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President Promoting His Tax Plan

Aired March 26, 2001 - 12:48 p.m. ET

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

LOU WATERS, CNN ANCHOR: All right, Roger. The president of the United States is on the road again today promoting his tax and budget plan. He's in Kansas City, Missouri speaking before a small business organization known as Bajan Industries, an enterprise that does light manufacturing. Let's listen to the president.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: thank you very much for your hospitality. You know, it's interesting he said, the name of his company is a reflection of his heritage, and that's true. But this company is also a reflection of the American dream as well. And I'm so thankful for the invitation to be here. I'm also thankful for your willingness to dream and to create jobs.

This is what America is all about. This is what I call the lifeblood of the country.

(APPLAUSE)

I also took notice of the fact that you were quick to introduce your wife.

(LAUGHTER)

Smart man.

(LAUGHTER)

But I'm so thankful for you all to let us come.

Senator, thank you very much for traveling with me. I appreciate Senator Bond's leadership. I believe he's got his priorities absolutely straight. And they include the people of...

(APPLAUSE)

They include the good people of Missouri, right at the top of the list. And I appreciate being able to call him an ally.

Earlier today, I was proud to travel with a newly elected congressman, Sam Graves. We went to his district to say hello to folks in the district.

And, Sam, thank you for your willingness to serve.

It's good to see Congresswoman Karen McCarthy.

Thank you for your hospitality, Karen.

And Congressman Dennis Moore. I've had a chance to visit with Dennis in the past. And I appreciate him at least giving me a chance to make my case.

(LAUGHTER)

Mayor, thank you very much for your hospitality. Thanks for greeting me here today.

I want to talk about a subject that's on my mind -- part of my job is to put it on your mind, if it's not -- and that's how to make sure we treat your money wisely in Washington and what do we do if we have any of it left over.

First, let me talk about budgeting. Ellison (ph) has to budget, and his plant manager has to budget. And one of the key components of budgeting is to set priorities.

When we're in Washington, sometimes there are no clear priorities. You have to prioritize with the people's money. And we have set priorities in my budget.

A major priority is education. The biggest increase of any department is in the Department of Education.

But I also want you to know, even though we're asking for more money to be spent in Washington, I'm not asking for more power. As a matter of fact, I want there to be less power in Washington, because I strongly believe in local control of schools. I believe that Washington ought to trust the local people to make the right decision for the schools, people closest to the problem are those best able to address.

(APPLAUSE)

You've heard a lot about some issues that relate to schools in this area. Don't be looking for Washington for the solutions. We may be able to help with some funding, but the government that is closest to the people is that more likely to be able to address problems.

And as a former governor, I understand one size does not fit all when it comes to education. The issues between Texas and Missouri are different. And they darn sure were different within my own state.

And so we need more flexibility at the local level, less power in Washington.

But I also believe in results. I know Ellison (ph) believes in results; he's a results-oriented man. And I believe public policy ought to be results-oriented.

So my attitude is, if we increase spending at the federal level and align authority and responsibility at the local level, we also ought to ask the question: What are the results? We ought to say to local school districts, "If you receive federal help, you measure, and you show us whether or not children are learning to read and write and add and subject." So that we know, so that we know whether school systems are quitting early on children.

I've seen what happens when school systems quit early on children. Guess who gets quit on: Children whose parents may not speak English as their first language, inner-city children.

To me, it makes sense that if you receive help, you got to measure. I don't want there to be a federal test. I don't want the national government to undermine local control of schools. But I do think society ought to ask the question: Are the children learning?

And if they are, we ought to applaud and thank the principals and teachers. But if not, we ought to correct the problem early, before it's too late. It's time for a new attitude when it comes to the education of our children, particularly starting in Washington, D.C.

(APPLAUSE)

And I think we're making good progress. There's a new spirit of accomplishment in Washington, D.C. And I think we're making good progress on an education bill. Both Republicans and Democrats are coming together to adhere to a set of principles that will encourage educational excellence.

Another priority of mine, of course, is how best to keep the peace. And so part of my budget was to ask Congress to spend more money on the men and women who wear the uniforms, to increase the salaries of our troops and to make sure they're housed better.

