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Senate Passes Tax Relief Bill

Aired May 26, 2001 - 12:00   ET

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: The Senate is voting right now on a tax bill giving taxpayers a rebate this year and less money out of their paychecks over time. The House passed the bill earlier today. CNN congressional correspondent Jonathan Karl has latest for us -- Jon.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Donna, they are still waiting for a couple of final votes, but the Senate has more than enough votes to pass this tax cut. It looks like it will get about 60 votes, with the support of a dozen Democratic senators in favor of the president's tax package.

Also, there were two Republican voting no. They include John McCain who was concerned about too much tax cuts for the wealthy, and Lincoln Chafee, a moderate-to-liberal Republican from the state of Rhode Island. By the way, Jim Jeffords, who is technically still a Republican, won't become a Democrat for another week or so -- won't become an independent for another week or so -- he voted yes on this tax package.

And just before the Senate action, this did pass in the House of Representatives by a commanding margin of 240 to 154, with 28 Democrats voting along with every single Republican to vote in favor of this tax package. It is the end of a long process that included a deal that was hammered out last night that will bring immediate tax relief to American taxpayers beginning in about six weeks or so.

(BEGIN VIDEOTAPE)

KARL (voice-over): The tax cut includes immediate tax rebates of $300 for individuals, $500 for single parents and $600 for married couples. At the rate of 11 million checks a week, those rebate checks will be sent out to a total of about 100 million taxpayers starting this summer.

The tax cut, which totals $1.35 trillion over 10 years, will reduce the lowest income tax bracket from 15 percent to 10 percent for the first $6,000 of an individual's income. All other brackets will be reduced, including the top bracket, which will fall from 39.6 percent to 35 percent, although the reduction won't be fully phased in until the year 2006.

REP. BILL THOMAS (R-CA), WAYS AND MEANS CHAIRMAN: $1 trillion, $350 billion doesn't go as far as it used to. KARL: The tax cut will also eliminate the estate tax, but not until the year 2010. It will reduce the so-called marriage penalty starting in 2005. And it doubles the child tax credit by the year 2010 and makes it refundable for low-income people who don't pay income taxes.

Although the tax cut was crafted with the help of moderate Democrats, most Democrats say the bill is fiscally irresponsible, benefiting the wealthy at the expense of the middle class.

(END VIDEOTAPE)

KARL: Just a few minutes ago, Trent Lott, the majority leader of -- at least for a few more days, the majority leader of the U.S. Senate -- said that Republican held the line on the tax cut and got largely what the president wanted. The president, of course, did want $1.6 trillion tax cut, this one $1.35 trillion, as far as Republicans are concerned, close enough to call a victory.

(BEGIN VIDEO CLIP)

SEN. PHIL GRAMM (R), TEXAS: This is a great day for the people who do the work and pay the taxes and pull the wagon in America.

(END VIDEO CLIP)

KARL: Now, there were, of course, 12, it looks like 12 Democrats who in the end came along and supported the Republicans in the Senate on this tax cut, and more than 20 that did so in the House of Representatives. But overwhelmingly, the Democratic leadership is saying that this is a bad tax cut, that the Senate will learn to -- live to regret, that it will explode the deficits in the future and provide unfair advantages to the wealthy.

(BEGIN VIDEO CLIP)

SEN. RICHARD DURBIN (D), ILLINOIS: In 10 years, the baby boomers will show up for Social Security and Medicare. When they show up, we better be prepared. We promised them those programs would be ready and funded. But there is absolutely no way to fund this tax bill without raiding the Social Security trust fund as well as Medicare benefits. That is it totally irresponsible.

(END VIDEO CLIP)

KARL: With final passage of this tax cut, all that left is before it becomes law is the president's signature. And White House says the president plans to sign this bill into law when Congress returns from its week-long Memorial Day recess, that will be the week of June 5. Also, at that time, Jim Jeffords, in a side note here, will become an independent and turn over control of the U.S. Senate to the Democrats -- Donna.

KELLEY: Jonathan, can you kind of update us where they are in a procedure? They have had this debate that they started at 10:00 a.m. Eastern time, and now when do they start the final voting? The voting has just kind of been tallied, when you said we are getting to about 60 votes for it. Where are we in the procedure?

KARL: We have completely passed the House of Representatives, and we have enough votes to completely pass in the United States Senate. The reason why the vote is being held up open is there are a couple senators who were not able to get here yet. They're leaving the votes open, it's just a technicality. All of the votes -- enough votes have been cast to pass this.

One senator who is not here is Joe Lieberman. He actually has to walk from his home in Georgetown, so they wanted to give him time to get here. Joe Lieberman observes the Sabbath, and as a result, does not use any motorized vehicles on the Sabbath. So, they needed to give him time to get here to cast his vote. There are a couple of other senators who have not been able to get here yet.

This, of course, being a Saturday, not usually the kind of day you see the Senate in session, so they are allowing the voting to take some time, but this is done as far as the Congress is concerned, and all that remains for those final votes to be cast, the gavel to be put down and the final vote tally to be announced.

KELLEY: OK. Interesting. Jonathan Karl from the Hill, thank you very much.

And for more on the compromised tax cut package we go to CNN White House correspondent Kelly Wallace -- Kelly.

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Well, Donna, we have learned that President Bush will be returning to the White House. He was spending the weekend up at presidential retreat at Camp David. We understand he will be returning to the White House to make a statement about this bill which has now passed the House and the Senate.

As you know, Mr. Bush made this the centerpiece of his presidential campaign. He also said it was going to be one of his top domestic priorities this year, and so it is no surprise the White House is hailing this as a major bipartisan victory.

Now, as Jon noted, the president not getting everything he wanted. He certainly pushed for a larger tax cut. He also pushed for reducing the highest income tax rates larger than what House and Senate lawmakers ultimately decided to do. Still, the White House is saying, this is an example of the president fighting for his agenda and getting it passed in the Congress.

Last night, after the House and Senate lawmakers reached a compromise, the president issued a statement. In that statement he said, quote: "As a result of this landmark tax relief agreement, the American taxpayers will have more money in their pockets to save and invest, and the economy will receive a much-needed shot in the arm."

The president also commending the Republicans and the Democrats, who, he says, were responsible for this. Now, the president, as Jon noted, will be signing this into law. He wanted it when he had said he wanted to get this bill to his desk by Memorial Day. That will happen. The president's chief of staff, Andrew Card, telling CNN Mr. Bush will sign this when lawmakers return from their Memorial Day recess.

(BEGIN VIDEO CLIP)

ANDREW CARD, WHITE HOUSE CHIEF OF STAFF: The tax relief is important, and he will sign it when it reaches his desk and is ready and members of Congress are ready to be part of the celebration, because this was an effort that the president led, but it could not have been accomplished without the cooperation of solid Republicans and solid Democrats in the House and in the Senate.

(END VIDEO CLIP)

WALLACE: There is a bit of an ironic twist here, though. The White House major victory here may have contributed, excuse me, to a monumental loss since Senator Jim Jeffords of Vermont cited the president's budget and his $1.6 trillion tax cut proposal as reasons he felt his moderate views were out of sink with this White House and Republicans in the Senate, and that is why he ultimately decided to leave the Republican Party and become an independent, which leads to giving Democrats control of the Senate, and leading some observers, Donna, to say that this bill, once the president signs it, could be the last major piece of legislation he signs into law this year -- Donna.

KELLEY: Kelly Wallace at the White House, thanks very much.

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