US President George W. Bush told Americans today that new tax cuts were on the way and would help revive the soft economy.
"By leaving American families with more to spend, more to save and more to invest, these reforms will help boost the nation's economy and create jobs," Mr Bush said in his weekly radio address.
A $350 billion tax cut bill passed by Congress yesterday will be signed into law by Mr Bush next week. It lowers the top tax rate on corporate dividends and capital gains to 15 per cent until 2008 and accelerates scheduled income tax cuts.
The health of the US economy is expected to be a major issue in next year's presidential elections, and the administration maintains the tax cut will inject roughly $200 million into the economy this year and next.
"These tax cuts will go into effect immediately, and some retroactively," Bush said.
Many Democrats who opposed the bill called it a windfall skewed in favor of the wealthiest Americans that provides little relief to the middle class and the working poor. They said it would undermine the economy by fueling huge budget deficits in the future.
The tax reduction approved by Congress is less than half the $726 billion Mr Bush sought. But it contains a number of temporary measures that Mr Bush and congressional Republicans are expected to eventually seek to make permanent. That would drive up the cost of the bill substantially.
Mr Bush, who is spending the weekend at his Texas ranch, pledged to work with Congress to reduce the nation's spiraling budget deficit, which he said "has resulted from war, recession and terrorist attacks."
"Faster growth in the economy will bring more revenues into the federal treasury," Bush said.
Critics of the tax bill dispute the idea that economic growth will make up for the lost tax revenue or narrow the deficit.
Mr Bush listed as beneficiaries of the tax cut about 25 million families with children who will receive an increase in the child tax credit. He said 136 million income tax payers, including 23 million small business owners, also stand to gain from the lower taxes.