TOPICS > Economy

Tax Deal

May 22, 2003 at 12:00 AM EST

TRANSCRIPT

KWAME HOLMAN: Making a rare trip to the Capitol this morning, President Bush thanked House and Senate Republicans for compromising on a tax cut plan.

PRESIDENT GEORGE W. BUSH: This bill I’m going to sign is good for American workers, it is good for American families, it is good for American investors, and it’s good for American entrepreneurs and small business owners.

KWAME HOLMAN: Senate Democratic Leader Tom Daschle was brief and to the point in his response to the tax-cut compromise.

SEN.TOM DASCHLE: Two words: Reckless, irresponsible. You can’t say it any more succinctly than that.

KWAME HOLMAN: The plan– agreed to late last evening– calls for $350 billion in tax cuts and some new spending. The tax cuts would total $330 billion, half of what the president originally wanted. And the long-debated tax rate on dividends would be reduced to 15 percent, but not eliminated, as the president had lobbied for. The rate on capital gains also would be reduced to 15 percent. But in 2009, the current higher rates on both would return. Tax cuts passed two years ago would take effect immediately. That includes lower individual tax rates across the board. There’s a decrease in the so- called marriage penalty tax. The child tax credit would jump from $600 to $1,000. And investments small businesses may deduct would increase to $100,000 from $25,000. The legislation also provides $20 billion in emergency funding to state and local governments. During his Capitol appearance this morning, the president commended the Congress for working efficiently.

PRESIDENT GEORGE W. BUSH: This is a Congress which is able to identify problems facing the American people and get things done. These are “can do” people, and I’m real proud of the work they’ve done.

KWAME HOLMAN: But it wasn’t easy getting the deal ready for the House and Senate to take a final vote. A House-Senate Conference formally had to approve the deal this afternoon that gave House Democrats– left out of the negotiations on the bill itself– a chance to argue over where to go to conference and when. New York Democrat Charles Rangel.

REP. CHARLES RANGEL: We’ve heard the chair has already reached agreement with his Republican friends in the Senate. And I don’t know who’s going to be appointed as a conferee, but it’s abundantly clear that they have reported to the press that they’ve already decided what they’re going to do. And so, the whole idea that democracy is being taking place here has really been shattered by the fact that the Republicans have yet to come out of the dark room that they’ve been in to share with us, where will the conference be.

REP. BILL THOMAS: The gentleman from New York says he doesn’t know where the conference is. He doesn’t know when it’s going to meet. I told you I’m from New York, I don’t either. You know why? As the gentleman well knows, the Senate is organizing this conference. It is the Senate chairman of Finance who will be the chairman of the conference. They organized it, they structure it. If we can get this motion to instruct behind us, I would have preferred yielding back time, but obviously statements need to be made, maybe we’ll find out where it is.

KWAME HOLMAN: Thomas and Rangel eventually found the meeting. But sensing Democratic complaints would not be aired, Rangel started wondering whether he was in the right room.

SEN. CHARLES RANGEL: I feel, it’s nice meeting with you senators, but is this the tax conference?

SPOKESMAN: This is the tax conference.

SEN. CHARLES RANGEL: This is different, and I’m learning.

KWAME HOLMAN: Sen. Democrat Jay Rockefeller of West Virginia.

SEN. JAY ROCKEFELLER: This is not the way Congress is meant to work, this is not the way democracy is meant to work, you may have the votes, but I think you’re losing a lot more today than some of you realize.

KWAME HOLMAN: In fact, the road to the compromise on the tax plan has been anything but smooth. It took months. And just yesterday, House Ways and Means Chairman Bill Thomas reportedly stormed out of a meeting with his Senate counterpart, Finance Committee chairman Chuck Grassley after the two disagreed on the final size of the tax cut. Grassley was constrained by a handful of moderates from his own party, including Ohio’s George Voinovich, who insisted tax cuts total no more than the $350 billion negotiators finally agreed to.

Late yesterday afternoon, Grassley asked Vice President Cheney for help in brokering the deal. Soon afterward, he arrived on Capitol Hill for a rare negotiating session with leaders from both Houses. As staffers and senators shuffled in and out of leadership offices, and journalists waited for final word on a deal, the vice president reportedly gave Senator Voinovich just what he wanted: A tax plan that would not exceed $350 billion, and funding for states. With that, Senate Majority Leader Bill Frist assured the pursuing press corps a deal had been cut, with enough votes in the Senate to pass it. Late this afternoon, Republican leaders worked on final details of the bill, aiming to clear the way for House approval late tonight and in the Senate tomorrow, with President Bush eager to sign the tax-cuts into law.