Caught in the Crossfire: Going, Going Gone - $5 Trillion Dollar Surplus
[Aired June 25, 2002]
Budget Deficit Stirs Partisan Feelings:
In the "Crossfire" tonight, New York Democratic Congressman Charlie Rangel
and California Republican Congressman David Dreier.
CARVILLE: (UNINTELLIGIBLE) in January of 2001 were projected to have a
surplus of $5.6 trillion. Now we're busted. What happened?
REP. DAVID DREIER (R), CALIFORNIA: Well first let me say happy anniversary,
CARVILLE: Thank you.
CARVILLE: I've got -- Bob's been here the whole 20, I believe, eh?
DREIER: I've got -- I've got two people from my office here who weren't born
when this show started.
NOVAK: Mr. Chairman, go on. This isn't the Rules Committee.
REP. CHARLES RANGEL (D), NEW YORK: When you don't have an answer, you do
DREIER: I'll tell you what happened. Among other things, September 11, a
downturn, which began before this administration came into power.
CARVILLE: Well, they had one quarter of negative growth.
DREIER: Well let me -- let me tell you, we are right now in a very, very serious -- facing a very serious crisis and it has to do with our national security, and we've had to expend more in resources on that. And I will tell you, we have put into place a tax bill, James, which will go a long way towards improving our economy and we have a way to go, but we need to do even more. That's why efforts to make the tax bill permanent, the tax cuts permanent, I think are very important.
DREIER: Unfortunately the United States Senate is not for that.
CARVILLE: ... cost $30 billion a year. You know how many -- how many $30
billions it take to get to $5.6 trillion?
DREIER: Well, you know what? The economic ...
DREIER: The -- I'll tell you, I mean obviously it'll take a lot.
UNIDENTIFIED MALE: Right.
DREIER: But the economic slowdown that we've seen in the wake of September
11 obviously played a role in diminishing the flow of revenues of the
Federal Treasury, and if you do what Novak and I want to do, and that is cut
the top rate on capital gains, put into place the kinds of incentives for
economic growth, we'd be able to deal with this, clearly.
NOVAK: Congressman Rangel, I want to -- I want to talk a little bit about this debt ceiling, it's an -- it's an issue that makes most minds boggle. But I want you to take a look at what the speaker of the House said to -- on the "NOVAK, HUNT, & SHIELDS" show last weekend. Let's listen ...
(BEGIN VIDEO CLIP)
REP. DENNIS HASTERT, SPEAKER OF THE HOUSE: Some would like to make politics out of -- out of the debt ceiling. We will not let the federal government default on debt. It will not happen.
(END VIDEO CLIP)
NOVAK: Now he -- the some he's talking about are you and your colleagues.
Why in the world will you not vote for a absolutely a mechanical raising of
the debt limit? When you go into debt, you have to raise the limit. You used
to do it the -- under Democratic presidents, isn't that the worst kind of
demagoguery to say because we have a Republican president we won't vote to raise the debt ceiling?
RANGEL: That's (UNINTELLIGIBLE). He didn't want an answer. The one reason that I won't vote for the debt ceiling is because the Republicans won't come
out with a bill.
DREIER: We got it.
RANGEL: Please. The speaker --the speaker said time and time again that we cannot have a vote on this because we don't have the votes.
DREIER: That's not true.
RANGEL: He says that we need Democrats to do it, and so what they intend to
do instead of bringing out a clean bill so that we can vote up or down, what
they intend to do is to put it into a spending bill.
DREIER: Oh, no.
RANGEL: Now let me tell you this. The reason that they don't want to have an
up and down vote is because we Democrats say hey, if you go to increase borrowing, show us the numbers, but they don't want to show us the numbers.
RANGEL: All they have to do is put a bill on the floor.
DREIER: You all want to increase taxes -- you want to increase taxes and you
want us to increase spending in exchange for increasing the debt ceiling ...
RANGEL: All we want is a bill to raise the debt ceiling. We have to borrow.
NOVAK: Just a minute, James. Mr. Rangel, I'm so disappointed in you, because
you know how much I admire you.
RANGEL: I know you do.
NOVAK: And for you to get into this demagoguery just disappoints ...
RANGEL: Asking for a clean vote?
RANGEL: ... a clean vote?
NOVAK: If you'd -- if they bring up a clean vote ...
NOVAK: ... the Democrats will vote no. You're saying ...
RANGEL: We will not.
NOVAK: ... we're against the tax cut, you'll vote no. It'll go down and
it'll be a humiliation.
RANGEL: Wait, wait, wait ...
RANGEL: Let me answer ...
DREIER: We're going to have a clean vote in the supplemental appropriations
RANGEL: Let me answer this. If you brought up a clean bill and the Democrats
voted against it to close down the government, as some of my Republican
friends have done, it would mean a political defeat for us. The problem is we're asking, show us the numbers before you borrow. If you're part of a family, you're part of a company ...
