The final congressional action was the Senate's approval, which came May 23. The 50-50 tie was broken by Vice President Dick Cheney's affirmative vote. The House had passed the measure the previous day, by a 231-200 vote.
"It is a short- to medium-term positive for the construction industry," says Kenneth D. Simonson, the Associated General Contractors' chief economist. He says the legislation will spark consumer spending, which should lead to increased construction demand by manufacturers and service providers."
But Simonson adds, "It's an open question what willhappen over the longer term, because Congress will have to come to grips with the large budget deficits that this bill creates."
The measure includes provisions that benefit individual taxpayers, and tens of thousands of construction companies that operate as partnerships or S corporations, which are taxed at individual rates. For those taxpayers, the bill speeds up cuts in tax rates, and the size of the child credit. It also cuts the rate on capital gains and dividend income.
For businesses, depreciation benefits are expanded. For example, the legislation allows companies to write off in the first year 50% of the value of purchased goods, up from 30% now. It applies to items purchased between May 5, 2003, and Jan. 1, 2005.
Hard-pressed state budgets also will benefit. The measure provides $20 billion in federal aid, half of which will go to "essential government services," and the remainder for Medicaid.
The House had approved the package on May 22, by a 231-200 vote.
Another plus for construction was something that wasn't in the bill. After objections from construction and design firms and other businesses, the congressional tax conferees decided to drop a Senate-passed provision that would have ended the income exclusion for U.S. taxpayers who work abroad.$350-billion package of tax cuts and aid to fiscally strapped states has cleared Congress and will head for President Bush's desk for his expected signature.