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American Morning

President Bush to Sign Tax Cut Legislation Today

Aired June 07, 2001 - 09:06   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: And to the White House now, where President Bush soon will sign into law his first major piece of legislation. It's the $1.35 trillion tax cut bill.

CNN's White House Correspondent Kelly Wallace has more on what the cut could mean to you and the economy.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Rushing back to the White House Memorial Day weekend, President Bush hailed the $1.35 trillion tax cut just hours after it passed in Congress.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: An American president has the wonderful honor of letting the American people know significant tax relief is on the way.

WALLACE: Across-the-board cuts in all income tax rates are on the way: the lowest rate reduced from 15 to 10 percent; the highest rate from 39.6 to 35 percent. Once all rate cuts are phased in by 2010, including benefits for children and married couples, the average family of four making $50,000 will see a savings of $1,800 a year. And refund checks will start going out in mid-July for anyone who filed a tax return this year. Singles will get $300, single parents $500, and married couples $600.

Mr. Bush says the refunds will boost the economy, but economists say that depends on how much consumers spend.

MICHAEL GREGORY, SR. ECONOMIST, LEHMAN BROS.: To the extent that consumers end up either using the majority of it to pay down debt or simply to save for a rainy day, obviously, the economic impact is going to be a lot less.

WALLACE: And the new leader of the Senate says Congress will eventually be forced to revisit the bill, which he says is too large and too expensive.

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: I just know that at some point, that reality is going to come down -- crashing down on all of us and we're going to have to deal with this.

(END VIDEOTAPE) WALLACE: And just moments ago, three buses carrying members of Congress headed from Capitol Hill over here to the White House. At least 200 members of Congress are expected for this East Room event scheduled to begin about 40 minutes from now. The president will point to the tax bill as an example of how Republicans and Democrats can work together to get things done, but still a majority of Democrats did not vote for this measure. They believe it could return the country to the deficits of the 1980s.

And there is one other issue out there. With most of these tax cuts expiring in 10 years, House Republicans plan to push legislation to make cuts permanent now. That is not likely to happen, though, anytime soon now that Republicans are in control or no longer in control, rather, of the Senate.

Kelly Wallace, CNN, reporting live, from the White House.

LEON HARRIS, CNN ANCHOR: All right. Thank you, Kelly.

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