TAX CUT WARS . . . GEPHARDT INTO THE FRAY

Two days before President Clinton unveils a middle-class tax cut to staunch the bleeding from his party's November defeat, House Democratic Leader Richard Gephardt of Missouri proposed his own lower- and middle-income tax break, then slammed Republicans as "trickle-down terrorists." Gephardt denied he was trying to upstage Clinton, but said "there will be and probably can be times when we are not going to agree and House Democrats are going to have our own proposals." Implicit in the remarks: Clinton shoulders much of the blame for Democrats' failure to "speak to the growing sense of insecurity" among workers whose wages are stagnant or shrinking. The Gephardt proposal would offer an unspecified tax break for all taxpayers who earn up to $75,000 a year -- less dramatic than the current GOP proposal to cut taxes for families with incomes of as much as $200,000 a year with a $500-per-child tax credit. "The question is going to become, at what point to do they set off a bidding war?" says TIME congressional correspondent Karen Tumulty. "It's similar to what happened in Ronald Reagan's first year, when he forced the Democrats to up the ante on tax cuts; as a result, our grandchildren will be paying it off. I think the Democrats are very afraid of that, but they've got to respond."