Will Tax Cuts Help Economy?
Aired May 28, 2003 - 16:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
On the left, James Carville and Paul Begala.
On the right, Robert Novak and Tucker Carlson.
In the CROSSFIRE, it's signed, sealed and your taxes are cut.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You got more of your own money to spend.
ANNOUNCER: But will tax cuts really do any good for the economy?
JOE LIEBERMAN (D), CONNECTICUT: It is more of what hasn't worked for the last two years.
ANNOUNCER: And is Canada going to pot?
Today on CROSSFIRE.
Live from the George Washington University, James Carville and Tucker Carlson.
JAMES CARVILLE, CO-HOST: Welcome to CROSSFIRE.
Now the idiotic and stupid tax cut for the rich.
Does the economy just feel better already?
I bet all you unemployed people's phones are just ringing off the hook with job offers. (UNINTELLIGIBLE) please join us in the best political briefing in television our CROSSFIRE political alert.
It's rare but every so often someone involved with this administration tells the truth and that's what they really feel. And Mondays Denver's Post, Grover North a Republican strategist close to the White House said, and I quote, Partisanship is another name for date rape. "Bipartisanship is another name for date rape." Remember the is expressing a philosophy that the White House ran a campaign on changing the tone.
There's been a lot of misrepresentation and (UNINTELLIGIBLE) in this White House on their commitment to the environment or whether we can afford tax cuts and whether there's weapons of mass destruction in Iraq. It's nice to have somebody that can speak the truth even if the truth ain't pretty. I all goes to show you that CROSSFIRE is the most honest show on television. We never pretended to want change the tone in the first place.
TUCKER CARLSON, CO-HOST: Well, I would say, James, if I really believed that Grover North spoke for the administration I would vote libertarian, I mean even the I might even join the
CARVILLE: He's at the White House all the time. He has said, us is them and them is us. He is the person that Karl Rove relies on more than anyone else at the White House.
CARLSON: And I am glad you believe that spin. But I will say, I agree with you, bipartisanship is mostly oversold and is changing the tone stuff is ludicrous in the begin.
CARVILLE: I think we should just sit here and just slug the living you know what out of you.
CARLSON: But I will say the one difference between this White House and the one that proceeded it is, this White House actually...
CARVILLE: That one was actually telling the truth and...
CARLSON: Musician Bob Geldof is no intellectual. But in contrast to many liberals who claim to care about Africa. The organizer of Live Aid actually knows a lot about the continent of Africa. During a visit to Ethiopia this week, Geldof said this, quote, "The Bush administration is the most radical in a positive sense in its approach to Africa since Kennedy." Asked about Bill Clinton, Geldof, conceded the former president was a good guy, but despite endless talking he did almost nothing for ordinary Africans. Clinton's administration refused to lift a finger to stop genocide in Rwanda Africa, in which almost a million people died. It sided with drug companies over AIDS patients in South Africa. It took a Republican to help Africa and at least one liberal is honest enough to admit that. And I bet you'd admit that too.
CARVILLE: I wouldn't admit that at all. I think Bill Clinton is the most popular person on the Africa Continent right now.
CARVILLE: No it's not sad. I know it makes you mad, but actually people in Africa love Bill Clinton, just like the people in India love Bill Clinton, people all over the world do.
(CROSSTALK) CARVILLE: The fact we had a president that was loved around the world makes you sad, because you are a unilateralist, you believe in arrogant foreign policy and arrogant America, and I don't. We just disagree, that's all I saying.
CARLSON: This is a president who has actually done something for the continent, who is actually spending tens of millions of dollars on AIDS there, and you ignore it.
CARVILLE: (UNINTELLIGIBLE) I thought I'd let everyone know that I'm sick and tired of this idiotic weather. Now it's exactly one month -- one month since the Washington, D.C. area enjoyed its last sunny day. I want you to know I don't blame President Bush for the weather. It's one of the few things miserable things that's happened around here that is not his fault. But it's leading to a condition called seasonal affective disorder or SAD. According to Norman Rosenthal, a clinical professor at Georgetown University, Seasonal Affective Disorder can prevent people from functioning normally and thinking clearly. Here that, Tucker? So the weather may not be George W. Bush's fault but may explain the misguided tax cut he just passed, the Republicans weren't thinking clearly.
