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Special Event

Republican Senator Phil Gramm and Democratic Senator Zell Miller Unveil President Bush's $1.6 Trillion Tax-Cut Plan

Aired January 22, 2001 - 1:04 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: This is the first business day for the new administration, and they're wasting no time. Mr. Bush's tax- cut plan, all $1.6 trillion of it, is being unveiled right now on Capitol Hill.

Two senators are doing the unveiling, conservative Republican Phil Gramm and Democratic newcomer Zell Miller, who is breaking ranks with most of his colleagues.

We'll listen in for a few moments.

(JOINED IN PROGRESS)

SEN. PHILL GRAMM (R), TEXAS: ... stronger today than it was when the president proposed and when the American people ratified it by voting for George W. Bush.

Number one, the economy is weaker. And while running a huge surplus made sense when the economy was steaming ahead, when investment was occurring at record pace, now that investment is falling off, now that the economy is getting cooler, a $400 billion surplus is like dragging an anchor for the economy under those circumstances.

The second thing that has happened since the president was elected is that our new estimates of the budget surplus have gone up and not down. So that the surplus is actually bigger than it was on Election Day.

And finally, it seems to me that we are at a point where we have to stop and look at what is actually to the surplus. And what is happening is that it is being spent at an unprecedented rate. And I'll show you in the chart here that if you go back to the 1997 budget agreement and look at spending growth in the last three years, that actually Congress has committed over the next 10 years with those three budgets to spend $1.8 billion, far more than the Bush tax cut.

And much of that spending is already built into the baseline.

Now let me finally just go through these charts, because they tell an important story in this debate.

The first story is, we've got the money. The newest estimate by the Senate Budget Committee, which is based on what we believe the Congressional Budget Office will send forward -- and those are the figures we're bound by -- shows that we're looking at a $2.9 trillion on-budget surplus; that's not counting the Social Security surplus. The total surplus is $5.6 trillion over the next ten years. The tax cut we're talking about costs $1.3 trillion.

The next chart shows that in either case, we are paying down the public debt. This shows the reduction in the public debt from $3.4 trillion, this is held by the public, it's paid off -- if we put every penny of the surplus toward debt reduction, it would be paid off by 2009. If we do the Bush tax cut, and put the rest toward deficit reduction, it would be paid off in 2011. Obviously, the more you spend in addition to the tax cut, the more you're stretching out fully paying off the debt. But it is not as if there is no debt reduction with the tax cut.

And the final chart is the one I mentioned earlier. We have many of our colleagues who are saying, well, let's don't let the working people of America keep part of this money; let's use it to reduce debt. The reality is, that much of it is being spent.

And this $1.8 trillion is derived in the following way: You take the '97 budget agreement, and then you take the rate of growth and spending for the last three years; you project it out for a decade, and you say, based on the path we're on, how much new spending would that be? Well, that's $1.8 trillion. So the truth is, while many of our colleagues are saying, don't give it back, use it to reduce debt, they're saying that but what they're doing is, they're using it to spend.

And I think when you ask people in Atlanta, when you ask people in College Station, Texas, when you ask people in Young Harris, which is the mountain town that Zell Miller's from, and you say, would you rather have the money spent in Washington by politicians or would you rather spend it in College Station, where I'm from, and Young Harris, where Zell Miller's from, I think people will say, they'd rather do it themselves.

Now, let me introduce my Democrat cosponsor, Senator Zell Miller.

SEN. ZELL MILLER (D), GEORGIA: I'm very pleased to join with Senator Gramm as a sponsor of this piece of legislation. I'm pleased first because it is an opportunity to reach across party lines and really practice bipartisanship, not just talk about it.

But I'm even more pleased to be a cosponsor because of the far- reaching consequences of this piece of legislation. Right now, our taxes have never been higher. Right now, our surplus has never been greater. To me, it's just plain common sense that you deal with the first by using the second.

Remember that old Elvis Presley song, "Return to Sender"? That's what we're wanting to do, right here. That's what we're wanting to do with this overpayment of taxes.

GRAMM: Amen. MILLER: As some of you know, I have been in politics for a long, long time, and I thought I had seen it all. But when I came to Washington last year, I was not prepared for the shock of just how matter of factly Congress ate into the surplus.

Gobbled it up without hesitation, on both sides of the aisle. I couldn't believe it. And it became clear to me that if we don't send this overpayment of taxes back to those who paid it, much of it will be just frittered away. And I think most Americans have enjoyed about as much of that as they can stand.

Some of my colleagues talk about targeted tax cuts. And I respect their opinions and I respect them. But here is how I think about that: Who are we to pick and choose and select and cull and single out among our taxpayers? Who are we to play eeny, meeny, miney, mo with our taxpayers?

ALLEN: All right, Zell Miller, senator from Georgia, the former governor, and Phil Gramm introducing a tax plan that President Bush supports.

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