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Will Americans Embrace President Bush's Tax Cut Proposal?

Aired February 28, 2001 - 7:30 p.m. ET



GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is why I have come to Western Pennsylvania, to remind Americans that the surplus is your money. It is not the government's money.


ROBERT NOVAK, CO-HOST: Tonight: Bush takes his tax-cutting show on the road. Will it be a hit with the American people?

ANNOUNCER: From Washington, CROSSFIRE. On the left, Bill Press. On the right, Robert Novak. In the CROSSFIRE: Democratic Congressman Charles Rangel from New York, ranking member on the Ways and Means Committee and House Republican Conference chairman, Congressman J.C. Watts from Oklahoma.

NOVAK: Good evening. Welcome to CROSSFIRE. What was George W. Bush doing in Beaver, Pennsylvania, of all places, today? It was day number one of the president's road show, selling his program, especially his tax cut, to the American people after addressing a joint session of Congress last night. Leaving Beaver, he was off to Omaha, Nebraska being the very last state that Bill Clinton visited as president, but one of the first for President Bush.

Meanwhile, back here in the nation's Capitol, the Bush budget of $1.9 trillion for this year was released. It's guaranteed to evoke whining by the many people who want more money from that big federal surplus. But in last night's address, the president tried to please nearly everybody, and his 49-minute speech was interrupted more than 80 times with applause.

So, which reaction will persist? Which will the Bush presidency encounter most often, whining and jeers, or approval and cheers -- Bill Press?

BILL PRESS, CO-HOST: Congressman Watts, there were mainly cheers after last night's speech, but also some jeers and I would like you to begin by listening one of the jeers from the senior senator from West Virginia. When Robert Byrd speaks, people listen. Here he is.


SEN. ROBERT BYRD (D), WEST VIRGINIA: His proposal is sheer madness. The $1.6 trillion tax cut is a high wire act, and if the projected surpluses don't materialize, as they very well may not, there is no safety net to catch us when we fall right back into the deficit ditch.


PRESS: Isn't that the peril, that the surplus may not materialize and what does happen if it doesn't?

REP. J.C. WATTS (R), OKLAHOMA: Well, the senior senator from West Virginia never thought it was a high-wire act when the Democrats were in control for about 30, 35 years, running up deficits, running up debt, taking the surplus from Social Security and spending those dollars on other things outside of Social Security.

I think it's good plan. I think $1.6 trillion, if you ask me, is probably low. I think there are going to be many dollars or plenty of money available to take care of Social Security, to take care of Medicare, to have a rainy day fund, put the appropriate dollars in education and at the same time, give the people that created the surplus, give them some of their money back.

PRESS: Well, Congressman, I agree that those Reagan deficits were terrible and I don't want that go back there.


PRESS: But I don't think you answered the question. So, let me try it another way. Let's bring it down to terms people can understand, OK. My Aunt Minnie, I've been told, is going to leave me $5,000 in her will some day.

Now, wouldn't I be a total idiot to go out and spend that $5,000 before Aunt Minnie is dead and before I've read her will? You're doing the very same thing. You're spending money that the Congressional Budget Office says 10 years from now may be there. You have no idea it's going to be there and you have no back-up plan if it's not.

WATTS: Well, Bill, the Congressional Budget Office, over the last several years, they have been wrong in every estimate. We have far exceeded the dollars that they said we're going to have. We've been over what they said we're going to have, and furthermore, the president's budget is based on very conservative estimate, almost zero growth in the economy.

So, I don't think this is planning on, you know, on a wing and prayer. I think this is planning on solid estimates, solid numbers and if you want to look at it like that, you know, the Democrats have had no problem proposing spending. So, why do you propose to spend it if you think it's not going to be there.