RANGEL: Hold it, hold it, hold it -- and you say we have to borrow money,
you at least have to show where you're spending it.
NOVAK: You're not pledging to vote for it.
RANGEL: If they show us the numbers, we will support the United States
DREIER: And we will ...
DREIER: We will do just that.
RANGEL: We can't afford to have Social Security collapse no matter how badly
(CROSSTALK) DREIER: And that ain't going to happen. Charlie, don't let
anyone in this audience believe that Social Security is going to collapse.
You know full well ...
RANGEL: I didn't say -- I said we would not allow it to happen.
DREIER: And you know what, it's not going to -- it's not going to happen,
RANGEL: I know it!
DREIER: I know. You say that ...
RANGEL: You guys haven't got the guts to touch Social Security.
RANGEL: You want to do it, but you're not going to do it.
CARVILLE: Excuse me here, but let me talk for the shoe clerks in this poker
game. You have said ...
CARVILLE: ... you have said something that I find stunning, that they won't
just put a bill up to tell what you the numbers are?
RANGEL: No ...
CARVILLE: Are they that -- are they that ashamed of the fact that they've run this country in a ditch, that they've taken $5.6 trillion ...
CARVILLE: ... and turned it over ...
DREIER: You know the amazing thing ...
DREIER: ... you know what the amazing thing is?
DREIER: ... you know ...
RANGEL: ... willing to bring out a bill, that he will bring it out in a
RANGEL: And so what you do mean ...
CARVILLE: Oh, I can't believe this ...
NOVAK: Wait a minute ...
CARVILLE: It's worse than I thought.
NOVAK: Can the chairman of the House Rules Committee answer you, please?
DREIER: James, let me tell you that you are just totally off base here. What
we have done ...
DREIER: ... what we have done is, we have said that we want to, in the
supplemental appropriations bill, which we're trying to get through so that
we can have the resources necessary for our men and women -- men and women
in uniform, about whom we were speaking earlier, and homeland security. And
we want to get that done.
UNIDENTIFIED MALE: Right.
DREIER: We also said that we had language in there that would allow us to consider increasing the debt ceiling. When the Democrats were in charge, they had something called the Gephardt rule. You know what that rule said?
It said they automatically increased the debt ceiling without any kind of
accountability or vote at all, and so they have Charlie now ...
DREIER: Yes, they have Charlie now sitting here saying, we got to have a
clean vote ...
DREIER: We're going to have a clean vote, Charlie.
RANGEL: ... Secretary Treasury Rubin for doing what they're doing now.
DREIER: Baloney. I never wanted to impeach Bob Rubin. You know that...
(CROSSTALK) DREIER: Come on. Come on.
RANGEL: He said that yes, we'll have a debt ceiling, but we're not going to
have it straight out. We'll have ...
DREIER: Yes, we are going to have it straight out ...
RANGEL: He said in the ...
DREIER: ... in the supplemental appropriations bill.
RANGEL: ... in the supplemental appropriation ...
DREIER: And that is very clear.
RANGEL: The supplemental appropriation is for our men and women in the armed
forces, for national ...
RANGEL: ... defense. All of these things, how can you vote against it when
you wrap in it in the American flag? I say put the bill out there separately, let's vote up or down.
DREIER: Paying Social Security is part of being wrapped in the ...
NOVAK: And what ...
DREIER: ... American flag, Charlie.
NOVAK: ... and what you do -- what you want to do, and what the Democratic Senate does, as you put the debt limit in this appropriations bill, you'll load it up with all your pork barrel spending, all your extra spending
RANGEL: We don't want it ...
RANGEL: ... spending.
RANGEL: We want a clean bill!
DREIER: Dick Gephardt just did a letter to the speaker, which he ...
You know what you're saying, Bob?
DREIER: ... basically said that, which he advocated ...
DREIER: ... what you were just saying.
RANGEL: ... asking for a clean bill is political, that's what you're saying.
CARVILLE: Novak, Congressman Rangel and Mr. Carville for the same ...
DREIER: They're going to increase spending and increase taxes in exchange
for what they're calling a...
CARVILLE: Why not do it ...
DREIER: ... clean vote.
CARVILLE: Why not do it -- why not just get the clean vote?
CARVILLE: Why do you have to be devious about it?
CARVILLE: Why don't you just put it ...
DREIER: You know what they want?
CARVILLE: ... out there?
DREIER: ... you know what they want? I'll tell you, James ...
CARVILLE: Just put the thing out there!
DREIER: ... there's ...
DREIER: ... nothing devious about our trying to control government spending
and also trying to prevent the Democrats from a massive tax increase on working Americans.
