More trouble could lie ahead for the Bush tax-cut plan. Senior GOP aides on Capitol Hill say the president may not get more than $500 billion to $550 billion in the final bill agreed to in a House-Senate conference. That amounts roughly to a one-third reduction of the president's $726 billion proposal, which the House approved intact. But even a $500 billion cut may be optimistic.
If Congress makes the previous tax-rate cuts permanent and accelerates them, it would put an estimated $250 billion back in the pockets of taxpayers. But eliminating the double taxation of dividends would deny Washington some $400 billion-plus in tax revenue, and that's unacceptable to many senators. The Senate passed only $350 billion worth of tax cuts. Should that number hold, no dividend cuts could emerge next fall. Seeing trouble on the Hill, the White House is lowering expectations. Press secretary Ari Fleischer now says the president hopes the final package comes out "somewhere in between" the House and Senate figures but will be "as close to the House number as is possible."