NOVAK: Charlie Rangel, Honorable Charles Rangel, I should say, the people who were cheering the president's speech were the American people. The Gallup poll measured it last night, and every measurement was sky high, for his tax cut, everything else. Let me just give you a couple of the measurements, questions: Is President Bush leading the country in the right direction? Before the speech, 73 percent; after the speech, 84 percent. The opinion on President Bush's tax cut proposals: Before the speech, 68 percent; after the speech, 79 percent.

Democrats, not for the first time, are bucking what the people want, aren't they?

REP. CHARLES RANGEL (D), NEW YORK: I'm telling you, that was one of the greatest performance I have seen in my over 40 years in politics. George W. Bush is the candy man. He got trillions of dollars out of places I never even perceived, and he was so proud of it. He would just stare at the Democrats as if to say, and you want another trillion dollars.

I have never seen an advocate for Social Security, Medicare, prescription drugs, improving the quality of life of our men and women in the service. These are Democratic ideals that his side of the aisle have never fought for. Indeed, you asked the questions what happens if the Congressional Budget Office, which I agree with you, have been wrong more often than they're right, they are saying a $5.7 trillion surplus.

If they are wrong, the other programs are cut, and there won't be any tears lost on the other side. In to answer the question, you show me Santa Claus, and that's who we had here last night, passing out the gifts. But what happens after that, the credit card comes with the Congressional Budget Office, with the budget that's going to say and how do you propose to pay for it?

NOVAK: Congressman Rangel, you were seated in the hall of the Congress, the hall of the House of Representatives. I was watching on television. And you didn't see the Honorable Charles Rangel, Democrat of New York, cheering and applauding and smiling. I thought that was Bill Clinton up there you were applauding.

Do you know that you were being used as a pawn and actor by the Republican president by -- he's putting out a few of these things and you say, oh, boy. That was great.

RANGEL: I couldn't wait for it because I knew that after the first act, the second act had to be the budget, and that's really where Democrats get a chance to have the president up there saying, I didn't mean that. You know, we talk about $1.6 trillion, and let's face it, people don't care about the trillions, but there's one thing that they're concerned about and that is just how much this is thing going to cost?

There's so much smoke and mirrors in this proposal that when accountants, whether they're Republicans or Democrats, start talking about, do you know under this proposal, people that deduct their local and state taxes, will no longer be able to deduct it? Do you know it? Do you know it? No, a lot of people don't know. That's true.

Do you know that the tax that some people were talking about yesterday, that if the woman works so hard, and after she reaches a certain level, that everything is going to be taxed by 50 percent? What a story. It means that the earned income tax credit at a certain income, cuts off because the person doesn't need it, and that we have kept it that way.

There are so many things in this package, and you know, we don't get the whole package in ways and means; they have just given us a sliver for tomorrow. The Ways and Means Committee have not given us the Republican tax package, just the rate cuts.

NOVAK: You will get it soon.

RANGEL: Sure we will.

PRESS: Congressman Watts, I want to pick up on that. I was watching the speech here on CNN last night with one of our conservative on-air people who, halfway through the speech, said, he hasn't said one conservative thing. Yet he never, in the entire speech, used the phrase cut spending.

Instead, as Congressman Rangel -- here's just a list -- I -- just very quickly: new money for schools for reading, new money to train teachers, new money for Medicare, community health centers, doubling the budget of NIH, new technologies for disabilities, new money for military pay, fully funding land and water conservation funds, more money for natural parks, and he's creating this whole new government agency called Federal Compassion Capital Fund, whatever the hell that is.

I mean, the era of big government spending is just beginning with George Bush, isn't it?

WATTS: Well, Bill, you also heard him say last night that we will allow -- that he would not allow the government to go -- grow more than 4 percent; that's a couple of points above inflation. I think that's a good idea. He also talked about, in this budget, you will see areas -- we talked to Mitch Daniels this morning, director of OMB -- Office of Management and Budget -- who said, yes, there are other areas in order to do those things -- there some other areas that are going to have to give. We will have to cut out the wasteful spending.