RANGEL: Why don't you give us a clean bill? DREIER: That's what they want --
that's what they want for this clean vote.
UNIDENTIFIED MALE: All right ...
DREIER: Dick Gephardt ...
DREIER: ... Dick Gephardt just said that in a letter to the speaker today.
RANGEL: It's a great answer to a question I didn't ask. Why don't you give us a chance ...
DREIER: After 20 years, you want to be the host here? When did you start asking questions?
NOVAK: I guess what happened here ...
NOVAK: ... Congressman Rangel, what has happened is that we, thanks to the
economy, thanks to the Republican Congress, we ended up with a surplus for
several years during the Clinton administration and ...
RANGEL: President Clinton ...
NOVAK: During the Clinton administration ...
DREIER: When he embraced Republican themes.
NOVAK: Republican Congress ...
NOVAK: So what -- so what has happened, and this is -- I think it was a bipartisan problem, you people started spending like crazy, and the reason we have a deficit now is there was so much spending during the fat years of
surplus that when you have some lean years, you can't handle it. Isn't that
RANGEL: Could you pass over the $1.3 trillion tax cut for the rich? I mean that didn't happen?
DREIER: That has ...
RANGEL: That just ...
DREIER: ... mitigated the economic ...
RANGEL: ... that just disappeared.
DREIER: ... downturn and you know that, Charlie.
DREIER: You know that that has mitigated the economic downturn ...
DREIER: ... we've got right now.
RANGEL: You're talking about ...
DREIER: That's one of the most important things that we have to deal with, the challenges that we've got economically.
RANGEL: The recession, the war against the evil empire. You talk about all of these things, but the tax cut, hey ...
DREIER: So Charlie ...
RANGEL: ... when did it happen?
DREIER: You know what ...
DREIER: So Charlie hasn't changed in 20 years -- in the 20 years of CROSSFIRE, he's been for more taxes and more spending and he's continued...
RANGEL: Why don't you answer the subject, you had a tax cut ...
DREIER: It's very (UNITELLIGIBLE) Charlie. Happy anniversary as a tax
RANGEL: You lost a $5 trillion surplus ...
CARVILLE: May I ask you a question?
RANGEL: You had $1.4 trillion tax bill
and you don't even say it in the same breath.
NOVAK: Do you think -- do you really believe, I mean you know a lot about
economics, do you really believe that if we had not had this tax cut that
the economy would not be much worse than it is today?
RANGEL: I would think that you have fulfilled your promise to protect Social
Security, to protect Medicare. You said you never would intrude upon it and
we would ...
DREIER: We haven't.
RANGEL: ... we would still have our surplus.
DREIER: Oh come -- that is -- that is baloney.
RANGEL: And now you're trying to make it ...
RANGEL: ... now you're trying to make the tax cuts permanent at a time that
you're asking for an increase ...
DREIER: We're trying to make them permanent so that we can keep the economy growing and get it back on track, letting the American people keep more of their hard earned dollars ...
DREIER: ... you know that very well.
RANGEL: It was on track before you guys got the majority, it was on track.
DREIER: That's not true.
CARVILLE: Did you cut the capital gain sector rate?
DREIER: We have cut the capital gain ...
CARVILLE: Boy, that's really helped the stock market ...
DREIER: And you know what ...
CARVILLE: ... look at America and say, we cut the capital gain tax rate and
the stock market has gone up.
DREIER: James, we haven't cut it enough.
CARVILLE: Look at ...
DREIER: We ...
CARVILLE: Look at ...
DREIER: We haven't cut it enough, but we cut to where it was. We just
followed John F. Kennedy's model by bringing about a cut. We need to cut it
down to 15 percent ...
DREIER: We need to ...
CARVILLE: What happened since you cut it?
DREIER: Since we cut it we've seen economic growth, but we have not cut ...
CARVILLE: What happened to the stock market?
DREIER: We need to cut ...
CARVILLE: What happened to Nasdaq? You think -- I'm sorry, I must be Lou
DREIER: It went up ...
CARVILLE: ... it's gone -- it's gone right up.
DREIER: James, it went down.
CARVILLE: Charlie, the stock market has gone up. This is what they're saying. They didn't cause the debt and the stock market is going up.
DREIER: We want to put the capital gains tax to zero.
NOVAK: Time out.
DREIER: We need to do more ...
RANGEL: That American firms should go abroad ...
NOVAK: All right.
RANGEL: ... to avoid ...
NOVAK: And we'll talk about that, Charlie ...
RANGEL: Oh, yes.
NOVAK: In just a minute, we'll ask our guests about another hot money topic.
Should some of America's largest companies be permitted to move their
headquarters off shore to say, Bermuda, to avoid paying U.S. taxes?
