THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DONNA KELLEY, CNN ANCHOR: We begin at the White House, where President Bush is expected to make a brief statement momentarily on his biggest legislative victory yet: passage today of a compromise tax cut by Congress. Both Houses approved the $1.3 trillion plan this morning, the centerpiece of the president's agenda.
CNN's White House correspondent Kelly Wallace is standing by with more for us -- Kelly.
KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Well Donna, we expect the president to come into the East Room -- you see that live picture right there. Just moments from now, the president briefly interrupting his Memorial Day weekend at the presidential retreat at Camp David to come back to the White House.
Aides say in his statement he will hail the passage of the tax cut in the House and the Senate as a major victory for the American people. The president saying significant tax relief will soon be on the way. As we know, all taxpayers expected to get refund checks in the mail as early as August or September.
This, as you noted, Donna, the president making a tax cut the centerpiece of his presidential campaign. He also said it was going to be one of his top priorities this year. So, definitely, hailed as a major achievement for this president.
Mr. Bush also expected to congratulate the democratic and Republican lawmakers who helped make this possible. The president already talked on the phone with Democratic Senators John Breaux and Max Baucus, as well as Republicans -- Senator Grassley of Iowa and Senate Majority Leader Trent Lott, as well as reaching out to House Speaker Dennis Hastert and Republican Congressman Bill Thomas, chairman of the House Ways and Means Committee.
So, Donna, I would expect you to hear a lot of talk of bipartisanship -- how Democrats and Republicans worked together to get this bill passed in the House and the Senate -- Donna.
KELLEY: That's right, Kelly, they did have a couple of cross- over votes. A couple of Republicans voted no, and some Democrats joined on board with Republicans.
WALLACE: Exactly. As you noted, I believe it's two Republicans in the Senate voted no, including Senator John McCain, the Republican of Arizona. But you did have as many as 12 democratic senators voting for this bill in the Senate, and you had some 20 -- can't get the exact number in my head, in the House -- democratic lawmakers voting for this.
So the message from the White House will be that this truly is a bipartisan tax bill, although we heard many democratic lawmakers in the House and the Senate coming out throughout the day -- the majority of Democrats believing this bill is too big, that it is too generous to the rich, and that it will lead to deficits in the 1980s (sic), and that it does not do enough to protect Social Security and Medicare -- Donna.
KELLEY: Big victory on the tax cut, and talking about bipartisanship; but at this point -- then it goes on to the next little step here -- Senator Jeffords leaving to become an independent -- leaving the GOP to become independent will certainly change the agenda.
WALLACE: Absolutely; a whole new political landscape for this White House.
And what is interesting is the White House says the president's agenda will not change, that Mr. Bush will continue pressing and making the case for his agenda; an agenda that includes his faith- based initiatives, modernizing the military, as well as his energy plan. Aides say the president will continue fighting for that agenda.
They also say he will continue reaching out to Democrats; that this administration knows it will be a much bigger challenge for the president to get any of proposals out of Senate committees and onto the Senate floor. Democrats will now be chairing all those Senate committees; Democrats will also decide what legislation gets to the floor and when.
So, a much bigger challenge ahead for this White House to get a victory such as the one it achieved today.
KELLEY: Kelly, have you heard talk in the halls whether or not -- now, they don't want to get caught again with a Senator Jeffords leaving, because it seemed to come as a surprise at the timing that it did. Are they wooing anybody else, trying to figure out who they can keep in camp or bring over?
WALLACE: Well, publicly and privately they're saying that there's really no wooing going on -- that the president and his aides are still reaching out to moderates. They also say that they believe Senator Jeffords may have been doing this for other reasons beyond the ones that he has stated. We heard some of the president's advisers sort of out there saying they think the senator may have been looking to, maybe, seal his political future when it comes to, maybe, running for governor down the road.
We haven't heard any talk of any Republicans who plan to follow in the lead of Senator Jeffords, but clearly this White House knows is does have to do more to reach out to moderates -- people like Republican Senator Lincoln Chafee of Rhode Island, Senator Olympia Snowe of Maine, also Arizona Senator John McCain, who has made it clear, and voted against the president today. So this White House will need to do more reaching out to these senators just to get their support for the agenda of the president.
KELLEY: Kelly, have you heard what could be next? We were talking about energy policy, and that seemed like that was coming up next. But now with the change in power, what happens? Have you heard how that changes?
