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American Morning
A Closer Look at Bush Economic Plan
Aired January 07, 2003 - 07:33 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.
PAULA ZAHN, CNN ANCHOR: Now for a closer look at the Bush economic plan, which the White House hopes can energize the economy. The White House projects the plan will cost them $600 billion over 10 years. Among what it is offering, it would eliminate taxes on individual stock dividends. It would also give tax breaks to businesses and individuals. It would increase the child tax credit and it would reduce the marriage penalty.
But can the plan jump start the economy and put money into your hands?
Let's turn to Commerce Secretary Don Evans, who joins us from the White House lawn on a frosty morning, indeed.
Good morning, Mr. Secretary.
Welcome back.
DON EVANS, COMMERCE SECRETARY: Thank you, Paula.
Good to be with you.
ZAHN: Thank you.
So how many new jobs do you think you can cerate with this plan and over what period of time?
EVANS: 2.1 million over the next three years. This is a very strong plan, Paula. It's a 10 year plan. It's a tax cut plan, as you described it. It's $674 billion of tax cuts over the next 10 years.
We estimate it will create some 2.1 million jobs over the next three years. But this creates the conditions for this economy to grow and for job creation well into the future.
ZAHN: So what do you say to the Democrats who say their plan is much more effective because their plan is front loaded and within the first year it would create a million jobs?
EVANS: Well, first of all, Paula, let me say there is a key fundamental difference between the two plans. In fact, there are two fundamental differences. One is theirs is a spending plan and the president's plan is a tax cut plan. Theirs is a temporary plan. The president's plan is a more permanent plan. It allows families to plan for the future.
Take the typical family of four that's earning $39,000 a year. As they're planning for their family future, taking about their child's education on into the future, they will know, under the president's plan, they will receive an additional $1,100 this year, more the following year, more the following year, more the following year, more the following year. And so they can plan for their future. That's how families think in this country. They like to be able to plan for their future, as opposed to a Democrat plan that is a spending plan.
ZAHN: But let me ask you about this, sir.
EVANS: Eighty-seven...
ZAHN: You offered tax rebates, your administration, at one point, and that's exactly what the Democrats are offering in this plan, I guess, what, tax rebates of up to $300 per person or $600 per working couple. Did that not work with your administration?
EVANS: Well, again, Paula, this is a temporary plan. They get a tax rebate, or it's a spending rebate, for one year. Now, what is it the following year or the following year or the following? Families like to be able to plan their future. They want some certainty in their future. That's what the president provides for them. That's the same way with businesses. That's how businesses think. They want to be able to plan for their future and that's what they're able to do, small businesses are, get a $75,000 expense of investment in this first year. But businesses are able to plan for their future.
And so that's, you know, the key difference is the president's plan is a long-term, permanent plan of tax cuts and the Democrat plan is about spending. When you're trying to create the conditions for economic growth in a country, what you think about is cutting taxes and controlling spending. That's exactly what the president's plan does. That's exactly the opposite of what the Democrat plan does.
ZAHN: But, sir, are you conceding, then, that the tax rebate your administration offered was the same thing, just a quick fix, just a temporary fix?
EVANS: Well, listen, I think that the president can stand firmly on his record of performance of this economy over the last two years. The president was handed a recession when he entered into office. He moved swiftly on that and led on a tax cut that was the best timed tax cut in the history of this country.
It meant that the recession was shallower than it would have been, not as long as it might have been and since the third quarter of 2001, this economy has been growing at three percent. This economy is doing well.
Now, let me tell you, though, there are some people in this country that are not working. And if there's anybody in this country that is not working that wants a job, we want to create the conditions for them to have a job. But the president's plan, through tax cuts, through a stimulus plan, through terrorism insurance, through tough measures on corporate scandals, through his handling of the West Coast port strike has created the conditions for this economy to be strong. It is strong right now. I mean three percent growth is pretty good growth. But the president, what he's doing here is saying I want it to be even stronger and I want it to be stronger well into the future, not just this next year. I want people to be able to think that this economy is going to be strong for the next 10 years and beyond.
ZAHN: Sir, I know you're going to get whisked away there in about 30 seconds or so to go on to your next job. But just a final question about the, getting rid of the tax on stock dividends. Only one fifth of U.S. households hold stocks outside of retirement accounts. What do you say to the four fifths of Americans who won't be affected by this?
EVANS: Well, under the president's plan, 92 million taxpayers get tax cuts. Under the president's plan, on the dividend side, there are some 35 million households that own stock that would receive benefits from the dividends. More than 50 percent of the benefits would go to our senior citizens. But, again, Paula, what we're talking about here is creating the conditions for job creation. That's what this does. When you cut taxes, you create the conditions for job creation and that's what this president is focused on is creating jobs.
He's not trying to pick winners and losers. The way the president thinks is you ought to structure programs where nobody wins unless we all win. And under the president's plan, everybody will win.
ZAHN: Commerce Secretary Don Evans, good of you to drop by in advance of the president's speech to explain to us what he's going to set out later today.
Thank you very much for your time.
EVANS: Sure thing, Paula.
Thank you.
ZAHN: And you can watch CNN's live coverage of the president's economic stimulus speech right here today at 1:00 p.m. Eastern.
