Interview With Richard Durbin; Interview With Mitch McConnell
Aired November 28, 2001 - 19:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It is important for the Senate not to look for ways to spend new money, but to look for ways to create new jobs. The American people expect it, and I expect it.
(END VIDEO CLIP)
BILL PRESS, HOST: Can the Senate come up with a plan to jumpstart the nation's lagging economy? And will it be enough to wipe out the recession? This is CROSSFIRE.
Good evening. Welcome to CROSSFIRE.
There's the military war in Afghanistan and the economic war back here at home, and sometimes it's hard to know which one is more intense. Certainly, two and a half months after 9/11, the battle over how to restimulate the economy is more intense than ever.
Republicans want more tax cuts. Democrats want more spending. And one top Republican proposes cutting Social Security taxes for a month. With time running out, President Bush pressured both sides today to get off the dime and put a bill on his desk before the Christmas recess. At this hour, Senate leaders are trying to hammer out a compromise. They're meeting over at the Capitol in private.
We'll have the same debate here on CNN right here in public. What's the answer? More tax cuts? For whom? More spending? On what? Or a combination of both? Speaking for the Republican minority, Senator Mitch McConnell of Kentucky, member of the Appropriations Committee. And here for the Democratic majority, Senator Dick Durbin of Illinois, assistant Democratic floor leader -- Bob.
ROBERT NOVAK, HOST: Senator Durbin, let's kick off the debate by hearing some testimony from the Republican leader of the Senate. Let's listen to him.
(BEGIN VIDEO CLIP)
SENATOR TRENT LOTT, (R), SENATE MINORITY LEADER: If we don't get a stimulus bill, you know, it's going to be at the feet of the Democrats and Senator Daschle in the Senate. (END VIDEO CLIP)
NOVAK: Now that is not entirely political invective, because isn't it a fact that instead of permitting the Senate finance committee chairman to sit down with his Republican counterparts -- as they did earlier in the year -- and put out a bill, your leader Senator Daschle forced through a bill -- through the finance committee -- on a strict party-line vote. And your fellow Democrat John Breaux said you cannot pass a bill that way.
SENATOR RICHARD DURBIN (D-IL), ASSISTANT DEMOCRATIC FLOOR LEADER: Bob, as usual, that's half the story. The other half of the story is we reported a bill out of committee from the Senate finance onto floor of the Senate, where a point of order was raised -- by the Republicans -- which stopped the bill in its tracks more than two weeks ago. And we reached an impasse.
We couldn't pass a Republican bill, subject to same point of order. Couldn't pass the Democratic bill. And at that point, that is where it sat until today. And today we have had a breakthrough. And as Bill said, the leaders are sitting down right now trying to work out a deal.
NOVAK: The -- the breakthrough, was that Senator Byrd finally backed down with his excessive spending, his injections of pork into the bill, and said he would hold off until next year.
But, you know, all this stuff about points of order. People out there, Senator, they don't understand what you're talking about with the points of order. What they understand is that every time there is a crisis, the Democrats want to spend more money. Isn't that true?
DURBIN: Here is what they should understand. when we tried to bring an economic stimulus bill to the floor, there was an objection -- call it a point of order, if you'd like -- from the Republican side. They have a right to raise it, but to overcome it you need 60 votes. Neither the Republicans nor the Democrats had 60 votes for their proposal.
NOVAK: So you had -- should have had compromise bill.
DURBIN: Well, let me tell you, we may move to compromise. We need the president in on this deal. But one thing I want to tell you for sure is if you think making the police force cross America and the firefighters stronger to deal with terrorism, and public health agencies stronger to deal with bioterrorism is pork barrel, then you ought to come back to your home state of Illinois and talk to the families I represent. They want the security of first responders who have the resources to do the job.
PRESS: Senator McConnell, let me suggest to you what the big holdup is. After 9/11, obviously, airlines are hurting, hotels are hurting, rental cars are hurting, the restaurants are hurting, a lot of people are out of work. And the best idea that you guys come up with to deal with this is to give every corporation in America a big Christmas card gift and get rid of the alternative minimum tax. I'd just like to read you -- this is what a "Newsday" editorialized yesterday. I think they sum it up perfectly. They said, quote, "A post-terror economic stimulus package is stillborn on Capitol Hill. That is mostly because the House Republicans turned a national emergency into an historic opportunity to reward every lobbyist on their Christmas card list." Merry Christmas, corporate America. that's the problem, isn't it?
