Less than five months into his presidency, the US Congress gave President Bush a triumph on Saturday by fulfilling his campaign promise of a sweeping tax cut. Ironically, however, the approval of the $1.35 trillion 10-year cut marks a severe weakening of the Bush administration, as it sets the stage for the US Senate to pass from Republican to Democratic control.
Mr Bush will sign the bill in early June when Congress returns from its Memorial Day recess. On that day, Senator James Jeffords of Vermont has said he will leave the Republican Party and become an independent aligned with Democrats, giving the Senate a 50-49 Democratic majority.
Congressional approval of the biggest tax cut in the US for 20 years, followed a final round of bitter partisan debate in the Senate on Saturday morning. The bill finally passed the House of Representatives by 240 to 154, and the Senate by 58 to 33.
Mr Bush welcomed the tax cut with enthusiasm, though it was smaller than the $1.6 trillion he originally proposed. "Tax relief is the right thing to do, and it is the responsible thing to do for the American people and for our economy," he said in celebratory remarks in the White House East Room. "This is significant, and this is only the beginning."
Democrat opponents said the bill was unfairly tilted towards the wealthy, put at risk key spending projects and opened the way for a return of the huge budget deficits that built up after the last big tax cut under President Ronald Reagan in 1981. "It is a disastrous long-term policy," said Senator Tom Daschle who will become majority leader next month. Congress would have to come back to "make corrections".
The immediate benefits of the bill will be felt as early as September, when US taxpayers will begin getting rebate cheques of up to $300 for individuals and $600 for couples, based on a new retroactive 10 per cent income tax rate on the initial $6,000 earned or $12,000 for a married couple.
This will provide a short-term stimulus to the stagnant US economy. Over the next 10 years, the bill will reduce all income tax rates, trim taxes owed by married couples, phase out taxes on large estates and double the $500 per child tax credit.
"The addicts [of spending] are going to have to take the cure. We're no longer going to get stoned on other peoples' money," said the House Majority Leader, Mr Dick Armey, replying to criticism that it was fiscally irresponsible to allocate a big part of the projected surplus before it materialised.
All of the measure's tax reductions will automatically end in 2011 unless renewed by Congress in the future, a device which Democrats said hid the fact that the real cost of the bill was over $1.6 trillion. "If baloney were electricity, this tax bill could solve our energy crisis," said Senator Richard Durbin of the Democrats.
In the Senate, 12 Democrats voted with Republicans, allowing Mr Bush to claim a measure of bipartisanship. Senator Jeffords also voted in favour, despite saying last week he was leaving the party partly because the measure drained away funds needed for education. Two Republican Senators, Mr John McCain and Mr Lincoln Chafee, voted against the bill. Mr McCain said tax rates were cut for the wealthy "at the expense of middle-class Americans".
The bill means that substantial proportions of the projected surplus will now be set aside for the tax cut and for reducing the national debt. If the economy slows further and the projected surpluses do not materialise, fierce partisan battles could erupt in Congress over spending for the military, health care, education, medical research, social security and medicare.
Education spending, another campaign priority of Mr Bush, fared badly in the tax bill. Senator Tom Carper of the Democrats said Republicans have left little money for ailing education programmes.