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CNN CROSSFIRE

Senate Passes Tax Cuts

Aired May 23, 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, thanks to Dick Cheney...

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: The vice president votes in the affirmative.

ANNOUNCER: ... you're getting a tax cut. Is everybody happy?

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: Our colleagues did the tax equivalent of a triple back flip off the high dive and they belly flopped.

ANNOUNCER: Plus, can this man find anything constructive to do?

Today on CROSSFIRE.

Live from the George Washington University, Paul Begala and Tucker Carlson.

(END VIDEOTAPE)

ROBERT NOVAK, CO-HOST: Welcome to CROSSFIRE.

President Bush wanted a tax cut on his desk by Memorial Day, and, today, he got it. In a little bit, we'll ask some members of Congress whether it's too soon to start talking about another one.

And since you can't get too much of a good thing, we're starting with the best political briefing in television, our CROSSFIRE "Political Alert."

Vice President Dick Cheney broke a 50-50 tie in the Senate to cast the deciding vote for President Bush's tax-cut bill. Nine hours earlier, the House passed the bill by 31 votes.

This is the third biggest tax cut in American history, includes reductions on dividends and capital gains. It also means millions of families will soon get checks in the mail, $400 for each dependent child.

The Democratic minority shed tears in both the House and Senate all week long. That's because it means less money for liberals to spend and no chance for the economic collapse the Democrats need to win the next election.

PAUL BEGALA, CO-HOST: News flash: We've had an economic collapse every since Mr. Bush passed his last tax cut. What was particularly vulgar about this was Mr. Cheney casting the deciding vote. This personally benefits Dick Cheney to the tune of $170,000 in his own pocket, and he votes for it. I think that's a sin.

NOVAK: Well, that -- that is ridiculous because he...

(APPLAUSE)

NOVAK: It -- it helps all Americans, and he is the vice president, and I -- I will tell you this right now, that your party, the Democratic Party, being against tax -- $400 for ordinary Americans is not going to help.

BEGALA: Four hundred? A hundred and seventy thousand dollars for Dick Cheney. That's a -- that's a ripoff.

Anyway, Republican House Majority Leader Tom DeLay has admitted that he contacted at least two federal agencies, the FAA and the Department of Justice, relating to the Texas Democrats who fled the state capitol recently.

Now Texas officials back in Austin have reportedly destroyed all records of their contacts with the federal Department of Homeland Security which reportedly did, in fact, attempt to spy on the wayward Democrats.

Democratic National Committee Chairman Terry McAuliffe today issued a blistering call for a full inquiry into these allegations of abuse of federal power trial, and, as of our air time this afternoon, so have presidential candidates Joe Lieberman, Dick Gephardt, Bob Graham, and John Kerry. John Edwards spokesman preferred what she called a full accounting of the matter. Others were unavailable for comment.

But here's hoping my Democrats show a little spine. You know, if they can't stand up to Tom DeLay, how are they ever going to stand up to al Qaeda?

NOVAK: Now this is...

BEGALA: Go get 'em, Democrat.

(APPLAUSE)

NOVAK: This is a sign -- this is a sign of the desperation of the Democratic Party, when they take this little story and say, boy, we've got to have an investigation like Watergate. You know, it was -- the real story -- the real story is that the Democrats -- the -- subverted the democratic process where they were going to pass a fair redistricting bill to give the Republicans what they're entitled to, and they just left town!

BEGALA: We could have an honest argument... NOVAK: You call that fair?

BEGALA: We can have an honest argument for redistricting, but they shouldn't use federal power to spy on Democrats.

NOVAK: The Clinton watch. The bell Clinton watch, that is.

The former president Clinton today is paying a very rare visit to his home state of Arkansas, overseeing the ceremony celebrating the collection of millions of dollars to build his presidential library, and then he's doing a fund-raiser to reduce the debt of the Democratic candidate for governor of Arkansas last year. He was a loser, too.

But the big news on the Clinton watch came yesterday when "Washingtonian" magazine reported that Clinton has definitely decided to run for mayor of his adopted city of New York in the year 2005.

Well, our former president may be restless, but he surely isn't nuts. Being mayor of New York is a tough job. Maybe he should try to run for mayor of Little Rock. But then again, those people know him far too well to elect him.

