Sen. Charles Grassley, R-Iowa

This is a partial transcript from Your World with Neil Cavuto, December 18, 2002, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.

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NEIL CAVUTO, HOST: Count Republican Senator Charles Grassley un-obsessed with this whole Trent Lott affair. He's much more focused on what his colleagues do with things like tax cuts and stimulus for the economy. With us now the incoming Finance Committee chairman, Charles Grassley.

Senator, good to have you.

SEN. CHARLES GRASSLEY, R-IOWA: Neil, I'm glad to be with you.

CAVUTO: I know you can't talk too much about the Lott affair, but does it concern you that it might stymie efforts to do kind of things want you to do if he is in there imperiled, or a new guy comes in and he is delayed?

GRASSLEY: I don't know how you know until you get there. And I think the best thing to do is for me to think in terms of moving ahead with the president's agenda. Because the work of the committee where is you develop the bipartisanship you have to do. And don't forget about 60 percent of the agenda, the next six months, maybe 70 percent of that agenda is going to come out of the Senate Finance Committee. And all of it is directly related to taxes and to people's jobs.

CAVUTO: You still want to build on the tax cuts that the president has, right? You not only make the 1.3 trillion permanent, but what else?

GRASSLEY: I think stimulus, the things that encourage investment...

CAVUTO: Are you for a payroll tax holiday?

GRASSLEY: I don't think it is the best. I think the best would be to make marginal tax rates permanent, speed up...

CAVUTO: How about speeding them up earlier?

GRASSLEY: That included, child tax...

CAVUTO: For all the marginal rates?

GRASSLEY: If it could be, but at least for some middle income people. Make the child tax credit, thousand dollars right now, permanent, make the marriage penalty phase-out right now, permanent. And, those who would help middle income families, those families will spend money, but that is on the consumer side. I think we've got to have plenty incentive for investment. We have had 28 months of downturn in employment, in manufacturing, that is a real serious thing. When we get that part of the economy turned around, we are going to have a strong revitalization. So I'm suggesting things like accelerated depreciation, speed up of expensing, and maybe the ending of double taxation of corporate dividends.

CAVUTO: Real quickly, there is some concern that some of the more moderate members in your party, sir, Chafee in Rhode Island, Snowe in Maine, would be opposed to aggressive tax cuts. And that in order to keep everyone together, especially in light of this whole Lott affair and the whole Senate staying together, Republican side, you will go slow as a result. Will you?

GRASSLEY: I would suggest to you that the problems we have with the budgets that they can legitimately be concerned about are directly related to war, a downturn in the economy because of September 11, and lastly, because Congress has been increasing spending 8 percent each of the last five years. That is not sustainable. We've got to be down on that. So the budget problems relate to too much spending, not too much taxes or too few taxes.

CAVUTO: Senator, always good seeing you. Thank you very much, Senator Grassley.

GRASSLEY: Glad to be with you.

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