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The outcome was at the low end of the $350-$550 billion negotiating range set up by the Congress, and well below the original $726 billion “Jobs and Growth” proposal floated by the Administration back in January. Nevertheless, the third Bush tax cut stacks up as a major domestic policy victory for the President and major economic stimulus for at least the next few years.

The impacts of JGTRRA are heavily front-loaded and could provide even more support to the economy in the second half of this year and in 2004 than the original Bush proposal. Indeed, about 85% of the $350 billion package is focused in the first three years because many tax breaks expire (sunset) after a few years.

The dividends/capital gains provisions already appear to be boosting the stock market and lowering the cost of equity capital for corporations. The (retroactive) cuts in personal income tax rates, along with “advance refunds” of the expanded child credit (beginning in July), will boost disposable income considerably and stimulate consumer spending significantly over the balance of the 2003-2004 forecast horizon.

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