Some of the opposition to President Bush's 2001 tax cut came from within his own party. On March 13, 2001, Secretary O'Neill was scheduled to meet with a group of centrist senators that included several moderate Republicans who had qualms about the size of the tax cut. The secretary needed to pull off a delicate balancing act: placate the GOP moderates without actually committing to any changes in the president's plan. The memo, preparing O'Neill for his meeting, spelled out the administration's strategy. "You should demonstrate to them that the lines of communications are open between Capital Hill [sic] and the Treasury, and listen to their ideas. However, it is not time to negotiate." O'Neill -- who'd spoken candidly at his confirmation that the $1.6 trillion tax cut would bring little immediate stimulus to the economy -- did negotiate. He felt a stimulus was needed, and suggested a $125 billion tax rebate, angering many in the White House, who feared it would be seen as a replacement for the larger tax cut. A rebate of $100 billion was eventually enacted, giving the economy a well-timed boost. Click here to go directly to the memo.

























