Transcript: Charles Grassley on Fox News Sunday
Sunday, April 27, 2003
Following is a transcribed excerpt from Fox News Sunday, April 27, 2003.
SNOW: As hostilities draw toward a close in Iraq, Americans are turning to domestic concerns, such as the economy. Our latest Fox News-Opinion Dynamics poll shows a sizable majority of Americans want Uncle Sam to spend more time creating jobs than on the war on terror or homeland security.
How much tax relief will the Republican Congress deliver? Joining us from Iowa, the chairman of the Senate Finance Committee, Charles Grassley. Also here, Brit Hume, Washington managing editor of Fox News.
Brit?
HUME: Senator, good morning. You are now supporting, and have pushed through the Senate, room in the budget for a $350 billion tax cut. That's just less than half of what the president originally requested.
Are you supporting a tax cut at that level because that's all you think you can pass, or are you supporting a tax cut at that level because that's all that you think should pass?
GRASSLEY: I support the full president's program if we could get it passed. We have about 48 votes for it, and obviously you don't pass anything in the United States Senate with 48 votes. So getting two more votes, it was necessary to compromise at $350 billion, unless we would go above that figure with dollar-for-dollar offsets.
And there will be some attempt to do that, and I think a little bit above, hopefully quite a bit above, but I can't tell you what that would be right now.
HUME: Your sense, then, is that if there can be offsets in an amount up to, say, $200 billion, that's quite a chunk of money, you could get a tax cut of $550 billion, the amount the president now says he would accept?
GRASSLEY: Yes, and that would include the good income tax relief for working men and women, and it would include also the dividend exclusion, probably at the 50 percent rate.
Both would create -- well, the income tax provision would create 1.4 million new jobs, and the dividend would create about 400,000 jobs.
HUME: Now, it is said, Senator, when you entered into this agreement that dropped the Senate version of the tax cut down to $350 billion, you surprised a number of people unpleasantly. House members said they were caught offguard.
It is said that Vice President Cheney, who was coming up there to cast a tie-breaking vote on this proposition, that he didn't know that's what he was going to end up being voting for, only $350 billion, and so on.
Is that true?
GRASSLEY: At 10 o'clock Friday morning, and that was seven hours before we voted, and when the vice president came up there, I called the White House, their congressional liaison people, and told them. They informed Andy Card and other people. So I would think the vice president would have been fully informed.
And by the way, I count on the White House knowing what's going on on the Hill, and if they didn't like the compromise that I agreed to, obviously they wouldn't have had to have Vice President Cheney cast the tie-breaking vote, and it would have lost 50 to 50.
SNOW: Senator, let me go back for a moment. We were talking about offsets, that's Washington talk for cutting into future, or at least anticipated, spending increases over the next 10 years.
Give us an idea of where you think there may be the possibility of making cuts. And let's begin, possibly, with the war in Iraq. Has that been overbudgeted?
GRASSLEY: Well, it may have been overbudgeted, but don't forget we're still going to be spending $2 billion a month there to maintain the peace and to bring civil order and help establish a government and strengthen their economy.
So I think, I would like to think in terms of where can we get additional income? And I would say closing tax loopholes, corporate sheltering, the off-shore -- going off-shore to avoid paying income tax for corporations, things of that nature.
SNOW: So you're talking about basically raising some taxes so you can lower other taxes?
GRASSLEY: Let's put it this way, there's a lot of people in the corporate world that are doing a lot of strange and very creative things to avoid taxation that wasn't intended by the tax code, and we would intend to close some of those loopholes.
HUME: Are you going to get to $200 billion in savings that way, Senator, or are you going to have to get into spending cuts?
GRASSLEY: It's entirely impossible to get much beyond $50 billion of what I just described to you, and I do not have a laundry list of things that would reduce expenditures.
And I think that some of those reductions in expenditures would have to be come outside of my committee's jurisdiction, because in the areas of Social Security, Medicaid and Medicare, we're not going to be making any cuts in those areas.
HUME: That leaves only a small portion of the budget, then, doesn't it, Senator?
GRASSLEY: It really does, and that's why I think it's very unrealistic and I feel a little bit intellectually dishonest in talking about going very far. And that's why I think I can say flat out, it's going to be difficult to get to 550. It might not be difficult to get to $425 or $450 billion, but, remember, it's got to be dollar for dollar.
SNOW: Let me ask you. The president has said repeatedly that if tax cuts are good for the economy, a larger tax cut is better than smaller tax cuts. Do you agree?
GRASSLEY: I do agree. But, once again, Tony, it takes 50 votes to get anything through the United States Senate.
SNOW: Do you believe that with these offsets that you've laid out that you will in fact get the votes from Olympia Snowe or Susan Collins or Lincoln Chafee or others on your side of the aisle who are skeptical about it? Or do you think, even if you get the offsets, they're going to stick with that $350 billion figure? Have they given you any characterization?
GRASSLEY: No, I believe that the letter that Senator Voinovich, Senator Snowe signed very early, with Breaux and with Baucus, would indicate that they would vote for dollar-for-dollar offsets above $350. But they would have to be intellectually honest offsets and not some sort of blue smoke.
SNOW: But, Senator, doesn't every budget involve large measures of blue smoke, simply because nobody has the foresight to be able to predict what's going to happen a year and two down the road?
GRASSLEY: Well, but then there's -- it seems to me there's intellectually honest blue smoke, where you're taking the words of the economists of what might happen as best they can predict, as opposed to a budget deception. And I'm talking about the former and not the latter.
SNOW: Do you think the president therefore is making a political mistake, in your judgment, in pushing for $550 billion, which I believe you were telling us today is simply politically impossible in the Senate?
GRASSLEY: I think the president is elected to show leadership, and I believe that the economic anxiety of the economy that the people have demand a very mammoth tax reduction, to leave money in the people's pockets so they can spend it rather than our spending it.
I think it brings more budget discipline as well, that the president is doing the right thing.
But, once again, we've got a divided government, and we have to operate within the realities of a Senate that is divided 51-49.
HUME: So your guess would be, the outer limit, just practically speaking, that you can see, is $425 billion?
GRASSLEY: The answer is, yes, based upon where I know closing tax loopholes and some budget expenditures can take us. But who knows?
Now, don't forget, there's one other alternative here, and that is that maybe President Bush, with his leadership, will be able to convince Voinovich and Snowe and other people, even hopefully some Democrats, that the economy can really be helped by a much more mammoth tax cut. And it may be much easier and with the president convincing them to go beyond 350, we might really be able to do something really big and good.
SNOW: During the last tax fight, Democrats were openly courting Lincoln Chafee, asking him to switch parties. Are you concerned that he is going to switch parties, or do you think he's safely in the Republican fold?
GRASSLEY: I have never heard anything from Lincoln Chafee, last year, this year or ever, about his changing parties. I know it's been reported, but I think he feels very comfortable where he is. He votes his conscience, and a person that's comfortable voting his conscience is a person that is very solid in his beliefs, and that's Lincoln Chafee.
SNOW: All right. Senator Charles Grassley, thank you for joining us today.
GRASSLEY: Thank you.
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