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Bush Unveils $674 Billion Economic Plan
Reuters via Yahoo ^ | 1/7/03

Posted on 01/07/2003 11:04:15 AM PST by B-bone

Bush Unveils $674 Billion Economic Plan

CHICAGO (Reuters) - President Bush (news - web sites) on Tuesday proposed a $674 billion boost for a struggling U.S. economy with measures including an end to taxes that shareholders pay on dividends -- a move denounced by Democrats as a politically motivated windfall for the rich.

"I will ask members of both parties to work with me to secure our economic future. We cannot be satisfied until every part of our economy is healthy and vigorous," Bush said in a speech to the Economic Club of Chicago.

The "growth and jobs" package aims to kick-start the U.S. economy by encouraging consumer spending, promoting investment that will create jobs and helping the unemployed.

It will include the acceleration of across-the-board rate cuts, immediate tax relief for married couples and families with children, and bigger incentives for small businesses to invest in new equipment.

In all the White House says it will give 92 million taxpayers an average tax cut of $1,083 this year. Up to 35 million people who get income from dividends could benefit.


TOPICS: Breaking News; Government; News/Current Events
KEYWORDS: bush; economicplan; taxes
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I didn't see this posted. I heard parts of the speech but haven't seen a transcript yet.

I'm looking forward to seeing most of this enacted.

1 posted on 01/07/2003 11:04:15 AM PST by B-bone
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To: B-bone

What a great speech!

Bush Unveils Economic Stimulus Plan
Tuesday, January 07, 2003

WASHINGTON — President Bush will seek to make 2001's $1.35 trillion tax cut plan permanent and accelerate cuts slated for 2010 as part of his $674 billion economic stimulus package, he said Tuesday.

"Americans are scheduled to receive tax cuts in 2004 and 2006 ... and the time to deliver tax rate reductions is now, when they can do the most good for American businesses," Bush said in a speech to the Economic Club of Chicago.

Bush said the nation was hit by a triple-whammy -- recession, terror attacks and corporate scandal -- but the economy is still moving forward.

"In spite of successes we have more work to do, because too many of our citizens who want to work can't find a job and many of our busineses don't have the confidence to invest and create new jobs."

Bush said more needs to be done, and called on Congress to accelerate the tax break for married couples, scheduled for 2009, and speed up the tax credit for families with children, who aren't scheduled to get the break until 2010.

"A family of four with two earners and $39,000 in income would receive more than $1,100 in tax relief real money to help pay the bills and push the economy forward," Bush said "And the sooner Congress acts, the sooner help will come."

Under the president's plan, 92 million taxpayers will get an average $1,083 tax break, as tax cuts scheduled for 2004 and 2006 are phased in this year instead. The child credit would give an additional $400 to 34 million families who currently claim up to $600.

The cost of the bill will be $102 billion this year. The 10-year cost of the child credit is $91 billion, the marriage penalty reduction is $58 billion and reducing the marginal rates is $64 billion.

The administration's fact sheet on the plan estimated that 46 million married couples would receive an average tax cut of $1,716 this year, while 23 million small business owners would receive tax cuts averaging $2,042. The tax cuts would be retroactive to Jan. 1.

The plan would also eliminate taxes shareholders pay on dividends. According to the president, since companies must already pay a tax on the dividends before they are distributed, they are currently taxed twice.

"I am asking the United States to abolish the double taxation of dividends," Bush said.

Democrats, however, complained that the president's plan is aimed at the wealthiest Americans.

"Most Americans who have investments in the stock market have it through their IRA or their 401K, so that is tax-free anyway," said House Democratic leader Nancy Pelosi of California.

The Urban Institute-Brookings Institution Tax Policy Center estimates that 41 percent of the benefits would go to the elderly, but most of that would go to wealthy retirees. Only 6 percent of the benefits would go to elderly people with incomes below $50,000.

On Monday, Democrats announced a $136 billion plan they say targets the people who actually need the help.

Democrats want to give a $300 tax credit to all taxpayers, even those who don't make enough to owe anything. They also propose a couple of business incentives, including a deduction for new investment.

Democrats want to double the amount of investments -- from $25,000 to $50,000 -- that small businesses can claim as a deduction on their income taxes. They would expand a bonus program for businesses who make large investments, but would require them to make the purchases this year.

Under the Democratic plan, states would get $31 billion for homeland security, highway, Medicaid and unemployment insurance programs.

A White House aide criticized the Democratic plan, saying that shifting federal money to states is not a stimulus.

And Evans said the Democrats' package is mainly a spending plan that may help some people temporarily but doesn't benefit the economy much.

"You've got a choice to make. Do you want to put the money in the hands of the American people in the form of tax cuts and create incentive for this economy to grow or do you want to spend? And I think the president made it very clear (he wants to) put the money in the hands of the American people, and let them spend it," Evans said.

On Tuesday, Bush also proposed "re-employment accounts" of up to $3,000 that people can use for child care, transportation and other costs of finding a new job.

The $3.6 billion, two-year plan would put $3,000 into individual accounts for unemployed job hunters to draw from to pay for child care, job training, transportation, moving costs and other expenses of finding a job, senior White House officials said.