I'm worried about morale in the military. And one good way to start rebuilding morale is to pay people better. And that's exactly what we're going to do.

(APPLAUSE)

But I also have the responsibility of laying out a strategic plan for the military, for how best to spend the taxpayers' money beyond pay increases. We have the responsibility in the executive branch to take a full review of where monies ought to be spent in the future so we can better keep the peace.

Before we ask Congress to spend money on weapons systems, our view is, let's make sure the weapons systems are needed. As we think about research and development money, let's make sure it fits into a strategic plan so that the United States can keep the peace not only today but 20 or 30 years from now.

Another priority is health care, and we've got a lot of money in my budget for health care. We double the money for Medicare. We double the amount of folks who will be served at community health centers. We provide money in the budget to help the working uninsured be able to purchase insurance. We focus on health care. And we also do something else in the budget -- and I know there's a lot of talk, and there's a lot of ways to justify keeping your money in Washington, but one of the old ways of justifying keeping your money in Washington has left, it's no longer relevant. Some may continue to try to frighten people with it. And that's the issue of Social Security.

We're taking all the payroll taxes and dedicating them only to one thing, and that's Social Security. The day of trying to frighten seniors in America to be against something is over with.

(APPLAUSE)

This is a budget that sets priorities. Defense is a priority. Education is a priority. Health care is a priority. I readily concede, we don't try to be all things to all people in our budget, however.

But we do increase discretionary spending by 4 percent, and this creates the rub in Washington. There are some who think 4 percent is too small. I can understand why, because during the last budget cycle, the Congress raised the discretionary spending by 8 percent.

I remember inflation is less than 4 percent. Most people aren't getting 4 percent pay raises.

And yet, asking our government to live on a 4 percent increase in discretionary spending has created some tension. It made people nervous, has created all kinds of noise in Washington.

But I think its realistic to ask the federal government to keep its spending at a rate a little more than the rate of inflation.

I think that's a realistic expectation. And it shouldn't surprise any of you all.

I said, if you give me the chance to be the president, I'll work to be fiscally responsible with your money. The days of spending orgies in order to get people out of town are over with, as far as I'm concerned.

I'm going to set priorities and strictly make sure that your money is spent wisely, and that we don't have a bidding contest in Washington, D.C.

We've also paid down a lot of debt. There's a lot of discussion about debt at the national level. And ours is a budget that pays down $2 trillion dollars worth of debt.

Now, there are some who may want to pay off more debt, but the $2 trillion is the only amount that's coming due over the next 10 years. And it doesn't make much sense to pay down debt prematurely; it'll cost the taxpayers additional money to do so.

I guess what I'm trying to say is, I've taken a common-sense approach to your money. We've set priorities. We've increased the budget by 4 percent. Admittedly, it's not 8 percent, but 4 percent's plenty for the federal government to live on. We pay down $2 trillion of debt. Incredibly enough, we also set aside $1 trillion more over 10 years for a contingency.

But you know what? There's still money left over, about $1.6 trillion, and that's where the big debate -- that's what we're talking about, what to do with the money.

I start with this premise, that that surplus is not the government's money; it's the hardworking people's money.

(APPLAUSE)

It's the money of the entrepreneur. It's the hardworking -- it's the people's money, that's whose money it is. And as we're thinking about what to do with it, I hope the Congress always remembers whose money it is.

I love the idea we're going to give the people their money back. You know, I say that myself sometimes. I just don't think we ought to take it in the first place. After we meet priorities, I think we ought to let you have it.

(APPLAUSE)

So I've submitted a tax relief plan. The debate no longer is whether or not we're going to have tax relief; it is how much money is going to be passed back to the people and how quickly. And that's a good sign for the hardworking Americans who are paying taxes.

I'd like to explain some of the principles of the tax relief plan. First of all, you hear a lot of talk about targeted tax relief. Those words basically mean that Congress gets to pick and choose who gets tax relief and who doesn't get tax relief. But that is not my vision of fair government. Our vision of government says that if you pay taxes, you ought to get relief. But the idea of trying to pick and choose of who does and who doesn't isn't right.

