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Comparison of Bush, Daschle Tax Packages
Aired May 06, 2003 - 14:46 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.
MILES O'BRIEN, CNN ANCHOR: Two men with two very different ideas about economic recovery push their respective plans today.
President Bush spent a second day promoting his tax cut package. He says cuts of at least $550 billion could help create about a million jobs by the end of next year. That's a step back from the $726 billion tax cut he originally wanted.
Meanwhile Senate Minority Leader Tom Daschle is proposing what he calls a jobs and growth package. The plan include aid to states and various tax credits. But no form of dividend tax break sought by the White House.
So how do the plans compare? The Senate Democratic plan being promoted by Daschle would cost $152 billion over ten years. It includes a $300 tax credit to every working American and $40 billion in aid to the states. The White House plan, which is scaled down version of one created by President Bush, proposes $550 billion in tax cuts. It also lowers taxes on dividends.
So is a tax cut really going to be just the medicine for an ailing economy? CNN's Allan Chernoff joining us from New York with more on what might be some other possible fuels for growth, quite literally. Hello, Allan.
ALLAN CHERNOFF, CNNfn CORRESPONDENT: That's right, Miles, literally because a tax cut and tax credit, you know it takes time for Americans to get that into their pocket.
But here's the medicine that is actually helping the economy right now. It is the decline in energy prices that we've been seeing, in fact, since the beginning of the war. And this is putting extra cash into the pockets of Americans. Since the beginning of the war against Iraq, the price of gasoline has tumbled 21 cents a gallon. The average price right now in the country is $1.51 a gallon for regular unleaded.
Now, that so far has put $2 billion -- about $2 billion into the pockets of Americans. And on an annual basis, this would actually save the country $28 billion. So if you're not spending quite as much at the gasoline pump, you have extra money to spend elsewhere, and that is the sort of incentive that can actually get the economy going again.
We can also factor in the decline in other energy prices such as heating oil, jet fuel, et cetera. That's helping the airlines. They certainly do need that help. Trucking companies and of course utilities and so many other companies. Factories of course paying plenty of money for the energy expenses. This will hopefully help corporate America and corporate America will hopefully start spending more money -- Miles.
O'BRIEN: All right. Any other good ideas out there for stimulating the economy? What about the Chernoff plan? What's that going to be?
CHERNOFF: Well, Miles, certainly what we need here is just for corporations to gain more confidence. The decline in energy prices is one step in that direction.
But really the critical issue here is corporate executives regaining confidence, enough confidence to not only spend for more equipment, but to spend to hire more people because, as you know, the labor situation remains dire, even with the economy picking up a bit.
O'BRIEN: All right. It's a little bit of difficult economics, isn't it? Allan Chernoff, thank you very much. No simple solutions in an economy this size.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired May 6, 2003 - 14:46 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Two men with two very different ideas about economic recovery push their respective plans today.
President Bush spent a second day promoting his tax cut package. He says cuts of at least $550 billion could help create about a million jobs by the end of next year. That's a step back from the $726 billion tax cut he originally wanted.
Meanwhile Senate Minority Leader Tom Daschle is proposing what he calls a jobs and growth package. The plan include aid to states and various tax credits. But no form of dividend tax break sought by the White House.
So how do the plans compare? The Senate Democratic plan being promoted by Daschle would cost $152 billion over ten years. It includes a $300 tax credit to every working American and $40 billion in aid to the states. The White House plan, which is scaled down version of one created by President Bush, proposes $550 billion in tax cuts. It also lowers taxes on dividends.
So is a tax cut really going to be just the medicine for an ailing economy? CNN's Allan Chernoff joining us from New York with more on what might be some other possible fuels for growth, quite literally. Hello, Allan.
ALLAN CHERNOFF, CNNfn CORRESPONDENT: That's right, Miles, literally because a tax cut and tax credit, you know it takes time for Americans to get that into their pocket.
But here's the medicine that is actually helping the economy right now. It is the decline in energy prices that we've been seeing, in fact, since the beginning of the war. And this is putting extra cash into the pockets of Americans. Since the beginning of the war against Iraq, the price of gasoline has tumbled 21 cents a gallon. The average price right now in the country is $1.51 a gallon for regular unleaded.
Now, that so far has put $2 billion -- about $2 billion into the pockets of Americans. And on an annual basis, this would actually save the country $28 billion. So if you're not spending quite as much at the gasoline pump, you have extra money to spend elsewhere, and that is the sort of incentive that can actually get the economy going again.
We can also factor in the decline in other energy prices such as heating oil, jet fuel, et cetera. That's helping the airlines. They certainly do need that help. Trucking companies and of course utilities and so many other companies. Factories of course paying plenty of money for the energy expenses. This will hopefully help corporate America and corporate America will hopefully start spending more money -- Miles.
O'BRIEN: All right. Any other good ideas out there for stimulating the economy? What about the Chernoff plan? What's that going to be?
CHERNOFF: Well, Miles, certainly what we need here is just for corporations to gain more confidence. The decline in energy prices is one step in that direction.
But really the critical issue here is corporate executives regaining confidence, enough confidence to not only spend for more equipment, but to spend to hire more people because, as you know, the labor situation remains dire, even with the economy picking up a bit.
O'BRIEN: All right. It's a little bit of difficult economics, isn't it? Allan Chernoff, thank you very much. No simple solutions in an economy this size.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