(LAUGHTER)

BEGALA: Let me tell you what. Despite -- by the way, let me say despite that cheesy, cheap shot that our show took at the greatest president of my lifetime in our opening, which I am really angry about -- despite that...

NOVAK: I...

BEGALA: ... wait until I get my hands on Sam Feist, our producer. I'm going to strangle his scrawny ass neck. But, despite that, Bill Clinton did a lot for this country. He was the greatest president -- 23-million new jobs. Bush has pissed away two-and-a- half-million of those new jobs. That's what the Bush economic record is.

NOVAK: I always thought you were ashamed of him for being a liar.

BEGALA: He's a great president. He lied about a personal act, not about leading us into a war, that which Bush lied about. I'd rather have...

(APPLAUSE)

BEGALA: There is at least, though -- while we're debating this current issue of "Washingtonian," there's at least one accurate item. Of course, Clinton is not going to run for mayor of anything.

There's a terrific piece in that same magazine, a lengthy and laudatory profile of CROSSFIRE's own Bob Novak. He's too modest to tell you, so I will.

The story details what heretofore had been a largely private journey of faith, how the so-called Prince of Darkness became a Roman Catholic. The Catholic Church, of course, is the ultimate big tent, big enough, thank God, to hold Brother Novak, James Carville, and even me.

I wonder whether Bob's only regret about the Holy Mother church, that he wasn't around to be placed in charge of the Spanish inquisition.

Bob, it's a terrific article, though.

NOVAK: Thank you.

BEGALA: Congratulations.

NOVAK: Thank you. Thank you. It's very flattering. I appreciate it, Paul. And in answer to your question, Spanish inquisition was not all bad.

(LAUGHTER)

NOVAK: Excellent.

Well, coming up, the elite get the gold mine, and you get the shaft. We'll be singing the Bush tax-cut blues with two members of Congress in just a minute.

Then later, the people speak. Tax cut or no tax cut? That is the question.

Stay with us.

(COMMERCIAL BREAK)

NOVAK: Democrats like Paul Begala claim that the tax cuts Congress passed today are too big, but that's not really the point. The Begala Democrats are never happy unless they are spending the taxpayers' money and redistributing income.

In the CROSSFIRE, Congresswoman Maxine Waters, Democrat of California; Congressman Mike Pence, Republican of Indiana.

BEGALA: It's not only Begala Democrats who are taking a hard look at this tax cut. "The Wall Street Journal," a great American newspaper, a paper so conservative it once employed Bob Novak, had the following headlines.

These are all headlines out of the news division of "The Wall Street Journal" today. Let me put them up on the screen. Take a look at it.

"Bill marked by gimmicks marches past glitches, toward passage."

"How a $350-billion price tag could balloon as high as $810 billion."

"Meanwhile, rising deficits force Congress to move toward raising the U.S. debit ceiling."

Story after story as these reporters look at this. This thing is going to be bad for the American economy, isn't it, Congressman?

REP. MIKE PENCE (R), INDIANA: Well, actually, I think it's going to be a good start for the American economy, Paul. The reality is that I strongly supported the president's original call for more than $700 billion in tax relief.

In my district, which encompasses most of eastern Indiana, we've had layoffs since your old boss was in the White House consistently about every sixth month. We need a tax cut big enough to fire the engine of a $10-trillion or $11-trillion economy.

The president wanted twice what Congress gave him yesterday. This is a down payment. I'm hoping our Republican leadership will embrace it, the American people will accept it, but we've got more taxes to cut and we ought to get right after it in this Congress.

NOVAK: Congressman Waters, I stayed up late last night listening to the House of Rep -- I'm a very weird person -- debate the tax cut, and Democrat after Democrat kept talking about we can't -- we shouldn't give this money to people for tax cuts who pay income tax. We should give it to the so-called first responders, firemen, policemen. And I couldn't figure out what was happening.

Then it occurred to me -- and, today, I'm going to ask you if I'm right. I'm sure you'll agree with me -- that what you are doing is you want a redistribution of income into these unionized local government units and Democratic communities, and it's all politics, isn't it? It doesn't have anything to do with...

REP. MAXINE WATERS (D), CALIFORNIA: No, absolutely not.

NOVAK: ... homeland security.

WATERS: Absolutely not. First of all, this $350-billion tax cut does nothing to stimulate the economy, does not create any jobs, and it favors the richest 1 percent of Americans in this country. What Democrats talked...

