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CNN CROSSFIRE

Interview with Steve Forbes, Ralph Nader

Aired May 12, 2003 - 16:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEOTAPE)
ANNOUNCER: CROSSFIRE. On the left, James Carville and Paul Begala. On the right, Robert Novak and Tucker Carlson.

In the CROSSFIRE, what a tax cut?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm more worried (UNINTELLIGIBLE) but I'm more worried about the fella looking for work.

ANNOUNCER: We'll ask two fellas who were looking for work at the White House. Get ready for a clash of the titans, former presidential candidates Ralph Nader and Steve Forbes.

And more fighting on the Democratic playground. Today on CROSSFIRE.

(END VIDEOTAPE)

ANNOUNCER: Live from the George Washington University, Paul Begala and Robert Novak.

PAUL BEGALA, CO-HOST: Hello, everybody, welcome to CROSSFIRE. You know, today's one of those days you're going to be glad you paid that cable bill, that is of course if you still have a job in the Bush economy, because former presidential candidates Steve Forbes and Ralph Nader will be here to debate whether we really need another tax cut for the rich to stimulate the economy.

Before we get to that let us start with the best little political briefing in television, our "CROSSFIRE Political Alert."

North Korea announced today that it is withdrawing from a 1992 treaty to keep the Korean Peninsula nuclear-free. Pyongyang blamed what it called, quote, "a sinister and hostile U.S. policy," unquote.

Of course under President Clinton, America used the carrot of better relations and the stick of potential war to shut down the North Korean nuclear program. President Bush replaced that policy with axis of evil bluster backed up by, well, nothing. Sort of a speak belligerently but carry no stick policy. So now, a psychotic communist in Korea has the bomb and President Bush is betting your life on his Star Wars plan, the faith-based missile defense system.

ROBERT NOVAK, CO-HOST: You know, Paul, people who are not Democratic spinners but are serious students of foreign policy believe that President Clinton's negotiations with the North Koreans failed. I think more negotiations are needed. I think that's what it's going to end up doing. But nobody thought that the Clinton administration negotiations brought peace. They obviously didn't.

BEGALA: Actually, Richard Armitage, who is President Bush's deputy secretary of state said he thought President Clinton's approach was the right one. He was speaking the truth, he was right, he is an expert on this, and certainly no Democratic spinner. We ought to have, I think, a smarter, tougher policy.

NOVAK: He said what they had to do is have negotiations. He didn't say that the Clinton negotiations were effective.

Two Democrats from New England, Senator John Kerry of Massachusetts and former Vermont Governor Howard Dean really don't like each other, as was made clear in the first Democratic debate. They're still at it. Dr. Dean told "New York Times" political reporter Adam Nagourney he was, quote, "surprised by the nature of the attacks by Kerry, calling this down and dirty Massachusetts politics."

Kerry campaign manager Jim Jordan said, quote, "There's no secret that we think Mr. Dean's rhetoric has been hot and a little bit personal."

Gee, I thought they were supposed to be running against George W. Bush.

BEGALA: This is a great point, Bob. I mean, you've been covering campaigns since JFK. The point is to beat the enemy, not the friends. Nut in a primary, these guys are going to mix it up. I think they both do well to take on the guy who either of them would be better than, and that is Bush, instead of attacking each other.

BEGALA: Well the problem is that they're running in New Hampshire. The guy -- which one of them doesn't win the New Hampshire primary is out of there. So they get nasty. You ever hear about politicians getting nasty to each other?

BEGALA: I thought it was kind of funny that the New Hampshire (UNINTELLIGIBLE) Howard Dean to the Massachusetts politics are so dirty. I'm from Texas, man. I (UNINTELLIGIBLE) Massachusetts is clean government compared to what we do in Texas. I don't think that (UNINTELLIGIBLE).

Well on Friday's show, you may recall I excoriated President Bush for taking a luxury golf vacation in ritzy Santa Fe instead of visiting victims of the tragic tornadoes in the Midwest. Today, the White House announced that Mr. Bush has changed his schedule and will in fact visit tornado-ravaged Missouri tomorrow.

