Return to Transcripts main page

CNN Crossfire

How Is President Bush Handling China and the Budget?

Aired April 06, 2001 - 19:30   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.
ROBERT NOVAK, CO-HOST: Tonight: A look back at President Bush's toughest week yet. The standoff in China could be breaking. And the Senate passed a scaled down tax cut.

So, how's the president doing?

ANNOUNCER: Live from Washington, CROSSFIRE.

On the left, Bill Press. On the right, Robert Novak.

In the CROSSFIRE, Democratic Senator Bill Nelson of Florida, member of the budget and foreign relations committees. And Republican Senator Craig Thomas from Wyoming, member of the foreign relations committee.

NOVAK: Good evening. Welcome to CROSSFIRE.

What a week for our new president! Twenty-four U.S. Naval crew members and their spy plane in the possession of the anti-American Chinese military, with the tough rhetoric from Beijing getting tougher.

And here in Washington, President Bush, unable to collect the 50 votes needed to pass his budget, including his big tax cut.

Well, hell week for George W. Bush began to ease up a little today. The Senate, late this afternoon, passed a budget, 65 to 35, all Republicans voting yes, all the null votes coming from the Democratic side. But the 10-year tax cut was scaled down from $1.6 trillion to 1.2 trillion.

And, meanwhile, President Bush expressed hope today for an agreement with the Chinese. Other sources indicated he might just be right.

So, is the glass half empty or half full for the president? How has George W. Bush handled himself in his toughest week as president?

Ace Democratic presidential consultant, Bob Shrum, is sitting in on the left. Welcome, Bob.

BOB SHRUM, GUEST HOST: Thanks. I guess that's a good compliment from the far right.

(LAUGHTER)

SHRUM: Senator, the Associated Press today described the vote in the Senate as a stinging setback for President Bush. The president tried to put the best face on it. I think there was a sudden outburst of bipartisanship in the White House, conversation that maybe things could be worked out over time. And this came after a long period in which the president, Karl Rove, Andy Card, everybody who works there, drew lines in the sand and said, "Absolutely no compromise. $1.6 trillion."

So let me ask you, was this a defeat for the president? Or does that figure of $1.6 trillion not matter much anyway?

SEN. CRAIG THOMAS (R-WY), FOREIGN RELATIONS COMMITTEE: Oh, it matters. But I don't think it's a defeat at all. As a matter of fact, take a look at where we were with the Democrats before. What did they want, 500 trillion?

NOVAK: 500 billion.

THOMAS: 500 billion, hardly any change at all. Think of the difference in the attitude in Washington, with respect to tax reductions as opposed to spending. And, you know, if you're going to have to deal with a 50-50 Senate, I think it's a very smart thing to hold your number. And if you get a smaller number, now, we've got the House has already passed it, we've got to go to a committee hearing to bring the House and the Senate together -- I think he's in great shape.

SHRUM: Yeah, David Brooks, who's a conservative writer for the "Weekly Standard" suggests that this wasn't a strategy to just hold his number, but that he actually meant it, and that he's coming across to the country as all conservative and no compassion.

His exact quote is, "Arsenic in drinking water, drilling in Alaska, even thinking of getting rid of Salmonella testing for school lunches." Now, I couldn't have said it better myself.

So you have the president now losing moderate Republicans and most Democrats. You have him losing on the tax...

THOMAS: Two. Just two.

SHRUM: But there are two, and there was a lot of nervousness on the part of others. You have him losing on the tax cut in the Senate and McCain-Feingold. You have his job rating at somewhere between 45 and 53 percent, depending on which poll you believe. Wouldn't George Bush be better off with a little more moderation -- acting bipartisan, instead of just giving speeches about it?

THOMAS: You know what I think we ought to be, is pretty proud of somebody who is out there campaigning, telling people what he is going to be for, and then, something we're not used to in the past eight years, he was actually for it. I think that's a pretty good idea.

NOVAK: Why is that it that Democrats always cite David Brooks as their favorite conservative journalist? But that isn't what I'm going to ask you. Welcome to CROSSFIRE, Bill Nelson.

SEN. BILL NELSON (D-FL), BUDGET COMMITTEE: It was a good quote, Bob.

(LAUGHTER)

NOVAK: You know, I like -- I like the people who grow. That is, that they -- as they hear more, they learn things. And I'd like you to take a look at this growth of the Democratic party on tax cuts.

Let's just take a look at the screen. Back in September of last year, that wasn't long ago, Gore-Lieberman, 10-year tax cut, 500 billion. Then in January, the Senate Democratic tax cut, 700 billion, the House Democratic was 600 billion at that time. By February, it was 900 billion. Today, we had 15 Democrats voting for 1.2 trillion.

