Political strategists Peter Fenn and Haley Barbour on Bush's budget and tax cuts

Haley Barbour

(CNN) –Vice President Cheney was hospitalized Monday afternoon for heart catheterization after experiencing mild chest pains. On Sunday, the vice president appeared on several morning news programs, and that President Bush will veto any annual spending bill that costs more than Bush’s proposed 4 percent increase for discretionary programs.

Democratic strategist Peter Fenn founded Peter Fenn & Associates, a media consulting firm, in 1983. Prior to that, he was a staff member for the Senate Intelligence Committee and chief of staff for Senator Frank Church. Fenn was the first executive director of Democrats for the ’80s, a political action committee founded by Pamela Harriman.

Republican strategist Haley Barbour was chairman of the Republican National Committee from 1993 to January 1997. During his two terms as chairman, the party had the largest midterm victory of the 20th Century, gaining control of both the U.S. House and Senate. Today, Mr. Barbour is chairman of Policy Impact Communications, a Washington, D.C.-based public relations firm, and is a member of the board of advisors for the political action committee, Restoring the American Dream.

MESSAGE BOARD Taxing and Spending: Bush Budget

CNN Moderator: Welcome to CNN.com, Peter Fenn.

Peter Fenn: Hi. Glad to be here!

CNN Moderator: Welcome to CNN.com, Haley Barbour.

Haley Barbour: Well, thank you. Glad to be here.

CNN Moderator: The Democrats have unveiled their own tax package. Has it attracted any interest from moderate Republicans?

Peter Fenn: Well, I think we're looking very seriously at picking up a half dozen or so Republican senators with this $900 billion tax plan geared to working families. And we seem to be having some success with those who are very concerned about the budget-busting nature of the Bush plan and those who think the Bush plan is too skewed to the very wealthy.

CNN Moderator: Vice President Cheney has been the point man for many of President Bush's initiatives. How does Cheney's current health situation affect his involvement in these initiatives?

Haley Barbour: I don't expect it to affect his involvement at all. He had a simple procedure today that could be done on an outpatient basis. I don't expect him to lose any appreciable time, much less involvement in his work at the White House.

Peter Fenn

Peter Fenn: You should receive serious tax cuts, but the problem with the Bush plan is that it is geared to those landed gentry folks who make huge sums from their investments, some of whom don't even have to work! The Democratic plan is geared to the middle class and those who work hard for a living. They'll be rewarded under it.

Haley Barbour: The fact is, under President Bush's plan, everyone who pays federal income tax gets a tax cut. The taxpayers in the lowest brackets get the largest percentage cuts. Families that make as much as $35,000 will have their entire income tax liability removed. The people who pay the highest income tax rates will also get their taxes cut, but when the Bush tax cut is in place, the highest income taxpayers will pay an even greater percentage of the total federal income tax than they pay now because the Bush plan gives bigger percentage cuts to the lower-income taxpayers.

The Democrat plan spends tens of billions of dollars giving money to people who don't pay ANY federal income tax and leaves many people who do pay taxes getting no cuts at all. I think that's a mistake -- and wrong.

Question from chat room: Mr. Barbour, why are the Republicans afraid to point out that the turnaround of the economy is the result of the changes the Congress has made, rather than Bill Clinton? In other words, Newt Gingrich has a lot more to do with that than Bill Clinton.

Haley Barbour: Well, of course Republicans point that out all the time; it's just that CNN and others in network news choose to not show it on their air. The fact of the matter is that when the Republicans proposed a balanced budget in 1994, the Democrats campaigned against us on that idea.

When there was a Democratic Congress under Bill Clinton, no bill to balance the budget was ever proposed, just like no welfare reform bill was ever proposed. When Republicans proposed a balanced budget and passed it in 1995 and again in 1996, the Democrats attacked us for it. So, the basis of your premise is well stated, and Republicans talk about it a lot, but it never seems to get any news coverage.

Peter Fenn: The reason that it doesn't get much coverage is because it's basically not true. My good friend Haley cites with some selectivity some of the facts of the last eight years. First of all, the reason that we have a surplus, and we've gone from $270 billion deficits to $250 billion surpluses, is because Bill Clinton and the Democrats passed a budget bill in 1993 that not a single Republican voted for. This was at the urging of Alan Greenspan.

Bill Clinton was the first president in 28 years to offer a balanced budget to the Congress. Bill Clinton's policies of holding the line led to the economic recovery of the 1990s, and the fact that Newt Gingrich and others were arguing for balanced budgets was all well and good, but the Republicans in the previous 12 years had succeeded in taking the deficits from $750 billion to over $4 trillion. Now hopefully, if the Democrats' plan succeeds, we'll bring that deficit down and continue economic growth.

Question from chat room: All this talk about couples receiving tax breaks. What about singles?

Peter Fenn: Under both plans, the Republican’s and Democrat’s, single people get a tax break. The difference is, if you're a middle-class or lower-class family or individual who doesn't pay much in the way of income tax, under the Democrat plan you get a rebate, because you pay payroll taxes; that is, Social Security tax.

Under the Republican plan, you would get no such rebate. The average tax break for middle-income families for the Republicans is $270. The average tax break for those in the top 1 percent is over $14 thousand. So, the Democratic plan is fairer, I believe, to single taxpayers.

Haley Barbour: In fact, middle-class taxpayers get a larger cut under the Republican plan -- a significantly larger cut. The Republican plan does not give grants, give money to anyone beyond what they pay in income taxes -- and call it an income tax cut.

President Bush has proposed to allow working people who pay Social Security taxes to keep a third of what comes out of the employee’s share of payroll and Social Security tax, and the Democrats, many Democrats, have been very critical of the idea that we would allow part of what employees pay into Social Security taxes to be put into plans for them.

But the Republicans not only have a very fair income tax cut for all who pay income taxes, but Bush has also proposed that everyone who pays the payroll tax or Social Security gets to keep approximately a third of the employee's share in a personal account that will grow much, much, much faster than Social Security benefits.

CNN Moderator: Thank you for joining us today, Haley Barbour.

Haley Barbour: Thank you for having me!

CNN Moderator: Thank you for joining us today, Peter Fenn.

Peter Fenn: Thank you very much! I appreciate the opportunity to be here.

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Cheney hospitalized with chest 'discomfort'
March 5, 2001
Cheney says Bush will veto higher spending
March 4, 2001

Peter Fenn's Bio

Haley Barbour's Bio

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