WASHINGTON — A deficit-conscious Senate on Tuesday voted to slash by more than half the $725-billion tax cut that President Bush had proposed to spur the economy -- a surprise domestic-policy setback to the administration as it wages war abroad.
The vote to scale back the tax cut to $350 billion was 51 to 48, as united Democrats joined forces with three Republicans. They argued that Bush's tax cut was unaffordable in the face of the growing federal budget deficit and the costs of the war with Iraq.
Bush's Senate allies remained hopeful that they could restore some of the tax cut -- either in another Senate action as early as today or in later negotiations with the House, a bastion of White House loyalists that has endorsed the president's $725-billion tax cut plan.
Still, Tuesday's vote -- part of a weeklong Senate debate on the annual budget resolution -- hurt Bush's aura of command on Capitol Hill. His public approval ratings have soared since the war in Iraq began, and the conflict has won bipartisan support in Congress. But these factors are not translating into a congressional rubber stamp for his ambitious domestic agenda.
That is especially true in the narrowly divided Senate, which just last week voted against Bush's plan to open a part of the Arctic National Wildlife Refuge to oil and gas drilling. With 51 Republicans, 48 Democrats and one independent in the Senate, the balance of power is held by a handful of GOP centrists. On fiscal matters, they are uncomfortable with the administration's argument that deficits do not matter when the country is at war and its economy is sluggish.
They have watched with concern as the GOP's traditional devotion to balancing the budget has taken a back seat to Bush spending and tax policies that would create deficits totaling $1.8 trillion over the next decade if enacted, according to the Congressional Budget Office.
These anxieties about the government's financial picture were heightened when the White House said Monday that it needed about $75 billion more in this year's budget, mostly to cover the costs of war with Iraq and its aftermath.
Quick Approval Urged
During a visit to the Pentagon on Tuesday, Bush called on Congress to quickly approve the spending, and lawmakers are expected to do so. But the funding request came just as the Senate was wrapping up its debate on the annual budget resolution -- the measure that has sparked recent skirmishing on the size of the tax cut.
