Gephardt transcript on economy talks

House Minority Leader Dick Gephardt, D-Missouri, stepped away from the president's talks on the economy to take some questions from the media. The following is a segment from his news conference.

QUESTION: The president and his spokesman both continue to refer to the people on Capitol Hill wanting to raise taxes. Ari Fleischer (White House press secretary) regularly refers to Democrats adjusting the tax cut provisions. Are you all attempting to raise taxes? Would you all do that?

GEPHARDT: I don't know where he gets that. He's, the best I can figure out, making it up. I have not said that, and I don't know of other Democrats who have said that.

What we are for is a more balanced budget. I hope the president -- I continue to hope he'll send us either a new budget or new budget suggestions given the changed numbers that we're looking at. I don't think the budget that he sent is as relevant today as maybe it was five or six or eight months ago.

So we need ideas. We're looking now at budget numbers that indicate that we're going to spend Social Security and Medicare funds in, not just next year, but in the years that follow.

We had a different budget. We brought a budget that was more balanced in our view. We lost that. We understand that. But our budget provided for a significant tax cut for middle-income Americans. It provided for the proper spending levels and investing in education and infrastructure and health care, and it stayed out of Social Security and Medicare.

Now, no budget is perfect. But what we are asking the president to do is to send new budget suggestions so that we can begin to work our way out of this problem. And we look forward to him being able to do that.

QUESTION: What was his response to that? Did he agree to do that or revisit the idea of sending a new budget?

GEPHARDT: He did not -- we've sent three letters -- and Tom Daschle and I and Kent Conrad and John Spratt have suggested that in light of these new numbers that we need new budget suggestions.

As we go through the end of this budget implementation or appropriations process, I think we're going to need new ideas on how to deal with this.

QUESTION:The White House has said, what this is really about is a debate about the economy, not the budget. A better economy makes the budget better. What's your reaction to that assessment?

GEPHARDT: Well, my view is that a good budget makes for a better economy. What we accomplished over the last eight years was straightening out the budget, and I think that had an important impact on long-term interest rates and ultimately on the way the economy worked. In other words, the government became a better partner with the private sector, with private businesses, in building a better economy.

I think one of the things that's troubling the economy now is that the markets are looking at higher deficits. They're looking at a deteriorating deficit picture, and long-term interest rates are now higher than they should be if we were on a different budget path.

So you can argue this from the budget to the economy or the economy to the budget. I think they're inextricably intertwined, and I think what is troubling the economy now in part is a budget which has us back on a path to spending Social Security and Medicare and back on a path, ultimately, of deficits.