SENATOR MITCH MCCONNELL, (R) KENTUCKY: Well, the fundamental problem is the Democrats just want to keep on spending. We -- we passed a $40 billion package after 9/11. We haven't even spent that yet. That is still there to be spent. We haven't spent that yet.
They entered into an agreement with the president in early October, setting the regular appropriated amount at 686. That represents a 13 percent increase over last year. And that is not enough. They want to turn what should be a job creation package, which -- and the way you create jobs is you reduce taxes, you put more money in people's pockets, you get the economy moving again. We -- on the spending side we've already done a heck of a lot since 9/11.
PRESS: Well, Senator, now, you know you didn't come close to answering my question. I'm asking you about the wisdom of this abolishing the corporate alternative minimum income tax.
But I want to point out that one of your former colleagues -- Republican colleague, Bob Packwood -- is the one who sponsored that legislation, saying that corporations have to pay some tax every year back in 1986.
He was on CNN today, and he said if you do away with that, you are going to go back to way it used to be. The corporations will just hire all the clever lawyers they can and end up paying no taxes at all. How do you explain that to the American people?
MCCONNELL: Frankly, from my point of view, I'd be willing to let that piece go.
What we need to do is to move the rate reduction forward that is going to occur in a few years -- move that forward. We need to give a payroll tax, a one-month holiday from the payroll tax which benefits low income people and puts money in their pockets immediately.
It also benefits businesses. That ought to be a part of the package. And we need to extend unemployment benefits for additional weeks that could carry the victims of the attack in terms of up employment compensation up to next June. All of that could be part of a package that we ought to agree on and agree on quickly.
NOVAK: Well, let me -- let me raise something that probably both sides agree on -- mistakenly -- and that is the income tax cuts earlier this year, which Senator McConnell said should be moved up. But there seems to be an agreement that there only be moved up as high as the 28 percent bracket. In other words, people who make more money won't have their income tax cuts moved up. Now I'm going to tell you, Senator Durbin, somebody is making $100,000 a year, if he gets a tax cut, he is not going to buy a diamond ring. He's already got that. He is not going to buy a car. He's got that. You know what he's going to do with that money? He's going to invest it. Is it just your class hatred that makes you opposed to giving rich people some money to invest?
DURBIN: No, Bob. I think what it boils down to is economics. When you have an economy with overcapacity like our economy, you need more consumption. And the middle-income working families are the ones with the tax break who will turn around and spend it on things that they need.
The Democrats have supported providing additional assistance for the unemployed, the millions across America who lost their jobs this year, some help to buy health insurance for kids. I don't think that this is a wasteful expenditure. It's money that's going to spent into our economy at a time when we need that kind of consumption. Here is my difficulty. I don't think accelerating tax rates...
NOVAK: Tax cuts.
DURBIN: Tax cuts for people who are making over $300,000 a year is a way to fire up the economy.
NOVAK: I'm glad you admitted that, Dick, because all that stuff does go into investment but you're anti-investment. Let me say something that both you and Senator McConnell say. You -- you want to give the people who are without a job some extra unemployment compensation.
Now, everybody I talk to says you give a guy some more rocking chair pay, and he isn't going to go look for a job. And that is the mistake your idol Roosevelt made all through the new deal. He had this relief and when you give people money they aren't going to look for a job.
DURBIN: Bob, you are consistent. You are consistently wrong. When you have an economy without enough consumption -- people are getting paid $230 a week on average unemployment. Imagine if you will, for a moment, paying your rent, your utilities, trying to take care of health insurance...
NOVAK: What's the incentive...
DURBIN: The incentive is even with another hundred bucks a week you aren't living in the lap of luxury. You have been so far removed from working people so long, you don't know what people are doing. They can't even afford a rocking chair for $230 a week.
PRESS: Go, Senator Durbin. Senator McConnell, it seems to me every time we come down to these debates it's the same old question. There is only so much money to go around, and the question is: what are the right priorities? And if you look after 9/11, look what are the right priorities? I think today Minority Leader Gephardt had it right in the House of Representatives, if we can listen to him for just a minute here.