WALLACE: Well, I mean, certainly the White House says it will continue pressing the president's energy plan, making the case that now is the time to act. The president's initiative a combination of boosting energy production, as well as encouraging conservation.
The president had said to lawmakers that he wanted to get an energy plan, energy legislation passed by July Fourth. No one thinks now that that is a reality, saying many of the president's ideas are somewhat controversial.
And, as we noted throughout the day, now you will have a new chairman of the Senate Energy Committee, a Democrat, Senator Jeff Bingaman of New Mexico, who has made it clear he opposed some of the president's ideas, such as drilling on public lands for oil and gas. Senator Bingaman and other Democrats believing there needs to be much more emphasis on energy efficiency and tax credits for alternative fuels, and maybe not as much emphasis on boosting oil and gas production in the U.S. -- more of a balanced approach.
KELLEY: OK Kelly, stand by. We're expecting to hear from the president in about four minutes or so, we hear. So we'll go on and continue with more details here and come back to you in just a moment.
Congress did pass the nation's biggest tax break in a decade during a rare weekend session. House and Senate negotiators agreed upon the compromise legislation late on Friday. The full House approved the bill this morning -- that vote, 240 to 154. Every House Republican and 28 Democrats voted in favor.
Voting followed in the Senate, where the bill passed 58 to 33. Ten Democrats voted with the Republicans and, as we mentioned, Republican Senators John McCain and Lincoln Chafee voted against it.
Republicans hailed the tax cut as a victory for bipartisanship and a well-deserved break for Americans.
(BEGIN VIDEO CLIP)
SEN. TRENT LOTT (R-MS), MAJORITY LEADER: We held the line and we got this job done. I'm very proud that the Senate has acted in this way. And let me say this, too: No matter who the personalities may be in various and sundry positions, we can do this again and again.
SEN. CHARLES GRASSLEY,(R), IOWA: Today the message to taxpayers is this: Substantial tax relief is on the way; the government will ease its grip on your wallet. And most importantly, the people of this country that make this country the greatest country in the world, you all deserve it.
(END VIDEO CLIP)
KELLEY: And the Democrats who did not go along with the vote are slamming the bill as tax fraud: too costly and favoring the wealthy.
(BEGIN VIDEO CLIP)
SEN. KENT CONRAD (D), NORTH DAKOTA: You remember several years ago the Republicans tried it add a 13th month to the calendar to disguise the cost of a tax bill they proposed then. What they have done is graduated to a whole new level of accounting gimmickry to disguise the full cost of this tax bill.
SEN. TOM DASCHLE (D-SD), MINORITY LEADER: This was confrontational politics. This was an effort on the part of the administration to peel off Democrats. I don't think that is the model of bipartisanship we really want.
(END VIDEO CLIP)
KELLEY: And we'll go back to our Kelly Wallace. We are expecting the president in just a moment or so.
You can expect a refund check, Kelly, as you were saying, sometime this summer; and the latest I saw was possibly it might not get there until October. But they hope to have it by October.
WALLACE: Yes, some 95 million checks; a massive number going out in the mail. They hope to get them there to taxpayers by August or September. As you noted, some might not get there until October.
And as we wait for the president, the president will be joined by a so-called tax family. Donna, you may recall the president, during the presidential campaign, often was joined by a family. He would point to them, ordinary Americans; and he would use these middle class families as an example of how they would benefit under the president's tax-cut plan.
As we know, during the campaign Mr. Bush pushed a $1.6 trillion tax-cut proposal. The Senate and the House passed a smaller version, a $1.35 trillion plan. Still, though, Donna, the White House believing this is definitely a victory. Believing that, as early as just a few months ago, people didn't think that such a tax cut was possible, and they believe they've proved those critics wrong today.
KELLEY: Got pretty close to what the president wanted on the total tax cut; you have the $1.35 trillion over the 10 years, and also brought down all of the brackets -- that he was hoping to bring an across-the-board tax cut.
WALLACE: Exactly, except -- with the exception of the highest income tax bracket...
KELLEY: Right. WALLACE: The president wanting to bring that down from 39.6 percent down to 33 percent. The final version from the House and the Senate...
KELLEY: OK Kelly, let me interrupt you for just a quick moment. I think that we can see the president is entering the East Room there at the White House. So we'll tune in here as he shakes hand; and that must be the tax family that you were talking about, Kelly.