(APPLAUSE)

WATERS: ... about -- what some of them talked about is, Mr. President, Mr. Republicans, how can you give these big tax cuts when you claim you're fighting a war on terrorism and you want homeland security? Who's going to pay for it? Who's going to pay for the first responders? Where are we going to get the money from to protect our ports?

NOVAK: But those are the unionized workers and they're all Democrats.

WATERS: It doesn't matter. Americans want safety.

NOVAK: It does matter. WATERS: Americans want to know that they have protection at the ports, at the airports. We have all these nuclear power plants that are not protected. We have all of these storage things coming into the United States. We don't know what's in them. Yes, they did talk about homeland security, and they did talk about first responders, and that makes good sense. You can't have it both ways.

PENCE: By the way, nobody asked...

BEGALA: The truth is -- the truth is nobody asked if those heroes who rushed into the burning buildings on 9/11 were union members. The truth is that they were.

PENCE: Sure, but, Paul...

BEGALA: But let me ask you this. Both of you...

PENCE: Paul, the truth about this is we...

BEGALA: Sorry, Congressman.

PENCE: ... cannot pay for the priorities that Maxine, I think, rightly points to. Rightly points to. We live in a very dangerous world. We've been reminded in just the last few weeks that the war on terrorism goes on, but the truth -- the hard truth is we cannot meet those obligations unless we get this economy growing again. Only at our annual rate of 3-percent or 4-percent growth, not the sluggish, jobless 1-percent growth economy we're in right now.

BEGALA: So you have...

PENCE: Three-percent to 4-percent will get it going.

BEGALA: You know, President Kennedy said...

PENCE: The -- the government can cut taxes...

BEGALA: Let me ask you a question, though, Congressman.

PENCE: ... and make that happen, Paul.

BEGALA: President Kennedy said to govern is to choose. Your party chose last night that to put your top priority, protecting our lives -- it's the first thing both of you are paid to do, to protect this audience and protect their lives.

WATERS: That's right. That's right.

BEGALA: You spend $40 billion on that and $800 billion on tax cuts. Congressman, I think that's insane. How can you defend that?

(APPLAUSE)

PENCE: Well, Paul, it's very easy to defend. Very easy to defend. We have obligations in this government that can only be met, as I said before, by getting the economy moving again and only by bringing the kind of tax relief -- accelerating the marginal rates will encourage investment in America. The cut in the capital-gains tax.

As I said, I -- I wanted a bigger tax cut, Paul. This is a good start. And, for my sister, Mary, who's at home watching right now her little baby Abbey (ph), little Lillian (ph), increasing that per-child tax credit is going to help working families in a very real way.

WATERS: No, that's a gimmick. That's a gimmick.

PENCE: You can gainsay it, but it will make a difference.

WATERS: Democrats...

NOVAK: Why is that a gimmick?

WATERS: It's a gimmick because what you do is you take the child tax credit from $600 to $1,000. Then you take it back. And it drops to $700. And then, by 2013, it drops to $500.

NOVAK: The...

WATERS: That's a gimmick.

NOVAK: The one thing that I agree with that Paul said is that this is more than a $350-billion tax cut.

WATERS: It is?

NOVAK: Thank God. Of course, it is.

WATERS: It is?

NOVAK: And I'll tell you why because you said it. When -- when these things come due in a couple of years, across-the-board tax cuts for everybody, the $40,000-a-year guy, the $30,000-a-year guy gets a tax cut, the child credit...

Maxine Waters, when you're sitting in Congress -- and I know you'll be elected until the end of time -- will you vote to retain these tax cuts, or will you say, no, we are going to suspend these tax cuts? Yes or no?

WATERS: Well, let me just tell you this. The tricks and gimmicks that were calculated by this administration...

NOVAK: Tell me. Give me an answer on that.

WATERS: ... to make people believe that they were going to have a 10-year tax-cut plan...

NOVAK: Will you vote yes or no?

WATERS: I'm going to expose it. I'm going to tell people... NOVAK: And will you vote yes or no?

WATERS: ... what you're doing.

NOVAK: Why won't you give me an answer?

WATERS: I'm going to tell people what you're doing, and I'm going to tell them by the year...

NOVAK: Will you vote yes or no?

WATERS: By the year 2013...

NOVAK: You won't answer.

