SHIELDS AND GIGOT
July 4, 1997
Mark Shields and Paul Gigot debate the tax cut proposals and campaign finance hearings.
JIM LEHRER: Now, our regular political analysis by Shields & Gigot, syndicated columnist Mark Shields, "Wall Street Journal" columnist Paul Gigot. Paul, tax cut proposals, now the President has one too. Where is all this heading?
PAUL GIGOT, Wall Street Journal: Well, I think it's probably headed to a deal ultimately, Jim, both sides, the President and the Republicans in Congress want a deal. But I don't think it's going to be all that smooth between now and then. I think that there may very well be a veto because while the Republicans have given the impression, particularly Newt Gingrich, the Speaker, and the Majority Leader, Trent Lott, that they'd do anything short of resign their office to get a deal, I think the President is in a very strong negotiating position, and his statement this week, while it rhetorically moved in the direction of the Republicans, in substance, it didn't move that much, and he puts on some very tough markers for them, so I think that--I think the President is well positioned to veto a bill that comes out of Congress, or draw the Republicans out more.
JIM LEHRER: Remind us again why this is so important to the Republicans.
PAUL GIGOT: Because this fulfills the things that they promised with a Contract with America. They promised a tax cut. They promised it to their social conservatives, a family tax credit, and they promised it to their economic conservatives through cuts in capital gains taxes and estate tax relief, that sort of thing. So this is a big part of the payoff to the people who elected him.
JIM LEHRER: Now, Mark, this used to be the big dividing point between Republicans and Democrats, tax policy. They seem to be getting closer and closer and closer. What's happening?
MARK SHIELDS, Syndicated Columnist: The middle has gotten not only larger but mushier, and differences between the two parties are hard to define right now, or at least--
JIM LEHRER: Don't you agree with me, that this used to be where you could really draw the line fairly simply?
MARK SHIELDS: Absolutely. I think we can see it now, the place where the Democratic faith, or the traditional Democratic beliefs are being most clearly heard are in the House of Representatives. And the President--I think Paul is absolutely right--I think the President's position is enormously strong here. What the House Democrat is concerned about is this is a mark in the sand that he has drawn, Jim, and from which he's not going to move, or this is just a negotiating ploy. That is the concern, but there's no question that the Republicans need this tax cut a lot more than Bill Clinton does. Bill Clinton--
JIM LEHRER: Didn't he say I'm going to give a tax cut to the middle class? Hasn't he been saying that for a long time?
MARK SHIELDS: But his basic pitch, the basic appeal of the Clinton strategy has been to take issues off the table, take issues that divided and hurt Democrats, crime, all right--you come out against assault weapons with the police--welfare--you come out for welfare reform, balanced budget. You're no longer the tax and spend Democrats, and this is--this is the one--this is the Holy Grail. This is the crown jewel for Republicans, and that's why Bill Clinton this week did something incredibly Clintonesque and adroit politically. He came out yes for cutting the capital gains tax, but he's going to cut it for the richest Americans from 28 to 27.7. That--I can tell you--the real champions of capital gains tax cuts are fuming because what he has done is agree with them in principle, yes, we need a tax cut, but let's do it on the basis of ability to pay; let's give it all those people at $15,000 and large stock portfolios, of whom there are only a few, let's give them the cut, so I think Clinton holds the far stronger hand here.
JIM LEHRER: Well, you certainly agree with that, right, Paul?
PAUL GIGOT: Well, I don't necessarily agree if the Republicans are willing to fight and to define the issues, but the fact is that when Bill Clinton made that proposal this week, the only Republicans who opposed it or raised any questions about it were not in Congress. I mean, you had Steve Forbes and you had Jack Kemp say, wait a minute, this is a phony capital gains tax cut because if you're going to put taxes on capital, you have to do it for people who have capital. That means some of the higher earning people in the country; that's just by definition what happens. The problem is that the Republicans in Congress are so eager to get the President's signature that they're not willing to draw the markers like this. And to say that the President isn't really--they're giving him credit for moving in their direction even when he isn't.
JIM LEHRER: You know, Mark, a lot of people have said in a very uncynical way that all of these plans really don't cut taxes very much; they don't really change, they're certainly not reforming the tax system in any way. It's all kind of a political exercise. Would you agree?
MARK SHIELDS: I think it is. I think that--Tom Campbell, a Congressman from California, had a piece in the "Times"this week on the Republican House to vote against it saying why, why have this tax cut, and of course it is Paul's right. It's part of a proposal and part of a pledge that Republicans made when they had their revolution and their Contract with America. But, Jim, the Republicans' position is weakened. As long as the argument--as we heard it on this show--reflected in the debate--is about the distribution, about who gets the tax cuts, and whether it's high income people or middle income people. That's all it's been about this past week. As long as it's about who gets it and the Republicans are then caught in that terrible bind of being the party of the rich--
JIM LEHRER: Because the President keeps saying I want to protect the middle--
MARK SHIELDS: I want to protect the middle class. I want middle class Americans, working families, and by a six to one margin this week the Gallup Poll said they felt the voters thought the Republican plan favored the rich over the middle class, and the Democratic plan was a split between the rich and the--
JIM LEHRER: And that, of course, is the traditional political argument on taxes between the Republicans and Democrats, right, Paul?
