.41 trillion budget for 2005. The spending plan largely follows the outline Bush proposed last month. But it distances House Republicans from the White House by proposing faster deficit reduction, smaller tax cuts and lower spending than the president sought.

The conflicting strains — erasing red ink yet reducing federal revenues, endorsing Bush priorities while recasting them — underscore the tricky terrain Republicans must tread as they try to retain the White House, House and Senate this November.

The House budget panel rejected a Democratic effort to impose the restrictions on tax cuts, also by a party-line, 24-18 vote.

Last week, Democrats teamed with GOP moderates to force through the Senate a measure applying the requirement to spending boosts and tax reductions. It would let tax cuts or spending increases go unpaid for if 60 of the 100 senators would vote accordingly.

The prospects for a final House-Senate compromise are uncertain.