WATERS: ... the child tax credit will be less than it is today, and I'm going to tell everybody what you have done.

NOVAK: The last 30 seconds -- if this tax cut is such a good idea, why the gimmicks?

PENCE: The reason for the gimmicks, quite frankly, Paul, is that we have had to squeeze returning and leaving tax dollars in the pockets of the American people into a smaller and smaller box because, frankly, some of our own moderates and liberals like Maxine Waters, instead of doing the bold and decisive tax relief the president's called for -- I hope Bob's right. I hope this tax cut gets...

NOVAK: It will be...

PENCE: ... bigger and bigger and bigger.

NOVAK: And I'll make a prediction she'll vote yes.

WATERS: We gave...

NOVAK: Coming up...

WATERS: ... you a tax cut in 2001.

NOVAK: Coming up after the headlines, it's...

(CROSSTALK)

WATERS: ... more people losing their jobs.

NOVAK: Sorry, Maxine. Coming up after the headlines, it's "Rapidfire," the quickest question-and-answer session on television.

And Paul Begala won't like the answer to this question, but, in a little while, we'll let our studio audience vote on whether they want a tax cut.

(COMMERCIAL BREAK)

BEGALA: Thank you, Miles O'Brien, for the update. Time now for "Rapidfire" where the time moves faster than George W. Bush rushing to suck up to Republican fat cats.

Still with us are two powerful Congressmen, Indiana Republican Mike Pence and California Democratic Congresswoman Maxine Waters.

Mr. Novak.

NOVAK: Congresswoman Waters, are the American people as a whole taxed too much or too little?

WATERS: The American people do not want tax cuts at this time.

NOVAK: I didn't ask you that question.

WATERS: The American...

NOVAK: I said are they taxed too much or too little.

WATERS: The American public want to spend money to protect this society and to have good education, health care, pay for preventive medicine, and they are willing to pay for it.

BEGALA: Congressman Pence, who gets more money out of President Bush's tax cut -- a working waitress or a wealthy heiress?

PENCE: I think as a percentage of income...

BEGALA: Who gets more money? More dough. Cashola.

PENCE: Absolutely, the people at the higher income level pay the majority of the cost of government pols. So, of course, in dollar value, the rich, the business owner will benefit the most. But, as a pipe fitter said famously to President Reagan in 1982, I ain't never been hired by a poor man.

NOVAK: Congresswoman Waters...

WATERS: Yes?

NOVAK: What should -- what should the top tax rate on the rich be, 90 percent, 70 percent? It's now 38 percent. You name a figure.

WATERS: No, I think it should be somewhere between 38 percent and 40 percent.

NOVAK: You would raise it now?

WATERS: I believe that I would not lower it. I would leave it where it is. We already gave a tax cut in 2001. We don't need to give another one.

BEGALA: Based on your last answer, do you believe that the economy's driven by elite investors and not ordinary consumers?

PENCE: I believe it's driven by both, Paul, but the reality is...

BEGALA: Why target -- why target the elite investors then for your tax cut?

PENCE: The -- well, the reality is that we -- we're an economy that depends on consumerism, but we're a capitalistic economy. We've got to encourage people to invest and risk capital, and that's what this tax cut will begin to do.

BEGALA: Congressman Mike Pence who won on the tax cut on Capitol Hill this week.

Congresswoman Maxine Waters, a Democrat, who fought the good fight for my side.

Thank you both very much for joining us on the Memorial Day Friday. Thank you all very much.

So now that you've heard the debate from two outstanding congressmen, it's time to ask our studio audience. Given all the damage it's going to do, folks, and all the good that money can do elsewhere, do you really want a tax cut? Press one for yes, press two for no here in the studio audience.

And in our "Fireback" Segment, all of you back home get to weigh in, and one of our viewers will remind everybody just where the idea for the Department of Homeland Security really came from.

Stay with us.

ANNOUNCER: If you'd like to "Fireback" at CROSSFIRE, e-mail us at crossfire@cnn.com. Make sure to include your name and home town.

(COMMERCIAL BREAK)

NOVAK: Time for "Fireback." The audience question: Do you want a tax cut? Prove that the reds and the blues are two different kinds of people in this world. Of the Democrats, 94 percent don't want a tax cut. Six percent do. Of the Republicans, 85 percent want a tax cut. Fifteen percent don't. Amazing.