CARLSON: I guess my question, I share your deep concern about the weather.
Whatever happened to global warming?
CARVILLE: This is global wetness I don't think this has anything to do with...
CARVILLE: having a global warming, yes, a scientific fact.
CARLSON: Environmentalist promised us an endless string of sunny days, OK, and they have not arrived.
CARVILLE: No, they did not.
CARLSON: Yes, they did.
CARVILLE: The temperature no the earth is rising.
CARLSON: It turned out to be a promise they couldn't keep.
CARVILLE: You show me one scientist that says there's no global warming.
CARLSON: Where is it? I want it to come to Washington. Instead it's freezing outside, raining every single day. CARVILLE: Freezing, it's wet.
CARLSON: I'm never going to believe (UNINTELLIGIBLE) again.
CARVILLE: All right, here we go.
CARLSON: In news from the frozen north today, the Canadian government has announced it will attempt to decriminalize Marijuana. And the proposed legislation possession of up to half an ounce of pot will draw a ticket rather than jail time. The change is expected to increase the flow of high grade marijuana into the United States. The trade already estimated up to $7 billion a year. The U.S. Government has protested the move, but Canadian officials are holding firm. They point out that increased marijuana use will greatly improve the lives, not simply the terminally ill, but of millions of ordinary Canadians who are forced to live in a country not only extremely cold but also is not very interesting.
CARVILLE: Well, maybe that's what we need here in Washington. Hey want to (UNINTELLIGIBLE) to deal through the weather or something.
CARLSON: I'm not saying it's right for the United States. But if you had to live in Canada honestly, partisanship aside, you'd want to be able to smoke pot.
CARVILLE: Let me tell you something. I would love to live in Toronto. I would love to live in Vancouver. Those are two of the great cities I've been to in the world. I actually like Canada. I like Canadians.
CARLSON: I do, too.
CARVILLE: I have been told I have never been there (UNINTELLIGIBLE) provinces are some of the most beautiful places on the earth. And it gets more beautiful with marijuana.
CARVILLE: I love people all over the world. I love people in Mexico. I love the people all over the world. You hate everything that's not American. I love my country and I love everybody else. I love you Canada.
CARLSON: Nobody has stood up for the people of Canada as vigorously as I have and I'll continue to do that, pass the bong.
President Bush has signed the third biggest tax cut in U.S. history. Stand by for the check and the third biggest Democratic whine in history. It's quite a whine. We're putting tax cuts and the need for more in the CROSSFIRE and "Rapidfire." You won't want to miss it. We will return in am moment.
CARVILLE: The White House (UNINTELLIGIBLE) President Bush signed his tax cuts for the rich today. Of course, you probably didn't notice when the president signed law (UNINTELLIGIBLE) increase in the national debt ceiling yesterday. Remember when this country used to run a surplus, I do three years ago.
In the CROSSFIRE, former Pennsylvania Republican congressman, Bob Walker, along with Democratic strategist and former California Democratic Congressman and my neighbor, Tony Coelho.
CARLSON: Mr Coelho, I understand the political need for the slogans about tax cut for the rich, to make it sound like Bill Gates is getting all of this tax cut. But I just want to read a couple of specifics about what's going to happen. Under this plan, a married couple with two kids will get $955 back, if a make a total of $30,000, you are not rich. A married couple each making $35,000 a year, again not rich, with two kids will get more than $2,000 back. These are working people getting big checks. Not a tax cut for the rich.
TONY COELHO, FORMER U.S. REPRESENTATIVE: You know, Tucker, that's wonderful. But you know what? You are not saying what you'd get back. You're not saying what I'd get back, you're not saying what James would get back.
CARLSON: What will you get back?
COELHO: I will get back too much. I don't need it. You know what? It is sick what's happening. We're willing to gamble away our future in order to re-elect this president. It's a huge risk we're taking, and we're going to -- we're in a situation where, you know, it may help this guy get reelected because we're dumping money into the economy right now, but it's going to devastate us in the future. And this guy, I remember when he used to think deficits were awful. And we're into the situation where the deficits are going to destroy this country.
