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CNN Live At Daybreak

Bush Gears Up To Deal With Economic Wrangling

Aired January 08, 2002 - 05:38   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 COSTELLO, CNN ANCHOR: President Bush is turning some attention away from battling terrorism overseas to fighting the recession here at home.

CNN Senior White House Correspondent, John King, has details.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT (voice-over): Back to work at the White House, a new year with new budget realities, including the return of deficit spending. Mr. Bush says he is not to blame.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I said to the American people that this nation might have to run deficits in time of war, in times of the national emergency or in times of a recession. And we're still in all three.

KING: The economy is priority one for the president. The Federal Reserve chairman invited to discuss both short and long-term policy options. Mr. Bush says he still hopes to reach agreement with Congress on a short-term stimulus plan.

BUSH: So the question I am going to ask, and the question I hope Congress asks, is how best to create jobs? What can we do to encourage economic growth so that people who want to work can find work?

KING: But election year politics will complicate things. Democrats, led by Senate Majority Leader, Tom Daschle, blamed the Bush tax cut for turning surpluses into deficits. Daschle stopped short of calling for a repeal of the tax cut, but Mr. Bush, once again, just about dared Democrats to try.

BUSH: There is some talk about raising taxes. That would be a disaster to raise taxes in the midst of a recession.

KING: House Democratic leader, Dick Gephardt, took issue. In a statement, he said -- quote -- "I have not heard one Democrat say he or she wants to raise taxes. This is a partisan blame game, and it has no place in the debate about the future economic health of this country."

(on camera): In his remarks, the president made clear he understands the role the economy will play in his own job security. Mr. Bush said the administration was winning the war overseas in Afghanistan, but now must make more progress helping the unemployed here at home.

John King, CNN, the White House.

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