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Ari Fleischer Addresses President Bush's Tax Cut Proposals

Aired January 30, 2001 - 12:34 p.m. ET


KYRA PHILLIPS, CNN ANCHOR: We are going to take you to the White House now, where White House Press Secretary Ari Fleischer has begun his daily briefing. And we are going to listen in.


QUESTION: Will the administration consider that an end to the affair?

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: I'm not going to speculate about a verdict that is not yet announced. After the verdict is reached, we will take all deliberate time, due time to study the verdict, and if we have anything to say at that point we will share it then.

QUESTION: The president in the leadership meeting seemed to be sending a signal on taxes that he could live with whatever the leadership in Congress decided to do, which the suggestion was that that would include breaking it up into smaller pieces and perhaps other things. Was that the signal that the president was trying to send?

FLEISCHER: On the procedural question about how Congress should best move forward with tax cuts, there's obviously a well-stated desire of the House to break the tax cut into individual components, all of which would add up to the president's proposal.

And the Senate, on the other hand, is still working its way through. It looks like they're interested in doing it as one comprehensive tax plan. What president indicated this morning is he's going to work with the Congress to do it. The plan that we submit will be one tax plan, but then the path it takes after we submit it to the Congress will be largely decided by congressional leaders.

QUESTION: Would we be wrong to interpret this as flexibility?

FLEISCHER: Well, it's procedural flexibility. I think what's important is the substance of the tax cut. And what the president believes is we need to reduce marginal income tax rates; we need to eliminate the death tax; we need to reduce the marriage penalty; we need to have a charity tax deduction. A series of changes need to be made in the tax code to make it more fair and to provide tax relief to the American people. Whether the Congress is best able to do that in an incremental fashion that adds up to the president's plan or in one fell swoop is a matter that the president is happy to work with the Congress on. And in the past, frankly, the House has passed incremental pieces and then it's all gotten bundled together in the Senate and then sent to the president in one package. So I think Congress is still trying to figure out the exact procedures that they will use.

QUESTION: Related to all of this, your old boss, Pete Domenici, said today that its monetary policy is a -- it's a rate cut that is actually the, "best short-term fixer," in his words, for the "recession in the economy," also his word today, which seems to suggest that even though there's a belief that a tax cut could be a permanent fix, what do we do in the short term for an economy that continues to slow down?

QUESTION: Consumer confidence is again down. And as the president outlined today, energy costs are starting to put the squeeze on people?

FLEISCHER: Well, I think there are three essential things you can do to help strengthen the economy, not all of which are immediate or short-term. But cutting taxes is one of them. Enacting a national energy security policy is a second. And also important but long-term is improving education because that, too, becomes an important part of America's economy.

QUESTION: ... short-term? I'm talking about the here and the now.

FLEISCHER: Short-term, the most important step you can take is to cut taxes, to move forward on the president's tax plan. It is important, and it also sends a signal. It will be a boost of confidence, we believe, for both markets and consumers when they see Congress is working with the president in a bipartisan fashion on the president's agenda, that the era of gridlock in Washington is coming to an end.

QUESTION: But that doesn't put money on the table, though. Does it?

FLEISCHER: Well, that's why we're looking at retroactivity on the tax cut. We're looking at the phase-in dates.

QUESTION: ... You could be in a recession before any of that happens.

FLEISCHER: Those are the best tools available to the government.

QUESTION: What about his question about rates? What about his question about rates?

FLEISCHER: I think you heard the president said he is going to respect the independence of the Federal Reserve. Clearly that is one of the options they are looking at.

QUESTION: Tax rates?.

FLEISCHER: Oh, the tax rates. I'm sorry, I thought you meant interest rates. And what's the question on it?

QUESTION: I mean the tax rate to put more money in people's pockets sooner.

FLEISCHER: I just indicated that's one of the issues we are looking at in terms of retroactivity or changing the phase-in dates on tax cuts. The president believes that can be effective tool to help create confidence in the economy.

