Bush Signs Tax Cut Bill

For the third time since taking office, President Bush signed a tax cut measure Wednesday to put money back into the pockets of individual taxpayers, investors and small business owners.

"By ensuring that Americans have more to spend, to save and to invest, this legislation is adding fuel to an economic recovery. We have taken aggressive action to strengthen the foundation of our country so that every American who wants to work will be able to find a job," Bush said during an East Room signing ceremony where he was flanked by congressional lawmakers who led the push in Congress, as well as Treasury Secretary John Snow, who lobbied on behalf of the White House.

With the signing of the 10-year, $330 billion tax cut (search), the third largest in history, the president is on track to fulfill his goal of signing a tax cut every year that he's in office. He signed a $1.3 trillion measure in 2001 and a $96 billion tax cut bill last fall.

Wednesday's tax cut measure will go into effect in July, when payroll checks will get a little bigger, reflecting reduced income tax rates that were not expected to go down until 2004 and 2006. Investor earnings will also increase as a result of a cut in dividend and capital gains tax cuts.

The president recited several examples of the amount of refunds average Americans would receive. He said that in July, 25 million families will begin receiving checks of $400 per child as part of the child tax credit accelerated in the bill.

"Tax relief matters a lot to the average citizen here in America. This tax bill will make it easy for moms and dads to save for their children's education, and that is vitally important for this country," Bush said.

The president's primary objective with the tax cuts is to create jobs, which he hopes will happen when people immediately pump money back into the economy. Saying tax cuts are more important than deficits, the administration is operating under the premise that with more jobs will come more tax revenues for the government.

White House Press Secretary Ari Fleischer said that economic numbers continue to show unevenness, and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (search) will give the boost needed to increase growth. New home sales were up last month but purchases of durable goods dropped.

"We continue to see mixed signs in the economy, and this tax cut comes at a very propitious moment in terms of being able to create opportunities for jobs and growth in the economy. It's a well-timed tax cut package," Fleischer said.

But Democrats say the $330 billion tax cuts will cost the government several times more than that. They say Republican congressional members are already trying to repeal the sunset provisions on some of the cuts, which are set to expire in just three to four years, and argue the president's tax cuts won't recover the more than 2 million jobs that have been lost since Bush took office.

If the president does get a second term, he is likely to rally Congress to extend some of the bill's provisions. But Fleischer was reluctant to make that promise on this day.

"In the future, the president will, of course, provide new budgets that may have ideas in them. Generally speaking, as an overall matter, the president believes that the more permanency in the tax code, the better. But the president wants to welcome today as the day of real progress in the code," Fleischer said.

The bill also provides $20 billion to help states deal with lower revenues and to pay for Medicaid expenses.

Wednesday's ceremony follows a much less public bill signing Tuesday, when the president raised the federal debt ceiling by $984 billion to nearly $7.4 trillion, in part to compensate the increasing deficit (search), expected to pass $300 billion this year.

Earlier in the day and also without fanfare, the president signed into law a measure that extends unemployment insurance an additional six months for those still unable to find jobs who have exhausted their state benefits. Unemployed workers in Alaska, Oregon, Washington, Connecticut, Massachusetts and Pennsylvania, where unemployment is higher than the national average, will get 26 weeks.

While the president has often said he inherited a faltering economy, starting with a recession in 2001 during the first three quarters of his presidency, Democrats say that with the tax cuts, the president clearly owns the ailing economy now.

That is something Democrats hope to capitalize on during election season, as they argue the president's tax cuts will have helped only the wealthy, who benefit from capital gains and dividend cuts more than lower income taxpayers.

Republican officials dismiss those arguments as a class warfare fight that no longer works.

Fox News' Wendell Goler contributed to this report.