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CNN Live Sunday

Budget War Has Began

Aired August 19, 2001 - 17:16   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.
STEPHEN FRAZIER, CNN ANCHOR: Public policy now: the budget war is on, as top Republicans and Democrats spare over budget surpluses and spending. Democrats are about to launch a television attack on the Bush administration. CNN White House correspondent Major Garrett takes a look at that debate.

(BEGIN VIDEOTAPE)

LAWRENCE LINDSEY, WHITE HOUSE CHIEF ECONOMIC ADVISER: I want to put it in perspective, if I may.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT (voice-over): When Washington fights over the budget, it's time to break out the charts and graphs. And the president's top economic adviser use them to counter Democratic attack that the Bush budget hurts Medicare.

LINDSEY: The president's budget not only spends every penny of this 197, it spends $45 billion more from the rest of the budget in order to keep the Medicare guarantee.

GARRETT: Lindsey looked a lot like another lover of charts and graphs, Ross Perot. The big difference? The former presidential candidate railed against huge deficits. Now, Washington fights over surpluses. The Democrats say they are too small, and will soon run TV spots, alleging the Bush budget jeopardizes not only Medicare, but Social Security.

SEN. RICHARD DURBIN (D), ILLINOIS: The surplus is all but evaporated, and we are knocking on the door of raiding the Medicare and Social Security trust funds, just to maintain the expenses of government.

GARRETT: In February, the White House pegged this year's surplus at 281 billion. But the weak economy and the Bush tax cut have sliced it to 160 billion, roughly equal to the amount of excess Social Security tax revenue Mr. Bush vowed not to touch.

The White House budget director says the weak economy, not the Bush tax cut, is to blame.

MITCH DANIELS, WHITE HOUSE BUDGET DIRECTOR: I think the nonsense-stopping question here is the one I asked a minute ago: If there had been no tax cut, now much bigger would these trust funds be? And the answer is, zero. GARRETT: The top House Democrat says Social Security needs more protection, but would he raise taxes?

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: I'm not for raising taxes. I do think we need to look at a different budget.

GARRETT: The fight has already left one top Republican analyst scoffing.

WILLIAM KRISTOL, "THE WEEKLY STANDARD": It is stupid. There is bipartisan stupidity on this.

GARRETT (on camera): Maybe so, but the debate will continue. It's one the White House will have to endure this year. The top advisers are predicting economic growth will yield big surpluses next year, just in time for the midterm congressional elections.

Major Garrett, CNN, Crawford, Texas.

(END VIDEOTAPE)

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