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$1.35 trillion tax cut becomes law
WASHINGTON (CNN) -- President George W. Bush signed into law Thursday the first major piece of legislation of his presidency, a $1.35 trillion tax cut over 10 years. The White House ceremony was attended by members of Congress who backed the bill. "Across-the-board tax relief does not happen very much in Washington, D.C., in fact it has happened only twice: President Kennedy's tax cut in the '60s and President Reagan's tax cut in the '80s," Bush said. "And now it's happened for a third time. And it's about time."
Following the signing, House Minority Leader Richard Gephardt, D-Missouri, joined House Minority Whip David Bonior, D-Michigan, and other congressional opponents of the tax cut at a Capitol Hill news conference. "Democrats want tax relief that goes to every taxpayer," Gephardt said. "This bill does not do that." The minority leader said the middle class will not benefit enough from the tax cut and the wealthy will reap unfairly high benefits. New Senate Majority Leader Tom Daschle, D-South Dakota, has said Congress will eventually be forced to revisit the tax cut, which he argues is too large, too generous to the rich and too expensive. On Saturday, just hours after the measure passed both houses of Congress, Bush rushed back to the White House from his Camp David retreat to hail the measure as "historic" and the "responsible thing to do for the American people and the economy." The law, the first major tax cut in 20 years, cuts income tax rates across the board, reducing the lowest rate from 15 percent to 10 percent, and the highest rate from 39.6 percent to 35 percent. Once all cuts are fully phased in, the average family of four making $50,000 will save $1,825 per year, according to a Senate Finance Committee staff estimate. The Treasury Department says 38 million families with children will save an average $1,460, 43 million married couples will save an average of $1,728, and 11 million single mothers will save an average of $772, once all cuts are phased in, a process that will take up to 10 years. One provision of the law -- the cut of the lowest tax rate to 10 percent -- was made retroactive to January 1, 2001, and taxpayers will be sent a rebate to cover that cutback. Ninety-five million refund checks will start going out in the mail July 20, said Michele Davis, Treasury Department spokesman. The checks will be sent to anyone who filed a tax return this year. Singles will get $300, single parents will receive $500 and married couples will see a $600 rebate.
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