House-Senate Conferees Begin Tax-Cut Talks

A House-Senate conference committee begins meeting today to craft a compromise tax-cut package that Republican Congressional leaders hope can win final approval of both chambers before lawmakers leave for their month-long recess Aug. 7. The conferees are attempting to resolve differences between the Senate bill that passed July 30 and the version approved by the House earlier in July. Although both measures call for cuts of $792 billion over 10 years, the House alternative includes a 10% across-the-board reduction in income-tax rates while the Senate package focuses on a cut in lower-income tax brackets. Both measures provide for relief of the alternative minimum tax and the estate tax, as well as an extension of the R&D tax credit -- three priorities of the business community. Another provision eagerly sought by business- -- a cut in the capital-gains tax rate -- is in the House bill only. Reaction statements from business groups praise passage of the Senate package, but indicate no preference for one bill over the other. Whatever final compromise emerges from the two houses, however, may be moot. President Clinton has promised to veto any tax-cut package that tops $300 billion over 10 years.