Despite the daily reports of layoffs and Alan Greenpan's efforts to stop the economy from slowing, some people are not keen on the idea of a tax cut.
Fox News Channel's Neil Cavuto talked to Steven Rattner of the Quadrangle Group, who says America has not earned a big tax cut yet.
Q: You don't like this tax cut, why not?
Rattner: They are fine if you can afford to pay for them. The surplus is $70 billion so we have not earned a tax cut of that size yet. But once you put it in place you have to earn the surplus. So I am all in favor of it as long as we can afford to pay for it.
Q: But there are more Democrats moving closer to the Republicans on the tax cut issue.
Rattner: Some of that is politics. Tax cuts are a hard thing to resist.
Q: Is it harder now that the economy is slowing?
Rattner: People think that the when the economy is slowing it's better to put more money in your pocket. But remember in '93 when the Clinton administration came in and proposed tax increases in the face of a weak economy, Republicans said it would wreck the economy but then we came into the greatest peace time boom in history.
Q: Let's say we get the large tax cut Bush wants what happens then?
Rattner: Well it is hard to know, first of all the cut will take place over a few years, and in my own view, we need to talk about the overall impact, in terms of the lower interest rates.
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Q: Alan Greenspan gave his blessing.
Rattner: But the size of the tax cut is significant. The Democrats are just as focused on making sure that the tax cuts benefit those that need help. The state tax has become an unpopular tax and happens to be the single most aggressive tax it does more for the lower income group. If you do not tax people you will have to take it from somewhere else.
Q: Or the government can stop spending so much.
Rattner: I am all for that but there are important spending initiatives. Bush has some sensible plans for education and the military.
Q: How do you think Bush is doing so far?
Rattner: He had a good week but it is a 162 game season so we should wait and see little bit more.
Q: Did Bill Clinton leave just in time because of the economy?
Rattner: Yeah, but I think we should be careful about announcing that the economy is on it's last legs. We have had 8 years of prosperity. I don't want to be cavalier about the weakness, and layoffs but we are only talking about a few quarters of negative growth. It makes people panic.