Our first question from the audience -- our first e-mail from the audience is from Jay Townsend of Grand Rapids, Michigan, "Any Democrats that don't' want the tax cut the Republicans just gave them can give theirs to me. I'll do my patriotic duty and spend it. Paul, you can send me yours, too."

Paul, I'll help out on that, too.

BEGALA: I'll tell you where we ought to send it. You know, where we ought to send it is to homeland security. We're in a high state of orange alert, our president has said so, and he's right.

NOVAK: Oh, send him...

BEGALA: Why doesn't he act like it? NOVAK: Send him...

BEGALA: No.

NOVAK: Send him your tax cut. Send him your tax cut.

BEGALA: Why is he crippling our homeland defense to give money to the rich? It's wrong. It's sinful. We ought to stop it.

(APPLAUSE)

BEGALA: Lindsay R. Dunham in Lake Havasu City, Arizona, "President Bush promised more -- money for -- to states for homeland security that haven't seen it yet. Also, I'm sick of Bush taking all the credit for the idea of the Homeland Security Department. It was Joe Lieberman's idea!"

Lindsay is right.

NOVAK: As a matter of fact, it was Joe Lieberman's idea and his colleagues in the Senate almost killed it -- his Democratic colleagues -- because they're under the influence of the government employees union. You know that.

BEGALA: Oh, Bush opposed it from the beginning, and he only signed it because Democrats...

NOVAK: David Bush of Casper, Wyoming, who, I believe, is one of the president's brothers, isn't he?

(LAUGHTER)

NOVAK: Well, anyway, "Mr. Begala needs to be reminded that we have Bill Gates to thank for the economy of the '90s, NOT Bill Clinton! P.S. I look forward to spending more of my paycheck!"

Out in Wyoming, they have the truth.

BEGALA: Well, tell me this. Bill Gates still runs Microsoft. Bill Clinton's not running the economy. Now, all of a sudden, the economy tanks. Bill Gates is still working. It's Bill Clinton. It must be.

NOVAK: There is a -- there is a business cycle, Virginia.

BEGALA: And there is an inept president running our economic policy, bob.

Ed Mills in Calvin, Louisiana, writes, "Here I was taking a nap on my living room couch, and, 10 minutes before the hour, I was awakened by your lively debate on CROSSFIRE. Please commence your bellowing sooner. I have chores to attend to."

Well, Ed, we're happy to help you.

NOVAK: They have a lot to do in Louisiana, don't they? Audience question, please.

BEGALA: Yes, sir.

UNIDENTIFIED MALE: OK. My name's David. I'm from Las Vegas, Nevada. My question is: Now that tax cuts have passed, do you think the Democrats are wishing a depressed economy on the United States so they can win the White House?

NOVAK: They -- the only hope the Democrats have is an economic collapse where people are out in the streets on bread lines. That ain't going to happen, believe me.

BEGALA: What do you mean hoping for it? It's Mr. Bush whose economic policies have sent us down. He has no Plan B. By the way, if the military were as inflexible as Bush's economic team, our children would be studying Arabic today. We need a more flexible economic plan. That just creates...

NOVAK: Didn't you say that a minute ago?

BEGALA: No.

NOVAK: I think you said that a minute ago.

Go ahead. Yes, sir?

NOVAK: Go ahead.

UNIDENTIFIED MALE: Yes. My name is Ben. I'm from Lebanon, New Hampshire. My question is: What will struggling state governments be able to do after a $350-billion tax cut.

NOVAK: Tighten their belt.

BEGALA: Yes. Which means New York City -- New York City where the World Trade Centers collapsed is shutting down firehouses today. It's laying off police officers. That is a sin. There's no other way to say it. That is a crime and a sin. That's what Mr. Bush's economic policy is about.

(APPLAUSE)

NOVAK: It's all -- it's all about the unionized government workers.

BEGALA: No.

NOVAK: This is all politics. Everything that Mr. Begala says is intended to win the next election.

BEGALA: No. No, it's all about protecting lives.

From the left, I'm Paul Begala. Have a wonderful Memorial weekend, and God bless our veterans. That's it for CROSSFIRE.

NOVAK: From the right, I'm Robert Novak. Join us again next time for another edition of CROSSFIRE.

Wolf Blitzer! "WOLF BLITZER REPORTS" starts right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com




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