US President George W. Bush on Monday signed into law a 146-billion-dollar tax cut bill in this up-for-grabs state, one month before the hotly-contested election that pits him against Democrat John Kerry.
Speaking to a crowd of cheering supporters four days before the second presidential debate, the president renewed his call for making permanent the 10-year, trillion-dollar tax cuts at the heart of his economic agenda.
"The tax relief comes at just the right time for America," said Bush, whose visit to the battleground state of Iowa guaranteed him local headlines and evening newscasts. "We need to make all the tax relief permanent."
Bush, who stands to become the first US president since the Great Depression to oversee a net job loss, promised that the tax reduction "will have good effects throughout the economy."
Although some economists have called the legislation a budget buster, it enjoyed the election-year support of Bush, Kerry, and an overwhelming majority of lawmakers in the US Senate and House of Representatives.
It marked the fourth major tax cut enacted by Congress at the urging of Bush, estimated to be worth 146 billion dollars over 10 years.
Analysts said the bill may give Bush a political victory going into the November 2 election, but Kerry also endorsed the measure as offering middle class relief.
"Millions of American families are being squeezed by the weak Bush economy, falling incomes and rising health costs, and we should extend middle class tax breaks to help them," Kerry said just ahead of the final votes. "That is why I support middle class tax cuts, including the tax package now being considered in Congress."
But some analysts said the measure puts the federal budget in an even more precarious situation, at a time when a record 422-billion-dollar deficit is predicted.