Mr. President, I'm humbled that you took my advice. So here's some more. Quit ruining the economy, stop packing the federal courts with knuckle-dragging thugs, just tell the truth about your plan to privatize Social Security and please, please, Mr. President, stop playing fighter pilot dress-up on the taxpayers' dime. NOVAK: You know, I hate to disillusion you, Paul. But as a matter of fact, he didn't even know you gave that advice. I don't think he knows you exist. And the other hand, I think it is terrible for you to call distinguished judge, judicial nominees who happen to be conservatives "thugs." I think maybe even you'll take that back. You call Priscilla Owen a thug?

BEGALA: She's a right-wing kook. Even Al Gonzalez...

(CROSSTALK)

NOVAK: ... take that back.

BEGALA: I take it back.

(CROSSTALK)

BEGALA: ... so right-wing that Al Gonzalez, Bush's lawyer, said she was too extreme.

NOVAK: You think Miguel Estrada's a thug?

BEGALA: He's a right-wing crank.

NOVAK: Is he a thug?

BEGALA: He's a crank.

NOVAK: You're taking it back.

Nearly all the Democratic members of the Texas House of Representatives played hooky today. In fact some actually left the Lone Star state so that the Texas Rangers couldn't track them down.

With Republicans in control of the legislature, they've been trying to change the congressional districts to make them fair, to end horrible Democratic gerrymandering. So with a deadline looming later in the week, the Democratic members of the legislature just took off to prevent a quorum.

Is this a Democratic pattern, dropping a losing Senate candidate in New Jersey after the deadline, filibustering qualified judicial nominees, because they're conservatives, not playing by the rules?

BEGALA: The rules are -- this is not Democratic gerrymandering. A three-member bipartisan federal judge panel wrote these districts. The Texas Republican attorney general said they were fair. The U.S. Supreme Court said they were fair. And Tom DeLay, who is a thug and brute, is trying to overturn those for his raw partisan power grab. His own paper, "The Houston Chronicle" says it's a raw partisan effort to satisfy Tom DeLay's appetite for power.

NOVAK: It is a matter of fact if they had fair districting, there would be two or three more Republican seats, (UNINTELLIGIBLE) prevent. But the way that you avoid the question, Paul, the question is, when you're in the minority and have a boat, why do you prevent a vote from taking place?

Stay with us for the battle of the economic titans. We'll ask former presidential candidates Steve Forbes and Ralph Nader what's wrong with letting American taxpayers keep more of their own money?

(COMMERCIAL BREAK)

NOVAK: President Bush asked Congress for a $726 billion tax cut. The House passed a $550 billion compromise. A Senate committee wants an even smaller cut, just $350 billion. And there are some Democrats, believe it or not, who want a tax increase. President Bush is going around the country asking who wants to keep more of their own money?

In the CROSSFIRE this afternoon, consumer advocate and former presidential candidate Ralph Nader, along with former presidential candidate Steve Forbes, president and CEO of Forbes Incorporated.

BEGALA: Gentlemen, we both thank you very much. This will be fun.

Steve, as we speak, our president is landing Air Force One in Omaha, Nebraska, part of this sales tour for his tax cut.

But you know, there's another resident of Omaha and his name is Warren Buffet, probably the most successful investor in America. He thinks the president's tax package is a bad one, because he says, Firs, it's tilted too much towards the rich and that won't help the economy, he argues.

Do you really expect me to believe that George Bush knows more about the economy than Warren Buffet?

STEVE FORBES, PRES. AND CEO, FORBES INC.: When it comes to the economy, the answer is absolutely.

BEGALA: Really?

FORBES: Every time we've cut tax rates in this country, the economy has blossomed, the economy has become stronger and government revenues eventually go up. It's always worked in the past, whether it's under John Kennedy, Ronald Reagan -- it will work this time. That's why those tax cuts have to be made effective now.

And to say we shouldn't do it until we get a better fix on the economy is like telling a patient with pneumonia, Don't take penicillin until you get better. Now's the time to do it.

NOVAK: I got to add Warren Buffet is a liberal Democrat and a stock picker, not an economist.

BEGALA: He's an investor.

NOVAK: He's a stock picker.

All right, Ralph -- Ralph Nader... FORBES: He's a very good one.

NOVAK: He's a good one. Good ones.

FORBES: Take his advice on stocks, not on economics.

NOVAK: Ralph Nader, the problem with the 2001 tax cut, it was delayed. Wouldn't it a be a good idea to have all -- everybody gets a tax cut in that -- to have -- speed it up so everybody has the money so you can invest, spend, stimulate the economy?

