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CNN Today

Bush Tax Plan Headed for Congress Thursday

Aired February 5, 2001 - 4:01 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOIE CHEN, CNN ANCHOR: If President Bush gets his way, you'll be seeing more of your paycheck. Today, the president pitched his jumbo tax cut plan to the nation, but the hard sell is bound to be to his critics in Congress.

Here's CNN senior White House correspondent John King.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): A focus on families, as the president opened the fight for his big tax cut plan.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is my approach: tax relief for everybody in every bracket, averaging $1,600 per family, while still reducing our national debt and funding important priorities.

KING: The White House says the 10-year price tag of the president's plan is $1.6 trillion. Democratic leaders back cutting taxes by half that, $850 billion. Mr. Bush disputed Democratic arguments that his plan is tilted to favor the rich, saying it is only fair that those who pay the most in taxes get a generous tax cut.

But he also had strong words for fellow Republicans who think the tax cut should be even bigger.

BUSH: Some in Congress view this as an opportunity to load up the tax relief plan with their own vision of tax relief, and I want the members of Congress and the American people to hear loud and clear: This is the right-sized plan, it is the right approach, and I'm going to defend it mightily.

KING: The driving force of the Bush plan is an across-the-board rate cut. There are now five federal income tax brackets: 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent.

Mr. Bush proposes four lower rates: 10 percent, 15 percent, 25 percent and 33 percent. The president will send his plan to Congress on Thursday. The Democrats are already lining up to voice their skepticism.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: You know, if you make over $300,000 a year, this tax cut means us that you get to buy a new Lexus. If you make over $50,000 a year, you get to buy a muffler on your used car. That's the difference.

(END VIDEOTAPE)

KING: And so, you get a sense there from the strong reaction from the Senate Democratic leader Tom Daschle. Partisan lines being drawn in the tax debate now, and perhaps the fading somewhat of the bipartisan spirit in the first two weeks of the Bush administration, but the president believes that the momentum is on his side, in part because of the slowing economy, and in part because of government projection showing an even bigger budget surplus -- Joie.

CHEN: John, it did sound like a little arm wrestling coming the way of Senator Daschle. I am wondering, though -- you know, we haven't heard this kind of talk about tax cuts since the time of Ronald Reagan. Relatively speaking, in the dollars of Reagan's time and today, is this as big a tax cut or bigger? Where does it fit in?

KING: Well, in terms of the money it is, but it depends on how you look at it. In terms of the percentage of the economy, it's a much smaller tax cut than the Reagan tax cut -- smaller still, than the John F. Kennedy tax cut back in the beginning of the 1960s. That's part of the argument that the Republicans will make, and especially, the White House will make as this debate goes forward.

They will say, now, if you look at it, the Democrats are here -- some Republicans want even more. The White House believes they can position the president now as the reasonable guy in the middle, saying, let's have a big tax cut, but not too big.

CHEN: CNN's senior White House correspondent John King for us.

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