Bill Nelson, who's winning this argument?

NELSON: Well, the fact is that the surplus was expected to go up, by the estimates. And so as the surplus went up, the fact is, that you want to give more of a substantial tax cut. But at the same time, you want to pay down that national debt.

Now, what's happening is the reverse. We now see, with the declining economy, that the projected surplus is going down, and that's part of the fallacy of now having everyone come out and want to use up all of the surplus for a huge tax cut, when in fact it may not be there, particularly, over 10 years.

NOVAK: I don't know if that answered my question, why this Democratic tax cut is getting larger. But, Senator, you were one of 35 Democrats who voted against the $1 trillion tax cut. Tom Daschle, your leader, was claiming victory, just as George Bush was claiming victory. But in fact, the Democrats voted against it. You Democrats have never really seen a tax cut you like very much. You couldn't even vote for that after -- and now you're claiming that the -- Tom Daschle is claiming that's a win.

NELSON: Well first of all, I did vote for a $900 billion tax cut, which is a rather substantial tax cut, over 10 years.

NOVAK: But you voted against 1.2 trillion.

NELSON: Yes, because it invaded -- it raided -- the Medicare trust fund. $57 billion in four different years.

THOMAS: Bill, that isn't the case. And the one you voted for with 900 was a higher percentage of the Gross National Product than this one is.

NELSON: Indeed, when you look at the numbers, I made a solemn promise to my people, Craig, that I would not invade the Medicare trust fund. And the proposal that was passed today, albeit a lower tax cut, indeed did, invade the Medicare trust fund.

SHRUM: But, Senator, let me pick up there. You know, as part of the damage control today, bipartisanship did break out in the White House briefing room. Let's look for a minute at Ari Fleischer.

(BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The president is very pleased with the cooperative spirit that is taking place on moving his education package forward. He cited the work of Senator Kennedy, Senator Lieberman, Congressman Miller, a number of Republican members of Congress, of course.

(END VIDEO CLIP)

SHRUM: Senator, I think he almost forgot the Republicans, as they tried to do the damage control today, and he's done better on education because he's been bipartisan. So as this budget goes to conference, in a form that takes 50- to $57 billion out of the Medicare trust fund -- do you think, in a bipartisan spirit, that you could persuade the president to reduce that tax cut by just another 4 percent or so, so that President Bush can keep his solemn campaign promise, never to threaten Medicare and never to touch it?

THOMAS: You know, I don't know where you guys are getting your information. This tax cut leaves enough money to pay down all of the debt that's available to pay over 11 years, over $2 trillion worth. It gives, of course, four times of tax relief. It saves Social Security dollars and Medicare dollars, in addition to being able to fund education and the security of defense. So all those things are there...

SHRUM: The Medicare figure is pretty widely agreed on, but let's --

THOMAS: By who? By you.

SHRUM: No, by most of the independent experts. But let's stay on tax cuts and George Bush's other campaign promises. Here he is last fall, talking about prescription drugs.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Every senior ought to have prescription drugs as a part of Medicare.

(END VIDEO CLIP)

SHRUM: Now he's proposing, over the next 10 years, half to a third of the total that's needed by almost all expert opinion, to keep that campaign promise. Don't you think we should keep the promise, give prescription drugs to seniors, and give a little less tax cut to the wealthiest Americans, like Bob Novak?

THOMAS: There are two things, Bob probably doesn't need it.

NOVAK: I do. I do need it.

SHRUM: He wants it, I can tell you. THOMAS: There are a couple of things you have to keep in mind, of course. One is, a budget does not determine where the money goes. Budget is a total expending thing, and the appropriators will change this.

The other, which I think's very reasonable, and that is if you're going to do something with pharmaceuticals, you have to wait until do you something with Medicare, and do those things so they fit together. So I think it's a very reasonable thing to wait. The money is there, we can do it.

SHRUM: So you're for a prescription drug benefit under Medicare, and you think that money ought to be found by the appropriators, even if it means that the wealthiest Americans get a little less in their tax cut?

THOMAS: They don't have to get a little less.

SHRUM: Well, the money has got to come from somewhere, Senator.

THOMAS: The money is there. And you talked about the tax surplus going down, I don't know where you get that information.

NOVAK: Senator Nelson, President Bush today was at the Horatio Alger awards. You didn't get one? I missed out, too.

But let's listen to what he said, because I think it puts in perspective some of the confusion in Bob Shrum's mind.

