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News & Views |House and Senate GOP Negotiators Strike Tentative Budget, Tax Cut DealWednesday, May 2, 2001 Deloitte & Touche OnLine House and Senate Republicans reached a tentative agreement May 1 on a fiscal year 2002 budget proposal that includes $1.25 trillion in tax cuts between 2002 and 2011. The agreement also would provide an immediate $100 billion tax cut as an economic stimulus package. 'We have more work to do to complete the full budget, but today we have accomplished significant tax relief,' said President Bush. 'This is a great day for the American people and for the American taxpayer.' The lower ceiling in today’s budget deal reflects the reality that a majority of the Senate will go no higher than the $1.25 trillion tax relief target put forward by Sen. John Breaux, D-La., and other moderates. It clearly signals the end of the line for the $1.6 trillion tax cut advocated by the White House and congressional Republicans. The agreement appears to clear the way for
congressional action on a fiscal year 2002 budget resolution, although
hurdles remain. The president has said
consistently that he wants an across-the-board cut in individual income
tax rates. If that happens, other tax measures -- such as marriage
penalty relief, doubling of the child tax credit, and the repeal of the
estate tax -- will have to be scaled back or
dropped entirely to fit under the new ceiling. The budget resolution determines the size of the tax
relief package in this year’s tax bill. The House Ways and Means
Committee and the Senate Finance Committee will determine the actual
design of the package.
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