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CNN Live Event/Special

Congressional Negotiators Agree on $1.35 Trillion Tax Cut

Aired May 01, 2001 - 16:03   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.
JOIE CHEN, CNN ANCHOR: Now to the Rose Garden at the White House. President Bush speaking about the tax deal; let's listen.

(JOINED IN PROGRESS)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ...working together, Republicans and Democrats in the House and the Senate have agreed on a proposal that will provide $1.35 trillion in tax relief over the next 11 years.

$100 billion will be distributed right away, this year and next, to help stimulate our economy and put money in people's pockets quickly. The rest of tax relief will be provided over the next decade.

I congratulate the members of the Senate and the House, Republicans and Democrats, who have worked so hard to achieve this bipartisan agreement.

You all deserve great credit for agreeing to provide the American people with meaningful, significant, sweeping tax relief; the most tax relief in a generation.

Today, Republicans and Democrats have agreed to help Americans send their children to college, pay off their mortgages a little faster, or cope with rising energy costs. In short, once we've funded our nation's priorities, we have agreed to let the American people spend their own money on their own priorities.

Today's agreement has a larger message as well: By finding common ground on an issue that divided the two parties throughout last year's campaign, Republicans and Democrats have today proven we can work together to do what is right for the American people.

Achieving the agreement on significant tax relief can help pave the way for consensus on other vital issues, including reforming our public schools, strengthening Social Security and Medicare, and transforming our national defense.

When I spoke to a joint session of Congress just a few months ago to outline my budget and tax relief proposals, I said that in the end we'll be judged not only by what we say, but by what we're able to accomplish. We have more work to do to complete the full budget, but today we have accomplished significant tax relief and shown we can work together in a constructive way to get things done for the people of this country.

Thank you.

QUESTION: Mr. President, are you going to be able to keep spending in check in order to be able to fund your tax cuts?

BUSH: Well, I'm absolutely convinced we'll be able to fund the tax cuts. And I will work with members of the House and the Senate to have discretionary spending at a reasonable level.

I hope we're making progress. There's a lot of discussions going on. I suspect I'm going to have to remain diligent over the next year to keep the spenders in check. But that's a good job for the chief executive officer.

QUESTION: Mr. President, how did your conversation with President Putin go?

BUSH: It was good. We have a very constructive conversation. I called him early this morning to let him know that I'd be giving the speech that I just gave. I wanted to assure him that my plans were in the best interests of our two countries, that we're going to consult with the Russians as well as our other friends and allies.

But I also made it clear to him that it's important for us to think beyond the old days when we had the concept that if we blew each other up, the world would be safe. I told him the Cold War is over, and that Russia was not our enemy. And I helped try to define the threats as realistically as I could, and that we needed to have defenses to meet those threats.

I also told him that we would work to reduce our own nuclear arsenals and would do so in time.

BUSH: He asked me whether or not there is a change we could meet before our upcoming summits. I told him I'd love to meet with him before beforehand, to look him in the eye and let him know how sincere I am about achieving a new way of keeping the peace.

He reminded me at one point in time that he talked about the need to address current threats in our world with systems that might be able to intercept missiles on launch or the boost phases I talked about today. So I felt that it was a very constructive meeting.

QUESTION: Mr. President, are you concerned about Director Freeh's resignation? Did that get you by surprise?

BUSH: Actually, Director Freeh came to see me late yesterday afternoon, and he asked if we could meet alone. I said, "Of course."

And he said, "I'm resigning." And it did catch me by surprise, and I'm disappointed. I was hoping that he would stay on. I think he's done a very good job.

I'm sure he explained to you -- I didn't see his press conference -- but I suspect he explained to you the reason why, and that is, he wanted to spend more time with his family.

I found Louis Freeh to be a fine public servant, and our nation owes him a debt of gratitude for his service to our country. And now we'll begin the process of finding a replacement.