(LAUGHTER)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, THE PRESIDENT OF THE UNITED STATES: Now the House and Senate will work to find common ground between these two budget plans, and the result will be the largest tax relief in decades. The fact that both Houses of Congress have committed to provide significant relief is good for the American people, and it's good for our economy.

(END VIDEO CLIP)

NOVAK: So what we are going to have now is a tax cut, 10-year tax cut, estimated somewhere between $1.2 and $1.6 trillion. If you want me to guess, I'll bet right around 1.4 trillion, and with across- the-board tax cuts, so that everybody would who pays income tax; you, senator Thomas, Mr. Shrum and I, all get tax cuts, and that is going to come right to the Senate, no messing around, you have to vote yes or no. What are you going to do?

NELSON: By time it gets to the Senate, Bob, it may not be a relevant figure. Indeed, people do not think that the surplus, as projected, is going to be there. We can't accurately project what the surplus or deficit is going to be two years from now, much less 10 years from now. And so what you may see, by the time that the tax bill really gets to us, in three or four months, is a totally changed economic picture, that we might not be picking between $1.2 and $1.4 trillion.

NOVAK: And 1.6 trillion.

NELSON: 1.6.

NOVAK: Senator Nelson, you were in the House before -- you are not -- you didn't just fall off the turnip truck, you have been around. You were a distinguished House member, and you surely don't think -- surely don't think that if the economy gets worse, that the tax cut is going to get smaller. You don't you believe that for a minute, do you?

NELSON: Oh, indeed. What you will have is a changing of the tax cut. You will have it front-end loaded instead of back-end loaded, you will have a stimulative kind of tax cut, and you will make sure that you're not overspending your surplus, so that you reserve it for some of these other things, such as prescription drugs that Bob is talking about.

NOVAK: I'll bet you a Florida grapefruit on that, but we are going to have to take a break. And when we come back we are going to assess whether George W. Bush kowtowed to Chinese Communists, or he's doing exactly the right thing.

(COMMERCIAL BREAK)

SHRUM: Welcome back to CROSSFIRE. I'm Bob Shrum sitting in on the left.

We've been talking tonight about the week when George W. Bush's tax cut got ambushed in the Senate, while in the same week his foreign policy leadership got stuck on a tarmac on Hainan island, off the coast of China. What's going to happen there, and how's the new president handling it?

Joining us are Republican Senator Craig Thomas of Wyoming, chairman of the East Asian and Pacific Affairs Subcommittee; and Democratic Senator Bill Nelson of Florida, member of the Foreign Relations Committee -- Bob.

NOVAK: Senator Nelson, much of the week, the President Bush -- and we're talking about the Chinese incident -- has been acting as though his dog had died, but he came out today with a much -- a much more optimistic air, and let's take a look what he said today.

(BEGIN VIDEO CLIP)

BUSH: We are working hard to bring them home through intensive discussions with the Chinese government, and we think we are making progress.

(END VIDEO CLIP)

NOVAK: Now, you senators, members of Foreign Relations Committee, you have all the inside dope, you had top secret briefing from Colin Powell. Is this deal going to be done? NELSON: I believe it is. I'm very optimistic. Our briefing with Colin Powell was a very positive one. And he obviously has been working around the clock to make this thing happen. This is a very delicate situation.

China has a lot at stake. China has the Olympics. China has the World Trade Organization. China has a lot that's at stake that it knows it ought to put this incident behind us.

NOVAK: Senator Nelson, the "Washington Post," took a quickie poll this week with ABC News, how -- on Bush's handling of the China situation. Sixty-four to 24, that is not exactly a Florida recount type of margin. Are you in the 64 percent, and do you think the president -- don't you think the president has first -- his first really domestic -- I wouldn't call it exactly a crisis, a mini crisis, handled himself pretty coolly and confidently?

NELSON: Yes, I think many members of the administration are handling themselves very well in this crisis. And goodness knows, we need to. And it is time for, you know, politics stops at the water's edge, partisanship. And so, I'm certainly one of those that would commend the administration.

NOVAK: Well, I commend you. You just made Mr. Shrum sick.

SHRUM: I don't want to sound a discordant note in this bipartisanship, although I do think the president is handling it right. I would point out that secretary -- former Secretary of State Kissinger, who is no Democrat, said earlier this week that the administration has made a mistake at the start by issuing a lot of demands to the Chinese. We are making progress now, after Colin Powell and George Bush expressed their regrets.

Then I pick up the newspaper this morning, and I read that a source close to the Secretary of Defense Donald Rumsfeld thinks we are being too soft, that we are playing patty cakes with the Chinese. You are on the Foreign Relations Committee too, senator. Who do you think is right about this? Donald Rumsfeld and hard-liners like Dick Cheney? Should we really go after the Chinese? Or do you think Colin Powell has the right approach?

