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CNBC Capital Report - Transcript

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SHOW: Capital Report (9:00 PM ET) - CNBC

September 11, 2003 Thursday

HEADLINE: Senator Don Nickles of Oklahoma, Budget Committee chair, discusses the current US economic situation with Bush's tax cuts, war and reconstruction costs and Medicare drug program


ALAN MURRAY, co-host:

Welcome back to CAPITAL REPORT. The $87 billion price tag for war and reconstruction in Iraq and Afghanistan continued to be the talk of the town here in Washington. Can the United States keep writing checks for the war, for tax cuts, for prescription drugs and so on? Well, joining us now from Capitol Hill is the man who has to answer that question. He is the chairman of the Senate Budget Committee, Don Nickles of Oklahoma.

Senator Nickles, thanks very much for being with us.

Senator DON NICKLES (Republican, Oklahoma; Budget Committee Chairman): Thank you.

MURRAY: Before we get to these important money issues, I want to ask you the question that we just asked Senator Hillary Clinton, and that is, in your view, is the nation significantly safer today than it was two years ago?

Sen. NICKLES: Well, I think so. We'd seen repeated acts of terrorism against the United States culminated with the attacks two years ago in the World Trade Center and the Pentagon, and probably against the Capitol. We'd had previous attacks; we didn't respond. We have responded; we're continuing to respond. We've eliminated a lot of threats. I'm sure there's still others out there. But my compliments to the men and women who are working aggressively 24 hours a day to protect us. I think they've done a fantastic job.


Senator, I want to change the subject now to the budget. The president has just asked for $87 billion in Iraq. He also wants to pass a prescription drug benefit that's going to cost, some say, $400 billion. Spending is rising at double-digit rates. You're the man in charge here at the Budget Committee. Does this country now have a serious budget problem?

Sen. NICKLES: Well, we do have a big budget problem. Revenues have declined precipitously, frankly, since the year 2000. No doubt 9/11 contributed to that a lot. It really did contribute to, I think, the decline of revenues coming in, to a lot of companies losing money and so on. It's hurt, and also having the war in Afghanistan and the war in Iraq. So we have a big deficit. We have a big problem. Expenditures have continued to rise. But just to give you an example, last night we passed a Labor-HHS bill, one of the biggest bills we've passed. It's $127 billion in discretionary spending and it grew by 2.3 percent. That's a lot less than it used to grow. It used to grow almost double digits. So we've had some success in containing the growth in spending. Democrats tried to increase that, I might add, by about $30 billion. We defeated those attempts. It wasn't easy, but we made some progress.

The president's request for $87 billion for additional assistance, military and economic, in Iraq is a big challenge. I think Congress, in large part, will be supportive, certainly the military component. We may--some of us may want to have some of the economic assistance, instead of direct assistance, maybe turned into loans.


Sen. NICKLES: But I think, by and large, we'll be supportive. We're committed. We want to restore freedom for Iraq. We're going to be there for the long haul. We would like to see the Iraqis take up a greater portion of it...


Sen. NICKLES: ...have more Iraqis be the policemen instead of United States. I think that's shared by Secretary Rumsfeld and the president.

MURRAY: Senator, let me play something for you that Senator John McCain said on this show the other night that left us a little bit confused, and maybe you can explain what he was talking about.

Sen. NICKLES: Sure.

MURRAY: Just listen.

Senator JOHN McCAIN (Republican, Arizona): (From September 9) Well, I was interested the other day that Senator Nickles, the chairman of the Budget Committee, said that he thought some of the tax cuts should not be made permanent. I'd be glad to examine that. Look...

MURRAY: We're not sure where you said that, but we're wondering, have we reached the point now where you think as chairman of the Budget Committee that maybe making all those tax cuts permanent leaves us in a bad fiscal situation?

Sen. NICKLES: Well, there's a lot of tax proposals, not all of which--many of which were enacted for a short term to have a positive impact on the economy, and they've done that. We have corporation accelerated depreciation. That was done for a short period of time. That's a couple years' window. That was done so we'd have more investment made in the next couple of years so we can create jobs.

MURRAY: So that should not be extended, in your view?

Sen. NICKLES: I think there's several things in the proposal that we've already passed or that are considered that might not be made permanent. I do think all the personal rate cuts should be made permanent. I think the cut on dividends, the cut on capital gains, those should be made permanent. Those are the ones that have probably the most economic potential, the bang for the buck that will really help the economy.

BORGER: Senator...

Sen. NICKLES: Some of the other proposals that CBO was guess--every tax proposal that somebody had proposed, they wanted to say it would be made permanent. I don't think we'll do all those.

BORGER: Senator, this Medicare prescription drug plan is going to be a matter of some controversy this fall. As we were talking about before, it costs $400 billion. Do you think, given the fact that the president has just gone to Capitol Hill to ask for $87 billion for in Iraq, that it's going to kill this plan?

Sen. NICKLES: No. I'm working on that. I happen to be a conferee on that. That's a big challenge. It's a big challenge to contain the growth within $400 billion over the next 10 years. I hope that we can do it. I hope that we can pass it in a way that will make it more affordable in the long term, provide prescription drugs as a benefit for Medicare, but do it in a way that makes sense. It's a coordinated benefit, not just Medicare and prescription drugs, and oh, yes, and we have to have a stopgap Medigap policy. Let's do something in an integrated plan, something more like federal employees have. I think that would create some competitiveness to the system and make it more feasible in the long term.

MURRAY: Senator, gotta change the topic on you because we understand you're about to become a star in the new HBO series "K Street" about power and money in Washington, which is something we like to talk about on this show. Are you playing yourself?

Sen. NICKLES: I am, heaven forbid. I tried to get a different role, and they wouldn't let me have it.

MURRAY: What...

Sen. NICKLES: I wanted to have an interesting role, and instead they said, 'Play yourself.'

MURRAY: You gotta be you. What..

BORGER: Well, what do they want you to be? I mean, what do they want you to talk about?

Sen. NICKLES: No, it's...

BORGER: Secrets or...

Sen. NICKLES: It's a very--I hope that they have success. George Clooney, as you know, is one of the producers and a great guy. Steve Soderbergh is also--they're a great combination. They did--or Soderbergh did "Traffic." I happened to have the pleasure of being in that. That was a good success, not because of me, but it was a good success.

MURRAY: He's apparently--George Clooney is apparently not just the producer of the--we saw him downstairs actually holding a camera. He's doing some of the filming of it. But I just gotta ask you quickly about one thing. These guys have apparently been told they cannot film in the US Senate. They did some filming there; now they've been kicked out by the Senate. What's that all about?

Sen. NICKLES: I wouldn't say--I think the Rules Committee said, 'Well, wait a minute, we don't want sitcoms doing episodes in the Senate.' Maybe they thought that would be demeaning to the Senate. I'm not sure. I haven't really even read the article about it. But we were happy to film off-site.

BORGER: OK. Well, Senator, we know you play yourself. Can you tell us if you're a good guy or a bad guy, huh?

Sen. NICKLES Oh. Well, I happen to be myself. I hope...

MURRAY: Oh, he's a good guy. I hope he's a good guy.

Sen. NICKLES: I'm sure there's plenty that would say maybe not so good. But we'll find out.

MURRAY: Senator Don Nickles, Budget Committee chairman, you've got a lot of work ahead of you. Thanks very much for taking some time to be with us on CAPITAL REPORT.

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