Sens. Jake Garn and Orrin Hatch, R-Utah, were among a dozen powerful Republicans who Tuesday told President Bush to read their lips: Quit offering income tax increases to Democrats to help pass a budget package.
Bush listened and quickly accepted their advice.He promptly backed away from a press conference statement earlier in the day where he said he would consider raising income tax rates for the wealthy in exchange for a "proper balance" of cuts in taxes on capital gains.
"We told him the Democrats would never offer the right kind of deal. We helped him reach that same conclusion," Hatch said.
Garn added, "It wouldn't be a fair trade-off. The Democrats are talking about a $50 billion increase in income taxes but giving up only $12 billion in capital gains. That gives them an extra $38 billion they would not have to cut from spending programs."
After such advice, Bush issued a statement that a possible deal for higher income tax rates in exchange for a cut in capital gains tax cut was now "off the table."
Congress has until Oct. 19 to work out details of a budget plan that would reduce the deficit by $500 billion over the next five years. If the package is not passed by Oct. 19, the government again faces a possible shutdown just two weeks before the Nov. 6 election.
Garn said Bush "called in a bunch of us who are ranking (Republican) members on committees to discuss the budget. When this capital gains issue came up, he asked how many of us opposed it. All of us but one raised our hand. That was overwhelming."
Garn added, "Bringing out capital gains again at this point is like running a dead cat up and down the flagpole. He tried it time and again before and it didn't work. Why bring it up again now?"
Both senators said Republicans in Congress are pushing for greater spending cuts to help achieve deficit reduction, while Democrats are pushing for higher taxes - and both sides hope to find a fair balance between the two methods.
"What Democrats are talking about would violate that fair balance," Garn said.
Senate Finance Committee Chairman Lloyd Bentsen, D-Texas, is expected to propose raising the top income tax rate on the wealthy from 28 percent to 33 percent, and propose an effective capital gains rate of 24 percent - nowhere near low enough to please Republicans.
"Democrats are just playing politics. They are unwilling to do anything but raise taxes because they don't want to offend any of their constituencies with spending cuts," Hatch said. "They have controlled the Congress for the past 50 years by buying the votes of the American people with their own money."
The original budget compromise rejected last week called for some tax increases on such items as gasoline, cigarettes and liquor - but no increases on income taxes. It also called for roughly equivalent spending cuts and cuts in entitlement programs such as Medicare.
Hatch said the only leverage Republicans have in the Democratic-controlled Congress is to convince Bush to use his veto power to force Democrats to make spending cuts.
"I am convinced that if Democrats propose an income tax rate hike now, the president will veto it - and we will sustain the veto," Hatch said. Republicans easily have enough votes in the Senate to prevent the two-thirds vote needed to override a veto.
Hatch added that he is "disgusted" by the politics Congress is still showing in trying to work out a budget. "No wonder people are tired of Congress. They should be."
He predicts Congress will be unable to pass an acceptable budget package by Oct. 19, and will again struggle with a shutdown of government services. He said the only likely way to avoid that would be to return to the original compromise that was defeated.
"That's likely the closest we will get to anything that's acceptable to most people," he said. "It's time to realize that domestic spending is out of control."