RALPH NADER, CONSUMER ADVOCATE: Well, half of the tax cut goes to the top 1 percent of the wealthy. I mean, Steve's going to make over $90,000 for every million dollar a year income. He's not going to go out and spend that. He's spending as much as he wants to.

The people who will spend more -- the people who get an extension of their unemployment compensation on an emergency basis, the people who will see their services not cut at the state level by having some aid to the beleaguered states. You know, they're laying off state troopers, they're ending scholarships, they're cutting health and education budgets at the state level.

I mean if you want to mess around with the taxes, what about collecting $70 billion more a year from corporate tax escapees in Bermuda and the Bahamas? So it doesn't work.

(CROSSTALK)

BEGALA: Why not get these corporate Benedict Arnolds and make them pay their fair share?

FORBES: Paul, if we had my flat tax there would be no place for those people to hide. Every one would pay a fixed rate.

BEGALA: Well, let me ask you, though, about the president's lack of success, candidly, as a salesman. I don't support his plan. I'm happy to see he's failing as salesman.

But you as a supporter have got to be troubled by a poll like this, today's ABC News/"Washington Post" poll asked people, just simply, which would they prefer: more domestic spending, 68 percent. Tax cuts, 29 percent. Bush has failed selling his plan, hasn't he, Steve?

FORBES: His popularity has actually gone our since he's gone on the campaign trail to sell this thing.

And I think the fact of the matter is this tax cut, which Washington makes it sounds like it's so big, is actually small potatoes over 10 years. It's much too small.

BEGALA: But why would they prefer more spending, which is a traditionally liberal approach, than more tax cuts, which is traditional conservative? FORBES: You have to see how the question was phrased. If you say should we stimulate the economy by spending because it works and tax cuts don't work, that's a loaded question.

NOVAK: Give him the question. Do you want more money to be spent to help the people or tax cuts for the rich?

What do you think they're going to answer? Yes.

BEGALA: That's not what was asked, though.

NADER: Well, you didn't even mention the increased deficit. This tax cut is borrowed from our children. Increased deficit, according to Alan Greenspan, increases interest rates. You wouldn't want that.

FORBES: That's not true, Ralph. Name one period where deficits have increased interest rates.

NADER: I refer you to Alan Greenspan.

(CROSSTALK)

FORBES: ..you ought to go -- you ought to ask the so-called authorities what their proof is.

In the 1980s, we had huge deficits and interest rates fell by two-thirds.

NOVAK: You know, contrary to what Paul says, I'm going to take the poll that we paid money for, Paul, the CNN/"USA Today"/Gallup Poll. And they asked whether the Bush tax cuts were a good idea. They asked on April 22-23, 42 percent. Now, on May 5-7, good idea, 52 percent. It's catching on with the people, isn't it? -- as the president goes around the country.

NADER: But what's it?

NOVAK: Tax cuts.

NADER: His own economy adviser says the tax cut will create 1.4 million jobs. Most economists think that's a wild exaggeration.

But even taking that figure, it amounts to half a million dollars per job. Good heavens, the government could hire people to improve our parks and improve our cities for far less than that.

NOVAK: Now that's funny math.

NADER: No, it's not funny math at all.

NOVAK: You're taking jobs in one year as against the tax cut over 10 years.

NADER: And look, let's face it, the top 10 percent of the income earners in this country get the lion's share. They're not going to go out and spend more money.

Look it, the issue here is not lack of capital. I think you'll agree with that. It isn't lack of capital to invest. We have plenty of unused capacity in our society, factories that aren't producing to peak.

FORBES: The capacity numbers are absolutely meaningless.

(CROSSTALK)

FORBES: What is meaningful is spending capital to become more efficient. It's the difference between building a building when you have somebody with a shovel, when somebody with a bulldozer. That's what capital is all about. Giving people the tools to become more productive.

Right now, right now, we don't have those incentives. When you create more capital, you get -- laborers get paid more and it's not trickle down. This tax cut gives a family of four making $40,000 a year a 96 percent reduction from $1,000 to $40.

NADER: You know that's deceptive. That doesn't deal with payroll taxes, overall taxes.

FORBES: You want to cut payroll taxes, throw it in there. I'm for that.

NADER: But you're talking about a few hundred dollars for most -- wait, wait. You're talking about a few hundred dollars for most -- a year for most -- for most family taxpayers.

