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Senate Plans To Downsize Tax Cuts

Republicans are trying hard to squeeze the tax cuts President Bush wants into a slightly smaller package, but the political balance in the Senate is still on the side of chopping Mr. Bush's original wish list in half.

The White House, determined to save the major features of the president's economic growth plan, floated ideas Monday for how to squeeze his original $726 billion proposal into the $550 billion that House lawmakers budgeted for tax cuts through 2013.

The administration is considering phasing in the tax cuts over time, an option that could come up in meetings with lawmakers when Congress reconvenes next week.

Republicans in the Senate said they will listen to the ideas, but cautioned that tinkering with the plan will not change political reality. The White House does not have enough votes to pass more than $350 billion in tax cuts through the Senate.

"I guess we would caution folks to be realistic about the Senate and what it can accomplish," said an aide to Senate Finance Committee Chairman Charles Grassley, R-Iowa.

The Treasury Department will step up political pressure on the Senate Finance Committee this week. Treasury Secretary John Snow, traveling through South America, will call lawmakers Tuesday through Thursday to promote a tax-cut package embracing the president's program.

"It is a reminder call that we view the president's components as the right components, the right medicine," said Treasury Department spokesman Rob Nichols.

President Bush Thursday will visit Ohio, reports CBS News White House Correspondent Mark Knoller, the home state of Sen. George Voiniovich, one of two Republicans who joined with Democrats in cutting the administration tax cut plan by more than half.

The White House declined to say the visit was meant as an in-your-face message to Voinovich. In fact, Spokesman Ari Fleischer said Voinovich is invited to accompany Mr. Bush on the visit.

The other Republican to cross party lines on this issue was Olympia Snowe of Maine.

Grassley has said the only way to successfully clear all the hurdles — committee debate, floor consideration and final negotiations with the House — is to keep the tax cut at $350 billion favored by Senate moderates.

He expects that the president's plan to eliminate taxes on corporate dividends paid to shareholders will not survive, but that many other elements of the president's plan will. Those include an acceleration of planned income rate cuts, larger deductions for married couples and tax breaks for small businesses.

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