Excerpts from the Press Briefing by Ari Fleischer, May 14, 2003 (Full Transcript)

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QUESTION: If I can turn to another subject for a moment. The Senate is going to take up the tax bill, which contains about $70 billion in the Senate version of tax increases in order to pay for, among other things, the President's version, the President's proposal to cut the tax on dividends. Does the administration support those tax increases? And in particular, is it going to urge Republicans to vote to retain the provision that would raise taxes by $35 billion on Americans living and working abroad?

MR. FLEISCHER: Okay, I want to remind you, particularly on the provision you just cited about Americans working abroad, that was not in the President's budget. It was not a proposal that the President made. And there are a variety of different ideas that are being circulated in the House and in the Senate as they work toward the final conference agreement on the tax bill, which is where the key decisions are going to be made.

The President's budget contained $11 billion worth of offsets over 10 years. Most of these were loophole closures, provisions that should not be in the tax code, they believe should be removed from the tax code. As to the specifics of it, we'll continue to work with Congress to see what is meritorious, what is, indeed, a loophole closure and not a tax increase. But the provision you just cited was not part of the President's plans.

QUESTION: Is that a signal, then, that Republicans should, when this comes up as an amendment, vote against keeping it in?

MR. FLEISCHER: Well, Republicans, Democrats alike will vote their conscience on every different provision as they see fit. The President's focus is on making progress and getting this bill into the House-Senate conference where these important decisions will be made.

QUESTION: Related to Dick's question, the President at most every stop has been saying that temporary tax cuts are not good because you can't do the planning you need. Now, it sounds like the White House seems to be lending some support to a notion of making the dividend tax cut temporary. Is that, in fact, so, and how can you --

MR. FLEISCHER: Well there's no question the President would prefer to have the tax provisions be permanent. But if that is not the case, then the President wants to make progress by, for example, accelerating the marriage penalty relief, accelerating the child relief. And as you know from the 2001 act, there were many provisions in there, such as the repeal of the death tax that was extended for 10 years, not in perpetuity.

So, yes, the President is continually pushing for the goal of making these permanent. But given the constraints that we must operate under, given the budget resolution, the President will work with what we are working with, and make the most progress possible and keep coming at it.

QUESTION: So temporary is better than nothing, if that's the choice?

MR. FLEISCHER: Well, clearly, if somebody can get the child credit accelerated to $1,000 immediately, that's preferable, particularly given the fact that will have an economic boost in 2003, at a time the economy needs it the most. So there is sound tax policy to it, sound economic policy to it. It could be sounder, but it still is sound.

QUESTION: But this is the dividend thing, in particular, that -- a temporary is better than nothing on that?

MR. FLEISCHER: Well, on the dividend thing, the President is going -- the dividend thing -- on the dividend exclusion, the President is going to continue to push to get 100 percent dividend exclusion, and we'll see what duration that may be and how that can be worked. There are a variety of different ways on a tax bill to forge agreements.

QUESTION: Ari, how would you characterize the state of play in the tax cuts on the Hill right now? And does the President still expect a bill by Memorial Day?

MR. FLEISCHER: The timing does look good. Despite the Senate Finance Committee's action to go back into committee yesterday, they are moving forward. In fact, it's worth noting that this is an important week in the Senate. They are making progress on two major pieces of domestic legislation. One is a growth package, which looks like it will be voted on before the week is through. And the second is AIDS legislation -- to follow the House, which has already passed the President's proposal from the State of the Union, for a $15-billion AIDS initiative to help the people of Africa and the Caribbean. These are two major domestic initiatives, both of which are moving forward rather nicely this early in the year.

It's also worth noting that in Moscow today the Duma ratified the Treaty of Moscow for the offensive reductions in nuclear weapons between the United States and Russia.

So on the domestic front and on the foreign policy front, this can be an important week. It has already been an important week in foreign policy with Russia; two major bills pending in the Senate. So I think you know I've spent a lot of time on the Hill; it's unusual to have this much legislative action being done this early in a session. It's unusual for the tax bill to be considered this early. Remember in 1997, when a tax bill was agreed to, and it was signed by then President Clinton, that wasn't agreed to until July or August of 1997. So they're ahead of schedule, and that's good for the economy because it means you can deliver more boost to the economy earlier, which is good for people who are looking for work.