WELL, THAT WAS EASY ENOUGH...

Dividend Tax Cut Cost More Than Thought (MARY DALRYMPLE, 5/21/03, AP)

Senators who approved a suspension of taxes on investor dividends last week underestimated the cost of the measure by $70 billion because of an error by congressional tax experts.

The mistake was discovered as House and Senate negotiators sat down to combine their tax bills.

The chairmen of the House and Senate tax-writing committees met for nearly four hours late Tuesday. House Ways and Means Committee Chairman Bill Thomas, R-Calif., said the chairmen were "near agreement" but wanted to see a detailed analysis of the cost of the framework. "We've made some tentative agreements," Thomas said.

Democrats said the mathematical mistake discovered in the Senate's tax bill could hamper negotiations with Republicans over combining it with a version passed by the House.

"It was a significant error, and as a result will complicate the conference" committee negotiations, said Minority Leader Tom Daschle, D-S.D.

Finance Committee Chairman Charles Grassley, R-Iowa, said the mistake by tax experts on the Joint Committee on Taxation could be easily fixed but Democrats refused to let them make the change. "Some Democrats apparently don't care about the policy or the cost," Grassley said. "They just want to exploit a mistake for political gain."

Discovery of the error boosts the cost of the proposed tax cuts to $420 ? well beyond the $350 billion limit that senators had imposed on themselves while writing a $2.2 trillion budget governing tax and spending bills. Democrats opposed to the dividend tax cut lost their chance to object to the amendment based on its cost.

You've got to love the way they talk about this stuff as if had they gotten the math right they were going to be able to nail the true cost of the cuts. All of these projected numbers are pretty worthless--what's seventy billion here or there? Posted by Orrin Judd at May 21, 2003 3:53 PM