(BEGIN VIDEO CLIP)
REPRESENTATIVE RICHARD GEPHARDT, HOUSE MINORITY LEADER: Instead of refunding billions and billions in tax cuts to corporations -- dating back to 1986 -- America could get more smallpox vaccine, hire police and firefighters, step up border patrols, and strengthen programs to prevent weapons of mass destruction from falling into the wrong hands.
(END VIDEO CLIP)
PRESS: Now let's take the corporate tax off the table, because you said you were willing to do that. But you still have this accelerated tax cut Senator Durbin was just talking about for the wealthiest people in this country. Aren't the more important priorities police and fire and public health? Anti-terrorism measures?
MCCONNELL: I think that is terribly important and that is what $40 billion that we already appropriated is for. And that hasn't even been spent yet. That hasn't even been spent yet. And that covers all of those items that Dick Gephardt was talking about.
Subsequent to passing the $40 billion spending package, the leaders of Congress sat down with the president, actually made him sign a document agreeing to $686 billion for our appropriation bills. That is a 13 percent increase.
Within weeks, that is inoperative and they want to come back and do more.
We are spending on all of the issues that Dick Gephardt mentioned. What this package that the Democrats basically didn't want to pass at all until the president started talking about it today -- and now they're sitting down and negotiating, which is what they should have done two weeks ago -- what this package should be about is stimulating the economy. And you don't do that by having yet another spending package on top of the $40 billion we already spent plus the $15 billion that we gave to airlines. That is $55 billion we've spent in the last six weeks.
PRESS: I understand, which raises the question whether we need any bill at all. But, but, the question here...
MCCONNELL: I think we all agree that we need a bill.
PRESS: What is the evidence that the tax cuts will stimulate the economy? We have been around here before. In June we were all told we were going to get all these rebates, we put out -- let me ask my question, please -- we put out $40 billion, and Alan Greenspan said only 18 percent of all that money went into the economy.
PRESS: It didn't work then and it's not going to work now, Senator.
MCCONNELL: Bill, I think we -- I think we can stipulate that there is no time -- no time -- upon which either you or Dick would like to cut taxes.
PRESS: That is not true.
DURBIN: That's not true.
NOVAK: They don't want to cut taxes for rich people.
DURBIN: The Democrats' plan cuts taxes now.
MCCONNELL: Let me finish. They -- they all about opposed to tax cut that we passed earlier this year, and the rationale for that was because they didn't want people -- higher-income people to get any reduction at all, even though they had socked the country with the biggest tax increase in history back in '93.
PRESS: No, the rationale was it would not stimulate economy.
NOVAK: I'm sorry. We have a statement by -- by the Congressional leadership right now.
(JOINED IN PROGRESS)
REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: ...procedure. And seriously we have some procedural questions. We're going to try to sit down and work out a framework, and we will meet tomorrow and hope that we can work off that. We didn't want to get into the -- obviously, the policy side before we had a procedure worked out. We hope that we have positive news tomorrow. Thank you.
UNIDENTIFIED MALE: That is all we can say at this point.
QUESTION: Was there some positive news tonight?
UNIDENTIFIED MALE: That is it.
NOVAK: OK, when didn't get an agreement. Surprise, surprise. We are going to break. And when we come back, we will talk to the senators about a novel idea: a one-month payroll tax holiday. Why, that's my kind of holiday.
(BEGIN VIDEO CLIP)
SENATOR TOM DASCHLE, SENATE MAJORITY LEADER: I would invite them to tell me when before Christmas they want to bring up the energy bill. Why don't you ask them? Is it the 23rd, the 24th of December? Because that is about the time we will finish all the other things we've got to do.
(END VIDEO CLIP)
NOVAK: Welcome back to CROSSFIRE.
Now that congressional leaders are trying to negotiate a compromise economic stimulus bill, an embarrassing question is posed: will there really be any stimulus? We are seeking the answer from Senator Richard Durbin of Illinois, the assistant Democratic floor leader, and Republican Senator Mitch McConnell of Kentucky -- Bill Press.
PRESS: So Senator McConnell, there was a new idea put on the table by -- as you know, by Senator Domenici and some -- and others. Let's just -- let's make sure that our viewers understand what it is.
It's the payroll tax holiday for the month of December. There will be no more Social Security payroll tax for that entire month. It would be suspended. And the -- also, just not only the employees but the employers would be exempt from having to pay that 6.2 percent tax. And that is expected to cost about $40 billion.
