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LIVE FROM THE HEADLINES

House and Senate Reach Tax Cut Deal

Aired May 21, 2003 - 19:28   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DARYN KAGAN, CNN ANCHOR: Congress strikes a deal tonight on President Bush's tax cut plan. With some pushing from Vice President Dick Cheney, negotiators from the House and Senate have now agreed to $350 billion in tax cuts over the next 10 years. The president said that a much bigger tax cut package would have been better for the economy.
Congressional correspondent Jon Karl is on Capitol Hill with the details.

Jon, good evening.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Good evening, Daryn.

Well, this is a tax cut that could send checks of $400 out to families for every child when it's put into law later, possibly as soon as Monday. What happened here is, this tax cut looked virtually dead today. And the vice president personally intervened up here on Capitol Hill, meeting with the key players in one key meeting that lasted 90 minutes with the chairman of the Ways and Means Committee.

When they emerged, this was the deal: a $350 billion tax cut, again, much smaller than what the president wanted. But it includes a temporary cut in the capital gains tax and the tax on dividends. It also includes an increase in the child tax credit to $1,000 from $600. That's where you would get your $400 check that could be mailed out possibly by two months from now. And there's also $20 billion in aid to the states in this bill.

Now, there's also a reduction in income tax rates that may also result in more money in your paycheck by mid-summer, when these tax rates go into effect. This was a deal that was crafted with the vice president's strong influence, but much of it is temporary. That's how they fit this all in to the tax cut, Daryn. The tax credit on children, for instance, is only two years. It's this year and next year. And then it goes back to current law.

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