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CNN LIVE EVENT/SPECIAL

Bush Holds News Conference

Aired October 5, 2001 - 14:35   ET

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


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
AARON BROWN, CNN ANCHOR: The president, as you can see now on the screen, walking out with Mr. O'Neill the Treasury Secretary. We'll listen.

(JOINED IN PROGRESS)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I've just concluded a meeting with my economic policy team. Secretary O'Neill has been up on the Hill talking to members of Congress and brought back some encouraging news, and that is the United States Congress is interested in working as quickly as possible to pass an economic stimulus package.

I want to remind the American people that the Congress has been working with us to provide relief. We passed monies for disaster relief, monies to help the people in New York. We've passed appropriations to help beef up our security. We passed appropriations to help airlines. Yesterday, I proposed additional expenditures to help workers who've been laid off as a result of the September 11 tragedy.

That spending totals about $60 billion. And in order to stimulate the economy, Congress doesn't need to spend any more money; what they need to do is to cut taxes.

And so I propose this. I propose that the United States Congress, as quickly as possible, pass tax relief equal to or a little bit greater than the monies that we have already appropriated.

Tax relief should come in this kind of form: One, that we ought to stimulate demand by cutting -- accelerating the marginal tax cuts that we've passed and I signed. As well as there ought to be a provision in the tax relief package to make sure that low- and moderate-income workers get tax relief as well.

And on the business side, we need to stimulate investment by allowing for enhanced expensing of capital expenditures. And we believe they ought to eliminate the alternative minimum tax on corporate America.

This is a package which will dovetail nicely with the marginal cuts and the increased child credit that will kick in next year as well. The American people expect us to act, and here's a way for us to act. We've spent money in order to have a stimulative effect of some kind. But to make sure that the economy gets the boost it needs, Congress ought to come together quickly and accept the ideas that I just laid out. We believe that'll be the best way to make sure that America recovers from the terrorist attack of September the 11th.

The terrorists attacked us, but they did not diminish our spirit, nor did they undermine the fundamentals of our economy. And we believe if we act expeditiously, that those fundamentals will kick back in and people will be able to find work again.

I hope you all have a fine weekend. Thank you all very, very much.

(END)

BROWN: The president with Paul O'Neill, his Treasury Secretary. We saw the vice president standing on the other side. It's the first time I've seen the vice president this week, it doesn't mean he hasn't been out there otherwise. And, the president was very clear on what he expects the Congress to do.

Major Garret at the White House, if you are with us, it seemed to me what the president said, and it was a message I think primarily to Democrats, not exclusively, is: Don't be passing any new, big spending plans, just cut taxes again.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Aaron, this is a byproduct of intense negotiations between congressional Republicans and the White House over the last 24 hours. Particularly conservative Republicans in the House, but some in the Senate have been telling the White House, look, you have been going down the wrong path with this stimulus package.

If you do not send a signal that you want that package to be heavy on tax cuts, and minimal or nonexistent on spending, you are going to lose. Senate Democrats will force you to spend more money on roads and bridges, infrastructure projects that Republicans simply oppose. They have been demanding that the White House issue a straightforward clarion call on tax cuts. That is exactly what we just saw now.

The president said, we have already put out into the revenue stream, or the economic stream, $60 billion of federal spending. We don't need any more of that. What I want that is that amount or slightly higher in tax cuts. He has already set the upper parameter at $75 billion.

He has laid out also, as Congressional Republicans have been quietly but persistently demanding, specifics on those tax cuts; accelerating the marginal tax cuts already passed by Congress, but that are not supposed to take effect until 2004. Increasing expensing for businesses, that allows corporations to buy products faster, to reinvest, essentially; something that has fallen off the cliff in the last 12 to 18 months. Also, eliminate the corporate average minimum tax, that is a means by which corporations have to pay some tax. If you eliminate it, if they have the necessary deductions, then they pay no tax. Democrats are likely to take a very dim view of that.

But this, Aaron, it is worth pointing out, is very clearly a response to Republican demands for a Republican stimulus package. It will be interesting now to see how Democrats respond. Aaron.

BROWN: Well, it is -- just, as you were talking I had one eye on the stock ticker, and at least the Dow, I don't think S&P totally, but the Dow has moved into positive territory for the first time today. Perhaps a reaction.

Should we look at this, Major, as the beginning of a negotiation. That is to say, the president took an "extreme," in quotes, position here, no new spending, just tax cuts. He knows he probably won't get exactly that, but that is probably where the negotiation begins.

GARRETT: Well, that's exactly what congressional Republicans have been asking the White House to do on this particular question. Lay down a marker.

Now the president laid down a marker yesterday on the worker dislocation aid. Democrats widely viewed that as an opening bid, privately the White House doesn't disagree with that.

So what you will probably see is that opening bid on the worker dislocation project, played against this opening bid on economic stimulus. You will probably see a softening on both sides, something moving more toward what Democrats want on worker dislocation, more than they would have originally accepted on economic stimulus, probably oriented more towards tax cuts. Ultimately a meeting of the minds.

But Aaron, let's not kid ourselves. On this issue, the economy, you have begun to see the first evidence of partisan lines reforming in Washington since September 11th. It's probably no surprise that even in wartime, economic principals, economic fundamentals that are often the driving force in partisan politics, not only in Washington but around the country, are placing very extreme pressure, politically, on this question of how to stimulate the question.

BROWN: Yes, that is exactly the character I was thinking. Thank you, Major.

You want a sign that normal is coming back, this is a classic political argument in Washington that goes on all the time, in war or peace, and it's going on again.

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