This partial transcript of Fox News Sunday, October 7, 2001 was provided by the Federal Document Clearing House. Click here to order the complete transcript.
TONY SNOW, HOST: President Bush wants to turn those happy thoughts into aburst of prosperity. At week's end ... he challenged Congress to cut taxes this year by an additional $60billion.
Just what form might those tax cuts take? We'll ask White House economic adviser Lawrence Lindsey.
Also here with questions Brit Hume, Washington managing editor of Fox News.
Mr. Lindsey, the president says he wants to accelerate tax cuts that have already been enacted. What's he talking about?
LAWRENCE LINDSEY: Well, the tax cut that the president signed in June had a number of rate reductions that's scheduled for 2004 and 2006. And his proposal is to bring them forward to start next year when the people need the money.
SNOW: So those would kick in in the next -- the 2004 and 2006,what would that mean to rates?
LINDSEY: Well, that means that the middle-class rate would come down to 25 percent from 28 percent, effective January 1.
SNOW: All right. Now, in addition, Democrats yesterday were saying, at least some of them, House Minority Whip David Bonior --he's the outgoing minority whip but he's still a player in this town.He said they like the $60 billion figure for a stimulus package but they think half of it ought to go to spending on workers and other priorities. What's your reaction?
LINDSEY: Well, as the president said in the Rose Garden the other day, we have already spent something approaching $60 billion.Now is the time to heed the private sector of the U.S. economy. The government spending was dealt with particular problems. We have NewYork City, for example, defense spending. But the private sector is suffering as well. And the best way to create jobs is to put some money back into people's hands and into company's hands.
SNOW: Why aren't you cutting corporate income tax rates?
LINDSEY: Well, we certainly looked at that as an option. It probably had a lot of merit. But the president and the rest of us have been spending the last two weeks talking to members of Congress, both Houses, both parties, and what the president has done and what he presented yesterday was, I think, a consensus, one that was designed to get through Congress quickly. That's what we're looking for.
SNOW: Quickly, when do you want this bill passed?
LINDSEY: As soon as possible.
SNOW: A week, two weeks? Give me some sort of...
LINDSEY: Congress has rules about how fast you can pass it.But, yes, I think if we could get it through in two or three weeks, I think it would be great.
SNOW: Are you confident that can happen? We've heard some talk, for instance, Senate Majority Leader Tom Daschle said, of a Thursday meeting with you and Republican congressional leaders, that the White House seemed to be meeting with and caving in to, quote, "extremists."
LINDSEY: Oh, I don't think so. The president's been meeting with members of both parties. Democrats signaled some things they didn't want to have happen, some things they wanted. The package the president presented I think reflects what's been two weeks of ongoing discussions.
SNOW: So you've given them some things deliberately.
LINDSEY: I think, looking at this package, people can say this is a balanced package. It's one that the economy needs and it's one that members of both parties can easily support.
BRIT HUME: Now if the president doesn't get it, is a veto threat out there?
LINDSEY: Oh, I wouldn't want to speculate. I think the president's going to get it. Again, the discussions we've had have been very, very extensive.
Members of both parties, for example, endorse the idea of going for accelerated depreciation, expensing. That's the major corporate cut. A number of Democratic senators, as well as Republican senators, have publicly endorsed the idea of accelerating the rate cuts. Democratic senators wanted tax relief for low- and middle-incomepeople. The president explicitly mentioned that. I think we're talking about a natural consensus, bipartisan package.
HUME: I saw you raise your eyebrows a little bit when you saw that Fox News opinion dynamics poll result showing 71 percent of the people optimistic about the economy. No less a seer than Warren Buffet said this -- well, said after the two weeks after the attacks in a letter to his shareholders at Berkshire Hathaway that he expecteda long and deep recession. Is that what you fear as well?
LINDSEY: No, I don't think that that is in the cards at all. I think the fundamentals of the U.S. economy are there. I think right now what we're seeing is people are a little bit more cautious.They're not spending as much. Businesses are a little bit more cautious. I think, as time goes on, as people realize that the United States is fundamentally healthy that we are going to see return to prosperity.
Furthermore, the government is determined to make sure that Mr.Buffet's forecast does not come true. The Federal Reserve took action. The president's proposing more action. I think that no one in this town wants to see the U.S. economy slip. That, after all,would be a victory for the terrorists, wouldn't it?
HUME: But how long do you think it will take for these measures to finally kick in? I mean, after all, we've been -- the interest rates have been declining all year long with no as-yet-discernible effect. Now there's been a further cut in them that's, I'm sure, fine. But people may not be that excited about it in light of the track record so far. There's going to be more spending out there.All of that is true.
