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Bush signs $350 billion tax-cutAdministration's second major tax cut
WASHINGTON (CNN) -- President Bush signed a $350 billion tax cut bill Wednesday, saying the measure will boost a faltering U.S. economy and spur the creation of new jobs. "By ensuring that Americans have more to spend, to save and to invest, this legislation is adding fuel to an economic recovery," Bush said. "We have taken aggressive action to strengthen the foundation of our economy, so that every American who wants to work will be able to find a job." Bush said the bill -- the second major tax cut of his administration -- will deliver "substantial tax relief" to 136 million Americans. Administration officials have said the cuts are needed to jump-start a lagging economy and reduce unemployment, now at 6 percent. The measure is considerably smaller than the $726 billion package the president originally sought, and it passed the Senate only with a tie-breaking vote by Vice President Dick Cheney. Democrats argued the cuts disproportionately benefit the rich and drive up the federal budget deficit, now projected to top $300 billion. Bush once mocked the $350 billion figure as an "itty bitty" tax cut, but said Wednesday that it "will make a difference for families in every part of this country." "When people have more money, they can spend it on goods and services," he said. "And in our society, when they demand an additional good or a service, somebody will produce the good or a service. And when somebody produces that good or a service, it means somebody is more likely to be able to find a job." The bill Bush signed Wednesday reduces income tax rates, lowers the marriage penalty, cuts capital gains taxes and boosts the expensing allowance for small business investment. It also significantly reduces taxes on dividends -- but does not eliminate them, as Bush had requested. ( Full story ) It also boosts the child tax credit from $600 a year per child to $1,000, and Bush has ordered the Treasury Department to begin issuing checks of $400 per child to 25 million families who claimed that credit last year. To win congressional support, its backers made much of the tax cut temporary, lowering its overall cost. Democrats and some Republicans complained the move hides the bill's true costs because future members of Congress likely will accede to pressure to extend the cuts. Democrats said the measure would do little to help the economy and would damage it in the long run. "Instead of finding a real solution to the growing unemployment crisis, this bill will give millions to those who don't need it and very little to those who do," Senate Minority Leader Tom Daschle said in a statement issued Wednesday. "It will add a trillion dollars to our national debt; spend the Social Security trust fund and ultimately lose more jobs." Sen. Joseph Lieberman, a Democratic presidential candidate, said the Bush administration "has sapped our schools of the funding they need to produce the next generation of innovation leaders. "I suppose that may help him finance those tax plans that haven't worked, but believe me, we're going to pay a large price for it in the future," said Lieberman, D-Connecticut.
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