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CNN Live At Daybreak

Battle Over Government Checkbook Begins

Aired August 30, 2001 - 08:06   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.
CAROL LIN, CNN ANCHOR: As of this afternoon, President Bush will be heading back to work from the western White House in Crawford, Texas. And when he returns to the Oval Office, he returns to a battle over the government's checkbook and how money is going to be spent.

Political reporter Ron Brownstein in Las Vegas this morning bright and early -- good morning, Ron.

RON BROWNSTEIN, "LOS ANGELES TIMES": Good morning.

LIN: Hey, so are you gambling that President Bush is ready to put his denim shirt aside and get back to work.

BROWNSTEIN: Well, you know, this is a city that is very well versed in losing money. So I suppose it's a good place to talk about what happened this summer. I mean, the big difference between when President Bush left Washington on vacation and when he returns is that both his own administration and the Congressional Budget Officer said effectively the budget surplus, the portion not attributable to social security, is gone. And that's going to make things a lot more difficult on a lot of fronts -- basically everything both parties want to do.

And many of the priorities that John King mentioned in his report are going to get a lot tougher, because like some of the gamblers here, they wake up in the morning to find they don't have a lot money left.

LIN: That's right. But President Bush not backing off on his shopping list. He just told former veterans at the American Legion that he is going to increase funding for the Pentagon. He wants to have more spending for education, prescription drugs for the elderly. He is going to go ahead with his missile defense shield.

So how is he doing to add up those numbers?

BROWNSTEIN: They are not going to add up in the short run. Basically, both the -- as I said, his own administration projected surpluses in the portion of the budget not attributable to social security holding $9 billion in the next three years, and the Congressional Budget Office has the budget actually in deficit.

Now, basically, to spend the kind of money that he is talking about in any of these areas, both parties would have to agree to essentially renounce their commitment not to tap the surplus in social security to pay for other government programs. That's something both parties have agreed to do. It's something the president as recently as a few weeks ago was saying that he was going to do. Now, they saying there is some wiggle room. That could be very dangerous.

I think that in the very short time the public has grown to expect that Washington will keep its budget in balance without touching social security, and there could be a real risk for either side in going ahead and tapping into that trust fund again.

LIN: So, Ron, I'm going to ask you to be a United Nations translator here.

BROWNSTEIN: Yes.

LIN: The Democrats sent the president a letter and when it comes to spending, and they write, "We would appreciate the opportunity to meet with you to receive the benefit of your thinking."

How does that set the tone for what the dialog is going to be when the president gets back?

BROWNSTEIN: You know, when a president named Bush, here is the idea of Democrats in Congress talking about a budget summit. There is probably not a great feeling that runs down his spine, because, of course, it was a budget summit during the first Bush administration that led then President George Bush to renounce his 1988 promise of no new taxes and really helped probably shorten his administration, sort of led to a revolt on the right.

What the Democrats are trying to do is force Bush to enter into broad negotiations with them to discuss what to do about the budget. They don't want to come out with their own alternative, because really in the short run, unless they are willing to reconsider the tax cut, not really to raise taxes in the way that President Bush has threatened, but to really defer future tax cuts that are scheduled in this tax cut. They're not going to have the money to do any of the things they want to do: Prescription drugs, education, anything like that. But at the moment, they don't want to go down that road. So you really have a little bit of a stalemate here where each side is pointing to the other and saying, no, you go first.

LIN: And by the way, continuing to read the tea leaves here, Al Gore making his debut while President Bush busy on the ranch -- a new and improved Al Gore.

What do you read into his reemergence?

BROWNSTEIN: Well, you know, we've been wondering -- some Democrats have been wondering, he has been so silent these last eight months whether he was marooned on a desert island. And I think the beard is proof they may have been right.

But the fact is that he's coming back, and he's going to be speaking next month in Iowa, a site of the first caucus in 2004 at the state party's chief fundraising dinner. And it's really an interesting confluence of sort of a messenger and moment, because certainly Gore's principal message in the 2000 campaign was that the Bush tax cut would evaporate the surplus. And that is, in fact, with the contribution of a slowing economy, what has happened. So it will be interesting to see whether Gore can find a way to say, I told you so, without sounding like someone saying, I told you so and irritating all of the voters that got sick of him talking about a lock box last year.

LIN: Yes, that's right. Hey, Ron, business or pleasure there in Vegas?

BROWNSTEIN: Yes. A little bit -- mostly pleasure, a little bit of returning from vacation mode myself.

LIN: All right. Well, welcome back.

BROWNSTEIN: Thank you.

LIN: Ron Brownstein, "Los Angeles Times."

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