CNN LIVE EVENT/SPECIAL
Democrats Present Economic Plan
Aired May 6, 2003 - 11:33 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Now we go to the Senate minority leader, Tom Daschle. He is offering his and the Democrats' economic plan for turning around the U.S. economy.
SEN. TOM DASCHLE, MINORITY LEADER: ... there are innovative, creative people ready to work hard and turn their ideas into good jobs.
The only thing holding them back are bad economic policies that have kept our economy from recovering what should have been a short recession. The American people deserve an economic plan that works for them, not against them.
And that's what we're here to unveil: How our jobs, opportunity and prosperity plan will put more than 1 million people back to work. That's twice as many as the Republican plan. Don't take our word for it, that's economy.com's official objective analysis of our plan versus the Republican plan.
It's a responsible plan that invests in the things we need to strengthen the economy and create jobs today.
Our plan cuts taxes for every working American. The centerpiece of our plan is a tax cut for middle class families in the form of a wage credit. It provides $300 for each adult, $300 each for the first two children. We also increase the child tax credit and speed up the reduction of the marriage penalty.
These tax cuts will save a family of four making approximately $50,000, $1,630 in their taxes this year. It'll also pump $61 billion into America's economy now when we need the stimulus. That's real tax relief now for working families all across America.
Our plan helps small business, the backbone of our economy, with a 50 percent tax credit to help employers maintain health coverage for their workers, and it provides large and small companies with incentives to invest and create jobs this year.
We provide $40 billion in immediate assistance for state and local governments to help them avoid raising property taxes and cutting vital services.
We extend unemployment benefits for nearly 4 million laid-off workers, including people who have exhausted their benefits and have been unable to find new jobs, workers whose benefits will run out at the end of this month, and workers who have been paying into the unemployment insurance program but are unable now to receive benefits. We're doing this not just because it's the decent thing to do, but because putting money in the hands of people who have to spend it quickly is one of the fastest ways to jump start the economy.
Finally, our plan puts American back on the path of fiscal responsibility. It provides three times more economic boost this year, when we need it the most, than the Republican plan at a fraction of the cost. And it doesn't create huge, permanent, new obligations that will worsen our long-term economic situation.
The economic plan offered by the Republicans, by comparison, doesn't invest in what working Americans need now or in the future. It will create far fewer jobs. It weakens Social Security. It slights middle class families in favor of those at the top. It will drive up property taxes on working families and force cuts in education and other vital services by making states' budget crisis even worse. And it will dramatically increase the deficit and drive up interest rates, which will make it more expensive to buy a house or to pay for college or pay off your credit cards. That's the hidden tax in their tax cut.
They call their tax cut robust. In fact, it's just a bust. What we're offering is real jobs, real opportunity and real prosperity, a plan that works for our country now.
Our plan will create more than 1 million jobs without mortgaging our future. It's fair, fast acting and fiscally responsible, and it's what our economy needs now.
We look forward to offering it on the floor when the bill comes before the Senate next week, and we will be working with our Republican colleagues in the hope that we can convince them that this is the approach, this is the direction, this ought to be the plan that the Senate adopts, the president signed into law, if indeed we want to move this economy forward as quickly as we can.
Thank you, and we'll take your questions.
KAGAN: We've been listening in to -- we've been listening to Senate Minority Leader Tom Daschle as he lays out some of the Democratic plans to try to turn around the economy. Two gentlemen now to help us sort through the politics and get to what exactly we're talking about, and let's start with Jonathan Karl to help, and we also have Bill Schneider, see your face there on the screen.
Jon, we're going to go ahead and start with you. This, of course, very basic what we're hearing at this point, what Tom Daschle has to say. But what are the basic differences between the Democrats' plan, and the one that President Bush is pushing forward?
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: The big difference is cost, and the first thing you need to know, Daryn, is that the Democratic plan has virtually no chance of passing up here. The president, as you know, and as we've been talking about for some time, is having trouble getting his plan through the Congress, but the Democrats have an even tougher time. Tom Daschle has outlined a plan that would cost $152 billion. That's the ten-year cost for his plan. The centerpiece of that is giving a tax credit, really a check to every American of $300, and also for their first two children, $300 each. And there's also $40 billion in there in direct money going from the federal government to the states that have been hit by the economic downturn even worse than Washington in terms of budget deficits.
So this is the Democratic plan. It costs much less than what the president is talking about. The president has been talking about a $726 billion plan that includes the complete elimination of the tax on dividends, and includes deep reductions in income tax levels. A much bigger, primary tax plan. No aid for the states, no direct tax credits like the Democrats are talking about. The centerpiece, again, being that elimination of the taxation on dividends.
Now, meanwhile, Republicans have been all over the map here on Capitol Hill. Over in the house, the House Republicans have a plan that's $550 billion, and it does not eliminate the tax on dividends, but it lowers them by lowering the capital gains tax. The White House calls it a step in the right direction, but privately White House officials say that they are not happy with that plan in the House either.
Meanwhile, here in the Senate, more confusion. The Republicans have only been able to agree on a plan of about $350 billion. The chairman of the finance committee is unveiling his plan today. It includes some elimination of the taxation on dividends, but makes that elimination only temporary. It expires after three years, the tax would go right back up. So bottom line here, Daryn, is you got a lot of different plans going on. None of them seem to, at this point, have the critical mass to pass.
KAGAN: All right. Jon Karl on Capitol Hill. Jon, thank you. Let's go ahead and bring Bill Schneider in and pick up on one of Jon's points. He says this one doesn't have a snowball's chance in you know what. So why bother by the Democrats?
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Democrats are laying down a marker. They're saying, if we had our way, this is what we'd do, and the signal they are sending is we put the money in the hands of average working Americans, and we'd be more fiscally responsible, and we'd return more money to the states because the states are in desperate situations, and they are cutting education, health care, services. We do more for ordinary people. The president wants to cut taxes on dividends. That is something conspicuously missing, a dividend tax cut, from the Democratic plan. All the other plans being considered do include a cut in dividend taxes, not the Democrats'. They're laying down a political marker.
KAGAN: Let's look at what President Bush has been doing over the last couple of days, going and trying to address the American people, encouraging them to contact their own congressional representatives and say, you tell them how you want them to vote.
SCHNEIDER: Yes. There's the president campaigning. Now, he's given a speech virtually every day since he went on that aircraft carrier to declare the battle of Iraq over. It's an amazing thing, and rather strange that you have a president coming off an enormous victory in the Middle East with sky high popularity, 70 percent job approval, trying to sell a tax cut.
What's wrong with this picture? A tax cut? I mean, that should be the easiest thing in the world to sell. But what we're seeing and the president is obviously seeing is that Americans are kind of nervous about this tax cut. The big question is, they wonder, can we afford it?
They know the deficit is mounting very rapidly. It's at a record level this year. There were some projections it could reach $500 billion, half a trillion dollars, this year. So a lot of Americans who think the economy is in poor shape wonder, can we afford that big a tax cut?
SCHNEIDER: Bill Schneider, Jonathan Karl, thank you gentlemen. Appreciate your help in looking at the story.
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