Prometheus 6

MR. RUSSERT: Let me show you live from Times Square The National Debt Clock. Our debt is $6.4 trillion. That's $70,000 for every American family. With that in mind, shouldn't Congress vote on lifting the debt ceiling, letting the American people know exactly how much debt we have before they vote for a tax cut?
SEC'Y SNOW: No. No. The two are really different. The debt ceiling is something that we need to do now because it's the product, Tim, of prior decisions, years ago really, on the part of the Congress to put in place various spending programs, various promises to the American people for their retirement and for their health care and prior tax reductions. What we need now, though, and need soon is a major tax relief program to create jobs and growth for the American economy.
MR. RUSSERT: But you just said it, Mr. Secretary, that the debt we have is because of entitlement spending but also prior tax reductions. The largest tax reduction in history in 2001-excuse me-added to that debt. Let me show you the economic record of the first 28 months of the Bush-Cheney administration. And here it is. Dow Jones is down 19 percent. Unemployment rate is up 46 percent. We've gone from a $281 billion surplus to a $246 billion deficit. That's a swing of $527 billion and that's going up, and worst of all, a net loss of 2.1 million jobs.
Now, you used to have a very different view towards deficits, I believe. Let me show you what you said in 1995 and it couldn't be clearer: "The budget deficit puts a hole in the pocket of every American, every day of their lives. It threatens the very foundation of our culture and we must seize and act upon this historic opportunity to solve this, the most pressing issue facing the country." Do you believe the deficit is still the most pressing issue facing the country?
SEC'Y SNOW: No. No. That was 1994 and 1995 when we were in an entirely different set of economic circumstances.
MR. RUSSERT: What was the deficit when you said that?
SEC'Y SNOW: The deficit was around $200 billion and rising as far as…
MR. RUSSERT: It was $164 billion.
SEC'Y SNOW: I said around $200 billion.[p6: a billion here, a billion there … pretty soon, you're talking real money!
MR. RUSSERT: And now…
SEC'Y SNOW: And the projections, Tim-go back and look at what the projections were for the Clinton deficits during that period. They were $175 billion, $178 billion in 1994 rising every year well over $200 billion, going up towards $300 billion during a period-and this is really an important point-when the economy was at full employment. Now, deficits are not all equal. We need to distinguish here. A deficit at a time of full employment and a deficit that's rising over time is troublesome. That's what I was talking about in 1995. Today, we have underemployment. Today, the economy is far short of its potential. If you're going to run a deficit, this is the time to do it because the real deficit we face today-and this is important to make this point-the real deficit we face today is a jobs deficit and a growth deficit.
MR. RUSSERT: Mr. Secretary, when you made those comments, the deficit was $164 billion. The debt was only 4.9 trillion. The deficit today is close to $300 billion, heading to $500 billion, and you know that as well as I do. And, at the same time, you were praising President Clinton for showing political courage in dealing with the budget.
SEC'Y SNOW: In 1995, Tim, the deficit was on a track to rise in absolute dollar terms, and as a percent of GDP. That's the important point, "as a percentage of GDP." And it was high in 1995, as a percent of GDP, and no prospect for coming down. So I, and a number of others in the Congress, in the business sector and in academia, took the view that we had to rein in those deficits.
MR. RUSSERT: And now that they're higher, you've taken a different view.
SEC'Y SNOW: Well, they're lower as a percentage-if you look at this budget, as a percentage of GDP, they decline, and they get down to well under 1 percent. That's a modest deficit.
MR. RUSSERT: But it sounds like a dramatic conversion since you've joined the Bush team.
SEC'Y SNOW: No. No. No.
MR. RUSSERT: Let me show you. This is The Washington Times, hardly a liberal organ: "Until earlier this year, Mr. Snow was on the board of the Committee for a Responsible Federal Budget, a debt- fixated organization hostile to tax cuts and a group that has sharply questioned the merits of Mr. Bush's $1.35 trillion tax-reduction plan."
That was his first tax cut. This is what the same group says about his new tax cut: "The hard choices have not been made. The President's proposed policies would produce higher deficits and increase the national debt; deficits would grow nearly $1 trillion and the debt would rise $2.7 trillion through 2013."
SEC'Y SNOW: And at the end of that period, Tim, the debt and, as a percentage of GDP, and the deficit in 2013, as a percent of GDP, will be far lower than they were in the Clinton years.
MR. RUSSERT: But they are record numbers.
SEC'Y SNOW: We are in a very slow recovery with millions of people looking for work who can't find a job. The real deficit today is a jobs deficit. We need to get our priorities right. The deficit we have is manageable. The real problem the economy faces today is jobs and growth. And that's why the president is so intent on getting his jobs in growth plan.
MR. RUSSERT: When the president proposed his 2001 tax plan, he said it would create jobs. Since the enactment of the first Bush tax cut we have lost 1.7 million jobs. Why?
SEC'Y SNOW: Tim, let me say something to you on that. In July of 2000, I was at my corporate headquarters reviewing the papers in Richmond, the headquarters of CSX, and the numbers came in. I couldn't believe them. You know, CSX is a transportation company. It gives you a bird's-eye view of the whole economy, and the numbers from the barge line and from the ocean carrier and from the railroad and the trucking operations and warehousing operations and logistics operations were terrible. We hit a wall. We had gone over a cliff. I called all the leaders of those businesses and said, "Are these numbers right?" And they said, "Yes, they are, unfortunately." And we could-I could see then that the economy was in trouble. And I told the president in Texas, in Austin, at a summit, president-elect in January of 2001, "Mr. President, you are inheriting a recession." That recession would have been a lot deeper, it would have been a lot harsher, it would have been a lot worse but for those '01 tax reductions that the president was behind.[p6: please note the good secretary said NOTHING "on that"]

MR. RUSSERT: Watching what is going on in Congress is quite striking. This was the headline Friday in The Washington Post: "GOP senators endorse tax hikes. Republicans broke from their no-new-tax orthodoxy to propose increases... All told, committee members approved more than 30 tax increases or other revenue raisers to help fund their tax cuts… Americans working overseas would be hit the hardest… 'This is a big tax increase' for oil and gas workers from Louisiana who work overseas, Sen. John Breaux (D-La.), said." Four hundred thousand Americans who work overseas are going to have their taxes increased; 29 other tax increases. It's like robbing Peter to pay Paul. Why would you raise taxes on working men and women?
SEC'Y SNOW: Well, of course, those are called offsets, as you know. And they are the product of negotiations among the senators, the members and the staff on the Senate Finance Committee. They were not in the original proposal of the president.
MR. RUSSERT: Do you oppose them?
SEC'Y SNOW: These offsets are there to make the package larger to accommodate more of the good tax relief that's contained in the president's bill.
MR. RUSSERT: But when you say offsets, Mr. Secretary, what you're saying is: In order to keep the deficit down, in order to keep the debt down, Republican senators are raising taxes on some to provide a tax cut to others.
SEC'Y SNOW: Well, in order to accommodate a larger set of broad and good tax relief.