The Canton Repository
August 29, 2001
Regula, Sawyer look at tax cut differently
By PAUL M. KRAWZAK Copley News Service and
LORI MONSEWICZ Repository staff writer
WASHINGTON — U.S. Rep. Tom Sawyer, D-Akron, is calling for a re-evaluation of the tax cut championed by President Bush in the wake of a report anticipating a lower than expected federal budget surplus.
But Rep. Ralph Regula, R-Bethlehem Township, who unlike Sawyer voted for the reduction, still supports it.
Sawyer criticized the tax measure after the Congressional Budget Office projected this week that the government will have to borrow $9 billion from an estimated $162 billion surplus in the Social Security fund to cover government expenses.
According to the Congressional Budget Office, the tax cut, which will reduce government revenues by $1.3 trillion during the next 10 years, has contributed to a lower-than-expected budget surplus this year. The slowing economy also has contributed by reducing tax revenues, the office said. The latest projection for the surplus is $3.4 trillion during the next 10 years.
“I have believed from the beginning that before this decade is out and before the full effect of that tax hits, we are going to have to revisit the question of its wisdom,” said Sawyer, who opposed the Bush tax cut but supported a Democratic alternative.
He added that the tax cut is affecting “the kinds of decisions that are on the table before the Congress and ... trust-fund spending.”
During the past few years, the government has borrowed from the Social Security surplus to make payments to reduce the national debt. If the government borrows $9 billion or so from the surplus to spend on operations, it still would use the rest to pay off the national debt.
The Social Security surplus is the result of a temporary situation where the taxes paid into the system exceed the benefits paid out. Regula said Congress still may be able to earmark the entire surplus for debt reduction.
“We haven’t taken a dime out of the Social Security surplus and we may not have to. Until the budget’s adopted, no one knows for sure what the outcome will be,” said Regula, a member of the Appropriations Committee.
Regula and Sawyer also talked about what they plan to do with their tax refund checks from the tax cut.
“I’m not going to spend it,” said Sawyer, who plans to save the money in case he owes taxes at the end of the year.
As for Regula, he said, “I haven’t gotten mine yet, so I don’t know what I’ll do with it — probably put it into the bank or pay bills, just like everyone else.”
The tax refund is the result of cutting the federal income-tax rate from 15 percent to 10 percent for the first $6,000 to $12,000 in income. The tax cut also will reduce income-tax rates, which range from 15 percent to 39.6 percent, to a range of 10 percent to 35 percent by 2006.