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CNN Live At Daybreak

The President Returns to Washington

Aired August 30, 2001 - 08:00   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.
BRIAN NELSON, CNN ANCHOR: After a month-long sojourn at the ranch, the president returns to Washington today, and Mr. Bush says his batteries are recharged.

And as White House correspondent John King reports, the president is going to need some energy for some big battles with Congress.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): The president conceded the economy is more sluggish than he had anticipated, but voiced confidence a rebound is just ahead.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: With the tax reduction already in place, Americans will have more of their own money to spend, to save and invest. The very things that make our economy grow.

KING: Mr. Bush used a speech to the American Legion convention in San Antonio to outline his top priorities for the fall legislation session: education, defense, his so-called faith-based initiative and the Patients' Bill of Rights acceptable to the White House.

But Democrats say the Bush tax cut has left Washington without enough money to pay for the president's priorities.

REP. CHARLES RANGEL (D), NEW YORK: Of course, there is not enough money for everything that President Bush has campaigned for. People forget, the president said get the money out of Washington.

KING: Mr. Bush disagrees.

BUSH: I presume those who now oppose tax relief are for raising your taxes. That would tie an anchor on our economy, and I can assure you I won't allow it.

KING: It is a critical stretch for the first-year president. He kept his promise of a big tax cut, but is on the verge of breaking a pledge not to tap into the social security surplus.

The economy is the wild card of the budget fight. The White House predicts growth at the rate of 3.2 percent next year. But the economy was almost flat growing at an anemic 0.2 percent rate in the second quarter of this year, and consumer confidence fell for the second month in a row. It is consumer spending that has kept the economy from dipping into negative territory.

(on camera): So slipping consumer confidence is especially worrisome to the White House and evidence to administration critics that the Bush tax cut is not delivering the economic stimulus the president promised.

John King, CNN, San Antonio, Texas.

(END VIDEOTAPE)

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