NOVAK: A few hundred dollars is something for poor people, you know?

NADER: No, no. The key thing is, to extend the unemployment emergency. That is for people who have been laid off by Enron and all the corporate crooks that Steve properly denounces, right?

FORBES: You dug yourself out of that one.

NADER: And the other thing that's really important here is look at the states here. They're canceling all kinds -- incredible what's going on. And Bush is totally ignoring the states.

FORBES: That's why we need the tax cut now.

(CROSSTALK)

BEGALA: You and others who support the president told us two years ago a $1.3 trillion tax cut, the largest in world history, would really rev up the economy. Well, how has it worked so far?

(CROSSTALK)

FORBES: The Democratic portion of the tax cut was put in in 2001, the $300 rebate. It did not work. The rate cuts, which is where you get your real juice, letting people keep more of their money permanently, taxing less of each extra dollar they get, that doesn't come into effect next year, two years, 50 years. Hasn't come into effect yet. That's why it's got to be made effective now, now 10 years from now.

NOVAK: You talks about tax cut for the rich. I just want to take you a look at the percentage. The top 1 percent of the income earners in this country pay 37.4 percent of the income taxes. The top 5 percent pay 56.5 percent. We got Karl Marx's dream in this country, a graduated income tax. Any tax cut you have that's fair is going to help people in that top 5 percent.

NADER: And those are the people who aren't going to spend more. You...

NOVAK: So you want it more graduated?

NADER: You want to give a tax cut -- if you want to play tax cut -- you want to give it to people who have a high propensity to spend because they don't have enough money for groceries and for rent and for transportation.

The other thing is 20 years...

(CROSSTALK)

BEGALA: Stay with us. Both sides got plenty more to say about this, as you can tell.

Our next segment is called "Rapidfire," where there are two kinds of guests, the quick and the dead.

Later in "Fireback," you're not going to believe what one of our viewers has to say about my friend Bob Novak. I know I didn't.

(COMMERCIAL BREAK)

Welcome back to CROSSFIRE.

Time now for the fastest question and answer segment in politics, we call it "Rapidfire".

In the CROSSFIRE, Steve Forbes, now president and CEO of Forbes, Inc. Along with him, consumer advocate, and fellow former presidential candidate Ralph Nader.

NOVAK: Mr. Nader, American people taxed too much or too little?

NADER: Too much, corporations taxed too little.

BEGALA: Mr. Forbes, was the economy better under Clinton or bush?

FORBES: Economy had the bubble under Clinton, and now we're cleaning up the mess and we'll have a stronger economy in the future.

NOVAK: Mr. Nader, if the deficit were created by spending instead of tax cuts, you worry less about the deficit?

NADER: What was that again.

NOVAK: If the deficit were created by government spending, would you worry less about it.

NADER: Depends, if it's productive spending to build the infrastructure on which the private economy is based that's a plus. If it's wasteful spending, like making the rubble bounce by having a military weapons system that can blow you up the world 200 times over to make Lockheed Martin happy, that's wrong.

BEGALA: Mr. Forbes who drives the economy, elite investors or ordinary consumers?

FORBES: It comes from the American people, starting out with little and making a lot like my grandfather did. That's what these tax cuts are about, letting people have a chance to get the capital to create new innovations.

NOVAK: Mr. Nader, the top tax rate under F.D.R. was 90 percent and we never got out of the depression.

Would you like a 90 percent tax rate?

NADER: Of course not, but 20 years of Reagan supply side economics with tax cuts have left the majority of the workers making less today in real purchasing power than they were making in 1973. Abject failure for that strategy.

BEGALA: Mr. Forbes, what should be the tax rate on corporate profits?

FORBES: Should be my flat tax rate of 17 percent. That way, they'd all pay it. That way they would all pay it. There's no way to hide it.

NOVAK: Can you agree, Mr. Nader that dividends are taxed too much, even if you don't want to eliminate them there will be some kind of dividend tax.

NADER: Absolutely not. Why should they be taxed less than ordinary income from Joe Lunchpail? I mean, it's crazy. And besides it's not double taxation, a corporation is a distinct entity and a shareholder is a distinct entity. If someone gives you income and you go into the market place and buy something and the sales tax hits you, does that say your income is taxed twice?

