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CNN Sunday Morning
Economy Becomes a Hot Button Issue in Washington
Aired September 09, 2001 - 09:06 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.
MARTIN SAVIDGE, CNN ANCHOR: We're going to focus now on what's become the hot button issue in Washington and on Wall Street. It's the economy, and it's been sputtering all year. It's also forcing President Bush to shift his attention.
More on the president's economic blues from the White House and White House correspondent Kelly Wallace.
KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Well, Martin, you know, President Bush is spending a rare weekend here at the White House. He was up bright and early and headed off to church with first lady Laura Bush and at this hour he is headed off for a jog.
The president's fall agenda was originally really supposed to be focused on education and citizenship and family values. But with all the troubling economic news we have seen over the past several weeks, Bush aides say that the economy is now front and center of their agenda, well aware that presidents are the ones that get blamed for bad economic times.
(BEGIN VIDEOTAPE)
WALLACE (voice-over): Even as President Bush uses his radio address to focus on one priority...
GEORGE W. BUSH, PRESIDENT, UNITED STATES: We have a chance now to pass education reform based on good principles.
WALLACE: ... he and his aides are consumed by another priority, stimulating the sagging economy. Friday, the stakes get even higher. Unemployment jumps to the highest level in four years, and Hill Republicans learn from the White House budget director at least $10 billion of the Social Security surplus may be needed this year to keep the budget balanced.
That sets off alarm bells in the GOP camp and a behind the scenes scramble with Bush aides and congressional Republicans trying to keep Social Security funds off limits. Options being discussed include an across-the-board spending cut, lower increases in defense spending, and borrowing some money from next year's budget.
Republicans worry they could pay a political price in next years congressional elections. UNIDENTIFIED FEMALE: If you're in the Republican House leadership, you only have a very scant six seat majority. You're very nervous about how this issue is going to play out in a year.
WALLACE: Democrats who are already working on ads accusing Mr. Bush of breaking his Social Security pledge blame the Bush budget for some of the downturn.
SEN. JOHN KERRY (D), MASSACHUSETTS: The president of the United States, whose budget it is, whose tax cut it is, has a responsibility to offer something new.
WALLACE: Lost in the political debate over Social Security is the question of what makes good economic sense. Republican Senator Pete Domenici of New Mexico points to experts who say it is wrong to wall off Social Security funds during an economic slowdown.
SEN. PETE DOMENICI (R), NEW MEXICO: I have now talked to at least 15 economists. None of them, none of them believe that that's good economic policy for America.
(END VIDEOTAPE)
WALLACE: And you could say the blame game over the economy is going to be in full gear on the Sunday talk shows. Democrats will continue to call on the president to act, while Mr. Bush will say he's got a plan, he is banking on the tax cut passed earlier this year. Martin, he's also calling on Congress to pass his energy and trade proposals, which he said would lead to an increase in jobs. Martin.
SAVIDGE: Kelly, there is some talk coming from people about wanting more tax cuts. Where does the White House stand on that?
WALLACE: Absolutely. That is coming mostly from congressional Republicans who are pushing for a capitol gains tax cut, which they said would give an immediate kick to the economy. The White House is basically saying it is keeping the door open, but right now it wants to see the full effects of the tax cut which was passed earlier this year kick in.
Although, Martin, I can say that the administration is certainly looking more and more closely at proposals such as a capitol gains tax cut as it sees this economy continuing to be sluggish and it knows it needs to do something soon.
SAVIDGE: And President Bush will have his hands on money today, but for a very different purpose. What's he doing?
WALLACE: Absolutely. Quite a lighter moment for the president. You know he is a big sports fan, and so he'll be in the Oval Office 1:00 today tossing the coin for the opening games of the NFL. The 10 games are opening at 1:00. The president will toss the coin in the Oval Office.
He'll have some young football players with him and, of course, heads or tails, whichever team wins the toss decides whether to receive the ball or kickoff. So, a big day for the president today.
SAVIDGE: It'll be a red letter day. Thanks very much.
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