QUESTION: What response did you get from the European allies on missile defense? Do you think they will go along eventually?

BUSH: Well, I think we've got a lot of explaining to do. That's why, yesterday, I called the leaders of France and Britain and Canada and Germany to explain to them exactly what I -- and the head of the NATO -- to explain to them exactly what I've just explained, I told you, to Mr. Putin.

BUSH: The phone call I made yesterday was nothing new, however. I had met with those leaders before and talked to them about what I meant, and during the course of the campaign, when I talked about providing defenses to meet the true threats that all of us are now faced with. The leaders were pleased that we're sincere about our desire to go through consultations.

I've sent a high-level team, a team of high-level members of my administration, deputies, Armitage, Hadley and Wolfowitz. It's a clear signal about, one, how important this issue is; and how, two, how seriously we take the idea of consulting with our allies and friends. They're very pleased with that.

But they're going to have to speak for themselves. I'm a little hesitant to put words in their mouth.

QUESTION: Mr. President, on the Social Security Commission, some are saying that the membership is going to be, sort of, stacked in a way that pre-ordains the recommendation of privatization.

BUSH: Well, I think, let us get -- tomorrow's the day when we'll be talking about Social Security. And that would be a very good question to the members of the commission, to make sure that there's an objective analysis of Social Security, how do we save it? What do we do to make sure it's viable in the future?

There's a lot of speculation about the commission. It'll be cleared up tomorrow afternoon, if I'm not mistaken right here in this very spot.

Thank you all very much.

CHEN: Mr. Bush, -- Mr. Bush, leaving the Rose Garden, a little briefing with reporters out there. Talking to them -- it's sort of a range of topics all in the news today. Mr. Bush coming out to talk about tax cut deal reached by House and Senate Republican leaders earlier in the day and brings the number to $1.35 trillion over 11 years. A little bit different; a little bit smaller than Mr. Bush's intended plan of a $1.6 trillion tax cut. That's the one that he had long advocated of course throughout the campaign and into his office as well.

Talking as well, Mr. Bush did today about a statement that he made earlier in the day about a missile defense shield and plans for that as well. He was talking today about the reaction of allies and then about Social Security. On all of those topics of course, our senior White House correspondent John King is well versed and he joins us now.

First, John, just talk to us a little bit about the tax cut deal and what that means to the Bush administration?

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, certainly it means significant process for the president. He didn't get everything he asked for. This tax cut a little bit smaller than what the president had asked for. But he is viewing this as a victory.

Remember last year, as far as the Democrats were willing to go on tax cuts was the vice president's proposal, Vice President Gore's proposal of $500 billion, so we will have now $1.53 trillion over 11 years. The president will put his stamp on that, claim a success for the administration and also say, hey, look is this an example of bipartisan compromise, relatively small number of Democrats involved in the negotiations.

But the key moderate Democrats were and the president hoping that this is a sign of things to come. They still need to work out the spending level in the budget. Those negotiations continue at this hour even as everyone celebrates this tax cut deal.

CHEN: Yeah, there are two sides of that; the tax cut and the spending as well, the other part of that.

John, we have questionnaires in our live Web chat. MariGrace asking:

"Where is Bush getting the money for these tax cuts?"

KING: Well, the money for the tax cuts comes out of your tax dollars. The president would make the case that American taxpayers are overpaying, that we have had a surplus in Washington since the middle of the Clinton administration, the final term of the Clinton administration anyway, and that it's time to give that money back.

So, the president's case is that the federal government is taking in too much from the taxpayers, and that a good chunk of that should be returned home. Now, he says, you can do that and still fund Social Security, Medicare, education improvements, a continuing debate over that with the Democrats.

Many Democrats warning that in the second 100 days of this administration, the American people will see the price of this big tax cut. The president, of course, disagrees. He believes there's enough money for this tax cut and to fund key national priorities.

CHEN: Our senior White House correspondent John King with the word from the White House this afternoon.

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