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Jubilant Bush Prepares to Sign Your Tax Cut

Monday, 28 May 2001 12:00 AM

"I want to thank the members of the House and Senate for working so diligently to give Americans another important reason to celebrate this holiday weekend," Bush said.

The Treasury Department has already purchased the paper necessary to print up to 100 million tax rebate checks, for at least $300 to anyone who paid taxes last year. Single parents get $500, couples $600.

"As a result," Bush said in the White House East Room Saturday afternoon, "when this tax relief plan is fully implemented, a typical family of four will see their taxes cut by half."

The president gathered what he has called his "tax families" in the East Room of the White House to show his appreciation to lawmakers who voted in favor of the bill in time to meet his goal of congressional passage by Memorial Day.

Bush returned from the presidential retreat at Camp David, Md., to showcase the tax cut only hours after the House and later the Senate passed the legislation. Their Saturday votes followed Friday night's deal struck by negotiators from both chambers to write a final bill that bridged the differences in the versions of the tax package that the House and Senate had passed originally.

Republicans and some Democrats applauded the legislation. "For this year's first installment of the tax cut, the check will literally be in the mail," Bush said.

Under the measure, rebate checks will be issued at a rate of 11 million per week starting in late July, about the same time the government will begin withdrawing less from paychecks as withholding tables are adjusted.

The Senate voted 58 to 33 to approve the bill about three hours after the House passed the measure, 240 to 154. The bill now goes to the White House for Bush to sign after the Memoral Day recess ends June 5.

The votes in both the House and Senate were split largely but not entirely along party lines, with 12 Senate Democrats voting with 45 Republicans and with the Vermont senator who is turning his back on Republicans to become an independent and align himself with the Democratic Senate leadership. James Jeffords.

Among those Republicans voting against the bill in the Senate were moderates John McCain of Arizona and Lincoln Chaffee of Rhode Island.

On the House side, 211 Republicans voted to approve the bill, while one Independent and 153 Democrats voted against it.

Under the measure, overall withholding rates will be reduced for all taxpayers effective June 1. Reductions for marginal rates will be phased in over 10 years: The current 39.6 percent rate will fall to 38.6 percent from 2001 to 2003, then to 37.6 percent from 2004 to 2005 and finally to 35 percent in 2006. The current 36, 31 and 28 percent brackets will each fall by one percentage point in 2001, 2004 and 2006 while the 15 percent rate remains.

"Nothing could be more profound, and nothing could be more fair," Bush said after the votes. "No more wondering whether you're targeted in, or whether you meet all the fine-print requirements to qualify for one special tax break or another. No, this tax relief is straightforward and fair - if you pay income taxes, you get relief."

The bill also incorporates key provisions of the original Senate bill. Among them: a reduction in the extra tax burden on many married couples, and phased-in cuts and larger exemptions for taxes on estates. The entire estate tax will be repealed in 2010, but its top rate of 55 percent is cut to 50 percent this year. The current $675,000 tax-free exemption from estate taxes is raised to $1 million next year and by 2009 to $3.5 million.

The final passage was a huge victory for the most critical portion of Bush's legislative agenda, despite coming in a week that saw Jefford's high-profile defection that is costing Republicans control of the Senate. Democrats will formally take over on June 5, after the Senate returns from a weeklong holiday break.

Acknowledging the power shift in the Senate, Bush thanked Sen. Thomas Daschle, D-S.D., for not blocking the Senate tax cut vote on Saturday. Daschle will become Senate majority leader when Jeffords leaves the Republican Party to become an Independent.

"I very much appreciate Senator Daschle's willingness to allow the will of the majority of the Senate to prevail even though he himself did not agree," Bush said. He went on to thank conference committee chairman Sen. Charles Grassley, R-Iowa; Sen. Max Baucus, D-Mont., ranking Democrat on the Senate Finance Committee, two senators who took it upon themselves to work out a bill that could attract enough votes instead of deferring to their Senate leadership; and Sen. John Breaux, D-La., a conservative Democrat who with his like-minded colleagues, has additional influence in a Senate nearly evenly balanced between political parties.

California Sen. Dianne Feinstein said she believed that when government is in the position to return money to taxpayers, it should. "Thanks to those hard choices, the budget is in balance and we have surplus projections for the next decade," she said. "We are in a position to return some of the hard-earned money of the American taxpayers back to the American people."

A Republican senator, Peter Fitzgerald of Illinois, said the measure would help working families get off the treadmill of working merely to pay taxes.

Republicans called the tax bill a victory, based on the tax-cutting pledge on which Bush ran for president. "There are reductions in rates across the board," House Ways and Means Committee Chairman Bill Thomas, R-Calif., said.

Democrats who supported the bill emphasized the parts of it that provide relief for the poorest Americans, and said they were successful in reducing the overall size of the package to ease its impact on the rest of the budget.

"This is a lot better tax cut than we would have otherwise been faced with," Baucus said.

More-liberal Democrats were not as receptive to the final deal. The ranking Democrat on the House Ways and Means Committee, Rep. Charles Rangel of New York, assailed it.

"The tax bill is a fraud on the American people," Rangel said. "They call it a tax bill but it is really a formula for depriving Social Security and Medicare of needed resources. The GOP has people thinking they are going to get some big tax reduction, but whatever tax cut low- to moderate-income Americans get under this bill will be dwarfed by its detrimental effects on Social Security, Medicare, other vital programs and the health of our economy."

Copyright 2001 by United Press International.

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I want to thank the members of the House and Senate for working so diligently to give Americans another important reason to celebrate this holiday weekend, Bush said. The Treasury Department has already purchased the paper necessary to print up to 100 million tax rebate...
Monday, 28 May 2001 12:00 AM
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