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Treasury Secretary Paul O'Neill Addresses Reporters on Economy

Aired October 31, 2001 - 11:36   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: We talked about the economy -- the treasury secretary, Paul O'Neill again at the White House talking about that.

(JOINED IN PROGRESS)

PAUL O'NEILL, SECRETARY OF THE TREASURY: ... the importance of the Congress acting quickly on the president's call for a tax stimulus.

It's very important that we put the stimulus in place quickly. I just came from a meeting with the leaders of the NAM. The president spoke to them and indicated his message to the Congress today was, We need this before you go home. And it looks like Congress is thinking about November 16.

So there's hope, I think, now that we will see a stimulus package that provides tax relief to help ensure that business is creating jobs for people and that we're moving back to a positive rate of real growth.

QUESTION: Mr. Secretary, do you expect a second quarter of negative growth before that positive growth resumes? Are we headed into a recession?

O'NEILL: I think if we can get this stimulus bill in place quickly, there is still a plausible argument that the fourth quarter could be mildly positive. But we need to act. We need this stimulus bill out there so that the market can take it into account and begin job creation again.

QUESTION: The president stressed the importance of offsetting any of the spending with tax cuts, $55 billion in spending right now, but the president had said previously he's willing to cut taxes up to $75 billion. So is there room for $20 billion in additional spending?

O'NEILL: In what the president recommended a few weeks ago in his comments to Congress was the inclusion of $14 billion that would go to lower-income people who didn't get a rebate in the summer program, and that would be $14 billion worth of additional spending.

So with the $55 billion the president mentioned this morning, another $14 billion, we're at $70 billion, and something in the neighborhood of $60 to $75 billion on the tax stimulus side, with business expensing and acceleration of tax rates that have already been agreed to but haven't come into implementation yet, I think we'd basically be in balance and we would have tax reductions for business and individuals creating jobs, creating consumer demand, balanced by the spending that's largely already been put in place.

QUESTION: Mr. Secretary, did the president indicate today, as some on the Hill are saying, that he would consider adding a little bit to the supplemental, new spending for unemployment insurance, for health insurance, beyond the $40 billion that has been...

(CROSSTALK)

O'NEILL: In the president's recommendation, again a few weeks ago, he suggested to the Congress that we should expand the unemployment insurance program to take care of places where there was a surge in unemployment coming from the September 11 events. And he also called a few weeks ago for the enlargement of something called the national emergency grants so that governors could use money to help people who were displaced by September 11 events with their health insurance coverage requirement

HEMMER: The message from the White House, apparently, is the need for speed with regard to the economic stimulus package. You will hear a lot about this in the days and weeks going forward, the White House clearly staking its claim that tax relief must a part of this. You will hear that throughout.

As regards to that recession, Paul O'Neill indicated, though, that he believed that if this can be enacted quickly, there is a slim chance or slight possibility that the chances of recession can decrease. Again , this is something that will clearly play out in the weeks and even months to come.

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