CNNfn Street Sweep - Transcript

CNNFN

SHOW: STREET SWEEP 03:00 PM Eastern Standard Time

HEADLINE: New York Stock Exchange Update; One Tax Bill Too Many?; Fifty Dollar Oil?; Shopping Trends, CNNfn

GUESTS: Sen. Lincoln , John Kilduff, Ashwani Kaul

BYLINE: Christine Romans, Rhonda Schaffle, Mary Snow

BODY:
ROMANS: All right. Rhonda Schaffler, thank you very much, Rhonda.

New tax breaks are on the way for an estimated 94 million Americans. The House and the Senate overwhelmingly passed new legislation that would extend tax-cut programs set to expire this year, most of them benefiting the middle class. But this nearly $146 billion bill could make an already troublesome deficit picture even worse.

That's why my next guest was one of only three senators who voted against the measure. Republican Senator Lincoln Chafee joins me now from Capitol Hill.

It must have been a tough decision for you, going against the entire -- pretty much everybody out there except for a couple of your other colleagues. Why did you step up and vote against this?

SEN. LINCOLN CHAFEE, ® RHODE ISLAND: These are popular tax cuts, certainly to the middle class, and they will help the economy gain the money back into the economy. But at some point we have to address the deficit and also address our spending. And we just haven't been able to do that here.

We have the war, which is very expensive. We put the subsidies back on the farm bill. And we have an added prescription drug benefit. We keep spending, while continuing to cut taxes.

ROMANS: We've heard from some Democratic congressmen and senators that they can't really in an election year vote against middle-class tax cuts, you just can't do it. Even though they were concerned about what this bill means to the fiscal picture of the United States.

Tell me, how difficult is it for your colleagues and you to think longer term about deficits when every four years people have to be reelected?

CHAFEE: Well it's a shame that the deficits aren't part of the national debate. Certainly I think the American people do care about them. And I do think it is in their consciousness, they remember Ross Perot and his charts, and all the effort and hard work that went into getting the surplus. And now it is gone.

So I think if the candidates were talking about, it would be easier to address some of these irresponsible tax cuts.

ROMANS: You go so far as to say it's fiscally ruinous policy. I suspect you won't be voting for George Bush this time around because of this.

CHAFEE: Well, when you look at the tax cuts, certainly these are the most popular tax cuts. These are the middle class cuts. And we should look at our tax policy in the entirety of the tax cuts for the wealthy, and whether we should look at them and perhaps try and pay for these middle-class tax cuts by rescinding some of the upper income.

That's my preferred option. As far as your question about where I'll vote, I've been on record on that. I'm voting Republican.

ROMANS: All right. Let's talk a little bit about another couple of issues that are very important right now. High oil prices. We have been talking about it for weeks now. The White House this week said it will allow some loans from the Strategic Petroleum Reserve. Also, the White House saying they would like to be drilling in Anwar, in Alaska. What do you think can be done to keep these oil prices down?

CHAFEE: Once again, as I talked before on the tax cuts, you have to address the spending if you're also going to address tax cuts. And here, on drilling in the refuge, we've got to address our consumption of oil. We've had numerous bills to try to conserve or consumption, in particular in raising the gas standards, closing the SUV loopholes, get the mileage standards up. Encourage hybrid car use.

Cut back on our consumption of oil in conjunction with looking at where we can find more domestic oil. And that shouldn't be just going to the Alaskan refuge as the first step.

ROMANS: All right. Senator Lincoln Chafee, thank you so much for joining us today.

CHAFEE: You're welcome.