Sunday, November 11, 2001

Sen. Hillary Rodham Clinton charged yesterday that the $1.35 trillion Bush tax cut “undermined our fiscal responsibility and our ability to deal with this new threat of terrorism.”
“If we hadn’t passed the big tax cut last spring we wouldn’t be in the fix we’re in today. But the fact is, we are,” Mrs. Clinton said during an interview on a CNN special, “America’s New War.”
White House spokesman Scott Stanzel reacted this way to the New York Democrat’s assertions: “Almost every leading economist believes the tax cut was the best way to stimulate growth in the slow economy that the president inherited.”
The former first lady made her comments when she was asked about criticisms that have been raised about the economic stimulus plan put forth by Senate Democrats. Republicans say the rival package provides pork-barrel tax breaks and too much spending.
Instead, she attacked the $100 billion stimulus bill passed last month by the Republican-controlled House, which focuses heavily on tax cuts for business.
“Let me start by saying that I thought the plan passed by the House of Representatives was a fiscal disaster that would set our country back for years to come. It was really a giveaway to large corporate interests,” Mrs. Clinton said.
She went on to defend the $66.4 billion Senate Democratic proposal, pushed through the Senate Finance Committee this week, which includes modest tax cuts for businesses, a tax rebate for the poor, and expanded unemployment benefits and insurance coverage for laid-off workers.
Mrs. Clinton then gave her historical perspective as to what led to the current ailing economy and the federal government’s less robust financial picture.
She said: “My view on this is pretty simple. We had eight years of prosperity [during her husband’s administration] because we paid down our debt and got rid of our deficit. We hit a rough spot, and it was turned into a terrible bump because of the attacks of September 11.”
Mrs. Clinton then put the blame squarely on the Bush tax cut, saying it compromised both fiscal responsibility and the government’s ability to combat terrorism.
John Feehery, spokesman for House Speaker J. Dennis Hastert, Illinois Republican, repudiated Mrs. Clinton’s assertions. “The tax cut signed into law by President Bush helped the economy. If it had not passed and become law, the economy would be in much worse shape,” he said in a telephone interview.
Mrs. Clinton “might think people are feeling nostalgic for her husband; they are not,” Mr. Feehery added.
He said the Senate Democratic bill “subsidizes bison meat and watermelons” and supports programs designed to reduce pollution from poultry waste.
“No one seriously thinks those measures would stimulate the economy. [Senate Democratic Leader] Tom Daschle thinks chicken waste is a national priority,” said Mr. Feehery.
In the CNN interview, the former first lady said the Democratic economic stimulus plan, “on balance” is “far preferable” to any Republican alternative.
“I don’t think more tax breaks that are not linked to investment and job growth or turning our back on the unemployment and health needs of hardworking Americans who have lost their jobs because of the attacks is a very sensible proposal,” she said, adding:
“I’m also concerned that we’re back into deficits, which we know from prior experience are job killers, because they dry up private investment capital.”
Mr. Stanzel, the president’s spokesman, countered:
“The president’s plan increases spending for immediate assistance for workers who lost their jobs as a result of the September 11 attacks. But the best way to help them is through tax cuts that will lead to a growing economy and job creation.”

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