President Bush Announces Plan to Boost Economy; South Carolina Prepares to Vote
WOLF BLITZER, CNN ANCHOR: To our viewers, happening now: Even President Bush admits America could be on the brink of recession and he's now pushing Congress to give the economy a big shot in the arm. Also, Democrats are seizing on the economy, but they're also going after one another. We're following the presidential candidates in Nevada on this, the eve of their next big contest. And Southern comfort, which Republican will find it in South Carolina tomorrow? We're on the campaign trail in a state where campaigns traditionally have been made and broken. I'm Wolf Blitzer. You're in THE SITUATION ROOM. We want to welcome our viewers in the United States and around the world. President Bush is trying today to stay on top of an issue that is driving the race to replace him. Of course that would be the economy. He's now laid out his vision of what Congress should do to give strapped Americans some immediate relief. Let's go to the White House. CNN's Kathleen Koch is standing by. The president toning down his normally optimistic statements about the state of the economy.</s>KATHLEEN KOCH, CNN CORRESPONDENT: Quite so, Wolf, a dramatic change of tone for this president, who is often accused by Democrats of being far too optimistic about the economy. But, you know, the R- word, recession, focuses people's attention. It's gotten the attention of this White House. And, today, the president admitted the economy needs a boost.</s>KOCH (voice over): A shot in the arm to keep the economy healthy, a rare admission by a president that the economy he once described as strong and getting stronger needs help.</s>GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: They are areas of real concern.</s>KOCH: The stimulus package President Bush is prescribing would be large, $140 billion to $150 billion. It would include tax incentives for businesses and tax relief for the American people. President Bush wouldn't give specifics, but sources on Capitol Hill say the White House has suggested tax rebates similar to those given in 2001, when individuals and families received checks for between $300 and $600.</s>BUSH: This gross package must be built on broad-based tax relief that will directly affect economic growth, and not the kind of spending projects that would have little immediate impact on our economy.</s>KOCH: But Democrats insist spending programs, combined with tax rebates, would be most effective.</s>SEN. CHARLES SCHUMER (D), NEW YORK: We know extending unemployment insurance is one of the most effective stimulus proposals because we have deployed it successfully in the past and it gets the most bang for the buck.</s>KOCH: Democrats are also upset that tax rebates would not help the poorest Americans, those who don't earn enough to pay income taxes. Aides on Capitol Hill say a plan that ignores the most needy won't pass, but the administration says that's not what this stimulus package is about.</s>ED LAZEAR, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Not on thinking about ways to distribute and take care of different needs. Albeit those needs, perhaps, particularly important, we believe that this is what we're talking about right now, and that's growth.</s>KOCH: Democrats do applaud the president's decision not to insist extension of his tax cuts due to expire in 2010 be included in the package.</s>KOCH: So, when might a stimulus package become a reality? Both sides are saying as soon as possible, perhaps a matter of weeks. Wolf, this is certainly the kind of item that the president would love to tout in his January 28 State of the Union address.</s>BLITZER: Kathleen Koch, at the White House, thank you very much. Out on the campaign trail, Democrats say they would do better than President Bush helping Americans in these tough economic times. Republicans are talking about what they would do as well. All the presidential candidates are focusing in on fears about the economy. It's part of their strategy to win contests tomorrow. CNN's Dana Bash has more now on South Carolina's Republican primary. Actually, Dana Bash is standing by. I want to go to Jessica Yellin in Las Vegas first. The Democrats are getting ready for their caucuses out there tomorrow and they're making final appeals to voters.</s>JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: They are, Wolf. They are addressing voters' concerns about the economy. But they're also taking time to beat up on each other, trying to fire up their supporters and make sure they get a strong turnout tomorrow.</s>JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: You are what we have.</s>YELLIN (voice-over): On the campaign trail, the candidates are promising to heal economic wounds.</s>SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I think your government that you pay tax dollars to should do more to help small businesses.</s>EDWARDS: We modernize our unemployment insurance laws to cover more people, that we get help to the states directly.</s>SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I have called for a tax rebate. Every American immediately gets $250, and then an additional $250 if the economy keeps on getting worse.</s>YELLIN: Sounds substantive, right? Well, while the candidates are taking issues, the campaigns or their supporters are on the attack. (</s>BEGIN VIDEO CLIP, AD) UNIDENTIFIED MALE: Hillary Clinton</s>YELLIN: The ad says Hillary Clinton supporters went to court to prevent working people from voting, and Hillary Clinton has no shame. The ad is paid for by a labor union that supports Barack Obama. Now John Edwards is calling Obama a hypocrite, since the ad is paid for by one of those reviled special interest groups.</s>EDWARDS: I hope Senator Obama will call for this ad, first denounce the ad, second, call for it to be stopped.</s>YELLIN: And camp Clinton is getting in on the circular firing squad, leaping on this from Obama.</s>OBAMA: I think Ronald Reagan changed the trajectory of America in a way that, you know, Richard Nixon did not and in a way that Bill Clinton did not.</s>YELLIN: Clinton supporters say they're stupefied, baffled that Obama would praise Ronald Reagan, a man they say made life worse for women, minorities, and the homeless, and proves she's the real Democrat in the race.