But when are we likely to see some results. When is this going to feedback to the economy and do some growth?
LINDSEY: Well, I think that next year's going to see a return to normal growth, 3-plus percent.
HUME: Really? First quarter, second quarter growth? Are youtalking about a big surge at the end of the year? When?
LINDSEY: There's no one that can predict what week, quarter, minute or whatever it is, that this is going to happen. But I think next year we're going to see a return to normal growth.
HUME: So what surprised you about that poll result?
LINDSEY: I had seen other things on the news, so I'm delighted that the public is optimistic. I think they have reason to be.
SNOW: Now, the other day when the president came out onto the South Lawn of the White House and he made his announcement about tax cuts, within about two minutes -- I was watching the ticker -- the Dow Jones went from negative territory to positive territory instantly.
LINDSEY: Right. Yes.
SNOW: The question is, if he doesn't get his tax cuts, what's going to happen to the market?
LINDSEY: Well, I think the market signaled that they liked very much what the president was proposing. After all, what we're trying to do is put more money into the hands of business so they can employ people, so that they can invest, so they can get the economy going.More money into people's pockets so they can buy goods. You know, this is a good-for-the-economy package. That's why I'm very confident that Congress is going to pass it.
SNOW: But it's important to pose the hypothetical. It may even have some political impact. The idea, if he doesn't get his tax cuts,does that mean that the economy's going to remain sluggish?
LINDSEY: I think that the tax cuts would be very, very important for reviving the economy. Just like I think the interest rate cuts that the Fed has been doing. We've said all year that the economy needs both fiscal policy and monetary policy, and that's what we're trying to give it.
HUME: Now, what about the federal balance sheet? This is likely-- we're likely to run a deficit in the near term and perhaps even the longer term.
First of all, how much of deficit, roughly, in the near term, andhow long is deficit spending likely to persist, in your view?
LINDSEY: Well, as to what we're going to run, I don't think anyone knows, because what we don't know is what the effect of 9/11 is going to be on the economy. We really don't. We're taking some precautions here, and I think that's what the policy is...
HUME: Well, wait a minute. You're all talking about normalgrowth next year. If you don't know the effect of 9/11 is going tobe, how can you predict normal growth next year?
LINDSEY: Oh, I think that -- again, when we've seen this in thepast, it takes a matter of months. After a matter of months, thingsget back to normal.
I would like to talk about the long run, though. There's absolutely no reason to expect that this will have significant impacton long-run budget surpluses. I think we're going to certainly see a budget surplus in '03 and for the rest of the decade. There is no reason for this not to be over in a matter of months.
HUME: Now, is all of this optimism that you're voicing here predicated on no further terrorist incidents in the United States?And if there were a further attack -- and experts have told Congress,one of them at least said there's 100 percent chance that if we counter-attack, there will be further terrorist incidents -- whatwould the effect of that be?
LINDSEY: I think that the United States government, the United States people, American economy are fundamentally strong. We're going to be able to survive this.
And what we want to do is to provide a strong basis in the private sector for people to once again be willing to take risks, spend money, to invest. That's what the president's tax cut is about,and that's what the interest rate cuts are about.
SNOW: Two final questions. Is one of the lessons of 9/11 that we need to decentralize so that our banking isn't so central? Do people need to decentralize their operations so they're not so vulnerable?
LINDSEY: I think that's up to the individual company. I'm not going to advise people on how to run their companies.
I think that, again, what we have is a fundamentally strong economy. And, yes, the terrorists, you know, threw their best punches. This economy is back and functioning. The stock market was up and running four days after the attack. That's quite incredible.The fact that, you know, we have business as normal in most of thiseconomy, I think, is a tribute to the strength of the economy.
SNOW: OK, a second question. We've talked about seizing assets, and we've announced that we've got $6 million of Usama bin Laden's assets. That's a drop in the bucket. How are we going to get more?
LINDSEY: Well, the president, secretary of treasury are working with banks around the country. It is not easy to trace this money.And the best minds, the computer networks, are at work on this. But no one has ever said it's a simple matter.
SNOW: So is he right to say that he'll be able to survive despite our effects to try to shut down his bank accounts, he'll have money?
LINDSEY: You know, that's something for the intelligence people.That's not something for me. But, you know, he probably has cash, and that's what he's thinking of as money. I wouldn't want to interpret what Usama bin Laden has in mind.
I'd be worried about more than money, though, if I were he. I think he's got a lot more to worry about than how much cash he has on hand.
HUME: Meaning what, quickly?
LINDSEY: Oh, I think we saw it on the news.
SNOW: All right, Mr. Lindsey, Lawrence Lindsey, the president's economic adviser, thanks for joining us.
LINDSEY: Thank you.
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