(APPLAUSE)

So we lower all rates for everybody who pays taxes. The largest percentage tax relief goes to the folks at the bottom end of the economic ladder. We understand -- or I understand and the proponents of my plan understand -- that if you're on the outskirts of poverty, struggling to get ahead, the tax code is incredibly unfair.

It's unfair because, as some taxpayers make more money, they pay a higher marginal rate than successful people do. If you start losing your earned income tax credit and you go into the 15 percent bracket for the first time and you pay payroll taxes, the marginal rate on every additional dollar you earn is higher than somebody making $200,000. That's the current tax code, today, and that's not right.

One of the major principles in the tax relief plan says: The harder you work, the more money you ought to be able to make and keep; the harder you work, the more money you ought to have in your pocket.

And so this is a plan that recognizes the code is unfair. That's why we drop the bottom rate from 15 percent to 10 percent and increase the child credit from $500 to $1,000 per child.

(APPLAUSE)

We also drop the top rate from 39.6 percent to 33 percent, and this is where some of the folks in Washington would rather holler than listen to the facts. It's easier to say some things about, maybe certain folks shouldn't be getting tax relief. But I want people to understand this about dropping the top rate: A major beneficiary of dropping the top rate from 39.6 percent to 33 percent are small- business owners.

Thousands of small businesses pay taxes at the top personal rate. The limited liability corporation, just like this company, pays taxes at the high personal rate. The unincorporated small-business owner pays taxes at the high personal rate. The sole proprietor pays taxes at the high personal rate.

Also, you'll be pleased to hear, I hope, that I believe the purpose of the government is not to create wealth but an environment in which the entrepreneur can flourish.

(APPLAUSE)

And one way to do so is to provide meaningful tax relief for the unincorporated businesses all across America. By dropping the top rate, we're enhancing the cash flow of the major new job creators in the country.

I've come to this...

(APPLAUSE)

Oh, I've heard the rhetoric. But the reality is the Ellison Seals (ph) of the world -- his company benefits, which makes it easier for him to employ the good folks he's employing here.

Tax relief for small businesses is vitally important. It's vitally important to make sure that the entrepreneurial spirit flourishes in America. It's also vitally important as our economy slows down.

We've got to remember who the major job creators are. New jobs are created by small-business people and entrepreneurs. And we should not let the rhetoric of a few in Washington cloud the issue.

And the issue is, how do we get more money into the coiffures of the small businesses like Ellison's (ph) in America? And that's what this tax relief plan does.

(APPLAUSE)

So when you hear them saying they're against dropping the top rate, you can translate that people are saying, "We just don't appreciate entrepreneurship or the small business creation in this country."

There's two other issues I want to talk about. One is that the marriage penalty is unfair. It's an unfair part of our tax code. And I urge the House, and ultimately the Senate, to do something about that.

And I tell you something else unfair in our tax code, the death tax. That's unfair. I think Ellison (ph) ought to be allowed to pass his business from one generation to the next without being taxed twice.

(APPLAUSE)

I don't know what your plans are to do with your business.

(LAUGHTER)

I'm not going to get you to declare right now.

(LAUGHTER)

Particularly in front of your son and daughter.

(LAUGHTER)

But I do know that if part of your dream is to pass your asset base on to your kin, you ought to be allowed to do so. He pays taxes during -- and when he makes money; that's one time. Why should he pay taxes on his death? That doesn't seem to make sense to me.

If part of the American experience is realizing a dream and building up your own asset base, an equally important part of that is passing your asset base on to your kin, to your son or your daughter.

It's part of the American dream. It's time to get rid of the death tax in the tax code.

(APPLAUSE)

Not only does today give me a chance to talk about the benefits for a company like Ellison's (ph). I'd like to introduce some folks that I got to meet at a restaurant over there, the Edwards (ph) family. Robert's a manager at Bob Evans restaurant and Jennifer is an accountant at a real estate firm. They've got Quentin (ph) and Ian (ph) with them. Quentin's (ph) 3-1/2; Ian's (ph) barely hanging on at 1. He's looking for a nap.

(LAUGHTER)

Mom probably is too right about now.

(LAUGHTER)

The reason I asked them to come is because -- I want to just describe their circumstances quickly. This good family works hard. They pay $1,750 in federal income taxes. And under the plan, when fully implemented, if Congress passes it, they'll end up paying no federal income tax. They'll end up saving $1,750.

