Table: The Impact of Tax Relief
WHITE HOUSE CLOUT
If the coalition that passed the tax bill hangs together, it may mean future wins for Bush in health care, education, and business tax cuts.
By providing a modest boost to consumer spending this year, it could raise GDP growth by about 0.5%. Still, most tax-payers won't benefit much until 2002.
Trimming marginal tax rates should eventually provide some stimulus. But the slow phase-ins of top-bracket cuts will dull that impact, while the lack of business tax relief will limit any boost in capital spending.
Funding the tax cut means Bush may have trouble coming up with money to bankroll a shift to Social Security private accounts.
Pressure on Congress to hold down domestic spending will grow. But Bush may have to delay Pentagon projects like the Star Wars missile-defense system.