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CNN Live Saturday

Bush Vows not to Dip into Social Security

Aired September 08, 2001 - 17:04   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.
STEPHEN FRAZIER, CNN ANCHOR: In Washington, concern about how President Bush will keep his pledge not to touch Social Security funds following word that the government may need about $10 billion of those to pay for programs.

CNN White House correspondent Kelly Wallace takes a look at what is at stake.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT, (voice-over): Even as President Bush uses his radio address to focus on one priority...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We have a chance now to pass education reform based on good principles.

WALLACE: He and his aides are consumed by another priority, stimulating the sagging economy.

Friday, the stakes get even higher. Unemployment jumps to the highest in four years. And Hill Republicans learned from the White House budget director, at least $10 billion of the Social Security surplus may be needed this year to keep the budget balanced.

That sets off alarm bells in the G.O.P. camp, and a behind-the- scenes scramble with Bush aides and congressional Republicans trying to keep Social Security funds off limits.

Options being discussed include an across-the-board spending cut, lower increases in defense spending, and borrowing some money from next year's budget. Republicans worry they could pay a political price in next year's congressional elections.

AMY WALTER, "COOK POLITICAL REPORT": If you're in the Republican House leadership, you only have a very scant six-seat majority. You are very nervous about how this issue is going it play out in a year.

WALLACE: Democrats who are already working on ads accusing Mr. Bush of breaking his Social Security pledge, blame the Bush budget for some of the down turn.

SEN. JOHN KERRY (D), MASSACHUSETTS: The president of the United States, who budget it is, whose tax cut it is, has a responsibility to offer something new. WALLACE: Lost in the political debate over Social Security, is the question of what makes good economic sense. Republican Senator Pete Domenici of New Mexico points to experts who say, it is wrong to wall off Social Security funds during an economic slowdown.

SEN. PETE DOMENICI (R), NEW MEXICO: I have now talked to at least 15 economists, none of them -- none of them -- believe that is good economic policy for America.

(END VIDEOTAPE)

WALLACE: But Domenici is definitely in the minority. The president has said he will only touch Social Security in cases of recession, or war. And aides say he will find a way to keep that pledge, ever mindful, Stephen, of the political fallout if he doesn't.

FRAZIER: Kelly, thank you for joining us live here at the end of your report. Tell me, we saw Senator Kerry there attacking the president for his budget, but what do the Democrats propose to do about the budget and about Social Security?

WALLACE: Well, this is something we are hearing from Republicans. They say the president and congressional Republicans have an economic growth plan, but that all the Democrats are doing are playing the blame game. Well Democrats to that, say first, they say the president needs to come forward with a new budget that shows how he can pay for his programs and not touch Social Security.

They are also, though, very mindful of the criticism, and are starting to talk about a plan of their own. They are pointing to a minimum wage increase, also looking at some other measures to stimulate the economy, such as some assistance for child care credits and to help stimulate -- help people who lose their jobs. They are starting to talk about their own economic growth plan, but they are still appointing fingers first, at the president.

FRAZIER: At the White House, Kelly Wallace, thank you.

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