DeLay Balloons $3.5 Billion Dollar Tax Cut to $82 Billion but Cuts Military Families Out

The 224 to 201 vote sets up a fight with the Senate, which adopted a more modest $10 billion bill last week. The Senate version would provide a $1,000 per-child tax credit for families earning $10,500 to $26,000 a year until 2005.

The House's decision to broaden and extend the proposed tax cuts could doom the enhanced child credit for low-income parents altogether. The reason is that several senators are threatening to filibuster the House version because it exceeds their preset budget limits. That would force proponents to muster 60 votes for passage, a virtual impossibility on such an issue in the narrowly divided, 100-member Senate.

Democrats called the Republican proposal a sham, saying it would worsen the deficit and delay Congress in sending a consensus bill to the president. In contrast to the Senate bill, they said, the House version would not allow 200,000 military families to qualify for the full child tax credit because combat pay does not count as income for tax purposes.

"They're taking a $3.5 billion problem that they created and they're using it to spend $82 billion of the Social Security Trust Fund and drive America even deeper into debt," said Rep. Martin Frost (D-Tex.).

Democrats defended the expanded child tax credit for lower-income households, saying these families pay property and payroll taxes (for Social Security and Medicare) even if they earn too little to owe federal income taxes. They questioned why House leaders did not accept the Senate version and avoid a potentially fatal conference between the chambers.

"This legislation would kill the expansion of the child tax credit," said House Minority Leader Nancy Pelosi (D-Calif.). "The Republicans give new meaning to the phrase, 'Suffer the little children.' "

After the vote, several Democrats and one Republican -- Sen. Olympia J. Snowe of Maine -- said in a statement they would fight any measure that would "increase the deficit. . . . We believe the Senate bill is the right solution to this problem."

Even if Senate and House members agree on a tax cut bill, low-income parents will have to wait until next year to receive their $400 checks, which would represent the difference between the current child credit of $600 and the new $1,000 amount. Such checks are already in the works for higher-income families, who were covered by the earlier $350 billion tax cut bill.