MCCONNELL: I like it.
PRESS: Now, my question to you is, Senator -- I like it too. I mean, this finally is a tax cut that I like. I like it, I proposed it before in the past. I'm glad that Republicans are catching up.
MCCONNELL: You proposed it?
PRESS: I have indeed. My question is, if it is the fairest tax, and if it is the quickest way to stimulate the economy, why one measly month?
MCCONNELL: Because it costs $40 billion. I mean, the question is just how much are we going to spend on this stimulus package? We have generally agreed to roughly $75 billion. We have already spent 55 billion since September 11.
In early October that the appropriated -- the regular appropriated accounts would be 686, which is a 13 percent increase over last year. The spending spree -- and including the tax cuts -- ought to be, we generally agree -- cut at -- limited to about $75 billion.
This -- this payroll holiday benefits low-income people who don't pay income taxes. Dick likes that, I like that. It also benefits businesses. This is a --- this is something I think is going to be in the final package.
PRESS: But you know, the bill that came out of the House -- which not only repeals that alternative minimum tax but takes the rebate back to 1986 -- is about a $200 billion package. And 40 sounds like a lot, but that's nothing compared to what you are willing to give -- at least your colleagues in the House -- are willing to give the corporations. Again, if it's such a good idea...
MCCONNELL: Well, I don't -- I don't serve in the House and I think you can make that bill better and that is why we have conferences. That is the bill that the House is going to send into conference. We are going to send a separate bill.
PRESS: Do you think the president is wrong in backing the House version?
MCCONNELL: I think we can improve upon it. And I think this payroll tax holiday is going to be an improvement.
NOVAK: Just -- just for the record, I'd like some things accurate. The president never supported the retroactive tax benefits for the -- for IBM, GE, GM and those companies. This is just for the record. I know you hate that, bill, but I have to butt in sometimes.
Senator -- Senator Dick Durbin, your so-called moderate colleague, John Breaux of Louisiana -- who I have suspected for a long time -- says that he worries about.
DURBIN: You think Breaux is a liberal?
DURBIN: OK, proceed.
PRESS: Well, compared to Novak.
NOVAK: You -- you -- he said that he worries about the tax holiday, because employers -- excuse me -- will not set -- give the money back that they get on the payments they don't have to put into the employees. Surely, that isn't the purpose of the bill. I happen to have three employees. And I'm going to take -- if I get that month's money, I'm going to get it and buy -- invest it in the stock market. That's not supposed to go back to the employees is it?
DURBIN: Bob, you are going to be shocked to know this but I support what Mitch and Bill were talking about. In fact, I made a similar proposal myself.
NOVAK: So you are a regular John Breaux.
DURBIN: Well, perhaps I am. But here is what I'd suggest that we take a look at.
NOVAK: That is a scoop.
DURBIN: If we applied it to all companies that have 500 employees or fewer -- that is 99.7 percent of the companies in America -- then it gives the employers and employees -- particularly at small businesses -- the kind of tax break they need. What I like about it, as Mitch said, is the fact that it's progressive. Finally we're talking about a tax cut that will help working families.
NOVAK: But I...
DURBIN: And let me give one last point. Just about the same amount of money that you want to -- someone to spend to give tax cuts to those who are making over $300,000 a year, the cost of that is about the same as this proposal. Now doesn't it make more sense to give a payroll tax holiday that applies to working families for the first dollar up to about $80,000 dollars?
NOVAK: I want you to realize -- and ask you -- ask you if you realize, that this is more than something to give beer and cigarette money to -- to these low income people. This means the employers are going to get a tremendous tax relief. The -- all these employees over at these -- with these small firms, that they don't have to give back to the employees, that they can invest in their own company. Isn't that the real good part of the bill?
DURBIN: Well, I like the fact that it helps both sides. And I think if you take companies with fewer than 500 employees for example -- even a hundred, whatever your standard might be -- you're going to help small businesses. And I think Senator McConnell and I can both agree that you have 95 percent of the businesses in America are small businesses.
NOVAK: What about me as a small businessman?
DURBIN: That is thing that troubles me. But I guess I'm going to have to swallow it.
MCCONNELL: Well, I different with Dick because he wouldn't do anything at all for anybody at the higher end of the scale. And that does need to be a part of the package. And moving forward the marginal rate reductions earlier in year have to be part of the package.