Ari, regarding the Congress, you are saying that he will not insist on a single package and that he would defer to members, leadership, and the leaders in Congress to decide whether or not to break it up or to keep it as a whole?

I think he indicated flexibility. He is aware of -- as far as the procedure is concerned -- he is aware of the different prerogatives of each institution. In the House, because you have a closed rule on all tax bills that proceed on the floor, they have one option available, or they have a different set of options available than in the Senate. And so this is a traditional issue that the Congress has faced in recent years where the House and the Senate weigh in on how they each think is best to proceed.

The president's focus will be the bottom line. He wants taxes cut. He wants the marriage penalty reduced. He wants the death taxes eliminated. And he'll work with the Congress on whatever procedure best gets that job done.

QUESTION: He's going to let them tell him what the best way to do it is?

FLEISCHER: He'll work with them. Again, the president proposes and it's up to Congress to dispose. Tax bills originate, of course, in the House Ways and Means Committee, and then it moves through the House first before it can get to the Senate.

QUESTION: Ari, on the inheritance tax, was it not being campaigned -- a program to eliminate over 10 years? Was that the right year?

FLEISCHER: That's about correct.

QUESTION: Was there any thought to moving that up as well?

FLEISCHER: Well again, all the phase-in dates that I've previously discussed that apply to the marginal income tax rates where we can look at any phase-in date, when we submit the plan up to the Hill, obviously you'll know what decisions were made by that time.

QUESTION: You are expecting to do that next week? Or does that come with the budget, when you make these decisions?

FLEISCHER: I think some of the details will still remain, some of the more fine-print details.

QUESTION: Does the CBO estimate on the surplus at $5.7 trillion say to this president there is no reason that he should back down on the size of the tax reduction package?

FLEISCHER: Absolutely. We are seeing a government that is awash in surplus money even with an economy that is softening from where it used to be, and that's a short-term softening. But especially in the out-years, we're seeing just an explosion in the size of the surplus. It is believed that the CBO projection will be $5.7 trillion of surplus. In other words, the taxpayers will send the government $5.7 trillion more than the government needs to spend over the next 10 years.

Approximately $2.5 billion of that is Social Security money, which leaves approximately $3.2 trillion in surplus for other governmental needs beyond Social Security. The tax cut, people have indicated they believe, will be about $1.6 trillion, is a figure that I've read in the press, over 10 years, $1.6 trillion out of a $5.7 trillion surplus. There's plenty of room for cutting taxes.

QUESTION: Why don't Democrats seem willing to give you more than $800 million?

FLEISCHER: Well, I think we're going to have a lot of progress with the Democrats.

QUESTION: Ari, in Europe, children are dying of the mad cow disease, the human version of the disease. If government officials are asked about it, if that can be a problem in the U.S., they say it might but it won't spread. Is this a sensitive issue, among other reasons, because it would badly hurt Texas cattle farmers?

FLEISCHER: Food safety is always an important issue. And as you're aware, there has been some developments on that front, and I would refer you to the Department of Agriculture and the FDA for more of the details on how the government is proceeding. But it is always an important issue, and it is always something that government needs to concern itself with but...

QUESTION: Ari, may I follow up, if Jim permits also? Are you a beef eater, Ari?



FLEISCHER: My personal eating habits will not be discussed from this podium, but thank you for your concern.

PHILLIPS: On that light note, we will take you away from White House press secretary Ari Fleischer and his daily briefing there at the White House, talking about what our new president is up to, specifically talking about strengthening the economy, that the president is moving forward on his tax plan, cutting taxes -- plenty of room to do that, he says -- death taxes eliminated among that plan -- also developing a national energy security -- policy, rather, to address the power crisis in California.

On a lighter note, Mr. Fleischer says the president did call the head coach of the Baltimore Ravens to congratulate him on his Super Bowl win.



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