Which Economic Strategy Will Survive?
KARL: ... will bring you that when it comes. We are also awaiting a press conference from the hone base of Nathan Ross, the special operations soldier that was killed in Afghanistan on Friday, that coming from Fort Lewis in Washington. But right now we're talking about America's new war and the impact on politics in 2002 with Republican pollster Frank Luntz and Michael Meehan, director of message development and polling at the Democratic National Committee. Michael Meehan, you just heard from Frank Luntz than Tom Daschle has blocked the Republicans on an economic stimulus plan, blocked them on the energy security plan.</s>MEEHAN: You know, as regards to both, Senator Daschle yesterday put forward a proposal, a new business tax cut that would help companies immediately get tax relief if they invest in the next six months, 12 months. You saw today that the Congressional Budget Office said that President Bush's stimulus package would do nothing in the short term. Democrats and Republicans came together two months ago and said, "We will go for a stimulus package if it is timely, if it is targeted and if it happens right now." That's -- the Republican plan clearly didn't meet that test, the CBO said that today. Tom Daschle and the Senate Democrats and congressional Democrats will sit down with Republicans as soon as we get back in two weeks to do something for the unemployment benefits and health care benefits. But what we won't stand for is just padding the bottom line of corporations that are already doing well. They're sitting on a bunch of cash and laying people off.</s>KARL: Frank?</s>LUNTZ: Well, you know, it's funny because I've done the focus groups and I've heard the same language. You don't have your talking points. You must have left them back in the green room. The fact is, it's these corporations that employ these people. And what you're saying to the American people is to -- American Express and to the corporations in New York and California and all across the country, your employees don't matter. If corporate America does well, if their profits get back into shape -- the airline industry, the hotel industry, the car rental industry -- if they come back, there's no reason to lay off people. But if you are going to be so anti-corporate, in reality you're being anti-employee. And that's the problem. We need to work together. We need to sit down, allow this legislation to go to the floor, and focus on what's good for people, not what's good for politics.</s>MEEHAN: Well, we put the legislation on the floor...</s>MEEHAN: ... the Republicans blocked it. I mean, the problem here is yesterday before Senator Daschle finished his speech, Senator Lott took a page out of your memo and called Senate and started calling Tom Daschle economic dummies. And out of the government office, they started name calling.</s>LUNTZ: That's not my...</s>MEEHAN: ... their members on the Hill.</s>LUNTZ: That's not...</s>MEEHAN: We don't need name calling. We need to sit down and work together -- members of Congress, Senators. Out of their officials offices, attacking Senator Daschle and belittling him because he put a proposal on the table? I mean, we agree there is not time for name calling now. It's time to sit down and get together. But right out of your memo, right out of your strategy, Karen Hughes comes fresh out Crawford yesterday and hitting Senator Daschle for not putting a plan forward. He put a plan forward yesterday, a seven-point plan. The ink wasn't even dry on the proposal before it was dismissed.</s>LUNTZ: Well, look, I think that we would agree that the country has an economic -- is concerned economically. There is some fear. There is some concern out there for the future. But we can't address these specific issues unless action is actually taken. And this is not about seven-point plans. This is about actual votes, actual legislation that will actually help people. I will give you another example. The energy policy -- will Senator Daschle allow an energy policy to come forward so we can actually become more self sufficient so we're not buying oil from Saddam Hussein? We're buying oil from...</s>KARL: Let's not forget, this is all happening in the context of -- you know, we have congressional elections. House and Senate both completely up for grabs this year, anybody would tell you that. And we have this relaxed, confident, popular president that is the symbol, the leader of the Republican Party. Listen to him yesterday as they unveiled his portrait down in Austin, Texas.</s>GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's my honor to be hanging with these men. It's also amazing to think it will be here for a long, long time. I just hope Governor Richards doesn't mind being my neighbor for eternity.</s>KARL: I spent a lot of time on the road with George W. Bush candidate, George W. Bush, during 2000. I have never seen him as relaxed and as confident as he has been, you know, really since September 11. It's going to be tough to go up against this guy this year, isn't it?