Breaking News: Estate Tax Jude Wanniski June 26, 2000

Within the hour, President Clinton is officially going to ask for a Summit Meeting with the Republicans to discuss the new projected budget surplus of $1.8 trillion over a decade -- and how to "responsibly" deal with it. My information is that he will announce a willingness to concede the marriage tax penalty to the GOP, but that he will say nothing about elimination of the estate tax. The fact that he is making this grand gesture has forced Senate Majority Leader Trent Lott to put off his call for the House-passed elimination of the gift&estate tax -- as he had planned to do this week – and put it off to July 10, when Congress returns from its brief recess for Independence Day.

While there is some nervousness at the GOP leadership level about a "Summit," which in the past has given an edge to Clinton in spinning the news coming out of it, there is also optimism that on the current track, the Democrats seem willing to avoid a cloture vote on the estate tax in exchange for two or, at most three amendments to the House-passed bill. That is, if their amendment to substitute an immediate $5 million exemption to the estate tax is not accepted, they will agree to a vote on the House bill, which the Republicans would easily win with several Democratic Senators in support. The White House is hoping to tempt the GOP with an immediate increase in the exemption as opposed to the 10-year phase out. Republicans seem to be ready to say they will take the increase now, but also insist on the repeal in ten years.

When the news is announced, conservatives may fear that Majority Leader Lott may be willing to compromise where the House was not, but he may wind up getting a better deal than seemed possible a week ago. We will stay on top of this, you can be sure.