[Kyra Phillips, Cnn Anchor:] We begin in Washington, where the House is expected to pass a compromise tax cut bill this hour with the Senate following suit later today. That would satisfy President Bush's request of tax relief passage by Memorial Day. CNN White House correspondent Kelly Wallace is here with more details on the plan. Good morning, Kelly.
[Kelly Wallace, Cnn White House Correspondent:] Well, good morning, Kyra. As you know, President Bush made a tax cut the centerpiece of his presidential campaign. He said it was going to be one of his top priorities this year. And even though he is not getting exactly everything he wants, and even before the final vote, he is hailing it as a landmark tax relief agreement, one that will give the economy a much-needed shot in the arm. As you mentioned, Kyra, at this very hour, House lawmakers are taking part in a rare Memorial Day weekend session. At any moment, really, they are set to vote on the $1.35 trillion tax cut plan, this after House and Senate lawmakers reached a compromise late last night. Now, here is what it will mean for you. All taxpayers will be getting recent refunds checks in the mail, probably by August or September. Individuals will be getting $300, single parents will see $500, and married couples $600. Beyond that, all taxpayers are likely to see less money coming out of their paychecks in taxes over time, since all tax brackets will be reduced. The $1.35 trillion plan over 10 years cuts the lowest income tax bracket from 15 percent to 10 percent. What this means is that the first $6,000 of your income will be taxed at that lower rate. Also, the highest income tax rate, now at 39.6 percent, is lowered to 35 percent. That full cut, though, not phased in until about 2006. Now, there are many other provisions of this tax cut, the largest tax cut in about 20 years, including a doubling of the child tax credit from $500 to $1,000 by 2010. The president wanted this tax cut bill on his desk by Memorial Day. His chief of staff is hailing it as a terrific bipartisan victory. But many Democratic lawmakers have been coming to the House floor this morning to say that this plan is too large, that it is too generous to the wealthy. And House minority leader Richard Gephardt said it will return the country to the deficits of the 1980s.
[Rep. Richard Gephardt , Minority Leader:] I was thinking of proper titles for this bill. I'm sure it has some classy title that has been given it by its sponsors. How about "the special interest relief act"? How about "the Deficit Re-Creation Act"? How about "the Plunder Medicare and Social Security Act"?
[Wallace:] Now, this tax cut, one of the biggest legislative victories for this White House this year, it also comes after one of its probably most disappointing weeks, this after Vermont Senator Jim Jeffords announced he will be leaving the Republican Party and becoming an independent, leading to a Democratically controlled Senate in a short time from now. This, Kyra, has many observers believing this bill, once the president signs it, he's expected to sign it sometime during the week of June 5 when lawmakers return to Washington, may be the last major piece of legislation he signs this year Kyra.
[Phillips:] Kelly, with Jeffords' defection and this Senate power structure definitely taking a shift, what other agenda items do you see being affected pretty soon?
[Wallace:] Well, very soon. One definitely, the president's energy plan. As you know, he just sent up his plan to Congress just about two weeks ago. He wanted Congress to enact that plan by the July 4 weekend. That does not look to be very likely, because now you have a Democratically controlled Senate, you do have a Democratic chairman of the new Senate Energy and Environment Committee, Jeff Bingaman of New Mexico is very much against some of the provisions of the president's plan, such as drilling on public lands. Other issues, Kyra, when it comes to judicial nominations, the president likely not to get some conservatives on the federal bench. Also when it comes to health care, the president has put forth his version of a patients' bill of rights and his ideas for prescription drug coverage for seniors. But Democrats will look for a much more robust plan when it comes to both of those issues. And now the president will definitely have to be negotiating much more heavily with Democrats, because the Democrats will control what legislation gets to the Senate floor and exactly when Kyra.
[Phillips:] All right, Kelly Wallace, thanks so much. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com