And so here he is he back from Camp David with his statement on the tax cut bill.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, thank you all very much for joining me here at the people's house on this historic occasion. I asked all of you to join me here to be able to publicly thank the members of the House and the Senate for working so diligently to give Americans another important reason to celebrate this holiday weekend.
I first want to thank House Speaker Dennis Hastert and Senate Majority Leader Trent Lott for their strong and effective leadership -- leadership that was instrumental in delivering significant tax relief for the American people.
I thank the incoming majority leader of the Senate, Tom Daschle, for working with us to schedule today's vote promptly. I very much appreciate Senator Daschle's willingness to allow the will of the majority of the Senate to prevail, even though he himself did not agree.
I thank all the members of the conference committee, especially Chairman Chuck Grassley and Chairman Bill Thomas, Senator Max Baucus and Senator John Breaux, who worked tirelessly to make tax relief a reality.
I also want to especially thank Don Nickles, Phil Gramm, Olympic Snowe and House Majority Leader Dick Armey and all who helped make tax relief possible.
And while I'm thanking people, I want to thank all those who voted "aye," and so do the taxpayers of America.
BUSH: Today, for the first time since the landmark tax relief championed 20 years ago by President Ronald Reagan and 40 years by President John F. Kennedy, an American president has the wonderful honor of letting the American people know significant tax relief is on the way.
What is especially significant about the tax relief passed by the United States House and Senate today is that it cuts income taxes for everyone who pays them. Nothing could be more profound, and nothing could be more fair. No more wondering whether you're targeted in or whether you meet all the fine print requirements to qualify for one special tax break or another. No, this tax relief is straightforward and fair. If you pay income taxes, you get relief.
BUSH: And for this year's first installment of the tax cut, the check will literally be in the mail.
BUSH: Late this summer and into the fall, every single American who pays income taxes will receive a check. Single taxpayers will receive a check of $300. Single parents who are heads of households will receive a check of $500, and married couples will receive a check of $600.
The immediate tax relief will provide any important boost at an important time for our economy. And what is more, is you can feel comfortable using it because more tax relief is on the way.
BUSH: The checks are the first installment of lasting, long-term reductions in tax rates. As a result, when this tax relief plan is fully implemented, a typical family of four will see their taxes cut by about half.
BUSH: The check you will receive in the mail represents your benefit from the newest lowest rate which drops from 15 percent to 10 percent. Starting in July and continuing next January, the federal government will begin reducing the amount it withholds from paychecks to reflect the first phase of new and lower tax rates. Ultimately tax rates will be reduced from the current 28 to 25, from 31 down to 28, from 36 to 33 and from 39.6 to 35 percent.
Over the next 10 years, the child credit will double from last year's $500 per child to $600 per child this year to $1,000 by the year 2010.
The marriage penalty will be dramatically reduced, and the unfair death tax will be completely abolished by the year 2010.
BUSH: This tax relief helps all taxpayers. It especially helps those at the low end of the economic ladder. It helps American workers by letting them keep more money, and it helps small businesses so that family-owned restaurants and start-up software companies can hire more workers and provide more jobs for Americans.
The tax relief package honors marriage and family by reducing the unfair marriage penalty and doubling the credit for children. It does away with one of the most unfair aspects of the tax code: a death tax that taxes earnings when you make them, the interest when you save them, and one more time when you die.
As many of you know, throughout my campaign, I met tax families all across the country, diverse people from all walks of life who represented the hopes and dreams of American families. Joining us today is one of those families, the Petersons (ph) -- Paul and Deborah (ph) and Juliet (ph) and Sarah Kate (ph).
BUSH: They work hard. Paul works during the day at U-Crops (ph) Supermarket in downtown Richmond, Virginia. At night, he's working on an MBA at Avery College.
Deborah (ph) works at home caring for their daughters. The Peterson (ph) family was here last February when the prospects for tax relief were not exactly what they were like they are today.
Well, Paul and Deborah (ph), I'm delighted to let you know that your family will receive $800 in tax relief this year -- $600 from the check and another $200 from the immediate increase in the child credit.
I have even more good news for the Petersons and folks like them all across America: When you were here in February, we calculated that your ultimate tax savings would be $1,100 a year. Well, when all aspects of the plan are phased in, you will receive not $1,100 a year but $1,700 a year.
