Bush Signs Tax Cut Into Law

W A S H I N G T O N, June 7 -- President Bush signed into law the largest tax cut in two decades today, hailing the $1.35 trillion, 11-year package as the first "great achievement" of what he claimed was a new bipartisan spirit in Washington.

"Tax relief is now on the way," Bush said at a signing ceremony in the East Room of the White House.

The sweeping legislation trims tax rates across all levels of income and will put millions of refund checks in the mail by the end of the summer.

"Across-the-board tax relief does not happen often in Washington, D.C.," the president said, citing the tax bills passed by Congress during the Kennedy and Reagan administrations. "Now it's happening for the third time — and it's about time."

Bush Hails 'New Era' of Cooperation

The tax-cut plan, approved by the House and Senate late last month, is a major legislative victory for Bush, whose call for tax relief was the centerpiece of his 2000 presidential campaign.

"A year ago, tax relief was said to be a political impossibility," Bush said this morning. "Six months ago, it was supposed to be a political liability. Today, it becomes reality."

(ABCNEWS.com)

Amid the political upheaval caused by the Democratic takeover of the Senate, Bush argued the enactment of the tax plan was a victory for bipartisanship and the "new tone" he had pledged to bring to the nation's capital.

"Tax relief is the first achievement produced by the new tone in Washington," he said, flanked by 20 members of Congress, many of them Democrats, who helped shepherd the bill through passage. "It is the first major achievement of a new era — an era of steady cooperation."

Though Bush had proposed a larger $1.6 trillion tax cut, the bill he signed into law today contains many of the key elements of his original plan.

The top income tax rate will be reduced from 39.6 percent to 35 percent and a new bottom 10 percent bracket created. And the inheritance tax and the so-called marriage penalty will be gradually eliminated over the next decade. The $500 child tax credit will also be doubled and the limits on contributions to IRAs and 401(k) plans raised.