DURBIN: $27 billion.
MCCONNELL: Have to be part of the package.
DURBIN: That is what it cost.
MCCONNELL: There are Republicans and Democrats. They don't control the House. They don't control the White House. This has to be a bipartisan package.
DURBIN: $27 billion for people making over $300,000 a year?
MCCONNELL: Do you want to stimulate the economy or not?
PRESS: Whoa, whoa, that is not your question.
MCCONNELL: ...job creation and economic stimulus.
PRESS: No, the question is, they already got their slice of the pie, a big chunk of the pie in June, when the working people, got nothing.
NOVAK: They didn't get any of that.
PRESS: Now -- now you are willing to give the working people some of the Social Security tax. Why not do that instead of giving the wealthiest another slice?
MCCONNELL: Look, Bill. NOVAK: Spin.
PRESS: It is not spin, Bob. And I'm asking the question, thank you. And you are answering it.
MCCONNELL: We've spent $55 billion since 9/11. This package needs to not all be on the spending side. It needs to be partially on the tax cut side. We need to put money back in the hands not only of low-income people, but also higher-income people as well, because Bob is right. They are the ones most likely to invest it and create jobs and opportunity for our country.
PRESS: Now let me ask you a question. Both of you may disagree with me on it. It's true a group of economists this week said we are in a recession. It's also true that every day you read economists in the paper saying the economy is still strong, we are going to see a recovery in early 2002. The Dow almost at 10,000, just about what it was before 9/11. Isn't it really true that we don't need any bill at all, and both sides are just using 9/11 to try to get either more spending or tax cuts?
MCCONNELL: I think both sides agree that we do need a stimulus package. That's why the talks are going on tonight.
MCCONNELL: Because we think they are in recession. We don't think, we know we are. We know it started last year. It continues. We need to jump-start this economy and see if we can make it as smooth as possible coming out of the this slowdown.
NOVAK: Senator Dick Durbin, something amazing happened in the Senate this week. I have been watching the Senate for half a century and it has never ceased to amuse me.
The Senate Majority Leader, Tom Daschle, took the stimulus bill off as the main part of business and put up one of the most outrageous scams I have ever seen, a $15 billion treasury raid agreed on by the railroad industry and railroad unions. No need for it. Lowering the tax payments by railroad workers, increasing their benefits, lowering their retirement age, because they have political power -- and puts that up as the order of business. How can you justify that?
DURBIN: I'm amazed at you Bob. I mean, first, the economic stimulus bill was off the floor because of the objection from the Republicans two weeks ago. This bill that dealt with railroad pension is supported by workers and the management. Allows them to invest railroad retirement funds in private investments. That sounds like Bob Novak philosophy...
NOVAK: When you get...
DURBIN: 74 senators supported it.
NOVAK: When you get -- when you get the railroad management and labor together, you guys have got your hand in the cookie jar. DURBIN: Well, 74 senators think it's a good idea.
NOVAK: That's what worries me.
PRESS: And also, I have to say, Senator, the train is now leaving the station, because, we are out of time. Senator McConnell, thanks so much for joining us. Senator Durbin, all right, good luck working out this bill. We're counting on you.
Bob Novak and I will solve the whole thing. We'll put the compromise together in closing comments coming up.
NOVAK: Bill, one thing that I never understood with your class warfare ideology that is what drives the economy of this country is the capital system and people who invest. That is why we are the -- the hope of the world, the shining city on the hill. And people like you have fought consistently -- everybody from Jack Kennedy to Ronald Reagan, who wanted to let rich people get some tax cuts, and keep their own money.
PRESS: That is pure Novak baloney. But let me ask you this. Here is what I don't understand. Maybe you can help me. Why, Bob -- give me one good reason why corporations should pay zero taxes. Why is that good for this country?
NOVAK: Well, it isn't a question of paying zero taxes. It is the alternative minimum tax, which since you are starting to make a lot of money on CROSSFIRE, you are probably paying the alternative. You probably will be soon.
PRESS: But answer the question. Why shouldn't they pay taxes like we do?
NOVAK: Well, if the tax law says you should pay zero they should pay zero.
PRESS: They should pay taxes. From the left -- like we do -- I'm Bill Press. Good night for CROSSFIRE.
NOVAK: From the right I'm Robert Novak. Join us next time for another edition of CROSSFIRE.
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