BUSH: That is 1,700 more dollars for this good family to spend on their children and on their dreams.
BUSH: I'm confident about one thing: These good folks can spend the $1,700 better than the federal government can.
BUSH: Tax relief was the right thing to do, and it is the responsible thing to do for the American people and for our economy.
I once again thank and applaud the members of Congress, both Republicans and Democrats, who joined together to get results on behalf of the American people.
The tax relief package that was voted on today was agreed on last night after this week's change in the balance of power in the United States Senate, and it can be a model for the work that is ahead.
Tax relief was based on important principles, principles that are compassionate and conservative, and principles that were preserved during the legislative process of give-and-take.
We listened to the voices of those in my party and in the Democratic Party who wanted additional help for those at the lowest end of the economic ladder.
We listened, and as a result this plan has even more help for lower-income Americans. The earned income credit is expanded for low- income married couples, and the child credit is refundable for parents, providing the most help for those who earn between $10,000 and $25,000 a year.
We acted on principle. We worked together to build consensus and to get results. This is significant and this is only the beginning. The Peterson (ph) family and families like them all across America need more than just a tax cut. The Petersons (ph) want us to work together to improve public education, strengthen their retirement security, modernize Medicare and strengthen and modernize our national defenses.
Again, thank to the members of Congress. I hope you enjoy your Memorial Day recess, and then let's work together to complete the great progress we are making on legislation to improve America's public schools.
Again, I want to thank you all for coming. This is an historic day. It explains the art of the possible. It shows what can happen when good people come together with the intention of doing what's right for the American people, and we have done right by the American people today.
God bless you.
KELLEY: President Bush in the East Room of the White House to an enthusiastic audience, thanking the members of the House and Senate who voted for this, as he put it, historic, significant tax relief, and said it was another important reason to celebrate the holiday weekend. And he thanked a number of people, including the incoming senator -- the Senate Majority Leader Tom Daschle, he said, for working with us even though he didn't agree with us -- for working with us on scheduling this vote.
Our Kelly Wallace is still at the White House -- Kelly.
WALLACE: Well, Donna, two notes really, just following up on what you were just saying. The president saying that the House and Senate lawmakers were able to reach a compromise on this tax cut last night -- the president saying after Vermont Senator Jim Jeffords announced he would be leaving the Republican Party, thereby leading to a shift of power and Democrats, now, to control the Senate.
The president saying, you see, this is an example of how Democrats and Republicans can work together. The president saying this should serve as an example in the future.
But many democratic lawmakers have a different perspective. They believe that Democrats were pretty much blocked out of the process. Even soon-to-be majority leader of the Senate, Tom Daschle, saying today he thought that the White House, or the administration, basically used a strategy of just trying to peel away Democrats, and not really, truly working in a bipartisan way.
So, an interesting perspective from the president and the soon- to-be majority leader on this one.
Also, you know, you can't help but point out the significance of this, in the sense that the president made a $1.6 trillion dollar tax cut the centerpiece of his presidential campaign. He often would appear with tax cut families like the Petersons, who he pointed out today, from Richmond, Virginia.
The president saying that this would be a centerpiece, also, of his administration, and he noted that, back in February, just a couple of months ago, predictions weren't very high that there would be a tax cut. So the president faced a lot of criticism during the presidential campaign, and even months ago, that he would never get close to what he was looking for. And now the president, certainly, saluting a victory of that $1.35 trillion plan -- Donna.
KELLEY: And, Kelly, the president said the check is literally in the mail -- or going to be in the mail.
WALLACE: Yes; and the White House definitely wanted to be able to say that. Administration officials definitely were pushing for refund checks, actual checks, to go out to taxpayers to give an immediate stimulus to the economy. As the president noted, individual taxpayers getting a check of about $300, single parents $500, married couples $600. Those checks to come out, as we noted, by August or September.
The president also noting that, beginning just, really, a month from now, in July, new withholding -- less money will be taken out of everybody's paychecks to reflect the phasing-in of those lower tax brackets across-the-board.
So this is something the administration wanted to push for -- to say, not only are we giving you a tax cut, but you'll be seeing it in just a month or two from now -- Donna.
KELLEY: All right; that's right Kelly Wallace. He said, it's a boost to the economy, and go ahead and use it because more tax relief is on the way.
Kelly Wallace at the White House, thanks very much.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com