CNN Crossfire

SHOW: CNN CROSSFIRE 16:30

HEADLINE: Club for Growth Says Republicans Against Bush Tax Cut Fail to Support Party

GUESTS: Lincoln Chafee, Stephen Moore

BYLINE: James Carville, Robert Novak

HIGHLIGHT:
The Club for Growth says that Republicans who are against the Bush tax cut are failing to support their party.

BODY:
ANNOUNCER: Live from the George Washington University, James Carville and Robert Novak.

JAMES CARVILLE, CO-HOST: Welcome to CROSSFIRE, or as we're going to call it today, the Republican edition of the "Family Feud." President Bush's idea of making the deficit even worse by giving his rich friends another big tax cut has split the party faithful. All of a sudden the Republicans are acting like Democrats and fighting among themselves.

In the CROSSFIRE from Capitol Hill, Republican Senator Lincoln Chafee of the great start Rhode Island who's broken ranks by voting for a smaller tax cut than the White House wants.

And with us here in the studio is Stephen Moore of the Club for Growth, the group running ads supporting the president's tax cut.

ROBERT NOVAK, CO-HOST: Senator Chafee, please tell me that you do not go along with this nonsense that you should be against the tax cut because it is such a tough road for the deficit.

For example, the tax cut next year, in this huge economy, would only lose one-tenth of one percent, not 1 percent, one-tenth of one percent of the gross domestic product, the whole economy. And after 10 years, in the year 2013, it would only be 0.3 of 1 percent. That's just trivial in this economy. That's not why you're against it, I hope.

SEN. LINCOLN CHAFEE ®, RHODE ISLAND: Well, the big question is, of course, the preparing for the baby boomers retirement. And we know this demographic tidal wave is coming. And as we see our deficits coming back, we didn't have deficits, we were in surpluses and now we see these big, big deficits coming back.

And with the prospect of these baby boomers retiring and entering the Medicare system and the Social Security system, we're going to be totally unprepared if he let these deficits continue.

NOVAK: How do you explain that small percentage, though, that I just mentioned? It's in this huge economy—it's just a—an eye drop of it, isn't it?

CHAFEE: Well, why then did President Bush 41 and then President Clinton fight so hard to get the balanced budget? And why were the conservative Republicans actually going for a Constitutional amendment to balance the budget? Because we do care about these deficits.

CARVILLE: Mr. Moore, we'll show you part of an ad that you are running, your club is running, which you had against Senator Voinovich in Ohio. Senator Chafee, I want to point out, has exactly the same position as Senator Voinovich. Can we see it, please?

(BEGIN VIDEO CLIP)

AD ANNOUNCER: ... bold job creating tax cuts to boost our economy. But some so-called Republicans like George Voinovich stand in the way.

America needs strong allies abroad and President Bush needs strong supporters in the Senate. Hey, George Voinovich, join President Bush's fight to cut taxes and fix the economy.

(END VIDEO CLIP)

CARVILLE: Now you put the French flag in there, which is a big (UNINTELLIGIBLE). But I want you to just tell Senator Chafee you don't think he's a very good American. That's what you're saying on TV, why don't you say it to the man's face? He's sitting there. Tell him he's a traitor.

STEPHEN MOORE, CLUB FOR GROWTH: Look, Jim, we are not questioning—we are not questioning the patriotism...

CARVILLE: He's from Rhode Island, he's not—well sure you are. You put a French flag...

(CROSSTALK)

MOORE: What we are questioning is their economic judgment. I happen to think that Senator Chafee is wrong on this. I think George Voinovich is wrong.

You say this is a family feud. It isn't family feud. Ninety- five percent of the Republicans in the House and Senate are for the president's tax plan. They understand that we can do this tax cut and we can balance the budget if we get control of spending. Something, by the way that Lincoln Chafee has not been in favor of...

(CROSSTALK)

CARVILLE: ... talk about your TV spot.

MOORE: Right.

CARVILLE: Here's a man sitting right here. Tell him to his face what kind of American you think he is.

MOORE: Here's what I'll say to Lincoln Chafee. Senator, please get behind the president's plan. We need your vote. We need this because we need to create jobs. We need this because it's good for the Republican Party.

NOVAK: Do you have a response to that ad, Senator?

CHAFEE: Yes. First of all I'd like to say that Mr. Moore said that 95 percent of Republicans are behind the president on this. Don't forget, go back to the first tax cut of the spring of 2001. And even Denny Hastert and Tom DeLay and Chuck Grassley back then were expressing some hesitancy about supporting that big tax cut in the spring of—check your records. Yes, they finally did vote for it.

MOORE: You were the only Republican in the Senate who voted against it.

CHAFEE: No, John McCain did, also. But we want to support the president, but we want to these things incrementally.

NOVAK: Senator Chafee, just following up on that. You find Democrats now, Congressman Gephardt running for president who wants a tax increase, and we have all of them against the cutting the top marginal rate. Don't you, as a Republican, feel a little bit uncomfortable in that company?

CHAFEE: Well, I tell you, as a Republican, I don't like hearing the Democrats, the Democrats talking about deficits. That used to be a Republican issue. And now the Democrats are talking about it.

And I don't like also to see the stopping of tax cuts that haven't been implemented, communicated as tax increases. I don't think that's accurate. If we delay or stop those parts of the tax cut that haven't yet been implemented whether it's 2004, 2006, 2008. It's not a tax increase.

