Senate halves proposed tax cut

March 25, 2003 at 3:59 PM

WASHINGTON, March 25 (UPI) -- The U.S. Senate Tuesday voted to cut in half a tax cut proposed by the Bush administration in a complete turnaround from last week, with several senators who voted against it last week supporting the cut in a revote.

The 51-48 vote reduced the size of the tax cut to $350 billion, striking a strong blow against what the Bush administration had made the centerpiece of its strategy to spur economic growth. Bush had promoted the plan to cut taxes on dividends and a reduction in some business taxes as crucial to simulating the lagging economy and boosting hiring to address unemployment.

But despite having defeated a similar amendment Friday in a 62-38 vote, the Senate appears to have changed its mind. Part of the change came due to defections by Rhode Island Republican Lincoln Chaffee -- who had previously expressed doubts about the size of the cut -- and South Carolina Democrat Fritz Hollings, who had previously refused to vote for the amendment because he opposed any tax cut at all.

The passage of the amendment requires that the money saved be used for bolster the Social Security trust fund or be applied to deficit.

The Senate has been particularly wary of the president's original tax cut proposal of $750 billion cut over 10 years since it was announced. One Senate staffer for the minority said that the cost of the war budget -- about $75 billion -- helped convince some members to vote against part of the tax cut.

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