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Sen. Lincoln Chafee on the Bush tax cuts proposal

Sen. Lincoln Chafee, R-Rhode Island
Sen. Lincoln Chafee, R-Rhode Island

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WASHINGTON (CNN) -- President Bush pushed for his new package of tax cuts Wednesday in Ohio, home to Republican Sen. George Voinovich, a moderate and one of a handful of Republicans who want to trim the bill to rein in growing budget deficits. Sen. Lincoln Chafee of Rhode Island is among them.

Chafee talked with CNN anchor Bill Hemmer Thursday about his view of the president's tax cut proposal. The following is an edited transcript:

Bill Hemmer, CNN anchor: Senator, what is your rub to go with $350 billion as opposed to $500 billion or more?

Sen. Lincoln Chafee, R-Rhode Island: We had big tax cut in the spring of 2001, and at that time, during that whole debate, nobody was talking about deficits. Everybody was saying, "Can't afford that big tax cut in the spring of 2001," and then of course, we got into deficits, so a number of us are very concerned about these deficits and are opposing any further tax cuts. We've been somewhat successful getting it at least down to $350 billion from $720 billion, but there is still some concern. I even voted against the $350 billion tax cut in the end.

Hemmer: You did vote against that in the end?

Chafee: I did.

Hemmer: So you will not support it if it comes back, is that what you are saying?

Chafee: Correct. I'm very concerned about the deficits, and we did such a good job in the '90s -- and at the same time, the economy was really doing well -- at controlling our spending with a balanced budget act and welfare reform, and at the same time, generating revenue we need to run the government; now back into deficits.

Hemmer: The White House suggests that if you have a bigger tax cut, you can have a greater opportunity to create more jobs in this country. Why do you disagree with that position?

Chafee: Well, fundamentally, in the beginning of the '90s, when President Clinton came in, despite all the criticism he got, he did raise revenues, he did address the revenue side of our budget and the economy took off.

And then when this administration came in, they had big tax cuts in the spring 2000 and the economy has been faltering, I don't buy the argument that these tax cuts are going to stimulate the economy.

Hemmer: What about arguments about the impact on your own party, knowing the White House has been so strong, with a popular president coming out of the war in Iraq right now. What is the impact on people like you and your party going forward?

Chafee: Well, I know, of course, as we look ahead to the elections of 2004, there is going to be a lot of discussion about the economy, and at least the administration is doing something by proposing these tax cuts.

I say the tax cut -- cutting taxes is easy for politicians, we love to cut taxes. It takes responsibility to make sure our revenues match our expenditures and we're not doing that right now. We have enormous expenditures with the war and with homeland security, and at the same time, we're cutting into our revenues. And to me, it just doesn't make sense.

Hemmer: Senator, we're told that part of the reason the president is going to Ohio is because another senator, another of your colleagues, George Voinovich, a popular former governor in that state, is essentially lining up with you, at this point, anyway, and proposing a smaller tax cut than the White House is offering.

What kind of pressure, what kind of impact can the White House put on your own colleagues, knowing that in the state of Ohio, George Voinovich is very popular, and so, too, is the president.

Chafee: I have a feeling this is going to backfire on the president. George Voinovich has been around a long time. He was mayor of Cleveland, governor of Ohio, in his second term, I believe, as a senator. And he's a revered politician in that state, and very responsible. He knows [about] making budgets, meeting budgets, as a mayor and as governor, and none of us like to raise taxes. We don't like taxes, but at the same time, we have to make sure we're doing the responsible thing and not getting into these tremendous deficits.

Hemmer: Senator, one final point. You said it's going to backfire on the White House. What's the chance of this backfiring on George Voinovich, [Sen.]Olympia Snowe [R-Maine], yourself, from the White House pressure?

Chafee: I think most Americans have the same questions that Senator Voinovich and Senator Snowe and [Sen.] John McCain [R-Arizona] and myself have about this: How can you be proposing more tax cuts? The big tax cuts, the $1.5 trillion in the spring of 2001, didn't stimulate the economy.

Now you're coming back for more? At the same time, we had these enormous expenditures in Afghanistan, with homeland security, with the war in Iraq. Just doesn't make sense.

Hemmer: Interesting to note when the first tax cut was proposed, a lot of people across Washington and the country had a lot of criticism toward the White House, but eventually it was passed. Many people have said, " Do not underestimate the message from the White House" in the end about possibly getting put through on Capitol Hill.

Sen. Lincoln Chafee, Republican from Rhode Island. Appreciate your thoughts with us today.

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