15 March 2001, 18:47   US TSY'S O'NEILL WORKS SENATE FOR SUPPORT ON TAX CUT

WASHINGTON (MktNews) - Treasury Secretary Paul O'Neill left a meeting with a group of more than a dozen Senate moderates Wednesday evening pledging to continue work on passing a tax cut package that can win bipartisan support. "We talked about everything you can imagine," O'Neill said, when asked to describe the specific elements of the tax package that were under discussion. O'Neill said that the meeting was wide-ranging and touched on almost all aspects of President Bush's $1.6 trillion tax cut package. "I learned an awful lot," he said, adding that he now understands the thinking of many lawmakers regarding specific concerns about the Bush tax cut. "We're going to get it done," he said, referring to a tax cut that can pass a Senate which is divided 50-50. Several lawmakers leaving the session said O'Neill made a particularly vigorous pitch for passing the marginal rate tax reductions, which are the centerpiece of the Bush tax cut program. Senator Arlen Specter said that one idea floated during the meeting was to pass this year a bill including only the marginal rate reductions, which would cost about $1 trillion over a decade. The other elements of Bush's package could be placed in a separate bill and pushed later if surplus projections prove true, Specter added. O'Neill deflected a number of questions about the current volatility in the U.S. stock market. He simply ignored direct questions about whether he is concerned about the continuing turbulence in the markets. O'Neill also said that he left the session believing that the moderate group is comprised of "people of goodwill" who want to pass a significant tax cut this year. He said the discussion did include mention of a so-called trigger, which would condition tax reduction on the achievement of surplus goals. He declined to endorse or rule out such a trigger.

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