And I've asked them to come because it gives me a chance to vividly make this point, and it's this: Once the government has met its basic needs -- and we've grown the discretionary budget by 4 percent and paid down $2 trillion of debt, set aside $1 trillion for contingencies -- what do we do? I would much rather have these good folks spend the $1,750 than the Congress.

In all due respect, I think we ought to trust these people with the money.

(APPLAUSE)

It is your money to begin with.

(APPLAUSE)

And that's the fundamental debate, and that's the debate that's going to take place, is taking place in the House, it's going to take place in the Senate, who do we trust? This debate, as far as I'm concerned, is a matter of trust. Do we trust the Ellison Seals (ph) of the world? Or do we trust the government to make the decisions?

Once priorities are met, once we have increased discretionary spending, once we have made sure Social Security is safe, once we have doubled Medicare, who do we trust with the people's money?

Ask the people. I'd much rather have this man and his wife making the decisions on what to do with that $1,750 than the appropriators in the United States Senate and the United States House.

(APPLAUSE)

And that's the issue during this debate.

And so if you like what you heard, I urge you to use the old e- mail...

(LAUGHTER)

... or the telephone or the letter. It's amazing how effective people can be when it comes to convincing their elected officials to listen to a different point of view. I'm honored to be able to come out and to make my (inaudible).

It's important for me to get out of the nation's capitol and get in front of as many people as I can.

Sometimes the filter may not say it exactly the way I'd like it to be said, if you know what I mean.

(LAUGHTER) Sometimes the message doesn't get delivered directly, and this gives me a chance to do so. It gives me a chance to say that ours is a plan that meets priorities but doesn't want to grow the size of the federal government relative to the size of people's pocketbooks.

There's a lot of talk about debt at the national level. I urge the senators and the Congress to remember there is a lot of debt at the personal level, too.

And there's a lot of talk about, oh, you know, this assumption, that assumption, but one thing we're certain of is that energy bills are going up for people. We're certain of that. And at the very minimum, we ought to share some of the people -- not take the people's money in the first place so they can manage their new energy account, their increased energy accounts.

We need to hear the people of this country. We need to listen to them. We need to understand the entrepreneurial spirit. We need to trust families with their own money. Because the true strength of the country lies in the hearts and souls of the American people. That's the great strength of this country.

The great strength of the country happens when a neighbor turns to a neighbor in need and says, "What can I do to help? Brother, you got a problem, what can I do to help?" So it's acts of kindness that take place on a daily basis.

No, the true strength of the country is when somebody says, "I think I want to teach some values to a child," and becomes a Boy Scout or Girl Scout leader or a Boys and Girls Club leader.

The true strength of the country comes when a mother or dad understands their most important job is not what they're doing during the day, but if they happen to have a child, loving their children with all their heart and all their soul. That's the true strength of this country.

(APPLAUSE)

I know we've lost some wealth in the stock market recently, but the real wealth of America is the creative energy of our folks. And tax policy ought to unleash the creative energy of Americans and trust Americans with their own money.

I'd like your help. I'd like your help. This isn't for me. This isn't help for a political party. This is help for doing what's right for America. This is important for our economy, but it's also important for the families and hardworking people all across the country, and we can afford it.

God bless.

(APPLAUSE)

WATERS: President George W. Bush asking that the people be trusted with the government's tax surplus and asking the people for help, send in your e-mails, make your telephone call, and send a letter to your senators and Congressmen urging them to go for the $1.6-billion tax cut.

The president's message, like a mantra, is "If you pay taxes, you ought to get relief." He wants $1.6 billion. The question now is: How much relief and what kind of relief?

As you know, there are a couple of Democratic alternatives now floating around the Senate, including Joseph Lieberman's. Senator Joseph Lieberman said: "Getting the people's money back just doesn't go far enough. We are not strengthening the economy with the George Bush tax and budget plans." So, that debate will go on.

The president's on a two-day, three-state trip to promote his tax and budget plan. Today Missouri and Montana. Tomorrow, it's Michigan. We'll be following along, keeping up with the story.

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