The Administration strongly supports House passage of the Tax
Relief Guarantee Act of 2002. The Administration understands
that H.R. 586 is now being used as a vehicle for consideration
of the Tax Relief Guarantee Act. The Administration is particularly
pleased that the House is acting to make the President's tax
relief plan permanent.
The Economic Growth and Tax Relief Reconciliation Act of 2001
provided much needed tax relief to the American people and
laid the foundation for further long-term economic growth.
The key elements of this relief are: a reduction in income
tax rates, including a new low 10 percent rate; elimination
of the death tax; an increase in the child tax credit from
$500 to $1,000 per child; and a reduction in the marriage
penalty. Unfortunately, this relief expires at the end of
2010. Failure to make this tax relief permanent would penalize
every American who pays federal income taxes, specifically:
43 million married couples whose taxes, on average, would
be increased by $1,730;
11 million single mothers with children who would lose,
on average, $780 of their income;
13 million seniors whose taxes would be increased by $924
on average; and
3.9 million individuals and families who would have to start
paying income taxes again, having been removed from the
tax roles by last year's tax cut.
The Administration urges quick action in the Congress so that
Americans can make their plans for the future today.
The Administration is also pleased that the legislation includes
taxpayer protection and Internal Revenue Service (IRS) accountability
provisions proposed in the President's budget, notably the
15-day filing extension for electronically filed tax returns.
Any law that would reduce receipts or increase direct spending
is subject to the PAYGO requirements of the Balanced Budget
and Emergency Deficit Control Act (BEA) and could cause a
sequester of mandatory programs in any fiscal year through
2006. The requirement to score PAYGO costs expires on September
30, 2002, and there are no discretionary caps beyond 2002.
The Administration will work with Congress to ensure fiscal
discipline consistent with the President's budget and a quick
return to a balanced budget. The Administration will also
work with Congress to ensure that any unintended sequester
of spending does not occur.