In My Time - Dick Cheney [163]
We needed every Republican vote as the 107th Congress opened in January 2001. Not only had we just triumphed in one of the closest presidential races in history, but the Senate was deadlocked with fifty Republicans and fifty Democrats. My tie-breaking vote as vice president gave the Republicans the majority. Trent Lott, the majority leader, and Tom Daschle, the minority leader, worked out an arrangement for evenly dividing up seats on committees, but each committee was chaired by a Republican.
SECURING TAX RELIEF WAS one of our most important campaign promises, and we proposed reform across the board for what would become the largest tax cut since 1981. It was our belief that taxes ought to be as low as possible, especially when it came to those elements of the tax code that affected savings and investment, economic growth, and job creation. We wanted to reduce rates on capital gains and interest and dividends, as well as lowering overall income tax rates for the American people. We believed, as do most conservatives, that the estate tax should be eliminated or significantly reduced. We saw it as fundamentally unfair, because it represents double taxation for those who have to pay it.
Because there was a significant budget surplus, there was bipartisan support for a tax cut of some size, but the Democrats, particularly in the Senate, wanted a much smaller package than we did. On April 3, 2001, I cast my first tie-breaking vote and stopped a Democratic effort to reduce the size of the tax cuts. On April 5, my tie-breaking vote returned money to the tax cut package for relief of the marriage penalty. I also took part in the negotiations with Senate Republicans and Democrats over the ultimate size of the package. Sitting in Trent Lott’s office on April 4, I picked up a napkin imprinted with “Office of the Majority Leader,” took out my pen, and wrote out the two numbers representing what we wanted—$1.6 trillion—and what the Democrats wanted—$1.25 trillion. In between the two numbers, I wrote, “1.425 trillion,” and I circled it. Ultimately, we would be successful in securing a package of $1.35 trillion in tax relief for the American people. The package included a phased-in reduction of the estate tax, with elimination in 2010. All the tax changes were passed as part of the budget reconciliation process, which exempted them from filibuster, but also provided an expiration date.
As the tax cuts were set to expire in 2010, they were, fortunately, extended for two more years. Although the estate tax was reinstated by President Obama, the current law allows for a five-million-dollar exemption, more than seven times the exemption allowed before President Bush acted.
In the midst of the debate over tax cuts, it looked as though the Republicans might lose their one-vote majority. As we debated the budget resolution throughout the spring of 2001, Senator Jim Jeffords of Vermont made clear that he wanted significantly increased funding for special education programs. Although we were increasing the education budget, we weren’t allocating the funds the way Jim wanted, and he threatened to switch parties, which would put the Democrats in control in the Senate.
I know Jim cared deeply about the education program he was proposing, and even though he ended up switching parties, he kept his commitment to us to vote for the final tax cut package. In the end, I think his decision to switch had more to do with the committee chairmanship that Tom Daschle offered him than with anything else. In the Senate committee chairmanships are normally decided purely on seniority—the longest-serving member of the majority party on any committee traditionally becomes the chairman. But it was so important for the Democrats to get Jeffords to switch, Tom Daschle moved him to the head of the line and made him chairman of the Environment and Public Works Committee. With his party shift,