THOMAS: Well, I'm not sure you are correct in calling them hard- liners at this point. I think there is pretty good unanimity in the administration. And I think they have done very well.

I really believe what's gone on here, of course, was an opportunity for the China People's Republic to test -- to test this new administration. And I think they pushed it this way, and we did have to put down some demands. We need to get our crew back. We need to get our airplane back. Beyond that, we're working very well with them, and I'm optimistic that something good will come out of it.

NELSON: Bob, you're talking about two different things here. Getting the crew back, I think, is more the unanimity, and by the way we have two from Florida on that crew and I've spoken to both of their families. But what you've introduced is another subject, which is, is there discord in the administration over the policy with regard to China? And I think there certainly is.

Hard-liners are trying to be tough with regard to the Taiwan and sell the Aegis system to them, and others in the administration want more the one China.

SHRUM: Well, let me follow that up with Senator Thomas, because I think there is a sense out there that there is a division in the administration, actually across the board. George W. Bush when he ran for president, people said he was inexperienced, and the answer was, don't worry, his team has experience. Well, a lot of that team has experience in the old Cold War, and a lot of them seem to want to recreate that old Cold War from North Korea to Russia, because that's what they're good at dealing with.

Don't you think Bush is better off following the counsel of people like Colin Powell, who it seems to me has been very cool-headed in this situation, instead of listening to the people who want to be confrontational?

THOMAS: You're making this up, Bob. He's working...

SHRUM: Well, actually, it's me and about...

THOMAS: Colin Powell...

SHRUM: It's me and about 30 people in the administration who are all over town talking about this.

THOMAS: They hear it from you, I think. Colin Powell...

SHRUM: You think the people in the administration hear it from me?

THOMAS: Colin Powell is the one who's handling this, and he's been up there. We had a -- a briefing again today. And don't tell me that Dick Cheney is a cold warrior, because he isn't. He's very aware of where we are now.

This thing is going to be difficult, China. They're going to have to be careful of their trustworthiness. If they're not willing to come out now and settle this thing, they've got a lot to lose in this thing.

But George Bush is in charge of this administration.

NOVAK: Senator Nelson, behind the administration policy is a policy which has extended through several presidents, and that is that constructive engagement with China is a good thing to do.

A lot of the left-wingers in your party say that this is just greed of the business interests trying to get a buck out of china, not worrying about human rights and persecution. Do you side with those lefties or do you side...

(LAUGHTER)

... with people who want to -- want to have a constructive engagement with China?

NELSON: Not a leading question, is it, Bob?

NOVAK: No.

NELSON: What I side with is a balanced foreign policy whereby we would bring more China into the family of nations. By trading with them, that certainly is a step in the right direction. But being tough with China when we have to, to stop them from deploying more of these 6 and 7's, missiles trained on Taiwan. So we've got to have balance in our approach to the People's Republic of China.

NOVAK: Senator Bill Nelson, thank you very much. Senator Craig Thomas...

THOMAS: Pleasure.

NOVAK: We'll be back with closing comments where I'll make an attempt to show the error of Bob Shrum's ways.

(COMMERCIAL BREAK)

NOVAK: Bob, I'm afraid you were misled about what's going on inside the Bush administration by reading the front page of "The Washington Times," which has been running this campaign against communist China. In fact, there may be some people in the Pentagon who say Rumsfeld is opposed to Powell, but there's been no such disagreements in the administration. Rumsfeld has made private comments to people how much he supports this policy, and he doesn't say anything publicly because of the anti-Pentagon attitude about the Chinese military. They don't want to enrage anybody.

So I would say that you ought to get your facts straight about the Bush administration.

SHRUM: Well, Bob, first, I apologize for reading a conservative newspaper. I know that would bother you. Secondly, "The Wall Street Journal" has suggested that there are two camps here really, fighting over what to do in terms of China policy, and one camp -- including Rumsfeld, and what I read in "The Wall Street Journal," including Vice President Cheney -- wants to be very tough, for example, in the form of supplying advanced, sophisticated weapons to Taiwan.

For the first couple of days of this crisis, I think Henry Kissinger is right, they didn't get it right. And now that they have actually stood up and said, we regret this, the thing seems to be on its way to a solution.

NOVAK: They're both for constructive -- they're all for constructive engagement with the Chinese.

SHRUM: From the left, I'm Bob Shrum. Good night from CROSSFIRE.

From the right I'm Robert Novak. Join us again next time for another edition of CROSSFIRE!

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com