COELHO: And you know, look, we have a situation in the "USA Today" on Tuesday that this White House had a panic about. There's falling prices. That's true. Rise in unemployment. Very true. Global recession. True. Financial collapse. The only one that's not happened. You know what? They are panicked over there, and they are taking extreme measures to try to save this guy for re-election.
BOB WALKER, FORMER U.S. CONGRESSMAN: This is exactly the program that Bush got elected on, which was to cut taxes.
CARVILLE: Goldman Sachs, one of the most respected Wall Street investment banks, Macroeconomic Advisers, which is considered the blue plate forecasting firm, the Congress's Joint Committee on Taxation directed by a Republican appointee all say that this tax cut will actually hurt economic growth. Why would we be so stupid as to pass something that the foremost economic forecasters in the United States say would actually hurt it?
WALKER: Well, I think that we have history on our side. Every time we've cut taxes in the past, it's resulted in economic growth. The Heritage Foundation, the (UNINTELLIGIBLE) Center for Data Analysis, they say that we are going to end up with $73 billion (UNINTELLIGIBLE) year as a result of the tax cut, and the most important thing is, it's going to end up with $135 billion of additional savings. That's where some of the money that you are going to get back in your taxes is going to go. It's going to go into investment and savings.
And I'm a little tired of hearing people beat up on the investment class in this country. It's 60 percent of the American people who are now investors. And they deserve to have some money that they can put into those investments and hope to grow and maybe get a little richer.
CARVILLE: Congressman, I want to show you (UNINTELLIGIBLE) 10 years ago to the date on CNN, you said: "The Clinton tax plan increases the overall debt by $1 trillion in five years. We just don't think you're getting deficit and debt reduction. Republican simply believe that that doesn't make any sense economically." A year after he passed it, the debt was down $100 billion. When President Clinton left office, it was down $5.6 trillion. I think you're off about 6.7 trillion. You know of anybody else ever made a mistake that big in the history of the United States?
WALKER: The fact is, the fact is that what happened was that you got a Republican Congress that in fact began the process of really dealing with deficit numbers and so on, and so the combination of tax cuts, that's the point is, tax cuts do work. And what we wanted was a tax cut that was more oriented toward assuring that we'd grow the jobs for the future. We felt that the ...
CARLSON: Tony, tax cuts do, in fact, work, and there's bipartisan agreement on that. That's why the Democratic plan, such as it is, has, as its backbone, its essence, tax cuts. That's why every Democrat running for president, with the exception of Al Sharpton, possibly Dennis Kucinich, pushing for tax cuts.
COELHO: I don't think tax cuts are the issue. I think what we have here is we have a White House that is saying that we have a tax cut program that's $320 billion, when you know, and I know, and the "Wall Street Journal" knows that we're talking about $800 billion, and they are just scamming this damn thing. This is what's unfair. And you know what? The "Wall Street Journal," which is considered not a liberal paper, and not an anti-business paper is in effect saying that this whole tax cut is based towards investment income instead of wage income. It is basically saying that if you are a wage earner, you get hurt. If you are of (ph) investment income, you are basically the one that benefits.
CARLSON: Governor Bill Richardson of New Mexico, probably one of the most promising politicians in your party, I hope he's chosen as a vice presidential candidate, had this to say about this sort of rhetoric that you just employed. Quote, in the "New York Times" two days ago. "The perception is out there that we're not the party of optimism and opportunity; we're the party of malaise. We're the party of class warfare." And that feeling ...
COELHO: I'm not talking about class warfare. Listen, I'm telling you -- and you know what? And I am for -- and I am for tax -- I am for a tax cut. But in New Mexico, in New Mexico, for instance -- you want to mention New Mexico? In New Mexico, the Republican governor didn't collect taxes for five years. Bill Richardson is having to clean up that mess out there.
CARVILLE: Let me just say, yes, I'm very, very much relished the Appalachian class warrior (ph). I was the only one in the country. Of course I now have a sidekick, a companion, a minor man that don't know much about anything by the name of Warren Buffett, which now of course according to this administration now makes my average net worth about $17 billion, because he's worth $34 billion, OK? Why do you think Mr. Buffett thinks that this thing, like Goldman Sachs, like Macroeconomic Advisers, like the Republicans on the Joint Committee on Taxation, says this thing is going to do nothing but put money in his pocket, is not going to do a damn thing for the economy, and why are you people always so wrong on everything when it comes to the economy? I don't understand that.
