President Bush says new tax cuts will help revive the struggling U.S. economy. Congress this week passed $330 billion in tax cuts that Democrats say will lead to higher deficits.
President Bush says Congress took "vital action" to create more jobs by cutting income taxes and boosting the amount of money small businesses can deduct for investing in new equipment.
"A higher expensing allowance will help small firms, including farms and ranches, to buy new equipment so they can become more productive and expand their operations. They will also have more money to add new employees," the president said.
The tax cuts are less than half of what the president originally requested. But he will sign the compromise plan in the coming week because he says it will strengthen the economy by reducing taxes on corporate dividends and giving parents a bigger tax credit for their children.
"By leaving American families with more to spend, more to save and more to invest, these reforms will help boost the nation's economy and create jobs," he said. " When people have extra take-home pay there's greater demand for goods and services. And employers will need more workers to meet that demand."
The Republican-controlled Senate Friday approved the plan over Democratic objections by a 51-50 margin, with a vote from Vice President Dick Cheney breaking the tie.
Congressional Democrats say the tax cuts unfairly favor the rich and will ultimately lead to higher deficits. In his weekly radio address, the president promised to work toward lowering a deficit made worse by the costs of war, recession, and terrorist attacks.
"Faster growth in the economy will bring more revenues into the federal Treasury. Yet moving toward a balanced budget also requires that we hold federal spending to a responsible level," the president said.
Mr. Bush called on Congress to keep spending within the current budget which projects growth of about four percent.
The timing of the tax cuts could provide some stimulus for the economy and calm voters' financial concerns, by summer's end when campaigning for next year's presidential election heats up.
The White House wants to keep voters focused on the president's popular role as Commander-in-Chief in the fight against terrorism. Nine Democratic challengers hope to unseat Mr. Bush by focusing on a sluggish economy.
