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American Morning

Sound Off: Daschle-Bush Economy Sparring

Aired January 07, 2002 - 08:46   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.
PAULA ZAHN, CNN ANCHOR: Welcome Back. When it comes to the war on terror, they are on the same team. But, when it comes to the economy, President Bush and Senate Majority Leader Tom Daschle are sounding a familiar political theme, the blame game. The president says his program of tax cuts will get the economy moving, and he accuses the Democrats of looking to raise taxes. But Daschle claims the president's plan has just had the opposite effect.

(BEGIN VIDEO CLIP)

SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: Not only did the tax cut fail to prevent a recession, as its supporters said it would, it probably made the recession worse. It also put us in an unnecessary fiscal bind at the worst possible time.

(END VIDEO CLIP)

ZAHN: Daschle says the suggestion the Democrats want to increase taxes is "hot rhetoric." Is Daschle hurting himself, though, by attacking the president?

Joining us now to sound off in Washington, Paul Begala, former Clinton adviser, and in New York, John Fund from the "Wall Street Journal." happy New year! This is the first chance I've had to welcome the new year inhere with you guys. Welcome.

PAUL BEGALA, FORMER CLINTON ADVISER: I love the new show, new set. Looks great.

ZAHN: I'm happy to hear that. How about John, you agree?

JOHN FUND, "WALL STREET JOURNAL: Spiffy, spiffy.

ZAHN: Oh good! We -- that will probably be the only consensus we'll reach in this segment. All right, let's talk a little bit about what Tom Daschle is up to. Could this backfire on him, Paul?

Begala: I don't think it could. I mean, Daschle stood up and took the outrageous position that squandering $4 trillion of surplus in just one year was maybe not a very good idea when we have important needs for national defense, homeland security, prescription drugs for senior citizens and social security.

I found it to be a very moderate speech. it was very much from the Bill Clinton, Bob Reuben playbook. And I thought Bush's response was the one that was very risky. If Bush had continued to stay on the high road, above the fray, the way he has on the war so successfully, and called for both parties to come to a compromise, it would have been very smart for Bush.

Instead, he went back to the old, pre-September 11th Bush, and he was partisan, he was mendacious, he was incoherent.

ZAHN: Oh wait! Now, wait a minute, Paul. You're telling me that Tom Daschle was not partisan in his comments last week?

BEGALA: Well, again, Bush's better play is to try to be above that. of course Daschle had his ideological view. But he was not -- first off, he didn't attack Bush, and he didn't lie. Bush said that Daschle wants to raise taxes, which is, of course a lie. Daschle, in fact, proposed seven steps, some of which were tax cuts, none of which were tax increases.

Now we ought to be able to have an honest debate about it without the President Of The United States diving into that kind of mendacity and, as I say, economic incoherence. At one point he said, the economy's going to be great in 2002, in the other he said, well, we need my tax cuts for big corporations. He just made no sense at all. And all Daschle says, "we've got to get a hold the deficit first."

ZAHN: Let's come back to the central point you're making to give John a chance to respond to that. Essentially, John, I think Paul is saying that when it comes to the war on terrorism, criticism is off-limits but when it comes to domestic issues, there should be a different rule here.

FUND: Oh, I think criticism is fine, but mendacity and such words like that, I think that is out of place. Look, Tom Daschle is probably running for president. This was a speech to position himself as Democrat Numero Uno, and I think he solidified his base. However, if you paid attention, he really didn't have that many disagreements with the president. He implicitly implied the tax cut didn't help the recession, but he has his own series of tax cuts that implies that tax cuts are the best remedy for this economic recession, which I think is still going to last several more months.

And the tax cut we do have and is in place, doesn't kick in until later this year. That tax cut we need. So Tom Daschle is just playing politics, pure and simple. And if it will have boomeranged against him? Only if people listen and recognize it's economically incoherent.

ZAHN: Well, you wouldn't, John, describe that speech as moderate, As Paul just described it as, would you?

FUND: I think it was very clever. I think he pretended to disagree with Bush a great deal, and -- but he refused to say, "we should scale back the tax cut." And the simple reason, Paula, for that is, 12 of his Democratic Senators voted for that tax cut. And even more of them voted for that tax cut that were Democrats in the House. So Daschle recognizes it is political suicide for him to call for repeal of that tax cut, so he pretended to question the tax cut, while bringing forth his own tax cut, which proves tax cuts are the best remedy for a recession.

ZAHN: So, Paul, walk us through the next stages. I think you helped expose us to an internal memo that was written to Democratic party leaders about how to blame the recession on Bush, and sort of the agenda in the coming months. What happens next?

BEGALA: Daschle put forward a seven-point economic plan. The president, I thought, should have taken him up on that and say, "well, I agree on this point but not that. Surely we can come to terms on some modest, temporary tax cuts to boost the economy and some aid to the unemployed folks, millions of people who have lost their job in the Bush recession.

But, instead he took this very partisan line. And so now we've got, in just one year of the Bush economy, we have the greatest fiscal reversal in American history, from our strongest surpluses back into deficits. We've had also, by the way, on his watch, the collapse of the Argentine economy, which is the second largest economy in South America, the collapse of Enron, the seventh largest corporation in America. And Bush just sort of blithely continues on saying, "well, all we need is more tax cuts for the rich."

ZAHN: All right.

BEGALA: That's why I say it is incoherent, and he would have been better to meet Daschle halfway and say, "well, let's find a moderate compromise in the middle."

ZAHN: John Fund, you get the last 15 seconds.

FUND: Paul wants to reinvent history. We all know that anything that happens in the economy has a time lag of between 6 and 12 months. I don't think we need to blame this recession on Bill Clinton, nor do I think we should blame this recession on George Bush. We should talk about solutions rather than the blame game. And that is trying to get people back to work and making this economy grow again.

ZAHN: I hear you. I think most of America would cheer you on on that thought. Paul Begala, John Fund, good to have you with us on day one of "AMERICAN MORNING."

BEGALA: Thanks Paula.

ZAHN: Appreciate your showing up for us this morning.

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

PAULA ZAHN, CNN ANCHOR: Welcome Back. When it comes to the war on terror, they are on the same team. But, when it comes to the economy, President Bush and Senate Majority Leader Tom Daschle are sounding a familiar political theme, the blame game.>