Gingrich pays price for tax-cut triumph

FROM JOHN CARLIN

in Washington

The Republicans in the House of Representatives celebrated late on Wednesday night the passing of a $189bn (£118bn) tax-cut bill, the "crown jewel" of their Contract with America. Yesterday the hangover set in.

The "Napoleonic" Newt Gingrich, Speaker of the House, has achieved in 92 days what he promised to do in 100 - to vote on all 10 of the contract's "revolutionary" items of legislation. Yet he may ponder whether, having won the battles, he will lose the war.

While it is not certain that either the tax bill or the welfare reform bill passed last week by the House will overcome the hurdles of the Senate and the White House and pass into law, what is beyond doubt is that, for all Mr Gingrich's zeal, the Republicans have handed the Democrats a propaganda gift.

Mike McCurry, President Bill Clinton's press secretary, said the tax bill "skews the benefits of tax-cutting legislation disproportionately to the wealthy". Tom Daschle, Democratic minority leader in the Senate, said the tax-cutting Republican agenda was "designed to reward the rich and the well-connected, at the expense of America's middle class families". Democratic congressmen contrasted Mr Gingrich's tax cuts with his plans to cut welfare for unwed teenage mothers, cut disability payments for children and do away with job-training programmes for the unemployed. The polls show the propaganda offensive is working. Republicans, and notably Mr Gingrich, are viewed by an increasing number of Americans as mean-spirited.

Wednesday's bill offers a $500-per-child tax credit for families earning up to $200,000 a year and sharp reductions in capital gains tax.

The bill passed after Mr Gingrich succeeded in quashing a revolt by more than 100 Republican congressman who wrote to him two weeks ago saying the ceiling should be reduced from $200,000 to $95,000.

Their arguments were based on a growing public feeling that the Republicans were taking from the poor to give to the rich. The dissenters also felt tax cuts would undermine the task of reducing the federal deficit.

Mr Gingrich reminded the rebels that, by definition, Republicans cut taxes. He bullied them with the threat that if they did not pass the bill he would not let them go home for Easter holidays. The upshot was that he declared the passing of a "truly historic moment and at the same time, a truly personal experience".

House Democrats, envious of Mr Gingrich's discipline over his troops, jeered at the meekness of the Republicans. "They are so cowed, you can almost hear them moo," said Lloyd Doggett, a Democrat from Texas.

As for Mr Gingrich's argument, that the higher up the income brackets you extend the tax cuts, the greater the benefits for society, Congressman Jim McDermott of Washington state remarked: "Under the Republican theory of trickle-down economics, working families won't even get wet."

Cold water might be in plentiful supply for Mr Gingrich's tax bill once it reaches the Senate. Senior Senate Republicans wonder how they will be able to make tax cuts and eliminate the budget deficit. Bob Dole, Senate majority leader, said: "We didn't get elected just to rubber- stamp everything the House did.''