Tax Cut Check in the Mail?
Aired July 25, 2003 - 16:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: CROSSFIRE. On the left, James Carville and Paul Begala; on the right, Robert Novak and Tucker Carlson.
In the CROSSFIRE: Is your check in the mail? And will it help the economy or his reelection campaign?
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're headed in the right direction. Better days are ahead for our citizens.
ANNOUNCER: Plus: A summer movie about horse racing couldn't be political. Wanna bet? -- today on CROSSFIRE.
ANNOUNCER: Live from the George Washington University, Paul Begala and Robert Novak.
ROBERT NOVAK, CO-HOST: Welcome to CROSSFIRE.
Thanks to the Bush administration and the Republicans in Congress, checks are now on the way to millions of taxpaying Americans. Today, we're discussing money matters with publisher Steve Forbes and former Secretary of Labor Robert Reich.
And here's something else to keep you occupied until the postman comes: the best political briefing in television, our CROSSFIRE "Political Alert."
If you thought you saw the last of Jack Kemp when he was Republican nominee for vice president in 1996, there may be a last act for him. Friends are urging Kemp to run for governor of California, making himself a candidate if Democrat Gray Davis is recalled. Well, he didn't say absolutely no. Kemp was born and raised in California and graduated from Occidental College in Los Angeles. Sure, it's been a long time since he lived in the state, but who cares about that in California?
The state could do a lot worse than Jack Kemp for governor, and undoubtedly will.
PAUL BEGALA, CO-HOST: I'm obviously against any recall. Governor Davis is only in trouble because Bush tanked the economy.
(CHEERING AND APPLAUSE)
BEGALA: If we had a recall vote in America, we could get rid of him, too.
But I agree with you. I agree with you. The Republicans could do worse than Jack Kemp. He's a decent guy. He's an honorable guy. In other words, he's not a Republican anymore at all, is he?
(CHEERING AND APPLAUSE)
NOVAK: Well, he's always been a Republican. He's always been an honorable guy.
But what's very interesting, Paul, is that, will he be -- will -- will Davis be recalled? I think it is right on the edge right now. And when you have a 22 percent approval rating, you can't be too confident.
BEGALA: Yes, but I think, when people figure out it's going to cost them a whole lot of money to hold this election that's going to put some right-winger in there...
BEGALA: Well, the House of Representatives last night passed a bill allowing Americans to purchase medicine from for foreign countries. Pharmaceutical corporations bitterly opposed the bill because they, of course, jack up their prices here in America, since we don't have a national health care system.
But, led by freshman Congressman Rahm Emanuel of Illinois, he rallied the Democrats, along with Republicans. The good guys finally won. Now, I've been in this business 20 years. I cannot recall a time when a freshman congressman in the minority party has taken on a big special interest like big pharma and won. Unfortunately, a majority of senators today announced that they're on the side of the big drug companies. Maybe we need more heroes like Rahm Emanuel over in the Senate.
NOVAK: Paul, I'm a one-man truth squad with you. And I have to -- I like Rahm Emanuel. He's your buddy. But, as a matter of fact, the principal cosponsors were two Republicans, Gil Gutknecht of Minnesota and Jo Ann Emerson of Missouri. Thirty-six...
BEGALA: Well, who cosponsored it with Congressman Emanuel?
NOVAK: Just a minute; 36 Republicans were cosponsors, not a few; 87 Republicans voted for the bill; 45 Democrats voted against it. This was bipartisan.
BEGALA: It was bipartisan; 135 Democrats voted for it; 80-some- odd Republicans. It was a Democratic bill. NOVAK: It was a Republican bill.
BEGALA: Many good Republicans -- Tom DeLay, the Hammer, opposed it. George Bush, who is in the bag for every special interest, opposes it.
BEGALA: This was a win for the good guys.
(CHEERING AND APPLAUSE)
NOVAK: We all laughed -- we all laughed when Jerry Springer, the unspeakably vulgar TV performer, indicated he might run for the U.S. Senate from Ohio. Believe it or not, Jerry is generating support from supposedly respectable Democrats.
Senator Maria Cantwell of Oregon says Springer would make a fine senator. It turns out that Senator Cantwell was a paid staffer for Springer when he ran for governor of Ohio 21 years ago, before he went into the heavy-duty schlock business. Springer is also being backed by Ohio State Democratic Chairman Denny White. I guess strippers, skinheads and brawlers are OK with Democrats these days.
