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Dividend Taxes Axed in $350 Billion Senate Plan
Aired May 16, 2003 - 14:44 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.
KYRA PHILLIPS, CNN ANCHOR: President Bush is sure to get a lot of tax relief that he wants. But a Senate-House conference committee will decide how much. The latest action comes from the Senate, as Jonathan Karl reports now.
Hi, Jon.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Hi, Kyra.
This was really quite a victory for Republicans up here and for the White House from just a few weeks ago when people were essentially declaring the president's economic plan stalled here on Capitol hill, facing opposition from fellow Republicans. But this time, he got it through, and he got it through with the support of some key Democrats.
(BEGIN VIDEOTAPE)
RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: On this vote, the yeas are 50 the nays are 50, the Senate being equally divided, the vice president votes in the affirmative and the amendment from the senator from Oklahoma is agreed to.
KARL (voice-over): With a tie-breaking assist from the vice- president, Republicans scored a significant if not complete victory for the president's economic plan.
SEN. JON KYL (R), ARIZONA: This was a real victory tonight, not only for President Bush and for the Republican Senate and the Finance Committee and the leadership, but, of course, for the American people.
KARL: The victory comes after President Bush aggressively courted key Democratic senators, especially Ben Nelson of Nebraska.
Nelson, however, insists his support has nothing to do with White House pressure.
SEN. BEN NELSON (D), NEBRASKA: I don't mean to, in any way, demean the presidency. But it's not about pressure from the White House or anything like that. It's about the contents of the plan because I think that's what's the most important part of what we're doing here.
KARL: Republicans won Nelson's backing by agreeing to include $20 billion in aid to cash-strapped state and local governments. The bill would completely eliminate the tax on dividends, the White House's highest priority. But it took some creative accounting to do that.
SEN. MAX BAUCUS (D), MONTANA: This is a huge yo-yo tax provision. Now you see it, now you don't.
KARL: The dividend cut would last just four years and the bill includes approximately $90 billion in so-called offsets, effectively tax increases, to keep the total cost of the tax cuts at $350 billion.
In addition to temporarily eliminating the tax on dividends, the bill would reduce income tax rates, increase the child tax credit and give small businesses a tax break on new equipment purchases.
(END VIDEOTAPE)
KARL: On the final vote late last night, there were three Democrats that voted for the tax cut. They included Zell Miller, who was one of the original co-sponsors, but also Ben Nelson of Nebraska and Evan Bayh of Indiana. What's significant about that is Nebraska and Indiana are both states that the president was out campaigning for his tax cut just this week. The president, the White House targeted those two Democratic senators and it seemed to have worked. They both came on in the end and he needed those two votes -- Kyra.
PHILLIPS: Jonathan Karl from Capitol Hill, thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired May 16, 2003 - 14:44 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: President Bush is sure to get a lot of tax relief that he wants. But a Senate-House conference committee will decide how much. The latest action comes from the Senate, as Jonathan Karl reports now.
Hi, Jon.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Hi, Kyra.
This was really quite a victory for Republicans up here and for the White House from just a few weeks ago when people were essentially declaring the president's economic plan stalled here on Capitol hill, facing opposition from fellow Republicans. But this time, he got it through, and he got it through with the support of some key Democrats.
(BEGIN VIDEOTAPE)
RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: On this vote, the yeas are 50 the nays are 50, the Senate being equally divided, the vice president votes in the affirmative and the amendment from the senator from Oklahoma is agreed to.
KARL (voice-over): With a tie-breaking assist from the vice- president, Republicans scored a significant if not complete victory for the president's economic plan.
SEN. JON KYL (R), ARIZONA: This was a real victory tonight, not only for President Bush and for the Republican Senate and the Finance Committee and the leadership, but, of course, for the American people.
KARL: The victory comes after President Bush aggressively courted key Democratic senators, especially Ben Nelson of Nebraska.
Nelson, however, insists his support has nothing to do with White House pressure.
SEN. BEN NELSON (D), NEBRASKA: I don't mean to, in any way, demean the presidency. But it's not about pressure from the White House or anything like that. It's about the contents of the plan because I think that's what's the most important part of what we're doing here.
KARL: Republicans won Nelson's backing by agreeing to include $20 billion in aid to cash-strapped state and local governments. The bill would completely eliminate the tax on dividends, the White House's highest priority. But it took some creative accounting to do that.
SEN. MAX BAUCUS (D), MONTANA: This is a huge yo-yo tax provision. Now you see it, now you don't.
KARL: The dividend cut would last just four years and the bill includes approximately $90 billion in so-called offsets, effectively tax increases, to keep the total cost of the tax cuts at $350 billion.
In addition to temporarily eliminating the tax on dividends, the bill would reduce income tax rates, increase the child tax credit and give small businesses a tax break on new equipment purchases.
(END VIDEOTAPE)
KARL: On the final vote late last night, there were three Democrats that voted for the tax cut. They included Zell Miller, who was one of the original co-sponsors, but also Ben Nelson of Nebraska and Evan Bayh of Indiana. What's significant about that is Nebraska and Indiana are both states that the president was out campaigning for his tax cut just this week. The president, the White House targeted those two Democratic senators and it seemed to have worked. They both came on in the end and he needed those two votes -- Kyra.
PHILLIPS: Jonathan Karl from Capitol Hill, thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
