[This Is A Rush Transcript. This Copy May Not Be In Its Final Form And May Be Updated. Kyra Phillips, Cnn Anchor:] The nation's top corporate watchdog says he could do a much better job of cracking down on abuses if Congress would raise his department, the Securities and Exchange Commission, to Cabinet-level, like Treasury or State. The idea is getting a cool reception at best, from both ends of Pennsylvania Avenue. CNN's Kelly Wallace now joins us from the White House with more on this. Hi Kelly.
[Kelly Wallace, Cnn White House Correspondent:] Hello, Kyra. Well, this is a story where you have the SEC saying this is a move designed to reassure investors, not bolster Harvey Pitt's power. But on the other hand, you have Democrats saying Harvey Pitt is too concerned about himself. And then you have the White House simply throwing cold water on the entire idea. Here is what an SEC official told me earlier today. He said that lawmakers asked Harvey Pitt for his suggestions to add to that corporate accountability bill currently being negotiated on Capitol Hill. The SEC then sent five suggestions, including one: elevating the agency to make it a Cabinet-level agency. This official said this was a move designed to send a strong signal to investors, not to enhance Harvey Pitt's power or his prestige. The official also said at no time was there any discussion about a pay raise for Harvey Pitt. "The New York Times" reporting that Pitt would get nearly a 21 percent raise to about $166,000. Senate Democrats, though, are speaking out. The Senate Democratic leader, Tom Daschle, saying this all further reinforces his belief that Harvey Pitt is the wrong man for the job.
[Sen. Tom Dashcle , Majority Leader:] You've got businesses that are on the rocks. He is talking about a Cabinet-level status, that he needs some elevation. I mean, this is this is further proof and a clear illustration of why it is many of us feel the time has come for a change in that position. I am surprised and saddened by the insensitivity of Mr. Pitt.
[Wallace:] Now, the White House says President Bush continues to have confidence in Harvey Pitt, but it is not supporting this proposal. Claire Buchan, a deputy press secretary, telling
[Cnn:] "Our focus is on ensuring the SEC has the resources it needs in terms of more people, better systems, so that it can go after corporate corruption. We view this as something that can be viewed as a distraction from those important goals." Even House Speaker Dennis Hastert, who was here at the White House earlier today, said he had not seen this proposal, but he said quote "I don't think it's the best time in the world for it." So clearly, Kyra, this appears to be a nonstarter. The SEC official I talked to said, that's fine, this was an innocent enough suggestion, this official said, but it could add to the political headaches for the embattled SEC chairman Kyra.
[Phillips:] SEC chairman obviously getting a lot of flack. Also, Treasury Secretary Paul O'Neill, people wondering where he has been, Kelly, and what's happening. Now, I understand he has canceled his trip to Latin America. What's going on?
[Wallace:] He is postponing that trip a week, Kyra. We know the Treasury Department issued a statement saying he has postponed that trip for about a week. Now, he'll go in early August. The reason he is postponing that, because Congress is doing critical work when it comes to that corporate responsibility measure. The House is likely to pass it sometime this week. The hope is the Senate will pass it next week, and then it will make its way to his desk President Bush's desk. But, Kyra, you know there have been a lot of calls about Treasury Secretary Paul O'Neill. Many people think he hasn't been speaking out enough, that he has been traveling around the world, when there have been problems with the U.S. economy. So clearly, a move by the White House and the Treasury Department to say that Secretary O'Neill will stay until Congress passes that bill- Kyra.
[Phillips:] Kelly Wallace, live at the White House thanks, Kelly. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.