(CHEERING AND APPLAUSE)
BEGALA: I tell you what. This is a classic example of right- wing elitism. All the sudden, now we're going to sit in judgment of how Jerry Springer earns a living. I don't like the show very much, but I'll tell you what. It's a lot more honorable than selling oil field equipment to Saddam Hussein. And that is what Dick Cheney did for a living before George Bush picked him to be on the ticket.
NOVAK: You know, you know, I think, Paul, our business is sitting in judgment on all these people. And I judge Mr. -- Mr. Springer as being unqualified for the U.S. That is a disgrace. That is a disgrace.
BEGALA: But is it -- is it -- which is a bigger disgrace? Bob Novak, which is a bigger disgrace, hosting a sleazy TV show or selling oil equipment to Saddam Hussein to enrich him?
NOVAK: Springer. Springer.
BEGALA: I'd take Jerry Springer over Dick Cheney any day.
BEGALA: Well, Gary Ross is a director and screenwriter out in Hollywood. His film "Dave" is, by my lights, one of the best political movies ever made and even includes a cameo from our own Bob Novak.
Well, Gary has a new film out today, "Seabiscuit." It's about the best movie I've seen in years, the story of the underdog colt who captivated America with his daring challenge of Triple Crown winner War Admiral. A very exciting film. You're going to love it.
It also, though, has a political message. It's set against the Depression and how FDR saved America through the government programs of the New Deal. Believe me, "Seabiscuit"'s terrific. If it doesn't win a major Oscar, I'll ride a horse across this stage. Bob, you got to see this movie.
NOVAK: Well, first place, I didn't do a cameo in "Dave." I did two cameos.
NOVAK: And the dictator of -- former dictator of Haiti, General Cedras, told me I did a wonderful job of acting. He thought -- it was one of his favorite movies.
BEGALA: It was one of my -- you were wonderful in that film. You would love "Seabiscuit," but except the underdog wins and the rich guy loses.
NOVAK: "Seabiscuit," the wonderful book by Laura Hillenbrand, who has overcome illness to write this wonderful book. She was a classmate of my daughter's in college. And there's nothing about the New Deal in the book. This is a Hollywood, left-wing thing. They've turned a horse racing book into a political movie. And, therefore, I won't go and see it.
BEGALA: Oh, you ought to see it. You'd love it.
NOVAK: I have to say one thing. I made a mistake. Senator Cantwell, this Jerry Springer lover, is from Washington state, not Oregon.
BEGALA: She's from Washington State.
Well, President Bush says the check's in the mail. Where have we heard that before? But millions of American families aren't going to see anything but an empty mailbox, thanks to yet another Bush broken promise. Are more tax cuts for the filthy rich really the cure for our ailing economy? We'll debate that in a minute with two of the savviest money men in the business, Steve Forbes and Robert Reich. Find out if you will be getting a check.
NOVAK: Good news never makes page one or the top of the nightly news on TV. So you might have missed that home sales are up. Orders for durable goods are up. And the government has started mailing out millions of checks to middle-income families.
They're really going out, Paul. They are tax credits of $400 per child. If you're getting one, chances are, you know who to thank. And who would you have preferred to raise your taxes instead?
Joining us from Boston to talk money and politics: former Clinton administration Secretary of Labor Robert Reich; and, in New York, Steve Forbes, editor in chief and CEO of Forbes Incorporated.
BEGALA: Guys, thank you both very much for joining us. We have a lot of intellectual firepower here, so let me get right to it.
Mr. Forbes, our president is in trouble, of course, because of 16 words in his State of the Union address that turned out to be false that were about going to war in Iraq. But Senator Dick Durbin yesterday on Capitol Hill pointed out another false promise of 16- words duration.
Let me play a piece of videotape from Senator Durbin, ask you to respond, Steve Forbes.
(BEGIN VIDEO CLIP)
SEN. DICK DURBIN (D), ILLINOIS: President Bush stated, "We can proceed with tax relief without fear of budget deficits, even if the economy softens," 16 words that cost 326 million Americans $21,480 each.
(END VIDEO CLIP)
BEGALA: Isn't that the problem here, Mr. Forbes, not only that we have a deficit, but the president promised us his tax cut wouldn't drive up the deficit and he misled us?
