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[Jim Choate <ravage@ssz.com>]

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                   CLINTON ADVISER: NO MAJOR TAX CUT IN 1998
                                       
   Tax Cut
   
   WASHINGTON (AllPolitics, Dec. 28) -- President Bill Clinton will not
   propose any across-the-board tax cut or push for any major overhaul of
   the tax system in his 1998 budget, a senior White House adviser said
   Sunday.
   
   But speaking on NBC's "Meet The Press," Rahm Emanuel also said that
   Clinton would not necessarily veto any tax cut sent to the White House
   by Congress, provided it didn't bust an existing spending agreement
   that would balance the budget by 2002.
   
   "If others have an approach, we'd love to see it," he said. "(But)
   where are they going to pay for it? Are they talking about cuts in
   health care? Are they talking about cuts in senior programs?"
   
   Some Wall Street analysts have forecast a surplus of as much as $40
   billion in the current fiscal year, which runs through September 30 --
   a surplus that proponents of a tax cut say could be used to pay for
   it. Emanuel
   
   But Emanuel said the White House believes that no decisions about what
   to do with the surplus should be made until a surplus actually
   materializes.
   
   "Washington should not return to its bad habits of spending money it
   doesn't have," he said. "That's what got us into trouble in the first
   place in the 1980s."
   
   In addition to tax cuts, a number of Republicans, including House
   Majority Leader Dick Armey and 1996 presidential candidate Steve
   Forbes, have also proposed so-called "flat tax" plans that would
   radically alter the income tax system. Others want to replace income
   tax entirely with a national sales tax.
   
   Even Democratic House Minority Leader Dick Gephardt has a modified
   "flat tax" plan that would simplify the system and reduce tax rates
   for middle and lower income taxpayers.
   
   But Sunday, Emanuel made it clear the White House wasn't looking to
   make any such radical changes in the tax code in 1998.
   
   "We finally have gotten the deficit under wraps and lifted it off the
   back of the economy," he said. "We shouldn't do anything reckless or
   irresponsible."
   
   However, Clinton will propose new tax credits targeted toward helping
   middle-class families pay for child care, Emanuel said.
   
   Reuters contributed to this report. Advertise on AllPolitics. Click
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