</s>MEEHAN: Well, I think President Bush and his national security team have done an outstanding job. And every Democrat has been completely supportive of his effort in prosecuting this war, without question. But what we found in 2000 and 2001 in the elections is that whether the president is at 50 popularity or 90 percent popularity, it doesn't translate into how people vote in their state and local elections. Democrats nearly ran the table in 2001. We knocked off Republicans. We picked back up seats in New Jersey and in Virginia. State legislatures, we have more legislatures than we have had control of since '96. In New York City, we had a guy who was a Democrat two years ago, he spent $70 million. If you have 50 more of those, I'm sure you are going to be very low on Senate races this year. But I don't think that's very likely. But it's clear that people, and particularly post-September 11, are going to take a much harder look at the candidates as an individual. There is more at stake now.</s>MEEHAN: There's more trust in leaders. There's more trust in the parties. The parties are at parity, and they'll look at individuals much more closely than...</s>KARL: Well, Frank, what's going to be the big issue in November of 2002? Is it going to be the war on terrorism, or is it going to be the economy?</s>LUNTZ: It depends on what happens. Will we be at war with Iraq? We don't know that at this point. Will we be engaging in other terrorist acts? We don't know what's going to happen there. We do know that the economy will be an issue and also the personality and the leadership of the individual candidates. I agree, with you. I think that this will probably be an incumbent year. I think that Americans feel better about their elected officials. They feel better about the country. They're proud. They're flying the flag. They're singing "God Bless America." And that's good for an incumbent election.</s>KARL: But if you look at the incumbents that are vulnerable this year on the Democratic side, the races to watch in the Senate, these are Democrats who voted for that tax cut that Tom Daschle just spent his big speech yesterday lambasting as making the recession worse. How do you handle that balancing act? Tim Johnson in Daschle's own state of South Dakota...</s>LUNTZ: Sure.</s>KARL: ... you know, Mary Landrieu, Jean Carnahan, these people are vulnerable Democrats up for election who voted for that tax cut.</s>MEEHAN: Well, they took a hard look and, you know, were promised by the White House Republicans that the surplus was big enough, that we weren't going to do any more spending, we had enough money for a rainy day and a tax cut would help keep us out of recession. Well, here we sit, nine months later, and we now have at least one of those Senate Democrats thinking about slowing down the acceleration of the tax cut in the future years. So I think that it will be something that will be on the table. We're going to wait and see when the president gives his speech to the state of the union on the 29th. They'll present a budget, and then -- and we'll look to see what the new needs are of this government post- September 11. This will be the first chance to reboot the whole system.</s>LUNTZ: I find this interesting that, according to your own CNN poll -- I think it's by a 2-1 ratio -- Americans actually blame the previous administration for the current economic conditions, rather than the current president. So you've got a long way to go to convince the American people.</s>KARL: Well, Frank, will that hold? I mean, have you ever seen a situation where the president did not take the heat for an economic recession?</s>LUNTZ: Well, we've never had a situation like this one. We've never had September 11. And trying to demonize the Republican Party or trying, as the leader of the congressional Democrats did, to refer to this as the "Bush recession," not even you Senate Democrats have supported that. It's just, it's a bridge too far.</s>KARL: We have less than a minute. I want to get in something else. I've heard people say that Daschle sounded a lot like a presidential candidate yesterday. Is he going run for president?</s>MEEHAN: I think will decide at the end of this year. He's got 15 senators in the United States Senate. He wants to expand that majority and that's his major focus this year, and he said he'll decide after this election what his plans are for 2003.</s>KARL: Frank, how formidable of a candidate will Tom Daschle be?</s>LUNTZ: He's running, and he will be extremely formidable. He's very laid back. He's very relaxed. I saw him at the VH1 concert. This guy went Hollywood with the black turtleneck. He looked cool. And everyone, even the Police, were applauding him, and you know that they don't applaud many people.</s>KARL: All right. Well, Frank Luntz says Tom Daschle looked cool and will be an incredibly formidable presidential candidate. We'll hold you to that. Michael Meehan, Frank Luntz, thank you very much for joining us. We'll be talking to you again. And we'll return shortly. And we also expect very shortly the president's town hall meeting from Ontario, California.