BEGALA: Yes or no does the bush tax cut spend social security trust fund?

FORBES: Bush tax cut will strengthen the social security trust fund.

NADER: Come on!

NOVAK: Thank you very much, Ralph Nader, Steve Forbes. Appreciate it.

Coming up in "Fireback," one of our viewers is on Paul Begala and his fellow Democratic strategy in 2004.

But next, you won't believe what's about to happen to one of the proudest symbols of American history.

(COMMERCIAL BREAK)

NOVAK: Welcome back to CROSSFIRE.

We'll get back to "Fireback" in a moment.

First, from our in case you missed it file, the University of Massachusetts may drop the minuteman as its mascot. The minuteman, the guy who picked up his musket at a moment's notice to fight the redcoats. That's the trouble, a guy with a gun. U. Mass's new athletic director, Ian McCall (ph) cites gender, firearms and ethnicity issues. That's it, Ian, patriotic white men are politically incorrect and you, Ian, are ridiculous.

BEGALA: You know, you have a point, minutemen are a great and proud tradition of American history. Why not if they want to change it, honor the fighting women. Look at, Private Lynch, Jessica Lynch from West Virginia, a American hero recovering now from her war wounds. God bless her, why not include women too.

NOVAK: Well, you're not quite as bad as Ian, but just about. The idea that you can't have -- you can't say that these were minutemen who picked up their gun. I didn't see any women at Concorde and Lexington.

BEGALA: There was Molly Pitcher who was in the revolution. Why not Private lynch As well? Recognize there are women, and Jessica Lynch recovering from here wounds. We wish her well.

In "Fireback," Diane in Miami writes, "Where are Saddam, Osama, the anthrax terrorist, and Ken Lay? Oh yeah, and all those weapons of mass destruction?"

Well, good point, Diane. Our president seems to be not finding what he's looking for.

NOVAK: I think Diane is a hopeless liberal when she compares Osama bin Laden and Ken Lay. That's really a problem.

NOVAK: The next is from Gary Black of Hickory, North Carolina. This is to you, "Paul, do you really think Americans aren't going to realize that the Democrats are hoping for a recession to win them the White House? Wishing misery for political gains apparently is all the left has left."

And you know, between you and me, if the economy doesn't go in the dump, the Democrats are dead.

BEGALA: If we wanted a recession, we'd vote for the Bush economic policy, because that's what it gives us.

Tom Cohen in Santa Barbara, California, writes, "Thank goodness for Bob Novak. Sometimes I think those pesky liberals make sense, but then you always bring me back to the right side."

Well, Bob, you've got a convert in Santa Barbara.

NOVAK: A token conservative from Santa Barbara.

BEGALA: Good job.

NOVAK: Question?

UNIDENTIFIED FEMALE: My name is Susan from Davis, California. I was wondering how you propose to help states deal with record budget deficits.

NOVAK: I would like them to cut their (UNINTELLIGIBLE) spending, cut it back, stop the wasteful bureaucrats, cut the payrolls and they won't worry about deficits.

BEGALA: Here is what states spend money on teachers, cops, prison guards, children's health care, what are they going to cut. Mr. Bush was a governor and should understand the states are hurting, instead of giving away tax breaks to the elite, he should be helping the states.

NOVAK: Next question?

BEGALA: Hi my name is Sarah, from north Vermont. And I was wondering, what --

NOVAK: Your from Vermont?

UNIDENTIFIED FEMALE: Yes. What Democratic candidate do you think has the best chance against Bush in the presidential election.

BEGALA: James Carville, but he won't run because his wife won't let him. We've invited all the candidates on the show, many have come on, some haven't. I mostly like the ones who do come on, mostly, but I can't choose sides until we have the nominee.

NOVAK: You're from the peoples republic of Vermont. That's really interesting. My favorite candidate is Al Sharpton. I think he would really set the agenda very well.

BEGALA: These guys always say that. Don't listen to them. Al Sharpton has run many times in my party and has never got an vote. Their party is led by Rick Santorum who is absolutely nuts and a homophobic at that.

That's it for CROSSFIRE, thanks for joining us.

From the left, I'm Paul Begala.

NOVAK: And Happy birthday Paul on your 42nd birthday. BEGALA: Thank you, Bob.

NOVAK: From the right, I'm Robert Novak.

Join us for another addition of CROSSFIRE.

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