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SHOW: JUDY WOODRUFFS'S INSIDE POLITICS 16:00
April 21, 2003 Monday
Transcript # 042100CN.V15
SECTION: News; Domestic
LENGTH: 4036 words
HEADLINE: White House Pushing Tax Cuts; Catching up With Democratic Presidential Candidates
GUESTS: Lindsey Graham
BYLINE: Judy Woodruff, John King, Jonathan Karl, Candy Crowley, Candy Crowley, William Schneider
The White House is pushing tax cuts. Also, catching up with Democratic presidential candidates.
WOODRUFF: OK, Bill Schneider reporting, thank you very much. Well, as far as some Republicans are concerned, their own Senate majority leader, Bill Frist, has some explaining to do about the tax cut side deal that has complicated the president's political life.
Let's talk now with one Republican senator, he is Lindsay Graham who joins us from his home state of South Carolina. Senator, why is Senator Frist in so much trouble with members of his own party?
SEN. LINDSAY GRAHAM ®, SOUTH CAROLINA: Well, I don't think trouble is the right word. A lot of us are disappointed that a deal was cut to limit the size of the tax cut to $350 billion. The House, as you knew, passed a budget resolution that had a range of 350 to 550 over ten years. The day of the vote, there was a deal struck with a couple of senators that said that we would not support anything in the Finance Committee above 350. I just think that's unacceptable. That compromises what the president's trying to do.
And the good news is Senator Frist understands that was a mistake. He has done something I very rarely have seen in Washington. He came forward and said that was a mistake. He's apologized to the House. And I don't know if we can fix this or not, but recognizing that deal was a mistake is a really good start.
WOODRUFF: You said you don't know if it can be fixed or not. Right now, the Republicans in the Senate who are saying we're not going to go any higher than $350 billion say they're just not going to budge. So how could this get fixed?
GRAHAM: Well, the president's going to weigh in here and tell the public exactly what he's trying to do. There's nothing magic about the number 350. $550 Billion over a ten-year period in an $11- trillion-a-year economy is not very much. It's two cents on the dollar, Judy, that we will collect in taxes over the next ten years. We're going to collect about $24 trillion in taxes.
The dividend tax aspect is very important to me, eliminating double taxation of dividends so it would be easier to raise capital, make stock investment more attractive. If that's not in the deal, there's not going to be much economic stimulus. We need to eliminate the marriage tax sooner rather than later. We need to cut rates. We need to do things in the 350 package. But if there's no economic stimulus package, then the 350 is not going to a achieve the goal. And I'm about achieving the goal of jump starting the economy.
WOODRUFF: Well, not to get too caught up on numbers, but it sounds like you are saying it doesn't have to be 550 billion either, is that right?
GRAHAM: Right, Judy. If there's not a substantial reduction of double taxation of dividend rates, at least in half, then I don't see myself voting for the deal. I want to eliminate the marriage penalty. I want to accelerate the child tax credits.
But consumer spending has kept the economy going. That helps consumer spending. We need something in the tax cut stimulus package, that stimulates an investment. And that's where the dividend elimination double taxation dividend comes about. And the dilemma we face is we're going to spend the money if we don't cut taxes.
WOODRUFF: The head of the Congressional Budget Office who used to work for President Bush says he's not sure it's going to have any stimulus on the economy. But very quickly, on Senator Charles Grassley, whose the Chairman of the Senate Finance Committee, he says the White House never complained in the hours after this vote. Is the White House guilty in some way of just looking the other way when all this was taking place?
GRAHAM: Judy, honestly, I think this happened very quickly. The goal was to pass a budget resolution. And people were willing to make a deal to pass a budget resolution. I don't believe the House would have ever voted for a budget resolution if they'd known that the Senate had not gone beyond 350. I can assure you I didn't know that was going to be a part of the deal. I think a mistake has been made, but people have dealt in good faith in the past. I think they will in the future.
Senator Grassley says he's going to keep his word to hold it at 350. I don't feel bound by this deal. As a senator from South Carolina, no one asked me. And my comment is when you ask is I'm going to fight for the president's tax cut in totality, and I don't feel bound by this. We should have a significant tax cut that provides economic stimulus or not one at all.
WOODRUFF: All right, Senator Lindsay Graham, we heard it from you. Thanks very much for talking to us in South Carolina. We appreciate it.
GRAHAM: Thank you. Thank you, Judy.