WALKER: The fact is that I think what Warren Buffett was talking about was the dividend portion of the tax cut, and as I recall, he made an awful lot of money when we were talking about market cap rather than real profits for companies. If you get real profits for companies, and you enforce boardrooms to really begin to think about making money, you actually grow the economy and produce more jobs in it, James.
CARVILLE: My fellow class warrior. There are only two of us. Warren and I. We're the only two left. Points out he gets $312 million a year as a result of this. And here's a man saying, you know, this is not right. This is not the way to do this. This is the most successful investor, the most astute person when it comes to this is saying this. And in every intelligent person to look at this and say, this is going to hurt the economy. Still comes back to the question, why are we doing something this stupid?
WALKER: That's not right. In fact, there are people, I just quoted you here a little while ago...
CARVILLE: The Heritage Foundation?
WALKER: The Heritage Foundation.
WALKER: Are you kidding? They are nothing but corporate lackeys. The Heritage Foundation (UNINTELLIGIBLE).
WALKER: They actually do some intellectual work, James, and they actually analyzed this, and it comes out to $73 billion next year of economic growth. We need that economic growth. The American people need it. The people who are out of jobs need it. We need to produce jobs and we need to produce more investment in this economy.
CARLSON: Wait, wait, wait, and on that note...
CARVILLE: They're nothing but a bunch of corporate lackeys.
CARLSON: After a quick break, James is going to cool down a little bit, and the headlines, it's "Rapid Fire." Short answers only and no whining allowed. We'll also ask the audience what they think about another tax cut. Will it help the economy or not? We'll be right back.
CARVILLE: It's time for the quickest question and answer session on television. We call it "Rapid Fire." It goes even faster than Republicans working their way through a budget surplus. Our guests, the former Pennsylvania Republican Congressman Bob Walker, along with Democratic strategist and former California Congressman Tony Coelho.
CARLSON: Tony, are you going to send your rebate check back to the treasury?
COELHO: No, I'm going to send it to people who have disabilities. They need it a lot more than I do and a lot more than the government needs it.
CARVILLE: Congressman, could you tell us why the White House didn't have a signing ceremony when it raised the deficit (UNINTELLIGIBLE) in our history?
WALKER: Well, I think probably because they thought the tax cut was more important.
CARVILLE: They could have done both. It was a good deficits really helped the economy, according to Republican thinking now.
WALKER: We are hoping to wipe out that deficit and that debt by reducing taxes and getting people back to work.
CARLSON: Tony, this is a massive political victory for the president, isn't it?
COELHO: It's a big victory for him, but is it a victory for the American people five years from now? That's the real issue. It shouldn't be a victory for the president. It should be a victory for the American people. I question that. That's what's sad.
CARVILLE: Congressman, give us an estimate on what you think the budget deficit will be for this fiscal year.
WALKER: I've seen figures around $300 billion.
CARVILLE: Would you be willing -- I'd say $500 billion. WALKER: No, I don't think it's going to be that high, because I think once you begin to pump some growth back into the economy and so on, it will make a big difference in terms of (UNINTELLIGIBLE).
CARVILLE: How much growth is there from the original Bush tax cut?
WALKER: It was all backloaded, though. I mean, the front loading of this tax cut will make it a far better (UNINTELLIGIBLE) economic growth.
CARLSON: You make an interesting point. Tony, you said -- you admitted the public likes tax cuts but you believe tax cuts are wrong for the country. Is the public stupid or just greedy?
COELHO: No, I believe in democracy.
CARLSON: But you think the public is wrong. Why?
COELHO: No, I think the public wants to have tax cuts. It's where you make the tax cuts. If you ask people, if they think people like me should get a tax cut, they'll say no. You know what? They're right. And I think what they want is make it fair. Let people who don't deserve it don't get it. Those who do...
CARLSON: Speaking of, we are going to actually throw this open to the audience in a minute. Tony Coelho, Bob Walker, thank you both very much. Time for our audience question. And that is, will tax cuts help the economy? Press 1 if you believe yes. Press 2 if you believe no.
