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CNN Live Saturday

Government May Have to Tap $10 Billion of Social Security Surplus

Aired September 08, 2001 - 16:05   ET

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

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DONNA KELLEY, CNN ANCHOR: The economy, and concern being expressed from the White House. The Dow Jones dropped nearly 235 points yesterday after the Labor Department reported that the national unemployment rate rose to 4.9 percent last month; that's the highest it's been in four years. And after that disappointing news the president addressed the nation saying, in his words: "We intend to do something."

And joining us with more on that is CNN's White House correspondent Kelly Wallace.

Kelly, what's on the table? What action is the president considering?

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Well, Donna, the president says he's already got a plan in place. He's definitely banking on that tax cut, hoping once all those tax rebates checks are out and in the mail this fall that that will give a boost to the economy. He's also calling on Congress to act on his energy and trade bills, saying that those will give a boost, also, to the economy, and increase the number of jobs.

But there's this other development, Donna, that has the White House very much concerned. And that is the budget director, Mitch Daniels, telling House Republicans yesterday that the U.S. government may have to dip into the Social Security surplus by at least $10 billion to keep the budget balanced this year. Well, as you can imagine, that has Republicans very concerned, this White House very concerned. The president and Republicans pledging not to use any Social Security funds to pay for government programs.

So there's a behind-the-scenes scramble going on to figure out ways to keep Social Security untouched. Many options being discussed, including some type of across-the-board spending cut. So that's a big concern right now for the White House and for Republicans -- Donna.

KELLEY: Kelly, if that numbers comes from Mitch Daniels, how solid is it? We've seen different numbers. I mean, now we're saying $10 billion -- it was nine, it's been 15, maybe not at all -- do we know if that number is pretty solid?

WALLACE: Well, you know what it is? The numbers keep changing, in part based on the economy. And so the White House saying weeks ago that there would actually be a surplus and there would be no need to touch any Social Security funds. Obviously things have not gone so well.

We do know from Hill Republican sources that Mitch Daniels saying yesterday that at least $10 billion may need to be used. The White House, though, not commenting on these numbers, certainly hoping that they will change.

It's important, Donna, to stress that even if the government had to dip into the Social Security surplus, that wouldn't affect benefits for current retirees. But the political stakes would be enormous. Democrats already getting ads together accusing the president of going back on his Social Security pledge. And Republicans thinking they could really pay a price for this in next year's elections -- Donna.

KELLEY: Kelly Wallace at the White House, thanks as usual. We'll see you shortly.

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