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'USA Today': 'Hard to Come Up With Evidence That a Recession is Under Way'Aired January 16, 2001 - 1:25 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NATALIE ALLEN, CNN ANCHOR: We want to talk a moment, though, about President-elect Bush, who will be inheriting an uncertain economy. And today's government figures which show more goods piling up on shelves point to further sluggishness.
All week, we're joined by the folks from "USA Today" to talk about the transition of power. And today, reporter George Hager is with us from Arlington, Virginia to discuss Bush and the economy.
George, thanks for being with us.
GEORGE HAGER, "USA TODAY": My pleasure, Natalie.
ALLEN: Well, let's talk about tax cuts. Is it probable or likely that George Bush will get the tax cuts that he would like to see?
HAGER: I think it's overwhelmingly probable that there will be a tax cut. Once you hear the Democrats start talking about how tax cuts would be a good idea, I think you can make book on it. It's just a question of the size of the package.
ALLEN: And what about paying down the debt? The Republicans used to be for that. During the Clinton years they were not. What about the next four years under George W. Bush?
HAGER: Well, I think, actually, the Republicans have been for paying down the debt. It's just a question of how much of the surplus they want to use for that. Both parties want to use the Social Security piece of the surplus to pay down the debt. It's a question of how far you go beyond that. Democrats have been in favor of being a little more aggressive about paying down the debt, in part, frankly, because I think they wanted to block some of the Republican tax cut proposals that they thought were a little tilted to the upper end of the income scale.
ALLEN: And do either parties get the credit for what we've seen with the economy in the past few years? In John King's report we saw here just a few moments ago, Clinton seems to think he didn't get the credit for managing policy. And herein, look at how good the economy was in the past eight years while he was president.
HAGER: Yes, I think President Clinton would like to take the lion's share of the credit. I think most even-handed economists that I've talked to give him a good portion, along with President Bush, who, back in 1990, passed a very tough and very political, dangerous, dangerous tax -- I'm sorry, deficit reduction and tax increase plan. So did President Clinton in 1993. Both of them suffered politically, but the economists give them a lot of credit and say that those two packages together really helped put the economy in good shape.
ALLEN: Is the economy's pace right now integral to a tax cut?
HAGER: Well, I think the economy's pace has a lot to do with how you sell this thing. If the economy really looks like it's slowing down and, even worse, going into a recession, it's going to be a lot easier to sell a tax cut. Right now, economist are all over the map as to whether we're in a recession, going into a recession, or just going through a slowdown and a soft landing. Obviously the worst things get the stronger the case for a tax cut. And I think that's what people are going to be watching over the next few months.
ALLEN: Do you think it could come within the first few months of Bush's presidency?
HAGER: Some sort of a recession? Right now, if you talk to pessimistic economists, they're saying we're already in a recession, we've been in one maybe since December. You talk to the optimists and they say, don't worry, we're not going to be in a recession. So take your pick.
Actually, we've been out in the countryside in western part of the state of Virginia talking to companies out there. And quite frankly, we're finding it hard to come up with evidence that a recession is under way. Yes, things are slowing down, but we don't really see that big downturn yet.
ALLEN: George Hager, "USA Today." Thanks, George, for talking with us.
HAGER: My pleasure.
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