Snowe’s Tax Cut Fight Frosts GOP Leadership

WASHINGTON —  Olympia Snowe has her finger on the jugular of President Bush’s prized domestic initiative -- and she’s pressing hard.

The Republican senator from Maine has led the drive to scale back the $725-billion, 11-year tax cut that Bush has offered as his main plan to stimulate economic growth. She argues it is unaffordable at a time of burgeoning deficits. And last week, she was central to a move that may ensure a much smaller tax cut than Bush wants.

By defying a popular president of her own party in wartime, Snowe has put herself on the hot seat.

She’s been lobbied by the head of one of Maine’s major employers, International Paper Co., to change her mind on the president’s tax plan. An influential business group ran an ad in one of her home-state newspapers urging tax cut supporters to call her office.

The conservative editorial page of the Wall Street Journal lambasted her -- twice in one week. Bush and Vice President Dick Cheney took a rare break from managing the war in Iraq to meet with her at the White House on the tax cut.

During last week’s debate on a crucial budget resolution, she was subjected to round-the-clock arm-twisting by the White House and Republican leaders.

Through it all, Snowe has stood firm in her opposition to any tax cut beyond $350 billion. Senate GOP leaders seeking her vote on the budget resolution finally buckled to her demand and promised to hold the cut to that figure.

There remains no guarantee she will get her way -- House GOP leaders are furious and plan to keep pushing for a bigger cut. But the pledge made by Senate leaders will be hard to reverse.

In the weeks to come, Snowe will be in the thick of the next crucial stage of the debate -- deciding what kind of taxes to cut. She is a pivotal member of the Senate Finance Committee, which will write the Senate version of the tax bill. Because Republicans have only a one-vote margin on the panel, she has tremendous leverage.

Snowe is one of a small group of Senate Republicans who have opposed Bush’s proposed tax cut as too large.

Sen. George Voinovich (R-Ohio) teamed with her in the drive to more than halve the Bush tax cut. Two others -- Sens. John McCain of Arizona and Lincoln Chafee of Rhode Island -- oppose any tax cut at this time.

The tussle has presented a rare opportunity for moderate Republicans such as Snowe to assert themselves in a party that has drifted to her right over the last generation.

When she first came to Congress in 1978, there was a much larger, more powerful faction of Republicans from the Northeast who shared her interest in reducing the deficit without unduly cutting domestic programs.

Now the party is dominated by conservatives -- mostly from the South and West -- in the mold of President Reagan who are fervent tax cutters and advocates of smaller government.

“She is pre-Reagan in her worldview,” said Grover Norquist, president of the conservative Americans for Tax Reform. She represents, he added, “a previous generation of economic and political thinking.”

Snowe, 56, came to politics from a life marked by personal loss. Orphaned at age 9, she became a widow at 26 when her first husband, state Rep. Peter Snowe, died in a car crash in 1973. A month later, she ran for his seat in the Maine House; in 1976, she moved up to the state Senate. Two years later she was elected to the U.S. House of Representatives. She was elected to the U.S. Senate in 1994.

Snowe has practically made a career of straying from the GOP party line. She is a leading abortion rights advocate. She was one of five Republican senators to vote to acquit President Clinton of all charges in his 1999 impeachment. She supported the 2001 campaign finance reform that most Republicans opposed.

Snowe and the state’s junior senator, Republican Susan Collins, defy party leaders so often that Bush made a joke of it while campaigning for Collins last year.

“Olympia and Susan are smart, capable women who aren’t afraid to speak their mind, even to the president of the United States,” Bush said. “As a matter of fact, I’m beginning to believe they’re not afraid to speak their mind especially to the president of the United States.”

That’s the kind of comment that plays well in Maine, a state where voters seem to value independence more than ideology.

While Snowe has a long history of crossing party lines, she also has shown herself willing to be a GOP team player too -- to the frustration of would-be Democratic allies who grumble that she and other moderate Republicans too often buckle under pressure from their conservative party leaders.

