CARLSON:   Welcome back to CROSSFIRE. Treasury Secretary Paul O'Neill and White House Chief Economic Adviser Larry Lindsey tendered their resignations today. Not only were those resignations accepted, administration sources tell CNN both men were asked to leave. What does it mean? In the CROSSFIRE, New York Democratic Congressman Charlie Rangel, who joins us from our New York bureau. With us here in Washington is the Chairman of the House Rules Committee, California Republican Congressman David Dreier. 
CARVILLE:   Congressman Dreier, let's listen to what President Bush's top spokesman, Ari Fleischer, talking about Bush's economic plan here. It's a graphic, OK? Can you see that? 
DREIER:   That's not a graphic. It's very graphic, but it is not a graphic. 
CARVILLE:   "Does he (President Bush) have in mind a specific solution to the economy?" Mr. Fleischer: "No, the president does not." Could you illuminate the president maybe and give him some ideas? He's out of them now. 
DREIER:   James, the president is a strong proponent of a bold economic plan which is going to be reducing taxes. And he believes very -- he believes it's very important for us to focus on job growth as well as productivity. And that's exactly what these two people who have left have been working on. And frankly, if you look at the fact that "The Washington Post," on October 5, described the tax bill that we already passed as being fortuitously well timed, you've got to realize that now we're going to go even further. And I think we need to work on an issue like capital gains with a prospective plan. And you know what, the president is going to be supportive of those kinds of things. 
CARVILLE:   But let's see how well the tax -- let's go to  . Let's just see how brilliant this economic policy is working. Let's just take the day that these were passed. Can we see that, please. Here we go. He signed it on June 7, 2001. The Dow Jones was at 11090. It is now at 8645. Unemployment rate was 4.6. Now it's six percent. I'm going to tell you this, Congressman, it ain't working. High tariffs and high deficits don't work. 
DREIER:   Wait a second. Now, James, did anything happen after June 7 of 2001? 
CARVILLE:   Yeah. September 11. 
DREIER:   Now I happen to remember September 11, and that's one of the reasons... 
CARVILLE:   We have bounded back. That didn't cause the unemployment rate to move. 
DREIER:   Wait a second. We know very well that the downturn began at the end of the Clinton administration. And to your credit, you don't constantly call it -- as Begala does -- the Bush downturn or the Bush deficit. The fact is, we inherited it. And, if you look at September 11, that's the reason that we've got to do what we can. We all acknowledge that we need to take more steps... 
CARLSON:   Mr. Rangel, Democrats -- and I think you're the best at this -- have been good and effective, fairly effective at criticizing the Bush administration, but maybe not as good at coming up with reasonable serious solutions on their own. But don't take my word for it. Listen to what Senator Fritz Hollings of South Carolina said about your party. He said, "We need a unified party position on the economy. We've got a crybaby position -- all we do is whine." That pretty much sums it up, doesn't it? 
RANGEL:   Well, first of all, you would think that on a day that unemployment has gone up to six percent, and that we now have 8.5 million Americans without jobs, many have lost their pension funds, without health benefits, that instead of just throwing overboard his economic team, that he'd be coming with a plan. Now Dave Dreier has a lot of imagination, but as long as he's been in the House, he has never brought the Bush economic plan to the floor. I'm on the Ways and Means Committee. We've never seen it. It just seems to me that at a time that, at a time that a million people are going to have their unemployment compensation expire three days after Christmas, and what is Dreier talking about? Tax cuts. We're on the brink of war... 
DREIER:   What we need to do is put into place a plan which is going to encourage economic growth. That is the key. You know that and I know that. 
RANGEL:   What plan? Has Bush got a plan? 
DREIER:   And the most responsible way to do that is to have a prospective capital tax gains reduction. That's going to encourage economic growth. That is going to get people back into the market, that's going to generate revenues to the Treasury to deal with the unemployment benefits that you're talking about, with prescription drugs, and a wide range of other concerns that we've got. 
RANGEL:   David, you make up these plans as you go along. The real plan has to come... 
DREIER:   We've been working on it for a long time, Charlie. 
