- The Washington Times - Saturday, May 24, 2003

CRAWFORD, Texas (AP) — President Bush says the 10-year, $350 billion tax-cut plan he intends to sign this week will kick-start the economy by encouraging spending and hiring.

“By leaving American families with more to spend, more to save and more to invest, these reforms will help boost the nation’s economy and create jobs,” Mr. Bush said yesterday in his weekly radio address. “When people have extra take-home pay, there’s greater demand for goods and services. And employers will need more workers to meet that demand.”

It was a formula for economic recovery that Mr. Bush has repeated often in his five-month campaign for tax cuts. But some critics such as Federal Reserve Board Chairman Alan Greenspan and the Congressional Budget Office have said they see little short-term gain in Mr. Bush’s proposed tax cuts, which began as a $726 billion package.

Democrats repeated warnings yesterday that the tax cuts are the wrong course for the country.

“It’s fiscally irresponsible. It’s paid for using Social Security and Medicare, and it’s geared to the very wealthy in our country,” said Ranit Schmelzer, spokeswoman for Senate Minority Leader Tom Daschle, South Dakota Democrat. “It’s the wrong policy at the wrong time.”

Mr. Bush insisted that the tax cuts “will help boost the nation’s economy and create jobs.”

“This achievement is a victory for every family struggling to pay the bills, every entrepreneur hoping to expand the business and create new jobs, and every American looking for work,” he said.

Mr. Bush will sign the bill before he leaves for Europe on Friday, spokesman Ari Fleischer said. The package includes an additional $20 billion for cash-strapped states.

The Republican-run Senate approved the bill 51-50 Friday, with Vice President Dick Cheney’s vote breaking the tie. The House passed it 231-200 earlier Friday.

Mr. Bush’s enthusiasm yesterday contrasted with his earlier derision of a $350 billion tax-cut package originally approved by the Senate.

In Ohio last month, Mr. Bush campaigned against that bill and insisted that only a package of at least $550 billion would “make sure that the economy grows.”

“Why are they for a little-bitty tax-relief package?” he said of senators who opposed his bid for larger cuts.

Anticipating the questions, the White House compiled numbers showing that the final version, while smaller overall, brings more relief in its first two years. Mr. Bush’s original proposal for $726 billion in tax reductions through 2013 included $191 billion in cuts the first two years, compared with $226 billion in the final bill.

Small businesses will be able to immediately write off $100,000 in new equipment purchases, and all businesses will be able to expense half their investments this year.

Personal tax cuts are retroactive to Jan. 1, so employees will see fatter paychecks during the last half of the year, and many parents will get an advance refund worth as much as $400 per child this summer.

Married couples who pay higher taxes than they would if filing as two single taxpayers will see some of that so-called marriage penalty disappear as their standard deduction and tax brackets broaden. Investors will see the tax rates on their earnings drop as the top rates on dividends and capital gains fall to 15 percent.

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