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CNN Live Sunday

Bush, Congressional Democrats Divided Over Tax Cuts

Aired January 06, 2002 - 15:40   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.
CAROL LIN, CNN ANCHOR: The president has been working on the West Coast this weekend, to keep his tax cuts in the works while the country is in a recession.

CNN's Kelly Wallace is in Texas now, where the president is preparing to return to Washington tomorrow.

Kelly, as I understand it, the Democrats have other plans for that tax cut?

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Well, that is a good question, Carol. Exactly what are the Democrats' plans for that tax cut? As for the president, though, he's enjoying one more day of some rest and relaxation on his ranch before getting back to the White House and to work tomorrow.

But his words yesterday generating quite a debate in Washington. You recall, Carol, the president in Ontario, California, trying to build support for his economic plan. And there, he said would be "over his dead body" that Democrats would be able to increase and raise taxes. And today, his advisers found out on the Sunday morning talk shows, saying Mr. Bush meant exactly what he said, that this administration will not support tax increases during a recession or even when the economy rebounds.

(BEGIN VIDEO CLIP, "LATE EDITION")

DON EVANS, COMMERCE SECRETARY: President Bush will continue to fight for the American taxpayer. He will continue to ensure that their taxes are lower, rather than higher. Taxes aren't going to increase under this administration.

(END VIDEO CLIP)

WALLACE: Now the administration saying it would block any efforts by Democrats to delay or repeal last year's $1.35 trillion tax cut, saying such moves would be the same as tax hikes.

But on this issue, Democrats are divided. Some Democrats, 12 Senate Democrats, who supported this tax cut believe it should continue. Others are pushing to repeal or delay it. And then there is another Democrat, Senator Joe Lieberman of Connecticut, who said the president's pledge is foolish, that this is not a time for absolutes, that everything should be on the table during these very difficult and uncertain economic times.

(BEGIN VIDEO CLIP)

SEN JOSEPH LIEBERMAN (D), CONNECTICUT: I think it's wrong for anyone, president or any one of us, to say anything is off the table as we try to get our economy going again. It's like having a doctor you know, that you go to because you're sick say, "Well, there's two things I can do to help you, but one I'm definitely not going to do." That's just not smart.

(END VIDEO CLIP)

WALLACE: Now of course, surrounding all this, some grim economic projections. We were talking to the House Budget Committee a short time ago. A year ago, the federal budget surplus, the 10-year surplus, was projected to be $5.6 trillion. Current projections now have it at about $2.4 trillion. Estimates are that the government will return to deficits as early as this year.

So, Carol, this is setting the stage for a big debate over the president's tax cut, and also over the budget in this congressional election year, as the president and the Democrats duel over less dollars and exactly where the money should go.

Carol, back to you.

LIN: All right, thank you very much. Kelly Wallace reporting live from the president's ranch in Texas. And we'll see you back in Washington soon.

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