In 2001, she made a strong case against Bush’s initial $1.6-trillion tax cut plan, saying it should include a “trigger” mechanism that would allow the reduction to take effect only if expected budget surpluses materialized.

In the end, she voted for a $1.35-trillion tax cut without a trigger. Snowe says she did so largely because Bush weighed in and backed another element of the bill she felt strongly about -- making more tax relief available to lower-income people.

In this year’s tax cut debate, Snowe was at odds with Bush practically from the day he unveiled his plan for economic growth in January. She argued that the proposal was far too costly at a time when the deficit is burgeoning and big outlays loomed for the war in Iraq and its postwar reconstruction.

In mid-March, she signed and released a letter with Voinovich and two conservative Democrats, John B. Breaux of Louisiana and Max Baucus of Montana, pledging to oppose any tax cut bigger than $350 billion. During the Senate’s initial debate on the annual budget resolution last month, the four won approval of an amendment setting that as the tax cut target.

The victory won Snowe kudos back home. The Portland Press Herald ran an editorial praising her -- and criticizing Collins for supporting the bigger tax cut. Democrats hailed Snowe and her fellow Republican renegades. “Profiles in courage,” Senate Minority Leader Tom Daschle (D-S.D.) called them.

But Snowe took flak from other quarters. One Wall Street Journal editorial called her a “Daschle Republican.” Another taunted her: “Maybe Mr. Bush should head up to Maine and give a speech before a group of paper workers. Tell them Sen. Snowe wants to send their jobs to Canada.”

The Business Roundtable in March ran a newspaper ad in Maine urging readers to contact their senators, giving phone numbers and e-mail addresses for Snowe and Collins.

Fellow Republicans chided Snowe for wringing her hands about the tax cut’s effect on the deficit at the same time she advocated big spending initiatives, such as $40 billion in aid to fiscally strapped states and a costly prescription drug benefit for Medicare.

Snowe said such pressures paled in comparison with the angst she felt herself about saying no to the president at a time of war, economic downturn and terrorist threat.

“It’s never easy, but this was the most difficult because of the confluence of events that made this an extraordinary time,” Snowe said in an interview.

When she went to the White House recently with Voinovich for the meeting with Bush and Cheney, Snowe said, the president did not appeal to them on personal or political grounds.

“It was all about substance,” she said. “I certainly made all my arguments. I’m concerned about the deficits. This was without a doubt one of the more difficult moments.”

The simmering heat on Snowe came to a boil last week, after House and Senate Republican leaders struck a budget deal that called for the House to write a $550-billion tax cut while the Senate would write a $350-billion version -- and work out their differences later. Snowe objected, fearing that would mean the final tax cut would surely exceed $350 billion.

But without her vote in the closely divided Senate, the budget resolution would fail -- a potential humiliation for GOP leaders who spent much of last year flogging Democrats for failing to pass a resolution while they ran the Senate.

Snowe spent almost all day Thursday meeting with GOP leaders and Voinovich, who stuck with her but seemed more willing to support the compromise. She dodged reporters. She stayed away from GOP meetings she usually attends.

By early evening, she told Senate Majority Leader Bill Frist (R-Tenn.) that she would vote against the budget. Frist walked across the Capitol to inform House GOP leaders.

In the meantime, Sen. Charles E. Grassley (R-Iowa) found a way to win Snowe’s vote. He promised to use his considerable power as chairman of the Senate Finance Committee to guarantee that no tax cut bigger than $350 billion would come before the Senate or out of negotiations with the House.

The next day, Grassley made his commitment to Snowe and Voinovich public in a speech on the Senate floor. Only then did Snowe announce her support for the budget.

“Without Sen. Grassley’s commitment, we would not be passing this budget today,” Snowe said. At that point, a beleaguered Snowe emerged from hiding and spoke to reporters. Asked to describe the pressure she felt in the frantic endgame lobbying, Snowe laughed uneasily. “Pressure?” she said. “That’s not pressure. Pressure is fighting in Iraq.”