CARVILLE: Welcome back to our 20th anniversary edition of CROSSFIRE. Coming
up, some favorite fights in the past two decades. We got a pretty good one
going tonight. But right now Washington is running out of money and one
reason why is because companies are moving to avoid paying their fair share
of taxes. Congress is considering ways to stop them from hiding in paradise.
New York Democratic Congressman Charlie Rangel and California Republican
Congressman David Dreier are in the "Crossfire."
DREIER: Nice to be here.
NOVAK: Congressman Rangel, I'd like to -- I'd like to try to explain to you
what is happening with these companies who have reversed their called an
inversion - they had their headquarters in Bermuda and the affiliate here,
why they have to do that and I'm going to give you a quote from an economist. The economist is the House Majority Leader, Dick Armey, one of the best economists I know it, and he - we'll put it up on the screen.
He says, "Corporate inversions are not the result of anti- American corporate sentiment, but tax laws that place U.S.-based multinational companies at a disadvantage with their foreign competitor". And let's look at the corporate tax rate -- put that up on the screen. In the European
countries, U.S. 40 percent; Germany, 38; France, 34; Britain, 30. Why don't
-- instead of trying to penalize these companies, why don't you just lower
the -- significantly lower the corporate tax rate?
RANGEL: You know what you're saying? You're saying during a time of war, if you don't like the tax structure, flee the country and avoid paying your taxes. And the ...
RANGEL: ... and the majority -- listen, the majority leader says the tax code is unfair. Well, most people, especially in your tax bracket, believe
it's unfair, but I think -- I think that since God has blessed you with so much talent and income that you shouldn't flee to Bermuda to avoid your responsibility. If you don't like - if you don't like the tax code, change
the Congress. Get people there ...
RANGEL: ... change the law, but don't run away from your ...
DREIER: If we change the Congress, I doubt ...
RANGEL: ... responsibility.
DREIER: ... I doubt if we change the Congress that you cut the corporate
RANGEL: ... into Bermuda.
CARVILLE: These poor corporations, they don't have any lobbyists here. They
got no influence. They give no campaign contributions. They are just pitiful
little people like these people that work at Wal-Mart, that are locked up in
the stores, or do they have lobbyists, Charlie?
DREIER: A lot of the Wal-Mart people are complaining about the tax code as
it is, too.
RANGEL: You can complain. That's healthy ...
RANGEL: ... to flee the country is unpatriotic.
CARVILLE: I got an idea ...
UNIDENTIFIED MALE: They are fleeing the country.
CARVILLE: Why don't we just get corporations that flee the country, to get
the Navy of Bermuda to protect them against an attack. Why don't they get
the army of Bermuda to give them some protection against attacks ...
CARVILLE: ... if they don't want to pay taxes in this country ...
CARVILLE: ... if they want to go to Bermuda, the hell with them. Let them go
and don't come here and ask us to protect them.
DREIER: And you can lead the brigade, James.
DREIER: Let me just say that I think that this is a challenge with which
we're dealing. The committee on which Charlie sits as a ranking minority
member is -- they had a hearing, I think, today on this, didn't you?
RANGEL: Yes, the subcommittee did.
DREIER: Yes, the subcommittee did have a hearing on it and this is an issue
that is going to be addressed. But I think Bob is right on target when he
talks about the fact that people obviously go to where the rates are lower.
And you know what, if we could lower the rate here I'm convinced that in
response to what Charlie just said ...
RANGEL: I don't believe ...
DREIER: ... that we'd able to increase ...
RANGEL: If you don't like ...
RANGEL: ... if you don't like ...
RANGEL: ... the law and I'm not saying you should like the law ...
RANGEL: ... I'm not saying you should like it, but what you're encouraging
DREIER: We're not encouraging ...
RANGEL: ... who's making profits, if you don't like the United States tax
NOVAK: Let me ask you a question.
RANGEL: ... flee the country during a time of war. That's disgraceful.
DREIER: And we're responsibly holding hearings to try and deal with this.
NOVAK: Let me ask -- let me ask you a question. Would you rather have a situation, instead of having these inversions, would you rather have a situation where they sell the company or close the company?
RANGEL: You know what I would really like? I would like for them to lobby the Congress, to have hearings, to have votes on these things and decide what's in the best interests of the United States of America. But the
RANGEL: ... they don't believe in having hearings.
DREIER: Charlie ...
RANGEL: ... they believe in ...
DREIER: You just admitted that there was a subcommittee hearing today.
What are you talking about, Charlie? We had a hearing ...
RANGEL: That's the subcommittee ...
RANGEL: We don't ...
DREIER: The subcommittee hold a hearing today ...
NOVAK: Time is up. Thank you very much.
DREIER: Happy anniversary, fellows.
NOVAK: Honorable Charles Rangel, Honorable ...
RANGEL: Happy anniversary.
NOVAK: Thank you very much.
RANGEL: Happy anniversary.