PAUL GIGOT: Yes. That has been the argument, and ever since I'd say 1979, when the--Proposition 13, the tax resolution passed in California, and with President Reagan coming in, you had Republicans gain the ascendancy on taxes because they argued in terms of growth. They made the economic argument, and they made the argument that government was too big, and you had to give some relief. That argument--they've lost a little bit of their confidence in that argument now. They're not making it as clearly with somebody like President Clinton's, who's awfully adroit at coopting them, they seem to really have lost their confidence.
So it's becoming a less important difference between the parties, as Mark suggested before. But one of the ironies here of this debate on taxes is that if there ever was a Republican tax cut that didn't favor the rich, it is this one. I mean, a lot of Republicans complained privately that it's already been written as if the chief economist for the Republican Party was Ralph Reed of the Christian Coalition. Most of the tax cuts in it go to the family tax credit, which a lot of the economic conservatives, like Jack Kemp and Steve Forbes, never liked in the first place.
JIM LEHRER: Let's move to next week. The Senate's campaign financing hearings are finally going to get underway. Mark, should the nation come to a halt and watch these? Is it going to be that dramatic an event?
MARK SHIELDS: You know, Jim, as we sit here tonight, we're not sure. I think the hearings are going to be important. There's no question right now that all attention has to focus on the Senate, rather than the House. The House Committee this week suffered a very serious setback when their chief counsel resigned in protest, the Republican counsel, the Republican chairman. But I think this is it. I mean, this is the only hope that reformers have of getting the story out about political money, its influence, its reaches, what people will do to get it, and the illegalities. And I am--I remain an optimist. I remain admittedly--I'm confessing--a cheerleader that the hearings will work. I think there's a lot riding on them.
JIM LEHRER: Well, what would have to constitute a working hearing, Paul? I mean, what has to happen. Sen. Thompson, Sen. Glenn, and other Senators, what do they have to do for these things to be successful, in your opinion?
PAUL GIGOT: I think they have to conduct a fact-finding inquiry. They have to try to in a bipartisan fashion, in a fair fashion, go after the facts. What happened in 1996? Both parties, Republican and Democrat, who broke the law? How was it broken? What was the role of foreign money? Forget the backbiting and the partisanship which has gone on behind the scenes in a way that--to a much greater degree than even usual in Washington. But once the TV cameras come on, can--can John Glenn, who's going to be leading the fight for the Democrats on this--the ranking member on the committee--and Fred Thompson, the Republican chairman--can they put all that side and actually try to find out what happened and perform the role of Congress, the important role of Congress, which is an educational role?
JIM LEHRER: And your answer to that question is what, sir?
PAUL GIGOT: I think that--
JIM LEHRER: Your own question.
PAUL GIGOT: I would like to think that Congress could still do that, is still up to the task, but I'll tell you the way it's led up to it so far I'm not sure.
JIM LEHRER: Scoring points, do you think, Mark, more than doing what Paul said?
MARK SHIELDS: No. I think you've got two serious people here. I mean, Fred Thompson has established credentials as a reformer, the only Republican co-sponsor of the McCain-Feingold bill in the last Congress, great tradition, and his own life, having run a hearing with Senator Howard Baker at the Watergate Committee, I mean, he's--he's a serious player. John Glenn in the twilight of a distinguished public career, not a partisan pit bull by any means, somebody who cares deeply and passionately about cleaning up money and politics, so I think you've got two serious people. I'm not saying that's all the way through in both sides of the aisle in the community, but I think it's true of the two principals here.
JIM LEHRER: But is this hearing about reforming the system, or is it about finding individual allegations or confirming individual allegations of wrongdoing against the President, or against Republicans, or whatever?
MARK SHIELDS: I think if the story gets out, if that rock is turned over, Jim, that the public's attention will be engaged; that they say, my God, I didn't realize it was that bad.
JIM LEHRER: The system was that bad.
MARK SHIELDS: Yes. That would be my hope and that perhaps just as in 1996, we saw the emergence of minimum wage legislation as sort of something the Senate had to vote on, each time a bill came up the Senate was forced to vote on it until finally they passed it because it became such an embarrassment to vote against it, the same thing might very well happen or could happen if, in fact, the McCain-Feingold bill is attached each time the piece of legislation comes before the Senate.
JIM LEHRER: Do you agree that's a possibility here, Paul, that no matter what anybody likes, that could be the end result of these hearings, just a fact of these hearings?
PAUL GIGOT: It could be, although I think there are going to be votes on the different bills, no matter what happens, because certainly the President is pushing everybody to have some votes, in part to change the subject from what happened in 1996, but before you know how to reform the system, you have to find out what happened. So Fred Thompson envisions this taking place in two different time periods, first to find out what happened in 1996, and then later on they'll have hearings which say, all right, what do we do about them?
JIM LEHRER: Okay, thank you both very much, and have a nice holiday.