[Wolf Blitzer, Cnn Anchor:] President Bush is pushing the economy to the forefront of his 2002 agenda as the recession becomes more of a political issue at the start of this mid-term election year. Our senior White House correspondent John king joins us with more from the White House John.
[John King, Cnn Correspondent:] Wolf, immediately back to work for the president. He returned to the White House today, as you noted, 12 days over the Christmas holidays, at the ranch in Crawford, Texas. A bit of travel at the end of that working vacation to focus on the economy. The president was back at the White House for only an hour when he sat down in the Cabinet room with several cabinet secretaries, his top economic team, the vice president was on hand. And a special and very important guest, Federal Reserve chairman Alan Greenspan. Mr. Bush trying to show to the American people that he will immediately get about the business of the U.S. economy. Remember just before the Christmas break, negotiations on a stimulus plan broke down because of disagreements between the Republican White House and the Democratic controlled Senate. Mr. Bush vowing again today to push for a stimulus plan. As he did so, he acknowledged the new realities of the budget debate. This president came to office almost a year ago, record federal budget surpluses at the time. Now the government will be in the red, a deficit, at least this year, perhaps for the next three, four, or five years. Bush aids say, the president says all that is necessary because of the ongoing war and the slumping U.S. economy.
[George W. Bush, President Of The United States:] It makes sense to spend money necessary to win the war. It makes sense to spend money necessary to protect the homeland. And we are in a recession. There are some talk about raising taxes. And that would be a disaster to raise taxes in the midst of a recession.
[King:] Some talk, you heard the president say, of raising taxes. Actually no meaningful Democrats have put such a proposal on the table, but the president is involved in a bit of a tug-of-war, if you will, with the Senator majority leader Tom Daschle. Mr. Daschle last week said he believed the Bush tax cut made the recession even worse. So economic policy will dominated the discussion early in this mid- term congressional election hear. Mr. Bush almost daring the Democrats to propose to repeal his tax cut. He believes, and other Republicans do, that would be a disaster for the Democrats. The Democrats on the other hand, trying to blame Mr. Bush and the Republican Party for the state of the U.S. economy. So that long-term calculus, looking ahead to the November elections dominating the discussion. The question is, in the short term, the next couple weeks, can they, amid all that partisanship, strike some sort of a bipartisan compromise on a stimulus package to help the Americans thrown out of work in recent months Wolf.
[Blitzer:] John, as you know, over the weekend, the president caused a bit of a stir by saying flatly that there would be no tax increases, using the phrase, "over my dead body," raising a lot of comparisons with what his father said in 1988, no new taxes, "read my lips, no new taxes." Any second-guessing, any second thoughts over at the White House about that very, very controversial statement the president made?
[King:] None at all. You will remember, the former President Bush went back on his word, if you will. He cut a budget deal with the Congress that did indeed raise taxes during his administration. Administration officials in this Bush administration say the president simply will not do that. Much of this though, is political positioning. No one expects the Democrats in a congressional election year to push a tax cut through the Congress. And remember, Republicans still control the House. So, even if they wanted to in the Senate, and again, most of the majority Democrats do not, even if they wanted to, they couldn't get it through the House of Representatives. So, much of that rhetoric viewed as political positioning as we head into this election year. Again, though, the big question is with all the rhetoric flying back and forth between the president, the Senate leader Tom Daschle, can they reach any agreement in the short term on a new stimulus package. That the big open question for the next week or two.
[Blitzer:] And looking ahead while I have you, John, what about the education bill the president is scheduled tomorrow to sign into law? I take it that Ted Kennedy will be standing right nearby when he does that.
[King:] Mr. Bush will travel to Ohio to sign that bill into law. He is travelling to focus on the bipartisan education reform bill. On one hand, he will use that as a springboard to the conversation we were just having, saying this is proof there can be bipartisanship, a Compromise on the education bill. On the other hand, the president's also believes and his political team believes that is one bill that the president should get more credit for than he did. It sort of passed under the radar screen late in the congressional session, at a time when everyone was focused mostly on the war in Afghanistan and on the debate over the economy. So, the president will sign that bill tomorrow in Ohio. He will also travel on to Boston. The two E's: education and the economy, White House aides say will be the president's focus in the early weeks of the new year.
[Blitzer:] John King over at the White House, thank you very much. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com