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Special Event

Ari Fleischer Addresses President Bush's Tax Cut Proposals

Aired February 5, 2001 - 1:11 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOIE CHEN, CNN ANCHOR: Now on to another late development. And that is what is going on at the White House today. The White House spokesman Ari Fleischer speaking to reporters -- the message of the day is about tax cuts.

Let's listen.

(JOINED IN PROGRESS)

QUESTION: ... is a right-sized plan, is that a suggestion that he wants to hold a line against Republican plans to add on taxes? Is that a message to Republicans?

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: It's a message to everyone, to all sides, Democrat, Republican alike.

QUESTION: Is it a message just that "I'm not going to accept anything lower than what I would have proposed"? Or also, "I don't want anything higher than what I proposed"?

FLEISCHER: I think the likelihood is, what you'll see is a number of Democrats say they want to keep taxes higher and, therefore, they shouldn't cut taxes -- Bush shouldn't cut taxes as much. And I think you might see some Republicans who say it's not enough tax relief. The president's proposal, in his opinion, is the right amount to cut taxes.

QUESTION: Is it their position that they want to keep taxes higher or they just want to give back what we can currently afford?

FLEISCHER: Well, certainly, if you don't cut taxes as much as President Bush has proposed, if you say the tax cut must be a different level, a smaller level, that means people will pay more taxes than they are currently paying under the Bush proposal -- than they would pay under the Bush proposal.

QUESTION: It's only a matter of semantics.

FLEISCHER: That's what I do for a living.

(LAUGHTER)

QUESTION: At the Wehrkunde strategic policy conference in Munich over the weekend, Defense Secretary Rumsfeld said in effect that the decision to deploy a national missile defense is a done deal. And as you know, there is strong opposition on the part of many NATO members, as well as Russia and China. And there are some who believe that Russia could try to use this issue to split the alliance. Having said all that and realizing that, is there any wiggle room? Are there any conditions under which the president could choose not to deploy? Or is he is still totally committed to it?

FLEISCHER: I think if you go back to September of 1999 and examine the president's statements from the time he gave a series of defense and foreign policy speeches, it is very clear that President Bush believes very deeply that the best way to preserve the peace is through the development of a national missile defense, to protect against an accidental launch or a rogue missile launch -- a rogue nation's launch of a missile.

And he intends to pursue that matter in consultation with our allies, and he will indeed pursue it. He believes it's a very effective way to protect America and our allies.

QUESTION: One follow-up, if this opposition becomes a ground swell and there really becomes a serious danger of the alliance falling apart, any possibility?

FLEISCHER: I'm not going to comment on any hypotheticals like that. The president will continue to consult with our allies and friends as we proceed and move forward.

QUESTION: The bombing trial just got started in New York today. I wonder what the president's expectations are for the trial's outcome? And also, since two of the suspects are charged with worldwide conspiracy associated with Osama bin Laden to kill Americans and to destroy American property, I wonder what steps President Bush is going to take to counter terrorism?

FLEISCHER: I'm going to, for the moment, refer that question to Mary Ellen at the Department of Defense.

QUESTION: On the tax plan, Bush indicated today he was in favor of making it retroactive to the 1st of January. Lindsey said yesterday that Bush also favored accelerating it, which implies shifting more of the benefits into the first year of the plan. Can you kind of clarify exactly what the president would accept, in terms of front-loading that tax plan?

FLEISCHER: By definition, if you make it retroactive you've accelerated it. It's one in the same. So retro...

(CROSSTALK)

QUESTION: It seemed from the discussion yesterday that there were two different issues they were thinking. I mean, it could take effect earlier, but it could have -- be phased-in faster.

FLEISCHER: There are two primary ways to address the question of when the tax bill goes into effect and at what rates it goes into effect. And let me underscore that what the president indicated today, you heard him say it and what Mr. Lindsey said, we're going to work with the Congress.

And the proposal that the president will make on Thursday will mirror the proposal he made during the course of the campaign. And we are hearing from a number of people in the Congress, given the economic slowdown, the importance of making it retroactive, and you heard the president lend his support to that today.

Now, there are two principle ways that you can impact the effective date of the tax cut, and then there's a third way that actually gets more benefit to taxpayers sooner. You can make it retroactive. Obviously, we're here on February 5, if you make the tax cut retroactive to January 1, that, in effect, clearly speeds it up.

You can also change the phase-in rates. When the tax cut, for example, the 15 percent bracket comes down to 10 percent, under the plan the president announced during the campaign, it comes down in a series of stair steps, from 15 percent to 10 percent over a period of years. You can change the period of years. That's another optional way to accelerate. That will all be what we work on with the Congress.

The third way is by adjusting withholding tables so that as workers, for example, in this year, 2001, where you don't pay your taxes until April of 2002, if you don't change the withholdings, the taxpayers don't receive the benefit until, in most cases, 2002. You can change the withholdings to address that question as well.

So those are a series of the options that the administration is looking at and will continue to work with the Congress on.

CHEN: Ari Fleischer, the president's spokesman, talking to reporters in his daily briefing today, explaining his finer points about to how to work out a tax-cut plan. Mr. Bush's plan is to go to Congress on Thursday.

CNN's White House correspondent Major Garrett standing by now to explain to us how this will all get laid out -- Major.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Well, Joie, it will all get laid out, as you mentioned, on Thursday. But it is an entire campaign this week devoted to building the message, not only in Congress, but on -- but throughout the country in favor of this tax cut, a tax cut that was one of the centerpieces of the Bush domestic policy during the campaign.

This morning, he met with three families here at the White House that the president said will benefit directly from his tax cut. And he moved from meeting those enthusiastic supporters to meeting with someone who is maybe not as enthusiastic, but far more influential, politically speaking, on Capitol Hill. That is Federal Reserve Chairman Alan Greenspan. The two gentlemen are having lunch right now here at the White House -- of course Mr. Greenspan's testimony before Congress about a week-and-a-half ago endorsing -- at least conceptually -- a tax cut for all income tax rates at this time.

It gave the Bush plan a huge boost on Capitol Hill. And the White House hopes to ride that boost to move this plan through Congress as quickly as possible and have it done maybe by sometime in June or July -- Joie.

CHEN: Major, we note that in the last week or so, the president has been doing a lot of courting of Democrats. Ari Fleischer called it the hug-a-Democrat-a-day approach of the Bush administration. I'm wondering, though, how much of the talk there has already been about the tax cut. Or have they stayed off that until they actually get Mr. Bush's plan in hand?

GARRETT: Well, there has been a little bit of talk about the tax cut. The president had members of the Ways and Means Committee -- that is the crucial House committee that will first write the bill. That's where all tax bills have to originate in Congress. They were here last week. There was a good deal of talk about the tax cut then. But at some of these other meetings with Democrats, the issues have been more diffuse: dealing with education, dealing with voter reform, dealing with other issues that core Democratic constituencies care about most.

But from this point forward, all through the week -- and really for weeks and weeks ahead -- Washington will be consumed were with debate about how much to cut taxes. And I must tell you, Joie, one of the fears here at the White House is not that Democrats will not go along with the $1.6 trillion tax cut over 10 years, but Democrats and Republicans may seek additional tax cuts for their own constituencies, some of them in the business community. That could inflate the size of the tax cuts.

And in his comments this morning, the president said he is drawing the line at $1.6 trillion, nothing more expensive than that: his tax cut and no larger. That was the message here today -- Joie.

CHEN: CNN's White House correspondent Major Garrett, with us from the White House today.

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