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Bush's Proposed Tax Cut Expected to Begin Partisan StrugglesAired February 8, 2001 - 1:01 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NATALIE ALLEN, CNN ANCHOR: That tax-cut plan you've heard so much about is finally on Congress' doorstep, where it's sure to be the object of a partisan tug-of-war. Now worth $1.6 trillion, the plan is way too big, as you can imagine, to suit most Democrats and too small, as you can imagine, for some conservative Republicans. But President Bush says it is just right and there's no time to waste. In fact, a day after likening taxes to a toll booth, Mr. Bush said, quote: "A warning light is flashing on the nation's economic dashboard and tax cuts," he said, "are the fix."
The new president's first major legislative initiative will test not only his purported skills at bipartisanship, but also his control over competing factions in his own party.
We have extensive live coverage this afternoon, beginning with CNN's Major Garrett at the White House -- Major.
MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Good day, Natalie.
The president at a rose garden ceremony earlier today here at the White House tried to create a sense of urgency about congressional consideration and final action on his tax cut plan. The president made many points; two of them that the economy is slowing down and a tax cut is exactly elixir that slowing economy needs and that, in an era of long-standing surpluses, taxpayers are sending far too much money to Washington.
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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Today I am sending to Congress my plan to provide relief to all income tax payers which, I believe, will help jump-start the American economy. We must give overcharged taxpayers some of their own money back.
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GARRETT: Some of their own money back, indeed. These are some of the characters of the Bush tax cut plan: it first includes the first across-the-board tax cut that Washington has seen proposed since 1981, the era of Ronald Reagan's presidency. The Bush team would like to shrink the five existing income tax brackets down to four. Starting at the lowest tax income bracket, 15 percent, the Bush team wants to cut that to 10 percent; transform the 28 percent tax bracket to 15; cut the 31 percent tax bracket down to 25 percent. And then, at the higher ends, the 36 percent tax bracket down to 33 percent; and then eliminating entirely the highest tax bracket for the wealthiest American taxpayers, 39.6 percent.
There are also some other provisions that the Bush team wants to help families with children and with other economic needs. Among them: to eliminate the estate tax, which some Republicans refer to as the "death tax"; reduce the marriage penalty -- that's the penalty assessed on some married couples -- pushes them into a higher tax bracket; also double the child credit to $1,000, up from its current $500; and also increase contribution limits to education savings accounts from $500 to $5,000; lastly, allow people with children to create an account that could pay for private school tuition for their children.
All of this comes to Capitol Hill, and Democrats will be considering it, as well as congressional Republicans. In the House there was tremendous momentum; the White House wants to exploit that momentum, but they know the sledding will get just a bit tougher in the Senate, and the Senate minority leader, Tom Daschle, said he wants to work with the White House, but on a plan that would be truly bipartisan.
(BEGIN VIDEO CLIP)
SEN. TOM DASCHLE (D-SD), SENATE MINORITY LEADER: We are here to extend our hand, our partnership to work with him to find a plan that Republicans and Democrats can agree on. It can't be a bill that says "it's our way or no way." It has to be a bill that recognizes if he really means what he says about bipartisanship, that it can be our way together -- Republicans and Democrats working to address the concerns that we've raised this morning.
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GARRETT: And those concerns will be raised, of course, in that narrowly divided 50-50 Senate. Democrats are hoping that that ratio will help them persuade the White House to compromise a bit. Democrats would clearly like to see this tax plan directed a little bit more at middle and low-income taxpayers. Right now the White House says it's full-speed ahead with the president's plan and they believe, in the end, most of it will get passed -- Natalie.
ALLEN: Are there specific parts of this tax plan that we already know both parties agree on?
GARRETT: Well, yes, Natalie. There is definitely broad bipartisan support for eliminating the marriage tax penalty that I referred to; making significant changes to that estate tax. Democrats have also said they're very much open to across-the-board tax cuts on the income tax rates, but they are not if favor of providing those tax benefits to the highest income Americans. They would like to see this tailored more toward middle and lower income taxpayers. That's going to be a key fight.
Also, Democrats want to see how this fits in the larger budget context. They have raised concerns that this plan might spend too much when you add it with other Bush priorities on education spending, defense spending and other matters like that. They want to see how all this fits into a budget before they want to proceed -- Natalie.
ALLEN: Major Garrett at the White House, thank you.
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