House Passes Bush Tax Cut Bill

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Dateline: 03/08/01

By a vote of 230-198, the House today approved H.R. 3, the bill comprising the core of President Bush's $1.6 trillion, 10 year tax cut plan. Ten Democrats voted for the Republican-backed bill, while no Republicans voted in opposition.

Under the bill as approved by the House today, the current 39.6, 36, 31, 28 and 15 percent tax brackets would be combined into four brackets of 33, 25, 15 and 10 over five years. In addition, a 12 percent bracket for the first $12,000 of income for married couples and $6,000 for single persons would go into effect, retroactive to Jan, 1, 2001. [See: Bush Tax Cuts: It's Your Money]

Total tax relief for 2001 provided by the bill would be about $5.6 billion.

Democrats opposed to the bill objected to passing a tax cut bill, before adopting a budget resolution. "This is happening without a budget, without hearings, without input from anybody," stated House Democratic Leader Dick Gephardt of Missouri during debate.

While federal budget analysts have placed the 10-year cost of the tax cut plan in H.R. 3 at $958 billion, Republicans argued that the taxpayers deserved the cuts to the tax rates. "There's a reason this government is amassing record-breaking surpluses. It's because people are sending too much of their money to Washington," stated Rep. Thomas M. Reynolds (R-NY).

Democrats opposed to the bill countered that Bush's tax cuts would help taxpayers who needed it the least with some 40 percent of the plan's tax relief going to the top 1 percent of wage earners.

Ranking Democratic member of the House Ways and Means Committee Rep. Charles Rangel (D-NY) addressed the House stating, "The Republican tax bill on the floor today is still unfair to many Americans."

A Democratic alternative plan, featuring smaller tax cuts totaling $585 billion over 10 years, was offered by Rep. Rangel and defeated by a 155-273 vote.

The bill is expected to have a more difficult time winning approval in the Senate. Not only is the Senate evenly divided between 50 Republicans and 50 Democrats, some Republican Senators have expressed reservations with the bill as written.

Other elements of the Bus tax cut reduction plan, including doubled child tax credits, elimination of the estate tax and reduction of taxes for married couples, will be considered by Congress later this year.