CARVILLE: You know a fellow named Bruce Bartlett? Isn't he a fellow traveler of yours?

MOORE: Sure.

CARVILLE: Let me show you—and he was in the Reagan administration. Very intellectual in your circles.

MOORE: Sometimes he's right. Sometimes he's wrong.

CARVILLE: "Complaints about Bush leaving a crushing debt burden on our children are," quote, "'not correct,' Bruce Bartlett argued because our children can just pass the debt on to their kids who will pass it on to their kids, etc., etc., etc. 'We'll simply pass it on forever,' he said."

Is that a good idea?

MOORE: No it isn't. The reason we have—it isn't. The reason we have these big budget deficits is because we've got big spenders like Lincoln Chafee in the Senate who want to spend more and more and more money.

(CROSSTALK)

CARVILLE: President Clinton must have been the most fiscally responsible president in history. He had the largest budget surplus...

(CROSSTALK)

MOORE: Back in the mid-1990s when Newt Gingrich was in office, we had Republicans and Democrats...

(CROSSTALK)

NOVAK: Senator Chafee, I just want to pin down the correct definition of terms. Congressman Gephardt, who has a lot of praise and attention for his proposal, is proposing not merely a suspension of the future tax cuts, he wants to roll back a tax cut that is already taken place. Please admit that's a tax increase.

CHAFEE: Yes, I will. I will stand corrected on that. I didn't understand that that's what Mr. Gephardt was saying. I thought he was just stopping the implementation of the future years.

NOVAK: Now you'd say to the Republicans, Senator Chafee, used to be—talk a lot about deficits and indeed they did. But when I was listening to them, the way they wanted to cure deficits was cutting spending.

now The spending has gone up much, much faster than any cuts in taxes. And you'll have to say that 10 years of Republican congresses have not controlled spending. Don't you think a lot could be done to control spending?

CHAFEE: Well we did look back at the increase in spending through the '90s because I've heard that alleged. And it wasn't that bad through the '90s. It was about inflation for many years. And of course the peace dividend was a big part of that, cutting back or keeping the increases in the military down. And that was a big aspect of that.

But if you look, that spending wasn't that much higher than inflation. I give the Democrats, but mostly the Republicans credit for that, the class of '94 that came in.

NOVAK: We're going to have to take a break because next it's off to the races with the fastest political segment in television. Don't place your bets yet. One of our guests thinks he knows who is going to win the Kentucky Derby Saturday, as well as the tax cut derby.

And later, who gets higher numbers. Those unpatriotic singers, the Dixie Chicks or the president of the United States? Find out in our "CROSSFIRE Political Alert."

(COMMERCIAL BREAK)

CARVILLE: It's time for "Rapid Fire." It's a sharp track where we're going to go fast. Our guests Senator Lincoln Chafee of Rhode Island, who has background in horse racing and handicapping. And Stephen Moore the Club for Growth and the Cato Institute.

Take off, Robert.

NOVAK: Senator Chafee, are Americans taxed too much or too little.

CHAFEE: Too little. Right now we're rolling back these tax cuts and when I ran in the fall of 2000, not once, not once did I hear somebody come up to me and say, cut my taxes, because they liked the economy rolling along as it was in the '90s. I came into my election in 2000. I can say that with a straight face.

CARVILLE: How many times did they ask you to increase their taxes?

CHAFEE: Never. But we don't like the deficits.

CARVILLE: Mr. Moore, taxes cut do they increase revenue or decrease revenue.

MOORE: If they're done right they increase revenue, it happened in the '60s under Kennedy, and it happened in the '80s under Reagan and it's going to happen with this tax cut, when we cut the dividend taxes.

CARVILLE: So why do we need to cut spending?

(CROSSTALK)

NOVAK: How big do you want the government to be?

Senator Chafee, will you join Congressman Gephardt in increasing taxes since you think we tax too little.

CHAFEE: No, that's very difficult politically and I recognize that. My dad lost an election over raising taxes. It's very difficult politically. You might say President Bush 41 and President Clinton lost the house and the Senate by raising taxes. Right now we have to just take the hand we're dealt and try and cut our spending.

CARVILLE: All right. This weekend, Saturday, will be the running of the Kentucky Derby as Churchill Downs. Senator Lincoln Chafee, known to me and few people as one foremost horse handicappers in the country. He has an excellent reputation. And senator, we want to put you in the rapid fire on the derby—Bob.

NOVAK: OK, senator, who is going to be the winner Empire maker is the favorite. Who is your pick?

CHAFEE: How about Empire maker and Peace Rules? Who do you have to go with Peace Rules.

CARVILLE: Isn't there a horse called Reaganomics in this race? Sometimes I look for a price or a long shot. You got anybody in the back of the field that might be good to stick in (UNINTELLIGIBLE) here?

CHAFEE: I like Buddy Gill. He won out in California, but he might not pay enough. Duane Lucas, has the real long shot, 10 cents a shine. If you really want to make big money, maybe throw him in.

NOVAK: Quickly Senator, how much money are you putting on Peace Rules?

CHAFEE: I'll put 20 on the nose.

CARVILLE: All right. I like a man that stand behind his predictions.

NOVAK: OK, thank you very much Senator Chaffee. Thank you very much, Mr. Moore.