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CNN Sunday Morning

Bush Spells Out Economic Policy

Aired January 06, 2002 - 10:21   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.
KYRA PHILLIPS, CNN ANCHOR: President Bush is wrapping up his almost two-week vacation in Crawford, Texas. Back in Washington, he's facing a battle over an economic stimulus package.

CNN White House correspondent Kelly Wallace joins us now live from Crawford, Texas with more on that.

Hi, Kelly.

KELLY WALLACE, CNN CORRESPONDENT: Hello to you, Kyra.

Well, the administration's political strategy in dealing with the economy is becoming very clear.

Number one, have President Bush out there talking about his concern and how he's trying to prod the Democratically-controlled Senate to act. And number two, have Mr. Bush do something, which we saw him do yesterday in Ontario, California, and that is accuse any critics of last year's tax cut as being in favor of tax increase.

We heard the president say yesterday over his dead body -- it would be over his dead body before Democrats would be able to raise taxes. That is the same message coming from his economic advisers who fanned out on the Sunday talk shows this morning. These advisers are saying that any efforts to repeal or delay last year's tax cut would really be a tax increase, and advisers say that's absolutely the wrong way to go during a recession.

(BEGIN VIDEO CLIP)

PAUL O'NEILL, TREASURY SECRETARY: That's basically saying -- rescinding the tax cuts that were passed by the Congress; doesn't make any sense to me. I think the American people are relying on the tax system that was agreed to and signed with great credit claimed by everyone back in June. And to now tell the American people, we're going to raise your taxes prospectively doesn't make very good economic sense.

(END VIDEO CLIP)

WALLACE: But Senate Majority Leader Tom Daschle in a statement said, "no amount of hot rhetoric will get the economy back on track. Let me be clear. I proposed short-term tax cuts to create jobs, not tax increases." Now the senator definitely got this debate going on Friday when he said that last year's tax cut probably made the recession even worse, and he criticized the president and Republican policies for turning years of surpluses into budget deficits.

Well, Kyra what we're seeing, Democrats definitely challenging the president on domestic issues while continuing to support him with the military campaign against Afghanistan. And as for the president, what we are going to do is see him continuing to talk about the economy traveling around the country this month.

He'll spend one more day here, Kyra, at his ranch before heading back to Washington tomorrow, and his first order of business when he gets back to the White House, sitting down with his economic team to talk about, you guessed it, the economy.

Kyra, back to you.

PHILLIPS: Of course. You know, watching the president's live speeches and how comfortable he has become. He's learned a lot of lessons from his father, hasn't he?

WALLACE: He certainly has learned a lot of lessons. You know, he definitely does appear to be more comfortable. He definitely likes to get on the road, get away from Washington, travel around the country and definitely seems more comfortable at the podium when he is on the road.

But as for those lessons from his father, number one he watched as his father's soaring approval rating during the Persian Gulf War slip away after Americans felt he was out of touch when it comes to the economy. So you are seeing this president definitely continuing to talk about the economy, to say he is trying to do something to help.

And then, Kyra, of course we heard his pledge yesterday, you know, not over his dead body would Democrats be able to raise taxes. That's very similar to his father's pledge more than a decade ago, "read my lips, no new taxes." Of course, that pledge backfired on the former president when he had to back away from it.

So obviously, we'll have to see what happens with the current President, but clearly lessons from his father definitely being learned by this White House.

PHILLIPS: Kelly Wallace, live from Crawford, Texas on the trail with the president. Thanks, Kelly.

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