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Morning News

Bush Begins Budget Trip; Sen. Snowe On Trigger Mechanism In Tax-Cut Plan

Aired February 28, 2001 - 9:01 a.m. ET

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

LEON HARRIS, CNN ANCHOR: Now, let's begin, though, with President Bush. He hit the road this morning, pushing his nearly $2 trillion budget plan to the public. The proposal would allow for the biggest tax cut in two decades.

President Bush outlined his plan last night in his first address to Congress.

And our senior White House correspondent John King is up bright and early this morning. He's got the latest right now from Washington -- John.

JOHN KING, CNN CORRESPONDENT: Good morning to you, Leon.

Well, the details of that budget also being released this morning.

The president's friends will look for things to cheer. His critics, of course, will look for things to criticize. Democrats making the case, You can't have that big tax cut and pay for all the thing that the president promised.

Mr. Bush, as you mentioned, though, he's taking it on the road, trying to sell his tax plan directly to the American people. He is in Pittsburgh, Pennsylvania, this morning. That is stop one. He will do five states over the next two days, as he tries to sell the American people on that plan that he outlined to the Congress last night.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Mr. Speaker, the president of the United States.

JOHN KING, CNN WHITE HOUSE CORRESPONDENT (voice-over): The reception was, as is custom, overwhelmingly positive, but the path ahead is less certain, so the president made certain he made his point.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The growing surplus exists because taxes are too high and government is charging more than it needs. The people of America have been overcharged, and on their behalf, I'm here asking for a refund. KING: He spoke for 49 minutes, interrupted repeatedly by applause. Democrats cheered his promise of bipartisanship, and this...

BUSH: Earlier today I asked John Ashcroft, the attorney general, to develop specific recommendations to end racial profiling. It's wrong, and we will end it in America.

KING: It was Republicans who cheered most when Mr. Bush promised to fight for big tax cuts and called on Congress to make them retroactive to January 1st.

Mr. Bush said his budget would spend $81 billion more next year on Social Security, Medicare and other entitlement programs and include $26 billion in additional new spending, nearly five billion of that for education. In all, government spending would grow four percent next year, just a bit more than inflation, and down from the average six percent increases the past three years.

BUSH: Unrestrained government spending is a dangerous road to deficits, so we must take a different path.

KING: Over the next 10 years the president proposed his $1.6 trillion tax cut, paying off two-thirds of the government's $3 trillion long-term debt, and setting aside another trillion for contingencies.

BUSH: But after a strategic review, we may need to increase defense spending. We may need to increase spending for our farmers or additional money to reform Medicare.

KING: The speech was the opening salvo in a budget debate that will test not only the new president, but also Washington's new political balance. For the first time in nearly 50 years, Republicans hold the White House and both chambers of Congress. Democrats are the opposition party now.

REP. RICHARD GEPHARDT (D), MINORITY LEADER: President Bush's numbers just don't add up; ours do. His plan leaves no money for anything except tax cuts; ours does. Our plan is better. It invests in the greatest needs and highest priorities of our country.

KING: Mr. Bush ended his speech well aware the debate was just beginning.

(END VIDEOTAPE)

KING: That debate will only intensify today as the president hits the road, traveling to try sell his plan. And both friends and critics look over the details and speak out in a budget debate that beings in earnest today but will last for several months -- Leon.

HARRIS: All right, good deal. Thanks much, John King reporting live this morning from the White House -- Kyra.

KYRA PHILLIPS, CNN ANCHOR: During the president's two-day trip to sell his budget plan, he will make stops in Pennsylvania, Nebraska, Iowa, Arkansas and Georgia.

Aides say these states were chosen to bolster support from key Republicans, while putting pressure on opposition Democrats.

CNN will bring you live coverage of some of the president's comments. And that's expected at about 9:40 a.m. Eastern time, 6:40 a.m. Pacific.

Well, there's a great deal of reaction this morning to the president's big plans for the budget.

CNN's Jeanne Meserve is live on Capitol Hill, checking the pulse of politicians -- Jeanne.

JEANNE MESERVE, CNN CORRESPONDENT: Kyra, with me today is Senator Olympia Snowe, Republican from the state of Maine, one of the moderates who's considered crucial to shaping the shape of the final legislation.

Thanks so much for joining us today.

SEN. OLYMPIA SNOWE (R), MAINE: Thank you, Jeanne.

You have you said, Senator Snowe, that you would like to see triggers in any tax cut bill to ensure that there is enough of a surplus to pay for it. The president didn't mention triggers last night. Some Democrats have indicated that the idea is unwieldy, unworkable. Where does that leave you in that idea?

SNOWE: Well, I am working with the Democrats and the Republicans on the idea of a trigger mechanism that was originally proposed by Chairman Greenspan before the Senate Budget Committee a few weeks ago because of the unreliability of projections over the next 10 years.

And I think that it makes a great deal of sense. It will tie the tax cuts and new spending increases to this mechanism to ensure that we reach the debt reduction goals.

MESERVE: But, you know, if enough of your colleagues don't buy into the idea, where does that leave you? Are you with the president or not on 1.6 of tax cuts?

SNOWE: Well, I am still going to work on the trigger. And I think that there is support for a trigger. And I have discussed with this with the president. I've discussed this with the leadership. And I am discussing it across the political aisle.

And this is just the beginning of a long debate in the Budget Committee and the Finance Committee, in both which I am a member. And so I think we have ways to go. And I think that we can convince people to support this kind of mechanism.

MESERVE: You in the past have indicated that 1.3 million might be the high watermark for a tax bill. Is that still your thinking?

SNOWE: Well, I think somewhere between 1.3, 1.6. Obviously, the reason why it's now 1.6 is because the president is moving it out from 2001 to 2002.

I think the issue is here: Can we put -- pass that 1.6 trillion of the next 10 years? Given the amount of surpluses that we project, yes. But we want to ensure that those projections become a reality.

MESERVE: You are a crucial player at this debate. What kind of arm twistings are you getting from the leaders of your own party, and from the other side of the aisle?

SNOWE: Well, I've had conversations. I wouldn't certainly imply that it's armtwisting. Obviously we are having conversations. This is the key initiative to the president. I want him to succeed. I think that everybody does. It's for America, it's for the taxpayers.

And so we're going to be working together. And I think that there will be a lot of discussions across the political aisle.

MESERVE: A lot of talk about that from the president last night, saying we need to have bipartisan. Is this talk all theatrics, though, when it comes down to the nuts and bolts here on Capitol Hill? Does that language mean anything?

SNOWE: I think it does. I mean, I think when you get 50/50 in the Senate, the political realities get worse across the political aisle. The president has done that as governor. He wants to do it now. He's met with more than 200 members of Congress and both sides of the political aisle, because he understands how he's going to be able to get his agenda through is working with Democrats and Republicans.

MESERVE: Senator Olympia Snowe, Republican of Maine, thanks so much for joining us.

SNOWE: Thank you.

MESERVE: Kyra, back to you.

PHILLIPS: Jeanne, let's talk about the Democratic side for a moment here. Obviously, the talk by some Democrats is that all this talk is just not going to happen, and that the president is the going to swallow his words. What's the reaction you're getting from the other side?

MESERVE: Well, the Republicans -- excuse me -- the Democrats, you heard them last night say that it's just too good to be true, that we can't possibly do all the things that the president is proposing.

Guesses are, at the point, that things may go more or less as the president wants on the House side. But frankly, what's going to happen here on the Senate, which is divided 50/50, is still very much up in the air. We just don't know, Kyra, how it will end up.

PHILLIPS: All right, Jeanne Meserve, thanks so much.

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