STEVE FORBES, CEO, FORBES INC.: Well, the Clinton bubble gave us the deficit when the bubble burst in 1999 and 2000. And these tax cuts are already working.
The latter part of this year, you're going to see 4 percent growth rates. Next year, they're going to approach 5 percent. So, in that sense, what the Fed has done and what the tax cut has done is working. And that's what people want, is economic growth. And in terms of deficits, when you have a slow economy, when you're fighting a war against terror, you are going to have deficits. The cure is a strong economy. And what the Fed has done and what the president has done with tax cuts is the way you get the economy moving again. NOVAK: Professor Reich, let me ask you this. I want to know if you have exchanged the mantle of John Maynard Keynes from Herbert Hoover, because every businessman I talk to says that the economy would be in really bad shape if we didn't have these tax cuts. You had to have a tax cut to prevent a real tanking of the economy, didn't you?
ROBERT REICH, FORMER LABOR SECRETARY: Bob, you want a tax cut right now. You want a tax cut that goes to average working people, not to rich people. Rich people are -- after all, the definition of being rich is, you're already spending as much as you want to spend. You are not going to spend any additional money you get from a tax cut.
So this kind of a tax cut is not going to help the economy. We saw in 2001 a similar kind of tax cut. It did not help the economy then. And I think George W. Bush -- now, look, nobody wants a better economy than I do. But I doubt that, a year from now, 14 months, 16 months from now, we're going to see an economy that is much better than it is today. And I think the Bush administration is going to suffer when it comes to election time.
BEGALA: Well, in fact, Steve Forbes, they're already suffering. This week, CNN/"USA Today"/Gallup asked the American people a fundamental question, one they'll take to the ballot box. It was this: Which party would do a better job on the economy? Now, at the beginning of the year, both parties were even: today, Democrats, 53 Republicans, 36. Democrats are crushing Republicans on who they trust to run the economy. Isn't that an enormous problem for your party?
FORBES: Not at all, because when people actually go to the polls next year in November of 2004, the economy will be much stronger than it is today. It's happening already.
In terms of the tax cuts, since the tax cut went in effect and was passed in late May, already, the stock market's up over three- quarters of a trillion dollars. So, in that sense, it's already paid for itself.
BEGALA: With respect, sir, there was a tax cut that was passed in 2001. They passed one two years ago. How long do we have to wait for that one to kick in?
FORBES: It was -- well, that was a phony one, because they did the rebates and nothing else. The rate cuts didn't come into effect until four or five, 10 years later. One good thing this tax bill did was put those rate cuts into effect this -- make it retroactive to this January, so the cuts are here now and not spreading them out from here to eternity.
NOVAK: Professor Reich...
REICH: Steve Forbes, we lost 30,000 jobs last month. And that's on top of a huge number, 70,000 jobs, the month before. We're seeing nothing but job losses right now. And I'm afraid this administration is suffering and going to suffer the same fate as the first Bush administration, because the first Bush administration, remember, they kept on saying, you are in great shape. The economy is in great shape. And people looked at their own jobs, their own paychecks, and the fact that they were losing them, and kept on saying, well, they don't -- this administration is out of touch with reality.
NOVAK: Mr. Reich, Mr. Reich...
FORBES: Bob, Bob, as you, as an economist, Bob, should know, that, sadly, when an economy recovers, job creations lags the recovery. It doesn't lead the recovery.
REICH: But, Steve, wait a minute.
FORBES: Early next year, this economy, when it's growing, jobs will be created again. And what is remarkable, when you take total jobs in this country, all of it, self-employed, farmers, manufacturing workers, everything, there are more Americans working today than there were a year ago.
REICH: Steve, you were saying the same thing a year ago. And the problem is that this is not like the last recession. After it ended...
NOVAK: All right.
REICH: Let me just say, after the last recession ended, within one year, you had job growth. This time, we're 22 months after the so-called official end of the recession. We're seeing no job growth at all.
NOVAK: All right, Mr. Reich...
FORBES: But, Bob, as you know, this recession is unusual because it was an investment recession. And that is beginning to change.
REICH: Tell that to the American people.
NOVAK: Mr. Reich, you're not only an economist, but you're a politician. You ran for governor. And I want to give you a political trivia question.
I'm going to read a quote by a Democrat and ask you to tell me who said it. The quote is: "If we nominate a candidate who is anti- tax-cut, pro-big-spending and weak-on-defense, it's a ticket to nowhere for the Democratic Party." Who said that?
