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American Morning

Interview With Sen. Charles Grassley

Aired May 07, 2003 - 08:18   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.


BILL HEMMER, CNN ANCHOR: Well, the debate over President Bush's tax cut plan right now heating up on Capitol Hill. At least four different plans right now in Washington. The Senate minority leader, Tom Daschle, harsh words for the Republicans' plan, as Democrats released their own version yesterday.
A sample from the Hill.

(BEGIN VIDEO CLIP)

SEN. THOMAS DASCHLE (D-SD), SENATE MAJORITY LEADER: We don't break the budget. We've got $152 billion versus $726 billion on the president's side. We think that we provide the kind of economic opportunity and economic plan for jobs and prosperity that is so critical. Theirs is irresponsible and I think that's the difference.

(END VIDEO CLIP)

HEMMER: There is a large debate right now ongoing.

Senate Finance Committee Chairman Charles Grassley also released a plan, his own. Not all Republicans, though, behind that either.

A question now, can the Senate get a tax cut plan together and pass?

Senator Grassley is our guest now live in Washington.

Senator, welcome back to AMERICAN MORNING.

Nice to have you here.

SEN. CHARLES GRASSLEY (R-IA), JUDICIARY COMMITTEE: Glad to be with you.

HEMMER: In a very basic sense, with the U.S. economy about $11 trillion right now, $350 billion does what for it?

GRASSLEY: Well, economists say that it would grow the economy by one and a half percent, bringing it up to three to three and a half percent from the two percent it's been going for the last year and a half, but not creating jobs and creating 1 4/10 million new jobs.

HEMMER: Now, you say economists believe that. Alan Greenspan apparently does not. At least on two occasions recently he said tax cuts are not what the economy needs. Do you disagree with him? GRASSLEY: Obviously I disagree because we are not, at two percent we are not increasing jobs. The, there's a great deal of anxiety by the American public about a growing economy but not growing enough to create jobs. In fact, six percent unemployment would be a better argument for this legislation than anything else. And it seems to me that even Alan Greenspan's concerned about a growing economy. Just think how often, maybe a half a dozen times in the last two years, he's reduced the interest rate.

Monetary policy is one way to grow the economy, but obviously when the federal government spends too much money, we run too much through the federal budget, as we do with higher taxes, it doesn't turn over in the economy as much when 535 members of Congress spend it as opposed to 110 million taxpayers.

HEMMER: You mentioned the word anxiety. I think there's a lot out there that you can tap into in the American people right now. Unemployment at six percent. Who's to say, though, if the economy continues the route that it's now headed that if I get this money back, I'm going to spend it? Or am I too scared and too insecure and I stick it in my pocket and save it?

GRASSLEY: It could happen. But remember, saving or spending, it's investing or spending. It helps both ends of the economy. In fact, this legislation that I put in is meant to be very balanced, to encourage investment, to also help the consumer side of the ledger, which is two thirds of the economy, to grow, to create those jobs that the economists are talking about. One and four tenths million new jobs is nothing to sneeze at.

HEMMER: Senator, we've got about 30 seconds here left, though. But there's already criticism against your plan. There's criticism against every plan. The "L.A. Times" say the dividend portion of this plan right now is going to cost the state of California $2.3 billion over the next three years. How do you defend that when the impact could be felt at the state level?

GRASSLEY: Well, let me suggest to you that we don't have anything to do with state tax law and all the California legislature has to do is adjust their state tax laws so that they don't follow and parallel the federal/state or the federal tax laws and every state has that problem. I can't do anything about that. I can only affect the dollars that federal taxpayers pay, and that's what we're trying to do, to give a jump start to the economy.

HEMMER: The debate continues. And I'm sure we'll talk again.

Senator, thanks for your time today.

GRASSLEY: Thank you.

HEMMER: Charles Grassley in Washington.

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 7, 2003 - 08:18   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Well, the debate over President Bush's tax cut plan right now heating up on Capitol Hill. At least four different plans right now in Washington. The Senate minority leader, Tom Daschle, harsh words for the Republicans' plan, as Democrats released their own version yesterday.
A sample from the Hill.

(BEGIN VIDEO CLIP)

SEN. THOMAS DASCHLE (D-SD), SENATE MAJORITY LEADER: We don't break the budget. We've got $152 billion versus $726 billion on the president's side. We think that we provide the kind of economic opportunity and economic plan for jobs and prosperity that is so critical. Theirs is irresponsible and I think that's the difference.

(END VIDEO CLIP)

HEMMER: There is a large debate right now ongoing.

Senate Finance Committee Chairman Charles Grassley also released a plan, his own. Not all Republicans, though, behind that either.

A question now, can the Senate get a tax cut plan together and pass?

Senator Grassley is our guest now live in Washington.

Senator, welcome back to AMERICAN MORNING.

Nice to have you here.

SEN. CHARLES GRASSLEY (R-IA), JUDICIARY COMMITTEE: Glad to be with you.

HEMMER: In a very basic sense, with the U.S. economy about $11 trillion right now, $350 billion does what for it?

GRASSLEY: Well, economists say that it would grow the economy by one and a half percent, bringing it up to three to three and a half percent from the two percent it's been going for the last year and a half, but not creating jobs and creating 1 4/10 million new jobs.

HEMMER: Now, you say economists believe that. Alan Greenspan apparently does not. At least on two occasions recently he said tax cuts are not what the economy needs. Do you disagree with him? GRASSLEY: Obviously I disagree because we are not, at two percent we are not increasing jobs. The, there's a great deal of anxiety by the American public about a growing economy but not growing enough to create jobs. In fact, six percent unemployment would be a better argument for this legislation than anything else. And it seems to me that even Alan Greenspan's concerned about a growing economy. Just think how often, maybe a half a dozen times in the last two years, he's reduced the interest rate.

Monetary policy is one way to grow the economy, but obviously when the federal government spends too much money, we run too much through the federal budget, as we do with higher taxes, it doesn't turn over in the economy as much when 535 members of Congress spend it as opposed to 110 million taxpayers.

HEMMER: You mentioned the word anxiety. I think there's a lot out there that you can tap into in the American people right now. Unemployment at six percent. Who's to say, though, if the economy continues the route that it's now headed that if I get this money back, I'm going to spend it? Or am I too scared and too insecure and I stick it in my pocket and save it?

GRASSLEY: It could happen. But remember, saving or spending, it's investing or spending. It helps both ends of the economy. In fact, this legislation that I put in is meant to be very balanced, to encourage investment, to also help the consumer side of the ledger, which is two thirds of the economy, to grow, to create those jobs that the economists are talking about. One and four tenths million new jobs is nothing to sneeze at.

HEMMER: Senator, we've got about 30 seconds here left, though. But there's already criticism against your plan. There's criticism against every plan. The "L.A. Times" say the dividend portion of this plan right now is going to cost the state of California $2.3 billion over the next three years. How do you defend that when the impact could be felt at the state level?

GRASSLEY: Well, let me suggest to you that we don't have anything to do with state tax law and all the California legislature has to do is adjust their state tax laws so that they don't follow and parallel the federal/state or the federal tax laws and every state has that problem. I can't do anything about that. I can only affect the dollars that federal taxpayers pay, and that's what we're trying to do, to give a jump start to the economy.

HEMMER: The debate continues. And I'm sure we'll talk again.

Senator, thanks for your time today.

GRASSLEY: Thank you.

HEMMER: Charles Grassley in Washington.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com