Later, another member of the fashion police is ready to fire back about what James Carville is wearing or not wearing on television. It's cruel, therefore you won't want to miss it. We'll be right back.
CARLSON: Welcome back to CROSSFIRE. Time for "Fireback." First the result of our audience poll. The question was, will the tax cuts help the economy? Yes, say 82 percent of Republicans, no say 89 percent of Democrats. Surprise, surprise.
CARVILLE: Partisan divide right here.
CARLSON: Partisan divide.
CARVILLE: No date rape going on in this little operation here, Mr. Carlson.
CARLSON: Not while we are here, James.
CARVILLE: All right. Here we go. "The White House was having this grand ceremony today for the signing of the new tax bill. Yet you could have heard a pin drop when President Bush signed into law this largest debt ceiling increase in history yesterday." Rick Firestone, Youngstown, Ohio. Rick, you are a smart guy, and they are going to be signing a lot more of these debt ceiling increases, in fact.
CARLSON: What's interesting to me is that interest rates haven't risen at all. You'd think they would.
CARVILLE: They will.
CARLSON: Michelle Phillips from Boulder writes -- "Where did the Democratic Party go?" Good question, Michelle. "Where is the charisma? Where are the ideas?" Well, of course, they are with Al Sharpton, traveling through Iowa right now.
CARVILLE: Health care programs, Joe Lieberman's (UNINTELLIGIBLE).
"I agree your southern accent is sometimes hard to understand, but even so you will make more sense than the right any day!" Eric Levine, Orlando, Florida. Thank you, Eric.
CARLSON: Eric has no idea what you're saying, but he likes the sound of it.
CARVILLE: He knows I make sense. You don't have to know everything.
CARLSON: Right. He likes your grunting. Kevin from Westfield, New Jersey writes -- "What's up with James Carville wearing jeans on CROSSFIRE? Does he think that we can't see them when the camera zooms out at commercial breaks?" I didn't even know that. "I thought that this was supposed to be an intellectual political debate, not a rodeo." Well, it's a little of both, Kevin.
CARVILLE: You're missing the whole point here. If you want to watch intellectual political debate, go to -- where would you go to find that?
CARLSON: I would go here.
CARVILLE: By the way, why is Kevin so interested in my pants? You know?
(CROSSTALK) CARLSON: Yes, sir.
UNIDENTIFIED MALE: Bruce Drushell (ph) from Oxford, Ohio -- won't the interest rate increases that accompany these tax cuts cancel any benefit for middle class working people?
CARLSON: Well, I mean, potentially, that absolutely can happen. It is striking, though, again, to me, you heard Democrats say for the past five years, well, you know, as the deficit rises, so do interest rates and it simply hasn't happened. It does sort of make you wonder, do they understand the way the economy works.
CARVILLE: Macroeconomic Advisers out of St. Louis, Goldman Sachs and the Republican Committee on Joint Taxation all agree with you. You're a very smart, brilliant person. You'll have a great future.
UNIDENTIFIED MALE: Good afternoon. How are you?
UNIDENTIFIED MALE: Corey (ph) from Rockville, Maryland. I have a question for you regarding the U.S. and not finding weapons of mass destruction. From a U.N. perspective, has the U.S. lost credibility in the international arena?
CARLSON: Well, look, it's been what, seven weeks now. And I think ultimately it's important for the United States to find weapons of mass destruction our government claimed were in Iraq. I don't think anyone disagrees with that. But in the short term, I think the public, I think the international community, such as it is, gives the benefit of the doubt. You know, it's a big country and it may take awhile.
CARVILLE: I agree 100 percent with Tucker. It is important, but you have got to give them more time. I don't think they're going to find any nuclear weapons programs that they told us about and I think that we need...
CARLSON: I don't think anybody suggested Saddam had nuclear weapons.
CARVILLE: Sure they did. Dick Cheney said they reconstituted (ph) nuclear weapons. Colin Powell said it.
CARLSON: Nuclear weapons program, different than the weapons.
CARVILLE: Well, he said nuclear weapons.
From the left, I'm James Carville. That's it for CROSSFIRE.
CARLSON: And from the right, I'm Tucker Carlson. Join us again tomorrow for another edition of CROSSFIRE. "WOLF BLITZER REPORTS" starts right now. Have a great night.
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