REICH: I don't know. You tell me, Bob.
NOVAK: It was Joe Lieberman, the vice presidential candidate of your party in the last election. He's right, isn't he? REICH: Well, I tell you something. I think it's very important for Democrats right now to wave the banner of fiscal responsibility over the long term. The Congressional Budget Office even is saying that most of the reason we're seeing out-year budget projections in the order of $400 billion deficits as far as the eye can see is because of the tax cut that Bush passed that favors mostly wealthy people.
Now, you need a tax cut right now. You don't need a tax cut that's going to jeopardize the budget over the next five, six, 10 years, make it difficult for the baby boomers and for the nation to afford Social Security and Medicare, jeopardize the entire fiscal foundation of this country.
FORBES: Bob, Bob, Bob, as you know, the Congressional Budget Office projections aren't worth the paper they're written on. They've never been right, which is why they have to have taxpayer money support.
REICH: Steve, they are Republican. Wait a minute. Wait a minute. They are Republican projections. And even Goldman Sachs projects that in...
FORBES: CBO in the hands of liberals. They've never made a right projection. And I don't think they're going to do so now.
REICH: Steve Forbes, who do you want? Who do you want?
REICH: Wait a minute. Wait a minute. I will give you -- I will give you Goldman -- I will give you Goldman Sachs.
BEGALA: No. Before we get into the
BEGALA: ... of Goldman Sachs and CBO, hang on a just a minute. Let me ask a more fundamental question. And that is about values, Steve Forbes. What does it say about Republican values that they put trillions of dollars into tax cuts and then cut 88,000 cops, $1.5 billion in military housing, 550,000 kids, poor kids, cut from after- school programs, 37,000 young people cut out of AmeriCorps.
BEGALA: What does it say about the values of your party, sir?
(CHEERING AND APPLAUSE)
FORBES: Well, first of all, first of all, this has been -- in terms of domestic programs, this has been the biggest spending administration in recent memory. They've been having bigger increases than the first Bush administration, the Clinton administration, the Reagan administration, the Carter administration.
So, in terms of financing domestic programs, they don't have to bow their head to anyone. It's been pretty good. In fact, in many instances, it's been excessive. And the way you really help people...
FORBES: The way you really help people is by having a strong economy. And that's what they've done with this tax cut and what the Fed has done. You put those two things together, we're already starting the recovery. You see it in retail sales. Bob started citing some of the other things that are going in the right direction.
BEGALA: Steve Forbes, as a magazine publisher, you'll understand this. We got to sell some ads. That's the key to our economy here at CNN. Keep your seat, Steve.
Bob Reich, hang on just a second. We're going to come back to this debate after a quick break.
And Wolf Blitzer will give us the headlines after that break. And then we'll have "Rapid Fire," where the questions come faster than fat-cat Republicans lining up for another Bush tax cut.
BEGALA: Later, in our "Fireback" segment, one of our viewers volunteers a patient for a new medical procedure called a tongue transplant.
BEGALA: Stay with us.
WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer in Washington. Coming up at the top of the hour: U.S. forces determined to prove to Iraqis that Saddam Hussein's sons are dead. We'll have the just- released videotape, the methods used and the reaction, all that just ahead. I'll also speak live with a former classmate of Uday Hussein's.
Liberia in chaos and the pressure on the White House, the president's new orders to his military on deployment to West Africa.
And new reports depict the side of Kobe Bryant we haven't necessarily seen before. I'll speak live with a senior writer at "Sports Illustrated" -- those stories, much more, just minutes away on "WOLF BLITZER REPORTS."
Now back to CROSSFIRE. (APPLAUSE)
BEGALA: Thank you for that update, Wolf Blitzer. Can't wait for your report at the top of the hour to see what Uday's classmate said. Boy, he always showed up for torture class. I don't know.
BEGALA: Anyway, here on CROSSFIRE, it's time for "Rapid Fire," where we have short questions, short answers, and no special breaks for President Bush's rich friends.
BEGALA: Joining us in the CROSSFIRE: from Boston, former Labor Secretary Robert Reich; and, in New York, Steve Forbes, editor in chief and CEO of Forbes Inc.
NOVAK: Robert Reich, don't you think that the rich people, who you begrudge tax cuts, will take the money from the tax cuts and invest it in stocks and bonds and other valuable investments?
