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    White House Deputy Press Secretary Barry J. Toiv

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  • GOP Reps. Thune, Portman and McIntosh and Democratic Reps. Frost and Cardin discussed taxes

  • White House Press Briefing Room

  • Tuesday, August 31, 1999

    When Congress returns from its recess Sept. 6, the $792-billion tax plan will be the prime focus on its agenda. President Clinton and congressional Republicans will take their seats at the negotiating table in an attempt to stave off Clinton's threatened veto.

    Barry J. Toiv has served President Clinton as deputy White House press secretary since July 1996. He answered questions about the president and the GOP tax plan on Tuesday. The transcript follows: Good afternoon, Mr. Toiv, and welcome. Can you tell us a little bit about the negotiations over the tax cut that will be starting after Congress returns from recess next week? Are meetings scheduled already, and do you get the sense that compromise is possible?

    Barry Toiv: The president has already made very clear that he thinks we ought to do first things first. That means that we ought to be focused first on how we address the long-term challenges facing Medicare and Social Security, that we pay down the debt, determine what resources we need to address priorities like defense and education, and then provide for a tax cut geared primarily toward middle-income taxpayers. Unfortunately, the Republican Congress has passed a massive tax cut of nearly $1 trillion that would prevent us from doing any of those things.

    The president will not under any circumstances allow such a tax cut to become law. What he's hoping is that the Congress will come back and be serious about adopting a budget framework that does first things first and then allows for a tax cut in the range of $250 to $300 billion. But we have not heard from them yet. Actually, they apparently spent most of their recess in what they must know is a futile effort to convince the American people that their huge tax cut makes sense. My guess is that the more they talked about it, the less popular it became.

    College Park, Md.: Hello Mr. Toiv,

    The president seems especially keen on so-called targeted tax cuts aimed at the middle class. The trouble is, these tax cuts aren't for the benefit of the whole middle class – just those who have children or elderly relatives or some other condition. The GOP's tax cut plans are appealing because everyone would pay less tax.

    Doesn't the White House realize that announcing a tax cut, and then not giving it to everyone, creates resentment?

    Barry Toiv: That's an interesting question that appears to be based on information provided by the Republican leadership rather than the administration. Because the administration's proposed tax cut is geared toward retirement savings. The largest part of the president's tax cut is the USA accounts, which provide federal assistance for individuals who put money aside for their retirement. There are also smaller tax-cut proposals relating to child care, long-term care, the environment and other areas. But the USA accounts are a $250 billion proposal over 10 years, and they make up most of the administration's tax-cut proposal.

    Chicago, Ill.: What if President Clinton and Republicans in Congress don't reach a compromise? Are we headed for another government shutdown?

    Barry Toiv: We certainly hope not, and we don't think there's any need for that kind of confrontation. Of course, what would cause a government shutdown would be the inability of the Congress to enact acceptable appropriations bills for the government for the fiscal year that begins on Oct. 1. Unfortunately, a large number of the bills that have passed the House and/or the Senate are completely inadequate in terms of their investment in key areas, or contain unacceptable riders. This reflects the cynical strategy that House Minority Whip Tom DeLay [R-Tex.] has already told reporters about. And it would leave areas like education, the environment and health research desperately short of the resources that are needed.

    The president submitted a budget that meets the needs of the American people without breaking through the spending caps for fiscal year 2000, and the Congress ought to be working to do the same. What is the main difference between this standoff and the one that shut down the government a few years ago?

    Barry Toiv: There are some unfortunate similarities. One is the insistence by the Republicans on a massive tax cut that makes it impossible to accomplish other priorities and meet other challenges. Another is the Medicare issue, although in this case, it's about extending the life of the trust fund and providing a prescription drug benefit as well as modernizing the program in other ways. The third similarity is that a Republican Congress is starving education, programs to protect the environment and other critical priorities.

    I think the difference this year is that they know that the public supports the president's approach on these issues and you have to hope that they will be wiser and work with the president rather than against him. They learned in 1995 that they cannot force the president to sign legislation that he believes will harm the American people. Hopefully that lesson will help dictate the course of events over the next several weeks.

    Washington, D.C.: What will the president do when his veto is overridden by Congress?

    This president is, after all, a seriously lame duck.

    Barry Toiv: I'm confident that Democrats in Congress are united in opposition to this legislation. But beyond that, the Senate Republican leadership had to twist the arms of some Republican senators just to get 51 votes for this bill. And it's clear that some Republicans in the House and the Senate are counting on the president to veto the bill because they know it's wrong.

    Arlington, Va.: You've managed to preserve your stellar reputation in an atmosphere where that almost never happens, at least not lately. Ever tempted, since you've change your identity by shaving, to make a run for it? I do not mean a run for office, I mean escape while you can.

    Barry Toiv: Thank you for the compliment. This has been an extraordinarily rewarding time in my career, but I don't have any changes to announce. Can you tell us a little bit about the OMB report that came out last week regarding the tax plan and entitlement programs?

