Return to Transcripts main page
American Morning
Competing Adjustments Offered to Tax Cut Plan
Aired June 03, 2003 - 09:35 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.
DARYN KAGAN, CNN ANCHOR: Let's check in on Capitol Hill now, new tax cut developments to tell you about. Critics saying the child credit in the tax cut law that just became law and actually offered little help for low-income households, Senate (AUDIO GAP) correspondent Jonathan Karl is live from Capitol Hill -- Jon, good morning.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Daryn. And this may be the most popular component of the tax cut, because it's the one that will actually send checks out to working families right now, this summer: $400 check for families that are eligible that have -- for each child. So two children, $800. Three children, $1200.
The problem is that in last minute negotiations between the House and the Senate, the provision that would have also given that $400 check to low-income families that don't pay income taxes but work was dropped. So now, Senator Grassley -- and there is also a competing Democratic proposal -- has proposed a fix.
Here's what Grassley's plan would do. He would, first of all, say that families that make between $10,500 and $26,600, those families that were left out in that last-minute change, would now get this refundable tax credit.
They, too, would get checks under Grassley's plan. He would also do something else that's quite costly. He would extend the tax cut, making it permanent for all eligible families, including middle income and upper income families. They would also get this tax cut, not for two years which is what they did in this bill, but permanently.
All told, we're talking about adding more than $60 billion to the cost of the tax cut, and possibly much more than $60 billion.
So this is something that Chuck Grassley says if Democrats want to complain about the fact that low-income families were left out, fine. Let's just have another tax cut. We talked to Senator Grassley about this. He said that the blame for leaving low-income families out actually rests with Democrats for insisting that the tax cut could be no bigger than $350 dollars.
(BEGIN VIDEO CLIP)
SEN. CHUCK GRASSLEY (R-IA), CHAIR, SENATE FINANCE COMMITTEE: I'm saying that -- that we passed it in the Senate because we believed in it. And it's a good thing to tie the two together, and if it hadn't been for the $350 billion cap on the tax bill that was imposed upon us by Democrats not wanting to cooperate with us, it would have been done in the first place.
(END VIDEO CLIP)
KARL: So you think this might be a done deal. Republicans are saying they want to provide this tax credit for low incomes, Democrats are complaining it was left out. But Daryn, it is not a done deal, because you also have a controversy over how to do this.
Democrats are insisting that if you're going to have this additional tax credit, you're going to have to pay for it by reducing some of those tax cuts that were passed for upper income families. So you can imagine, Daryn, that this will be a point of controversy in the weeks ahead. You thought that tax debate was over. No, it's not over.
KAGAN: Apparently not quite yet. Jonathan Karl on Capitol Hill. Jon, thanks.
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 June 3, 2003 - 09:35 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Let's check in on Capitol Hill now, new tax cut developments to tell you about. Critics saying the child credit in the tax cut law that just became law and actually offered little help for low-income households, Senate (AUDIO GAP) correspondent Jonathan Karl is live from Capitol Hill -- Jon, good morning.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Daryn. And this may be the most popular component of the tax cut, because it's the one that will actually send checks out to working families right now, this summer: $400 check for families that are eligible that have -- for each child. So two children, $800. Three children, $1200.
The problem is that in last minute negotiations between the House and the Senate, the provision that would have also given that $400 check to low-income families that don't pay income taxes but work was dropped. So now, Senator Grassley -- and there is also a competing Democratic proposal -- has proposed a fix.
Here's what Grassley's plan would do. He would, first of all, say that families that make between $10,500 and $26,600, those families that were left out in that last-minute change, would now get this refundable tax credit.
They, too, would get checks under Grassley's plan. He would also do something else that's quite costly. He would extend the tax cut, making it permanent for all eligible families, including middle income and upper income families. They would also get this tax cut, not for two years which is what they did in this bill, but permanently.
All told, we're talking about adding more than $60 billion to the cost of the tax cut, and possibly much more than $60 billion.
So this is something that Chuck Grassley says if Democrats want to complain about the fact that low-income families were left out, fine. Let's just have another tax cut. We talked to Senator Grassley about this. He said that the blame for leaving low-income families out actually rests with Democrats for insisting that the tax cut could be no bigger than $350 dollars.
(BEGIN VIDEO CLIP)
SEN. CHUCK GRASSLEY (R-IA), CHAIR, SENATE FINANCE COMMITTEE: I'm saying that -- that we passed it in the Senate because we believed in it. And it's a good thing to tie the two together, and if it hadn't been for the $350 billion cap on the tax bill that was imposed upon us by Democrats not wanting to cooperate with us, it would have been done in the first place.
(END VIDEO CLIP)
KARL: So you think this might be a done deal. Republicans are saying they want to provide this tax credit for low incomes, Democrats are complaining it was left out. But Daryn, it is not a done deal, because you also have a controversy over how to do this.
Democrats are insisting that if you're going to have this additional tax credit, you're going to have to pay for it by reducing some of those tax cuts that were passed for upper income families. So you can imagine, Daryn, that this will be a point of controversy in the weeks ahead. You thought that tax debate was over. No, it's not over.
KAGAN: Apparently not quite yet. Jonathan Karl on Capitol Hill. Jon, thanks.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
