Snow: 'We can do better than what we've got today'
(CNN) -- In his second term, President Bush is proposing major changes he says will strengthen the economy. Included is an overhaul of the tax code, and privatizing certain aspects of social security.
CNN anchor Wolf Blitzer spoke Wednesday with Treasury Secretary John Snow about the White House's plan and his part in the process.
WOLF BLITZER: Mr. Secretary, thanks very much for joining us.
JOHN SNOW, TREASURY SECRETARY: Thanks, Wolf. Good to be with you.
BLITZER: Let's get to some of the specifics as much as you can share with our viewers around the country on -- for example, on the tax code simplification. Some of us are already beginning to think about April 15 already. What do you have in mind specifically to make the tax system simpler?
SNOW: Well, Wolf, you know the way the president has laid this out, he'll be appointing a panel of tax economic experts to report to the Treasury on options to make the code simpler, fairer and more growth oriented. And then the president has asked Treasury, me, to give him a series of recommendations growing out of the panel.
I don't want to prejudge what we're going to come up with but it is pretty clear there's lots of room to make this code simpler and we're bound and determined to do that. You know, Einstein observed it is the only thing he ever encountered that impenetrable to the mind of man. Well, we can do better than what we've got today. I'm convinced of that.
BLITZER: It is a very complicated system, as we all know, from firsthand experience. What kind of time frame though are we looking at? When should the taxpayers who are watching right now assume that you will have passed through or at least attempted to pass through the Congress this kind of tax simplification, a year from now, two years from now, what kind of time frame are you talking about?
SNOW: Well, we're looking to get this panel appointed, hope to see that done soon. And the president has asked the panel to report back to Treasury as soon as possible in '05. And then us to forward our recommendations, I don't have a particular timetable, but just as soon as possible to come forward with some well thought out ideas for the president.
BLITZER: How long do you think this panel will sit and consider options, a period of a few months, a year, two years, how long do you think it will take them?
SNOW: Oh, I don't think -- it's not going to be two years, Wolf, it's going to be appointed here soon. I hope they can get their work done quickly and give me some options that I can then take to the president just as soon as possible in '05.
BLITZER: In '05 you think the proposals will be flushed out and submitted as legislation, is that what you're saying?
SNOW: That would be my expectation.
BLITZER: All right. Within the year. Let's talk about a couple of little things on that. Is a flat tax something, for example, that other economists have suggested -- is that something that you would consider on the table?
SNOW: Well, certainly there are a number of ways to reform the code, consumption taxes, VAT taxes, sales taxes, flat taxes, there's a whole range of things. I don't want to prejudge any of them. But I'm confident we're going to get a good airing of all of the alternatives that are available.
BLITZER: The VAT that you're talking about, a national sales tax, you're saying that's something this panel will consider, as well?
SNOW: Well, I think the panel will want to look at the whole range of things that are out there, all of these ideas. They are well documented in the tax literature and the economic policy literature and there are even a number of proposals in the Congress going one way or another. We're going to want to make sure the panel looks at all of these options so they can give us the benefit of their very, very best thinking.
BLITZER: Speaking of taxes, when will the president submit legislation to Congress to try to make permanent the tax cuts he got passed during his first four years in office, so that the estate tax, for example, will become permanent, the marriage tax, some of the other taxes which have a deadline imposed on them, when will he ask Congress to make those taxes a permanent feature of our lives?
SNOW: Well, making them permanent is part of the administration agenda. I just chaired a panel on tax policy with small business and tax experts and there was a uniform view from the White House panel that we need more certainty, stability and permanence in tax policy. So that remains a priority objective of the president's.
BLITZER: When is he going to do that?
SNOW: Well, we have already indicated that that's our priority. And it will be incorporated, I'm confident, in the budget proposal that will come forward here soon.
BLITZER: So that will be happening within the next few months, that legislation you assume will be submitted to Congress to make those tax cuts permanent?
SNOW: That's very much part of our policy, absolutely.
BLITZER: Let's talk about Social Security reform, partially privatizing Social Security. You know the AARP, the American Association of Retired People, other groups, they are already expressing concern that this is going to be a huge expenditure and could endanger people's retirement. First of all, this $2 trillion, $2,000 billion, $2 trillion figure that has been thrown out to pay for the short-term transformation, is that accurate?
SNOW: No, it isn't, because we don't have a proposal yet, Wolf. But clearly the president has made the case for these personal accounts as part of any reform of Social Security. But we have not come forward with any particular proposal so it would be inappropriate try and put any transition cost numbers on anything at this time.
BLITZER: When do you think the president will do that, come forward with a specific plan to Congress to partially privatize Social Security?
SNOW: Well, the personal accounts will be part of the president's proposal. He's indicated strongly that he believes in the personal accounts. They are a way to allow people build a nest egg to supplement their retirement income, to have something they own, it's part of this idea of an ownership society. But the precise timetable for the president to come forward with proposals, I think will have to wait the president's action on that.
BLITZER: Some interesting comments from the president, specifically on strengthening the dollar. A very sensitive subject right now, Mr. Secretary, as the dollar has gone down in value compared to the euro and other foreign currencies. How important is this from your perspective to try to get the dollar strong?
SNOW: Well, you know, I never comment, Wolf, as you now, on the relative exchange value of the dollar. Our policy on the dollar though is well known. And the president focused on the short-term and long-term deficits. That's important because that means we'll increase our own savings rates, reduce our dissavings (ph) rates, and that will help deal with this current account deficit. So clearly we're focusing on the right things here.
