12 May 2003

If Bullshit Was an Export, All Our Problems Would Be Over

Regardless of where you fall on the political spectrum, I think it's fair to say that you really have to work hard to top the bullshit quotient of the Clinton administration.

Never let it be said that the Bush administration doesn't work hard.

The following are some edited exchanges from Treasury Secretary John Snow's appearance yesterday on Meet the Press (hosted by Tim Russert). You can find the entire transcript here if you want to convince yourself this isn't a liberal conspiracy. This is the point man for President Bush's economic policies. You have been warned.

RUSSERT: 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?

SNOW: No. No. The two are really different.

RUSSERT: 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.

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?

SNOW: No. No. That was 1994 and 1995 when we were in an entirely different set of economic circumstances.

RUSSERT: What was the deficit when you said that?

SNOW: The deficit was around $200 billion and rising as far as...

RUSSERT: It was $164 billion.

SNOW: I said around $200 billion.

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 ... it sounds like a dramatic conversion since you've joined the Bush team.

SNOW: No. No. No.

(chas interjects: is this starting to sound like a Python sketch yet or what?)

RUSSERT: 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."ù 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."ù

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.

RUSSERT: But they are record numbers.

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.

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?

SNOW: 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.

RUSSERT: (giving up) Let me turn to the current tax plan. This is how Paul Krugman of The New York Times assessed the House bill. He says: "In fact, the extent to which the House bill favors the rich is breathtaking: the typical family would get a tax break of only $217 next year, but families with incomes above $1 million would get an average of $93,500 each. The [Center on Budget and Policy Priorities] estimates that over the next decade, 27 percent of the tax cut -- about the share that goes to the bottom 90 percent of the population -- would go to these very high-income families, who compromise a mere 0.13 percent of the population."

SNOW: I think the larger point and the more important point is everybody gains when we have growth. Everybody gains when the economy is stronger. Everybody gains when we have a more bountiful economic performance. And that's what the president's jobs plan is all about. You know, a Democratic president advancing tax proposals some 40 years ago said that a rising tide raises all the votes. We need to raise all the votes in this economy.

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."ù 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?

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.

RUSSERT: Do you oppose them?

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.

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.

SNOW: Well, in order to accommodate a larger set of broad and good tax relief.

RUSSERT: Do you support those?

SNOW: Well, I am now in the process of reviewing them. I'm not sure what is contained in all of them. They were not our proposals ... but wherever we come out, I think we're going to have major tax relief for the American taxpayers, and tax relief that'll create jobs. And that's the real point of this.

RUSSERT: But the previous tax cut, as pointed out, there's been a loss of 1.7 million jobs since it was passed. How do you know for certain that another tax cut will create jobs?

SNOW: Well, it just stands to reason that tax reductions of the sort that are being proposed by the president will create jobs.

RUSSERT: But you're also going to increase the deficit. It is now approaching 3 percent of GDP. It was only 2.2, by the way, in 1995. It is on the increase, Mr. Secretary. Let me bring you back...

SNOW: Why do we worry about deficits? We worry about deficits because of concerns that the deficit, the government sector, will push out private capital. That's not happening today. We worry about deficits because deficits drive up interest rates. You know, Tim, we have the lowest interest rates in 40 years. So I think those concerns about the deficit, while we always have to have them in mind, are misplaced today in terms of this particular tax plan.

RUSSERT: Well, in 1995, you wrote an op-ed page in The Richmond Times saying the exact opposite, that a big deficit would really create a dramatically negatively effect upon the economy.

SNOW: We had a fundamentally different economy in 1995 than we have today.

RUSSERT: Let me bring you back to a speech you gave at the Commonwealth North in Alaska on July 21 of 2001 because it's very strong language, and I'll give you a chance to see if you still agree with your own comments. Let's watch:
SNOW: The U.S. economy is very weak. In fact, I would say it's the weakest I've seen it in 20 years. The economy we're looking at is pretty bleak.
(End videotape)

RUSSERT: Do you agree with that?

SNOW: Oh, yeah, it was bleak. And the '01 tax plans that we talked about helped bring us out of that and gave us the shallowest and shortest recession in modern times.

RUSSERT: When you made those comments, Mr. Secretary, "the weakest economy in 20 years,"ù let me show you what the economic numbers were compared to now. The Dow was at 10,000; it's now 8,600. Unemployment was 4.6; it's now 6. There were 132 million people working; there are now 130, a net loss of 1.7 million. The economy is much weaker now than it was when you said it was the weakest in 20 years.

SNOW: Tim, you know too much about economics to believe that statement.

RUSSERT: After President Reagan had his large tax cut, there were three subsequent tax increases because Republicans and Democrats in the Congress became concerned about deficits. If, in fact, the deficits keep building, 450, 500, 600, and the debt keeps going up, would you consider going back and raising taxes to deal with the deficit?

SNOW: Well, I'm not going to deal with a hypothetical because I don't think that's going to happen. I really firmly believe that as we get the economy growing, and this tax plan will, government receipts will increase. As people have more jobs, as businesses are more profitable, the tax receipts for the federal government will go up.

RUSSERT: The tax receipts now are the lowest percent of GDP since 1959 after the first Bush tax cut. What makes you think that's going to change?

SNOW: Well, what's going to make it change is companies becoming more profitable, the stock market becoming more buoyant, more jobs. And as people have additional work, of course, they pay more taxes.

RUSSERT: And if you're wrong?

SNOW: Well, I'm not going to be wrong on this. We know that these tax proposals are going to create jobs and growth.

(Chas again) Okay, people ... you tell me. This is the guy in charge of our money, President's Bush's most trusted economic advisor. A guy who flip-flopped 180 degrees on the importance of the deficit the moment he got offered a government job. Do you trust him? Do you trust Bush's economic policies now that they've been explained to you?

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