Navigation

2001 Economic Growth and Tax Relief Reconciliation Act

SUMMARY:

The Economic Growth and Tax Relief Reconciliation Act of 2001 was the first major tax cut legislation signed into law by President George W. Bush. The tax cuts were to be temporary, lasting 9 years before expiring in December 2010. The legislation was carried with Republican votes and those of a handful of Democrats.

DESCRIPTION:

The question of what the federal government should do with the large budget surpluses of the late 1990s was a major issue during the 2000 presidential election. Democratic candidate Vice-President Al Gore argued that the surplus should be reserved in a "lock-box" to ensure the solvency of Social Security for generations. Texas governor and Republican candidate George W. Bush insisted the surplus were funds owed to the American people and should be returned to them in form of tax cuts.

Shortly after Bush was inaugurated in January 2001, he and the Republican-controlled Congress began pushing for a package of robust tax cuts. The original Republican planned called for tax cuts that favored wealthier Americans. However, Democrats, newly in majority in the Senate after the defection of Senator Jeffords to their caucus in May, negotiated a compromise package that provided additional tax breaks to Americans of more modest means. The cuts included: a reduction in income taxes, the elimination of the so-called ‘marriage penalty,’ the end of the estate tax, and an increase in the child tax credit. Congress estimate the total cost of these tax cuts to be at least $1.4 trillion through fiscal year 2011.

The legislation was signed into law by President Bush on June 7, 2001. This legislation and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (Pub. Law No.: 108-27) are known collectively as the "Bush Tax Cuts."

FURTHER INFORMATION:

Economic Growth and Tax Relief Reconciliation Act of 2001 (Pub. Law No.: 107-16). http://www.irs.gov/pub/irs-utl/egtrra_law.pdf

"Personal Income Tax Cut, 2001-2002 Legislative Chronology." In Congress and the Nation, 2001-2004, vol. 11, 89. Washington, DC: CQ Press, 2006. http://library.cqpress.com/catn/catn01-426-18052-964198.

Copyright © 2011 The Regents of the University of California. All Rights Reserved
Comments & Suggestions | Last Updated: 03/07/11 | Server manager: Contact

University of California, Berkeley The Bancroft Library Regional Oral History Office Slaying the Dragon of Debt: Home Resources Multimedia Interviews News Timeline About Home