    Barry Toiv: The budget enforcement rules, which were enacted in the '80s and early '90s to get the deficit under control require that if we cut taxes or increase entitlement spending without paying for it by raising other taxes or cutting other spending, the administration, upon Oct. 1, must begin cutting certain entitlement programs across the board to pay for that legislation. Even though we are now in surplus, those rules are still in effect. Therefore, if the president were to sign the Republican tax cut into law, the Office of Management and Budget would be required to implement substantial cuts in Medicare, agriculture safety net programs, student loans and other entitlement programs. This is just more evidence of the cynicism of this tax bill and one more obvious reason that it has to be vetoed.

    San Diego, Calif.: The GOP and administration's tax plans have proposals for distress communities, why can't we get together and make them work:

    l. Community Renewal
    2. New Markets
    3. Entrepreneurial Equity Capital Formation Act?

    Barry Toiv: I'm most familiar with the new markets proposal, which the president has made. But I think it's fair to say that in general, the president believes it's important that we work with the Congress to enact legislation that provides targeted tax benefits and matching resources to attract capital to those areas of the country that have not kept up with the extraordinary economic gains of the past several years. The president believes that this is not only the right thing to do, but investing in these areas is the smart thing to do for businesses. And he is very much committed to encouraging this kind of investment and to enacting legislation that provides inducements for those kinds of efforts.

    College Park, Md.: Thanks, Mr Toiv, for answering my question about the White House's fondness targeted tax cuts.

    But I have to say that you didn't refute my point.

    USA accounts, even if everyone could set them up, are still targeted tax cuts. If you die before you retire, you won't get a tax cut. And USA accounts – like Roth IRAs –have a net of eligibility and deposit strings attached to them.

    Everyone who pays taxes will not have a USA account; everyone will not, therefore, enjoy a tax cut from the White House.

    Why doesn't the president favor lowering the tax rate?

    Barry Toiv: Fair enough, in the sense that USA accounts do target a specific goal, albeit one that the vast majority of Americans would find helpful. As for across-the-board rate cuts, the Republican proposal provides far greater benefits to the wealthiest Americans than to average Americans. And the president does not believe that tax policy should favor the wealthy over others.

    I think it's also worth pointing out that the congressional tax bill contains plenty of targeted provisions aimed not only at the wealthy in general, but to specific industries and businesses. And surely that doesn't make more sense than targeting retirement benefits or child care that so many millions of Americans can take advantage of.

    Fairfax, Va.: I honestly don't understand all this fuss about a tax cut. The amount that ends up in the taxpayer's wallet is so small that it doesn't make any difference in his lifestyle. Let's just use it to pay down the national debt.

    Barry Toiv: That's somebody who has this issue in pretty good perspective. The fact is that paying down the debt reduces interest rates, which in itself provides a substantial effective tax cut by lowering the cost of mortgages and other loans.

    Washington, D.C.: Off the budget for a second – what's it like doing those White House press briefings? Looks like the hardest job in DC......

    Barry Toiv: Actually, sometimes it can be fun, although it depends on what kind of mood our press corps is in. Though I think the experience might change a little bit with Sam Donaldson leaving, if what I read in the newspaper is correct.

    Washington, D.C.: Why do you think the Republican leadership continues to make the same political mistakes in their budget battles with the White House – for instance, thinking they can blackmail the President with government shutdowns (1995) or catastrophic spending cuts (DeLay's recently "leaked" strategy)?

    Barry Toiv: I've had to handle a lot of tough questions in my time, but I think it's unfair to ask me to explain the thinking of the congressional Republican leadership. How are Vice President Gore's campaign and the first lady's expected Senate bid affecting the press operation at the White House? Is there a lot of shifting on the staffs?

    Barry Toiv: For the most part, the vice president and the first lady have hired press staff who did not previously work in our office. With maybe one exception: Roger Salazar. So other than having to answer questions about their respective campaigns, it really has not affected our office.

    Richmond, Va.: What's the deal with all of the conflicting budget forecasts? Why are OMB and CBO so often different?

    Barry Toiv: There's someone who must know I used to work for OMB. There have traditionally been a lot of technical differences in the way that OMB and CBO estimate future spending and revenues. In previous administrations, CBO tended to be closer to the mark. In this administration, OMB has done a better job of making projections, and I think that is a reflection of the president's determination to provide the most accurate and appropriately conservative projections possible. That was our last question for White House Deputy Press Secretary Barry Toiv. Thanks to Mr. Toiv and to everyone who participated today. We'll continue the discussion on taxes tomorrow at 12:30 p.m. EDT with Rep. J.C. Watts (R-Okla.) and on Thursday at noon EDT with Rep. Robert Ehrlich (R-Md.). Submit your questions now, and come back and join us.

    © Copyright 1999 The Washington Post Company

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