Republicans celebrate tax cut but worry about Senate power switch. Democrats probe energy price hikes.

Published June 8, 2001 8:07PM (EDT)

Daily line

"A year ago, tax relief was said to be a political impossibility. Six months ago, it was supposed to be a political liability. Today, it becomes reality."
-- President Bush, speaking at the White House while signing his tax cut into law

Bush buzz

Bush signed his historic tax cut Thursday, fulfilling the primary promise of his campaign after just five months in office. But analysts are still debating whether it will boost consumer confidence in the sluggish economy. Many believe that the cut, already spread out over a decade, won't survive if unforeseen circumstances dictate a change in spending priorities. For now, the cut effectively reverses the tax increases that former President Clinton signed into law in his first year in office, a move that Republicans decried at the time but was later considered a major factor in reducing federal deficits.

Critics of the new tax law assert that it represents a return to deficit spending. Congress has already begun to try to find ways around the strict spending limits set out in Bush's budget, and Democrats in the Senate worry that their major agenda items, particularly prescription drug coverage, will be starved for cash under the budget restrictions necessitated by the magnitude of the Bush tax cut.

Meanwhile, Bush wants to be sure that his tax cut won't be his first and last victory in the Senate, which has now shifted to Democratic control. So he's cozying up with moderates in both parties who, before the defection of Sen. Jim Jeffords, I-Vt., felt shut out of the White House. The president has had dinner with the new Senate majority leader, Tom Daschle, D-S.D., and with his presidential rival, Sen. John McCain, R-Ariz. McCain, recently rumored to be planning a party shift as well, has been aggressively reasserting his loyalty to the GOP and downplaying the prospect that he will run for the presidency as an independent in 2004.

Some Republicans say that despite the president's fence-mending efforts, the damage caused by the Jeffords switch is already past repair, with Dems emboldened to challenge GOP congressional members in 2002 and some Republican incumbents eagerly eyeing their alternative prospects in the private sector.

On the Democratic side, Sen. Joe Lieberman, D-Conn., a man with serious White House aspirations, is stepping up for a high-profile watchdog role. As the new chairman of the Senate Governmental Affairs Committee, Lieberman has pledged not to abuse his post for political purposes, or to run a perpetual partisan investigation force such as the operation set up by Clinton chaser Rep. Dan Burton, R-Ind., in the House.

But Lieberman's restraint won't stop him from launching an investigation of soaring energy costs, starting with an inquiry into whether deregulation of the natural gas and electricity industry led to power crunches and price increases like those suffered in California. Democrats believe the probe will highlight differences between their approach to energy and that of the Bush White House, a contrast that they feel will play to their advantage in upcoming elections.

Outside Congress, Bush's energy policy has suffered a blow, thanks to a study confirming that global warming is on the rise. The White House has now pledged to take the problem seriously, though Bush and his administration still dispute how much impact emissions restrictions, conservation and other efforts would have on the phenomenon.

That stance is likely to leave allies unimpressed during the president's European tour next week. The White House's reticence on the global warming issue and Bush's enthusiasm for missile defense have prompted renewed resistance to American power from several of our nation's allies abroad.

And don't miss first lady Laura Bush steaming over the new People magazine cover story about her twin daughters and their run-ins with the law. The White House had apparently been aware for some time that a story was in the works, but didn't realize that it would be the cover until earlier this week. Both Bushes believe such a story is a violation of their daughters' privacy. And it's the second Bush family cover in People in recent weeks. In May, People declared Laura Bush one of the 50 most beautiful people in the world, and devoted a cover to her.

In other news, social and religious conservatives are bashing Bush for being too gay-friendly. Groups like Concerned Women for America and the Culture & Family Institute claim that the president has failed to fully promote family values by including gays in his administration and by letting pro-gay policies left over from the Clinton administration stay on the books.

Friday schedule: President Bush is in Iowa in the morning, celebrating his victory on the tax cut. Later, he attends the opening game of the College World Series in Omaha, Neb., and then travels to his ranch in Crawford, Texas, for the weekend.

-- Alicia Montgomery

This day in Bush history

June 8, 1995: Texas executed Ronald Keith Allridge, who was convicted of the 1985 slaying of a 19-year-old woman during a robbery. Gov. George W. Bush denied Allridge's request for a stay, and Allridge became the 10th man executed during Bush's first year as governor.

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Bushed! contributors: Eric Boehlert, Karen Croft, Gary Kamiya, Kerry Lauerman, Daryl Lindsey, Alicia Montgomery, Fiona Morgan, Scott Rosenberg, Jake Tapper, Joan Walsh, Anthony York

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