WASHINGTON — President Bush signed the third-largest tax cuts in U.S. history on Wednesday, saying they already are "adding fuel to an economic recovery." The IRS posted new withholding tables that will add money to paychecks starting next month and began preparing refunds due in parents' mailboxes later this summer.

The 10-year, $350 billion package of tax cuts and aid to state governments was less than half the amount Bush had proposed. But the White House hopes the cuts, the third round in his presidency, will not only revive the economy but bolster his own political future.

"Tax relief matters a lot to the average citizen here in America," said Bush, surrounded at the East Room signing ceremony by his top tax-cutting partners in Congress and more than three dozen people who had joined him at roundtables during his sale-pitch travels around the country.

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"We have passed a bold package of tax relief for America's families and businesses, which will help turn our recovery into a lasting expansion that reaches every single corner of America."

Democrats said the cuts will greatly increase federal deficits that will in time depress the nation's gross domestic product and drain jobs.

"This bill will give millions to those who don't need it and very little to those who do," said Senate Minority Leader Tom Daschle, D-S.D. "It will add a trillion dollars to our national debt; spend the Social Security Trust Fund, and ultimately lose more jobs."

Bush and congressional Republicans said the economy was getting just the right medicine.

"We have economic anxiety in this country," said Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee. "Tax relief eases economic anxiety."

Bush pointedly praised the two Democratic senators who supported the plan — Zell Miller of Georgia and Ben Nelson of Nebraska. He ignored that it was a few in his own Republican ranks who were responsible for keeping the lid on higher tax cuts.

Bush first proposed $726 billion in relief. But the GOP-controlled Congress balked, with the House setting a $550 billion maximum and the Senate — led by moderate Republicans — agreeing to no more than $350 billion.

As a result, Bush lowered his sights to $550 billion and traveled widely to sell it. In Ohio, he said senators supported $350 billion "might have some explaining to do" because the "little bitty tax relief package" wouldn't be enough to spur economic growth.

Still, as Bush thanked members of Congress Wednesday for sending him even less than that, the key word in his remarks was "quick." It won't be long before millions of Americans feel the law's impact.

The Internal Revenue Service put new tax tables on its Web site so employers can reduce the amount of federal income tax withheld from workers' paychecks as the bill prescribes. Employers were told to use the new tables by July 1, making it possible that some employees will see larger checks starting next month.

Starting in the last week of July, the government will send checks to the 25 million parents who claimed a 2002 child tax credit. The automatic refunds — no phone calls or forms required — will be advance payments on their 2003 credits, in an amount equal to the increase provided by the new law up to $400 per child.

There were reminders of the still-plodding economy not far from the East Room celebrations.

A Commerce Department report revealed demand for manufacturers' products dropped last month by the largest amount in over half a year.

And earlier in the day, with no fanfare, Bush signed legislation extending federal unemployment benefits through December. With the nation's unemployment rate at 6 percent — almost 2 percentage points higher than when Bush took office — and nearly 9 million out of work, it was the third time Congress had felt the need to act on unemployment since last year.

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"Increased hiring happens gradually," Bush said. "But we're on the path to greater job creation across this country."

Congressional Republicans have made plain their intention to try to make permanent, or at least extend, the bill's provisions now set to expire. The White House did nothing Wednesday to squash those hopes.

"Let me assure you that the president is committed to avoiding future tax increases on the American people," Treasury Secretary John Snow said during an online chat sponsored by the White House.

The White House says that the bill will pump about a million new jobs into the economy.

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