Congress Approves Tax-Cut Package - KLTV.com - Tyler, Longview, Jacksonville |ETX News

5-23-03

Congress Approves Tax-Cut Package

WASHINGTON (AP) -- Congress gave its final approval Friday to $330 billion in new tax cuts for families, investors and businesses, handing President Bush a victory despite sharply curtailing his plan for lifting the economy from its knees.

The Republican-led Senate approved the measure by a 51-50 roll call, with Vice President Dick Cheney casting the decisive vote in the narrowly divided chamber.

Two hours after midnight, the GOP-run House used a 231-200 vote to sign off on the legislation, which also included $20 billion in aid for cash-hungry states. Bush was poised to sign the bill.

Enactment will deliver rebate checks of up to $400 per child to many families as early as this summer. Other reductions would go to married couples, most workers, people who sell property, businesses, and corporate stockholders who receive dividends -- though Bush's plan to erase taxes on those dividends was dropped as too expensive.

Though less than half the $726 billion in tax reductions through 2013 Bush initially proposed, approval marked a significant personal victory for the president.

Despite polls showing little public interest in tax cuts -- and opposition by some moderate Republicans concerned about burgeoning budget deficits -- the president parlayed his popularity after the victory of Iraq into the third tax cut of his two-and-a-half-year-old administration.

It was also a noteworthy win for congressional Republicans, who control Congress by razor-thin majorities but have managed to prevail on a measure they made the cornerstone of their domestic agenda.

In the Senate, moderate Republicans John McCain of Arizona, Olympia Snowe of Maine and Lincoln Chafee of Rhode Island opposed the bill, but the GOP prevailed by winning the support of Democratic Sens. Zell Miller of Georgia and Ben Nelson of Nebraska.

"This is a great victory for the American people," said Senate Majority Leader Bill Frist, R-Tennessee. "The wonderful thing is it really boils down to greater job security for people."

Democrats said the bill was tilted excessively toward the wealthy, and would make the government's already staggering deficit problem even worse. Even before the tax measure's passage, this year's federal shortfall was expected to rocket well beyond the unprecedented level of $300 billion.

"This is a policy of debt, deficits and decline," said Sen. Kent Conrad, D-North Dakota, adding, "This is a scandal in the making. We're going to read there are perverse results as a result of this tax policy."

Friday's votes marked the end of a four-month journey for the proposal, which Bush unveiled in January. Before winning passage, the measure sparked wrenching divisions between House and Senate Republicans over how deep the tax cuts should be, and it saw Bush hop campaign-style across the country to put pressure on wavering senators.

Underlining the muscle of moderate senators uncomfortable with the red ink, the bill's tax cuts were less than half the $726 billion in tax reductions through 2013 that Bush proposed in January as a tonic for the swooning economy.

As a result, instead of his trumpeted proposal to end taxes on corporate dividends paid by individuals, a less costly version was included that also reduced levies on capital gains.

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