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 January 7, 2003 - 07:33 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Now for a closer look at the Bush economic plan, which the White House hopes can energize the economy. The White House projects the plan will cost them $600 billion over 10 years. Among what it is offering, it would eliminate taxes on individual stock dividends. It would also give tax breaks to businesses and individuals. It would increase the child tax credit and it would reduce the marriage penalty.
But can the plan jump start the economy and put money into your hands?
Let's turn to Commerce Secretary Don Evans, who joins us from the White House lawn on a frosty morning, indeed.
Good morning, Mr. Secretary.
Welcome back.
DON EVANS, COMMERCE SECRETARY: Thank you, Paula.
Good to be with you.
ZAHN: Thank you.
So how many new jobs do you think you can cerate with this plan and over what period of time?
EVANS: 2.1 million over the next three years. This is a very strong plan, Paula. It's a 10 year plan. It's a tax cut plan, as you described it. It's $674 billion of tax cuts over the next 10 years.
We estimate it will create some 2.1 million jobs over the next three years. But this creates the conditions for this economy to grow and for job creation well into the future.
ZAHN: So what do you say to the Democrats who say their plan is much more effective because their plan is front loaded and within the first year it would create a million jobs?
EVANS: Well, first of all, Paula, let me say there is a key fundamental difference between the two plans. In fact, there are two fundamental differences. One is theirs is a spending plan and the president's plan is a tax cut plan. Theirs is a temporary plan. The president's plan is a more permanent plan. It allows families to plan for the future.
Take the typical family of four that's earning $39,000 a year. As they're planning for their family future, taking about their child's education on into the future, they will know, under the president's plan, they will receive an additional $1,100 this year, more the following year, more the following year, more the following year, more the following year. And so they can plan for their future. That's how families think in this country. They like to be able to plan for their future, as opposed to a Democrat plan that is a spending plan.
ZAHN: But let me ask you about this, sir.
EVANS: Eighty-seven...
ZAHN: You offered tax rebates, your administration, at one point, and that's exactly what the Democrats are offering in this plan, I guess, what, tax rebates of up to $300 per person or $600 per working couple. Did that not work with your administration?
EVANS: Well, again, Paula, this is a temporary plan. They get a tax rebate, or it's a spending rebate, for one year. Now, what is it the following year or the following year or the following? Families like to be able to plan their future. They want some certainty in their future. That's what the president provides for them. That's the same way with businesses. That's how businesses think. They want to be able to plan for their future and that's what they're able to do, small businesses are, get a $75,000 expense of investment in this first year. But businesses are able to plan for their future.
And so that's, you know, the key difference is the president's plan is a long-term, permanent plan of tax cuts and the Democrat plan is about spending. When you're trying to create the conditions for economic growth in a country, what you think about is cutting taxes and controlling spending. That's exactly what the president's plan does. That's exactly the opposite of what the Democrat plan does.
ZAHN: But, sir, are you conceding, then, that the tax rebate your administration offered was the same thing, just a quick fix, just a temporary fix?
EVANS: Well, listen, I think that the president can stand firmly on his record of performance of this economy over the last two years. The president was handed a recession when he entered into office. He moved swiftly on that and led on a tax cut that was the best timed tax cut in the history of this country.
It meant that the recession was shallower than it would have been, not as long as it might have been and since the third quarter of 2001, this economy has been growing at three percent. This economy is doing well.
Now, let me tell you, though, there are some people in this country that are not working. And if there's anybody in this country that is not working that wants a job, we want to create the conditions for them to have a job. But the president's plan, through tax cuts, through a stimulus plan, through terrorism insurance, through tough measures on corporate scandals, through his handling of the West Coast port strike has created the conditions for this economy to be strong. It is strong right now. I mean three percent growth is pretty good growth. But the president, what he's doing here is saying I want it to be even stronger and I want it to be stronger well into the future, not just this next year. I want people to be able to think that this economy is going to be strong for the next 10 years and beyond.
ZAHN: Sir, I know you're going to get whisked away there in about 30 seconds or so to go on to your next job. But just a final question about the, getting rid of the tax on stock dividends. Only one fifth of U.S. households hold stocks outside of retirement accounts. What do you say to the four fifths of Americans who won't be affected by this?
EVANS: Well, under the president's plan, 92 million taxpayers get tax cuts. Under the president's plan, on the dividend side, there are some 35 million households that own stock that would receive benefits from the dividends. More than 50 percent of the benefits would go to our senior citizens. But, again, Paula, what we're talking about here is creating the conditions for job creation. That's what this does. When you cut taxes, you create the conditions for job creation and that's what this president is focused on is creating jobs.
He's not trying to pick winners and losers. The way the president thinks is you ought to structure programs where nobody wins unless we all win. And under the president's plan, everybody will win.
ZAHN: Commerce Secretary Don Evans, good of you to drop by in advance of the president's speech to explain to us what he's going to set out later today.
Thank you very much for your time.
EVANS: Sure thing, Paula.
Thank you.
ZAHN: And you can watch CNN's live coverage of the president's economic stimulus speech right here today at 1:00 p.m. Eastern.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