I saw a report from the Journal Accounting Office a couple of years ago that said there's $850 billion in government assets unaccounted for. We had missiles and ships and we don't know where they are. So, Bill, there's plenty of waste in government currently as it is that we could pay for that tax relief plan just by cutting out the waste and fraud and abuse in government.


RANGEL: I don't want to hear about the cutting. I want to hear about the trillion dollar slush fund that he talked about.


WATTS: I think it's a good idea to say we should have a rainy day fund.

RANGEL: A trillion dollars.

PRESS: Just a quick question about one of the programs that might be cut: you have expressed some concern about the Small Business Administration; in fact you were quoted in this morning's "Wall Street Journal":

"Once you see the budget, we all need to reserve the right to disagree and to haggle."

Well, lo and behold, President Bush does cut the Small Business Administration by $82 million. Are you going to haggle about that or are you just going to roll over?

WATTS: No. And Bill, and what I said in that -- the rest of the conversation that was probably not reported in the "Wall Street Journal" is to say, the president has laid out his budget. There will be questions about it; we have been having listing sessions on our side to hear our members concerns, to see where they might have some problems, to see where they think we ought to be able to reduce the size of difference agencies.

I think small businesses -- the Small Business Administration can be a very effective tool to encourage entrepreneurship, to create jobs, to create tax payers, to create more revenue for the federal government and I think it should be looked at just like every other thing should be looked at.

PRESS: All right, lots of questions still on the table. We're going to take a break here. When we come back, let's talk about why the Democrats are really so opposed to George Bush's tax cut; we will be right back.


PRESS: Welcome back to CROSSFIRE.

The charm offensive is over. Now it's open warfare on Capitol Hill, over tax cuts. How big? How soon? And for whom? Two members of Congress who are leading the battle in the CROSSFIRE tonight: Republican J.C. Watts of Oklahoma, Republican House Conference chairman; and Democrat Charles Rangel of New York, ranking minority member of the House Ways and Means Committee -- Bob.

NOVAK: Congressman Rangel, as we have said, when President Bush said, anything about spending money you were cheering and jumping and applauding last night; but there was one thing he said that you had a very uncharacteristic sour look on your face. I don't know how mean you looked on television...

RANGEL: That is uncharacteristic.

NOVAK: It is uncharacteristic. Let's listen to what the president said that made you so unhappy.

RANGEL: I don't want to see it again.


BUSH: The people of America have been overcharged, and on their behalf, I'm here asking for a refund.


NOVAK: Among the Democrats, you and Teddy Kennedy hate the idea, don't you, of giving the people of America who pay taxes some of the money back they paid?

RANGEL: Let me say two things. First of all, you, Bush, and other Republicans somehow don't believe that those people who work hard every day and pay the payroll tax, even though they don't call it an income tax, you don't think they deserve any relief. Bush went out his way to say, those who pay tax should get income tax cuts but we say, yes, they should get income tax cuts, but also, those people who have to pay for Social Security and Medicare, should get some relief too.

The second thing is that the way we look at it in a family, in a business, in a Congress, or for our country is, before you cut the taxes, let's have some fair idea of what your expenses are going to be, and what revenues you will have. He has said the Congressional Budget Office has been consistently wrong. The $1.7 trillion tax cut...

NOVAK: Underestimated...

RANGEL: ...and 60 percent of it which goes to the top 10 percent of the people, 43 percent of it to the top 1 percent of the people. If we are wrong, the question we ask, what do we do? What do we do if the surplus is not there?

NOVAK: Congressman, let me just give you another theory of why you are opposed to a tax cut to the American people.

RANGEL: I wish you would. The whole world is listening; you know that, Bob.

NOVAK: You're speaker, Congressman Hastert, speaker of the House of Representatives...


NOVAK: ... a very fair-minded person -- he pled out an interesting theory last night of why the Democrats are opposed to tax cuts, and let's listen to it.


REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: There are some people who would have it politically convenient to have a recession because that means that they will have a political advantage. We're not going to let that happen, and by moving that tax cut early, and having it in time to kick this economy and kick it up and get it going, we're going to prevent that from happening.


NOVAK: In other words, you are trying -- you...

RANGEL: That's a very sad thing to hear.

NOVAK: You're trying to stop the tax cut to invoke a recession.

RANGEL: I have -- I have the deepest respect for the speaker, and I'm so sorry that he got caught up his own rhetoric. But to suggest that any American, especially a member of the Congress, would be -- would be encouraging a recession for political reasons, I think is beneath any member to do that.

We have families, we have concerns about the country, we have -- you know, it's just sad that he would say that and I don't think it warrants a response.

PRESS: I -- I hate to disagree with my good friend Congressman Rangel, here with Congressman Watts, but I want to suggest there may be someone who would find it politically convenient to have a recession. And in fact, has been trying to talk one up -- or talk one down, as the case may be, for a few weeks now. Here's a quote just from a couple of weeks ago.


BUSH: A warning light is flashing on the dashboard of our economy. And we just can't drive on and hope for the best. We must act without delay.


PRESS: If there is anybody who, almost every day is saying the economy is gone down, therefore we need the tax cut, it's President Bush. Doing it deliberately for a political reason, isn't it?

WATTS: Well, Bill, I beg to differ with you.

PRESS: You can.

WATTS: I think the president is -- I think the president is being honest. I'm think he's being factual. We've seen layoffs, we have seen a decline in the economy. That's why this tax relief package is important.

This tax relief is about giving people their money back. They're chomping at the bits, hold on, give their people money back -- give people their money back, so they can buy appliances, they can buy food, they can help pay for clothing, they can go...

RANGEL: Our multimillionaires don't need a tax cut.

WATTS: Sixty-eight percent of the economy is driven by consumer spending. Tax relief is good for job security, it's good for economic growth. Now, it's interesting when, back during the campaign, when the president offered this very same tax relief package, Charlie just said that 43 percent of the taxpayers get -- one percent of the taxpayers get 43 percent of the benefits.


WATTS: Back during the campaign, you guys were saying that one percent of the taxpayers get 90 percent of the benefits.


RANGEL: You're talking about spurring the...

WATTS: Your rhetoric is changing here.

RANGEL: This tax cut does not spur the economy. If you want to do it, it would be concentrated on the lower income people. Not on his income group.


NOVAK: We are out of time.

We're out of time.

J.C. Watts, thank you.


RANGEL: Let's get your -- get your refrigerator...

NOVAK: Charlie Rangel...

PRESS: A Bentley.


NOVAK: Charlie Rangel. We're going to be back with closing comments and we're going to refine why Bill Press is absolutely paralyzed with fear at this very moment.


NOVAK: Bill, I look into your eyes and I see fear. It's the same kind of fear Democrats had over Ronald Reagan, because there was a Republican president here who the people liked, who is likable, isn't being -- promising pain to the American people, he isn't confrontational, and you're in trouble, buddy.

PRESS: And I look into your eyes and I see fantasy, Bob. I think what Bill Archer said today -- Bill Archer said that anybody former Republican chair of House Ways & Means said: Anybody who's counting on deficits 10 years out is living in Never-Never Land.

NOVAK: Deficits? You mean surpluses, don't you?

PRESS: Surpluses. Never-Never Land.

NOVAK: Try to get it right. I hate to have to correct you.

PRESS: I'm glad you mentioned Ronald Reagan because that's exactly where George Bush wants to take us. Back to the big deficit, took us 18 years to get out of them, Bob.

NOVAK: That was responsible -- that tax cut was responsible for our present prosperity.

PRESS: And the big deficits. From the left, I'm Bill Press. Good night for CROSSFIRE.

NOVAK: For the right, I am Robert Novak. Join us again next time for another edition of CROSSFIRE.



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