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American Morning

Bush and Congress to Decide on Budget Spending

Aired September 10, 2001 - 10:11   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.
COLLEEN MCEDWARDS, CNN ANCHOR: Turning now to politics and your pocketbooks, the slumping economy has created a difficult equation in Washington: Where can the decision-makers slash costs without cutting into constituent support?

For more on the numbers crunch and the Capitol's new bottom line, we turn to senior White House correspondent John King.

Hi, John.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Hello to you, Colleen.

Well, the economic problems facing the United States now have become the subject of a fierce intense political debate here in Washington. Fall is budget time anyway. The president and the Congress already facing tough choices about spending. Mr. Bush, for one, wanted to return a great deal of the surplus in the form of his tax cut; he did that. Now the Democrats, though, saying, as the economy had continued to slow, that there's not enough money in Washington to fund things, like: Mr. Bush wants more defense spending; Mr. Bush wants more money to spend on education; some Democrats would like to spend much more than the administration would like on the health care, things like a prescription drug benefit for those in the Medicare program.

So a political debate now about the economic statistics, and one thing the Democrats are making clear, even though Mr. Bush says the slowdown started when Bill Clinton was the president of the United States, the Democrats say, this is now the Bush economy.

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SEN. TOM DASCHLE, (D) MAJORITY LEADER: Well, I don't know if it's the president's words as much as his deeds that have caused us to be in the financial fix we're in. We're in a real financial situation right now, in large measure, because of his deficit and because of his tax cut. And with his budget and tax cut proposals we now have an economy that is also his.

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KING: Now, the administration trying to decide what to do next and just which proposals to support when it comes to perhaps stimulating the economy. Many Republicans in Congress pushing another tax cut, a reduction in the capital gains tax cut. The administration initially very cool to that, now looking at it with a bit of an open- mind, trying to crunch the numbers to see what impact that would have on the surplus. Many also want an across-the-board spending cut to keep the government from dipping into the Social Security surplus; that, a political promise both parties made last year not to touch the Social Security money to fund the government's programs.

But, remember, anytime the government cuts spending, that can hurt the economy as well. So none of the choices easy as the president and the Congress try to decide whether they need to do more to help the economy and who's to blame for the slowdown we're in right now -- Colleen.

MCEDWARDS: Well, John, the Australian prime minister, worried about his own economy, visiting with the president, hoping for some kind of a deal on trade deals that might help both countries. But I understand he's not going home with any kind of a promise or a deal, he's going home with a great big bell instead.

KING: He is going home with a 250-pound bell that was aboard the USS Canberra, named after the Australian capital. That ship named after an Australian vessel downed and destroyed in World War II.

Mr. Bush presented the bell today to the visiting Australian Prime Minister John Howard. But you're right, Mr. Howard faced the voters this year, he would very much like to negotiate a U.S.- Australia trade pact. But the president right now already seeking approval in the Congress to negotiate a free-trade zone of the Americas, already seeking the approval in Congress of the previously negotiated trade agreements between the United States and Jordan and the United States and the Vietnam. Trade, a very divisive issue in the Congress, especially when the economy is slowing, so President Bush's message to the prime minister, we are told, is that he's in favor of such an agreement, but he just can't do just yet -- Colleen.

MCEDWARDS: CNN's John King, thanks very much.

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