</s>YELLIN: Wolf, the tit-for-tat didn't stop there. This afternoon, Senator Obama accused Senator Clinton basically of cribbing from his economic stimulus plan. But the Clinton people laughed. They say she came out with her plan first. Bottom line, there's not a love lost out here on the campaign trail -- Wolf.</s>BLITZER: Jessica Yellin in Vegas for us -- Jessica, thanks very much. Let's head over to Myrtle Beach in South Carolina. Dana Bash is watching the Republicans. They're getting ready for a contest tomorrow. Normally, what happens in South Carolina for Republicans goes on to happen as far as the Republican eventual nominee is concerned. This year could be different, though, Dana.</s>DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, that's right. Republicans take a lot of pride in the fact that here in South Carolina in the fact that they traditionally, at least in recent history, do pick the GOP nominee. But tomorrow's primary may not just be a test about whether the Republicans can beat one another in the primary. It also may be an early indicator of whether they can beat a Democrat in November.</s>BASH (voice-over): Mike Huckabee's final plea for South Carolina votes goes like this.</s>MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: And if you want someone who understands what life growing up in the South, growing up like so many of you did would be in the White House, I ask for your vote and your confidence.</s>BASH: Fred Thompson is going for Southern bonding too, his drawl a bit thicker here.</s>FRED THOMPSON, REPUBLICAN PRESIDENTIAL CANDIDATE: It sure is good to be among folks that don't think I know -- that I talk funny and know how to cook green beans.</s>BASH: Any advantage helps for GOP candidates facing their first Southern contest.</s>HUCKABEE: Every year since 1980, South Carolina has picked who the next Republican nominee would be.</s>BASH: Critical because of that and winning in the South is also a test of whether a Republican can win the general election. Look at this map. In 2004, the only big Northern state George W. Bush won was Ohio. It was the Southern states in red that propelled his victory.</s>UNIDENTIFIED MALE: If you cannot win in the South, you will not win the presidency. That's a fact of life for Republican candidates. It's actually a fact of life for Democratic candidates as well.</s>MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: And we're going to join together here in Nevada in a great campaign.</s>BASH: Which makes former Massachusetts Governor Mitt Romney's decision to leave South Carolina in search of delegates in Nevada risky.</s>UNIDENTIFIED MALE: One of the biggest challenges for Romney is, can he compete in the South? Can he appeal to social conservatives, the evangelical wing of the Republican Party?</s>BASH: But South Carolina poses the greatest challenge for this man.</s>SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We will win tomorrow.</s>BASH: John McCain must prove he can win among Republicans outside New Hampshire, where independents fueled his comeback, trying his form of South Carolina bonding.</s>MCCAIN: It has enriched my life to be able to be among the most patriotic citizens in this country.</s>BASH: Now, I talked to some Republicans, and they say it is critical for the party to reach beyond the conservative South and find a nominee who can do that. Now, that might be true, but the reality, Wolf, is that you can't win without your base. And the ideological and geographical base of the GOP is right here in the South -- Wolf.</s>BLITZER: All right, Dana, thanks very much. Dana will be watching the story unfold with all of us tomorrow. Let's go to Jack Cafferty. He's got "The Cafferty File" in New York -- Jack.</s>JACK CAFFERTY, CNN ANCHOR: They just say anything, don't they?</s>CAFFERTY: Anything. They're shameless. They will say anything.</s>BLITZER: Are you surprised? Are you surprised?</s>CAFFERTY: All right. You know, things are getting ugly out there on the campaign trail -- excuse me; I couldn't help myself -- when the candidates start going after the news media. And that's what's happening right now. First, there was that heated exchange between Bill Clinton and a local TV reporter in California, the former president getting visibly annoyed when the reporter asked him about the decision to allow caucuses in Las Vegas casinos, where a lot of Barack Obama supporters work. Enter Republican candidate Mitt Romney. When he was asked about the role of lobbyists in his campaign by an AP reporter yesterday, he became defensive. He said he don't have no stinking lobbyists running his campaign. What he does have though is a high-level adviser who's also the chairman of a large communications firm. Oh. And John Edwards is whining about the media, too. His campaign is launching a full-on assault on the media for what they claim is inadequate and unfair press coverage. His communications director says -- quote -- "For the better part of a year, the media has focused on two celebrity candidates" -- unquote. He wasn't finished whining. He said, the media continued to focus on Obama and Clinton, despite the fact that Edwards beat Clinton in Iowa and that polls show competitive races in states like Nevada and South Carolina. You see, complaining about the media comes as naturally to a politician as having his hand out. Here's the question. Is it the news media's job to keep all the candidates happy? Go to CNN.com/caffertyfile and get on my blog and have yourself a merry time -- Wolf.</s>BLITZER: Jack, thank you very much. And I have read your blog, and they do. To some, it's a symbol of pride, for others, a symbol of pride. One governor says there are more important issues to talk about.</s>GOV. MARK SANFORD (R), SOUTH CAROLINA: If you were to talk to the vast majority of South Carolinians, they would say that we do not need to be debating where the Confederate flag is or is not.</s>BLITZER: South Carolina's governor talks about the Confederate flag and other issues that have crept into the presidential race. Also, Barack Obama explains his weaknesses. How much will they really matter? And regarding that British Airways flight that came down short on the runway, just before it landed, its engines simply stopped responding. We will have the latest. Stay with us. You're in THE SITUATION ROOM.