REICH: Bob, I think that they'll take the investments and they will go any place around the world they can get the highest return. And that is not necessarily the United States. Instead of trickle- down economics, it's trickle-out economics.
BEGALA: Steve Forbes, our president wants to invest $1 trillion of our money in tax cuts for the rich and only $28 billion in homeland security. Is he crazy?
FORBES: The way you finance homeland security is by having a strong economy. The way you get a strong economy is giving incentives to people to create new jobs, create new businesses. That's exactly what he's doing. Kennedy did it. Reagan did it. Bush is doing it, too.
NOVAK: Mr. Reich, you're terrifically rich. What are you going to do with your tax cut money? How are you going to invest it?
REICH: Bob, the fact of the matter is that I'm not getting all that much tax cut money. And if you are -- I'm earning, look, a pretty good living. But if you happen to be earning between $30,000 and $60,000, and most people in that area are not actually going to get more than about $100. Most people are -- look, they're single households. They don't have kids. And this is a big fraud on the American public.
BEGALA: Steve Forbes, you campaigned against George Bush on the flat tax. Al Sharpton supports the flat tax. Are you a Sharpton man?
FORBES: I think -- no, I think Al Sharpton is leading the way. And I think, after the elections, we are going to get a flax tax in this country. The Russians have done it. Ukraine has done it. China is about to do it. We're about to do it.
BEGALA: That's terrific. Thank you.
NOVAK: OK. Thank you very much, Robert Reich.
Thank you, Steve Forbes.
NOVAK: It's time for our "Ask the Audience" question. Take out your audience voting devices right now and tell us whether you think the U.S. economy is getting better or worse. Press one if you think the economy is getting better. Press two if you think it's getting worse. We'll have the results after this break.
And one of our viewers fires back a question that I just can't get Paul Begala to answer. Who knows. Maybe it's too taxing.
BEGALA: Welcome back to CROSSFIRE. Time now to do "Fireback."
But first, let's check our audience question today. Is the United States economy getting better or worse? Lookie there. All the Republicans think it's getting better, because it is for the rich, I guess, but all the Democrats, the ordinary people, the walking-around folks, they think it's getting worse. So...
(CHEERING AND APPLAUSE)
NOVAK: If only all the ordinary people were Democrats, we'd have Al Gore as president.
BEGALA: Well, they all voted for him. It was just the Supreme Court that stole the election.
(CHEERING AND APPLAUSE)
NOVAK: OK, our first question from Brian Palmer of Miami, Florida, who says: "Bob, as much as the Democrats have complained over Bush's tax cut, how many do you think have refused to accept their tax credit check?"
NOVAK: Brian, the answer is zero. Zero. BEGALA: You know what? You know what? I would gladly, gladly refuse it if it would get Bush to rehire the cops he's laid off and the kids he's kicked out of after-school programs and all the other cuts, all the...
NOVAK: You want to give me your tax cut?
BEGALA: If it would help to do all that, I'd take yours as well.
John in Bellingham, Washington, writes: "I just saw that doctors performed the first successful tongue transplant. I have the next candidate for them, George Bush. Perhaps they can replace the forked tongue he's been using all these years to spin his tales on his National Guard service, Harken Energy, compassionate conservatism, Iraq, and how tax cuts for the rich are going to help our economy."
BEGALA: Wow, John, good point.
NOVAK: Next question, please.
UNIDENTIFIED FEMALE: Hi, I'm Dana Marcelino (ph) from Lawrenceburg, Indiana.
And my question is, why should low-income families that pay little to no income taxes receive a child tax credit?
BEGALA: Because they have children, young lady. They have children who need to eat, just like rich kids need to eat.
NOVAK: They shouldn't.
BEGALA: And in America, every child ought to get a hand, not just the children of the rich. That's why, young lady.
(CHEERING AND APPLAUSE)
NOVAK: They shouldn't. May I say something? They shouldn't. They should not receive it. And -- they should not receive tax cuts if they don't pay taxes. That is one of the rules.
(CHEERING AND APPLAUSE)
BEGALA: They're children. It is a sin. It is a sin. What George Bush is doing to poor children to help wealthy friends of his is a sin.
BEGALA: From the left, I'm Paul Begala. That's it for CROSSFIRE.
NOVAK: From the right, I'm Robert Novak. Join us again next time for another edition of CROSSFIRE.
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