Bush Signs Tax Cut Into Law
W A S H I N G T O N, June 7, 2001 -- 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.
A key part of the legislation that was not in Bush's earlier proposal is a onetime tax rebate aimed at stimulating the economy: This July, the Treasury Department will begin putting millions of refund checks in the mail — $300 for individuals and $600 for married couples.
Tax Cut 'Fails American People,' Say Dems
A total of 28 Democratic representatives and 12 Democratic senators voted to approve the tax cut last month. But most congressional Democrats say the plan relies on overly optimistic projections of federal budget surpluses and will ultimately leave many key domestic spending priorities badly underfunded.
"Today we have a sound fiscal policy … a sound Social Security system, a sound Medicare system, a sound future for education and health benefits for our elderly … Tomorrow you won't," Rep. Charles Rangel of New York, the ranking Democrat on the the House Ways and Means Committee, said at a Capitol Hill press conference following the signing ceremony.
Critics also say the plan is a boondoggle for the wealthy.
"President Bush and Republicans in Congress have decided to sacrifice these priorities in order to give massive tax cuts to the wealthiest individuals," said House Minority Leader Dick Gephardt, D-Mo. "This bill, in short, fails the American people."
According to Citizens for Tax Justice, a Washington-based group that opposes the plan, 37.6 percent of the total tax cut will go to the wealthiest 1 percent of taxpayers — those earning $373,000 a year or more.
Democratic opponents of the legislation also say it is riddled with gimmicks, noting that many of the bill's provisions will not be fully phased in until the end of 2009 and that all of the provisions are set to expire the following year.
"This bill has enough budget tricks, gimmickry and sleight of hand to make a con artist blush," Sen. Kent Conrad, D-N.D., the chairman of the Senate Budget Committee, told reporters this afternoon. "It's not fiscally responsible. It's not fair."
(Copyright 2001 by The Associated Press. All Rights Reserved.)
The president is set to dine at the White House this evening with Senate Majority Leader Tom Daschle of South Dakota. Daschle voted against the tax plan and suggested Wednesday that the newly Democratic-led Senate would revisit the legislation. But White House press secretary Ari Fleischer warned Democrats not to attempt to repeal any of the bill's provisions.
"Any attempt that is made to roll back any aspect of this tax cut is nothing other than a tax increase, and it will be resisted," he said at a press briefing this afternoon.
On Friday, Bush is scheduled to promote the tax cut with a trip to Des Moines, Iowa. The Hawkeye State is where the president first proposed his tax relief plan in advance of the state's Republican caucuses last year. It is also home to GOP Sen. Charles Grassley who, as chairman of the Senate Finance Committee before this week's power shift, was instrumental in winning approval for the compromise bill that became law today.