A person who lands a job in 13 weeks would be able to keep any money left over in their account, the officials said.

The officials, who spoke on condition of anonymity, said 60 percent of the bonus money would go to the person when they get a new job. The rest will be awarded after six months on the job.

The $3.6 billion will divided among states based on their levels of unemployed.

Republicans and Democrats do agree on the need to help the nearly 800,000 workers who have received nearly a year of unemployment benefits so far but who are still looking for jobs. Benefits expired at the end of December.

The Senate agreed by a voice vote on Tuesday to extend benefits by 13 weeks. A bill must be presented to the president by Thursday to avoid an interruption in benefits .


2 posted on 01/07/2003 11:06:24 AM PST by RobFromGa
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To: B-bone
I could really make do with an extra $1100 or so. $600 to invest and $500 to spend!
3 posted on 01/07/2003 11:06:49 AM PST by xrp
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To: B-bone
Did I hear Bush's speech correctly in that he is proposing accelerating all of the tax cuts in his previous tax package so that they retroactively come into effect on January 1, 2003 or did I hear that part wrong?
4 posted on 01/07/2003 11:07:33 AM PST by vbmoneyspender
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To: RobFromGa
It was a good speech wasn't it.

I love his plain spoken manner.
5 posted on 01/07/2003 11:09:19 AM PST by B-bone
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To: vbmoneyspender
You heard it right. Bush is going for it. Way to go W!!
6 posted on 01/07/2003 11:10:10 AM PST by Wphile
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To: vbmoneyspender
I also understood that it would be retroactive to 1/1/03. I'm not sure if it applies to everything, but I am under the impression that it does.
7 posted on 01/07/2003 11:10:31 AM PST by B-bone
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To: vbmoneyspender
you heard right. Also, note how the DemoncRATs and their allies in the media always take the amounts over 10+ years and then ask questions without any context? For example, asking somebody, "do you think 600 billion out of 30 trillion dollars is very much?" is a lot different than "do you think 600 billion for the wealthy is to much of a giveaway for the rich?"
8 posted on 01/07/2003 11:11:34 AM PST by Steven W.
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To: xrp
Yahoo. Give me back some of MY money. Go W.
9 posted on 01/07/2003 11:13:01 AM PST by snippy_about_it
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To: B-bone
I heard most of President Bush's speech - it sounded wonderful to me. Great speech, but so many people will never hear it, except for a small soundbyte tonight while they're rushing to get dinner on the table. I wonder why he chose to give the speech at 1:15PM ET when most people are working. Wouldn't it have been better delivered during "prime time" tonight? Gives the 'RAT media too many hours to spin it back to "tax cuts for the rich" in time for the 6:30PM news.


10 posted on 01/07/2003 11:13:43 AM PST by nutmeg (I hate 'RATs!)
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To: vbmoneyspender
Thats what he said, all the tax cuts now, retroactive to Jan 1, 2003. Here are the proposed brackets: 10%, 15%, 25%, 28%, 33%, 35%

There's more detail on todays plan at White House Economic Security Agenda

11 posted on 01/07/2003 11:13:58 AM PST by RobFromGa
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To: Wphile
pretty incredible. It's nice having a president with brass pelotas.
12 posted on 01/07/2003 11:15:40 AM PST by vbmoneyspender
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Comment #13 Removed by Moderator

To: RobFromGa
Bad link above, should be:

White House Economic Security Plan


14 posted on 01/07/2003 11:16:11 AM PST by RobFromGa
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To: B-bone
an end to taxes that shareholders pay on dividends -- a move denounced by Democrats as a politically motivated windfall for the rich.

The Democrats are idiots if they think only the rich own equities. I am firmly, inextricably entrenched in the middle class, and the owner of some stocks. Every year, I have to pay income taxes on the few hundred dollars in dividends earned. This is ridiculous. It's time for all of us "not rich" to let the Dems know that we welcome even the slightest of reductions in the monstrous burden that is the federal income tax.

15 posted on 01/07/2003 11:16:25 AM PST by mountaineer
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Comment #16 Removed by Moderator

To: nutmeg
Today was just the set. The spike will be in the President's State of the Union address when Bush will have an opportunity to set the record straight.
17 posted on 01/07/2003 11:17:04 AM PST by gov_bean_ counter
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To: B-bone
I hope it gets enacted, too. The Spin machine is cranking up already,though. CNN is already talking about the "so-called marriage tax penalty".

Nothing so-called about it. It exists. Period.

18 posted on 01/07/2003 11:18:12 AM PST by wbill
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To: Darklon
I am SICK of neo-conservative transitionalism. Why won't Bushie sign an executive order to remove all taxes?

Hmm, an Executive Order to overturn a law passed by Congress? Yeah, we need more of those.
/sarcasm

19 posted on 01/07/2003 11:18:31 AM PST by mountaineer
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To: vbmoneyspender
You heard correctly..retroactive as of Jan. 1, 2003
20 posted on 01/07/2003 11:18:35 AM PST by smiley
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