RANGEL:   You're working on it, but you work on it in the back room. You haven't brought to it the House. We don't know about a plan. You just keep talking about tax cuts for the rich. You have no plans at all for the stimulus. You want to make permanent -- you want to make permanent tax cuts ten years from now. Every governor in the country just said that they're going into deeper deficits. They're depending on the federal government, and we're going broke. 
CARLSON:   Wait. Mr. Rangel, hold on. It's not simply David Dreier who is saying this. Do you remember Alan Greenspan? He's the one Democrats used to spend so much time adoring. Well listen to what Alan Greenspan said about the tax cuts. Here's what he said. "It would probably be unwise to unwind the long-term tax cut" -- what you're suggesting -- "because it is already built into the system. There are potential adverse consequences, which I don't think are desirable." Alan Greenspan... 
RANGEL:   First of all, I didn't say unwind the tax cut. I said not make it permanent. And I'm not suggesting...  
CARLSON:   What's the difference? 
RANGEL:   There's a heck of a difference. We're talking about -- give me a break.    We're talking about ten years from now. The second thing I'm saying is that, with all of the unemployment, with the crisis that we're facing, don't give me Greenspan and Dreier. Give me someone from the White House with a plan. The only plan he has is tax... 
CARVILLE:   My temptation right now is to bust out laughing, and I'll tell you why. You guys are talking about a capital gains tax cut. I don't know how to tell you this, Congressman, but there ain't nobody got any capital gains out there. The Nasdaq is down 80 points. The Dow is down one-third. What are you talking about? Live in the real world. People have lost their savings. 
DREIER:   I'm talking about a creative tax cut, which is going to encourage people to get back into the market. I'm talking about a prospective capital gains tax... 
CARLSON:   I'm saying  . Do you have gains in the Nasdaq? Tell us what you're doing.    Let him answer. 
DREIER:   We also need to deal with capital losses as well. But you know what, we   encourage growth with a responsible cut. And you know, you've got to know, James, more than half the American people are members of the investor class. They're invested today. And, yes, there are a lot of losses that have been suffered out there. But there are some people who have gains and other assets. And I think we need to... 
CARVILLE:   Who? 
DREIER:   ... have a perspective... 
CARVILLE:   Who? Do you really believe people are making money on their investments now? Are you all that out of touch? 
DREIER:   Some people are. 
CARVILLE:   What about my losses? 
DREIER:   Well one of the things we want to do is we want to increase the deductibility for your losses, too. We want to move beyond the $3,000 level. Those are the kinds of things -- OK, we need to generate revenues to the Treasury to deal with a lot of the issues. Paying for the war on terrorism, dealing with prescription drugs. We need to have the revenues to do that. Economic growth is the only way to get that done. 
CARLSON:   Charlie Rangel, I hear you laughing there. Now, wait, hold on, James. You have James laughing, you have Mr. Dreier giving actual ideas. I want you, Mr. Rangel, if you don't mind, tell us the three things that you think would get the economy moving long term, meaning beyond this winter. Say over the next five years. What are the three discreet ideas you'd bring if you were treasury secretary? 
RANGEL:   The first thing that I would do is to have someone that would be able to talk to the American people and the Congress, and tell the president that Republicans and Democrats will have to work together, because there's no Republican solution, no Democratic solution. We both have to come forward with a compromise. 
DREIER:   We're doing that, Charlie. You know that we're working... 
RANGEL:   Would you be quiet? 
DREIER:   Yes, sir. 
RANGEL:   The second thing I would do would be able to say that when we find 40 million people in ten years going into the Social Security program, going into Medicare, this is not the time to make permanent tax cuts. But everything that we should put on the table, including given a stimulus to the working people that would get out there, that would spend the money on food and clothing. And the other thing I would say is that we've got to have shared sacrifice. If the president is so dedicated to having a preemptive strike against Iraq, it should be shared and we should make certain that we have a draft and everyone is going to participate. 
CARLSON:   Oh, wait a second. I'm sorry, I asked you for three discrete ideas. You said they need better PR, we need some sort of stimulus and we need a draft. I mean -- what are the economic ideas over the next five years? 
RANGEL:   Well, the economic ideas are going to be that we're all going to share in this and that it's not just going to be giving tax cuts to the rich and expecting the poor to go off and fight the wars and not to have anything in terms of knowing that Social Security, Medicare, prescription drugs, not one of these things have been done. 
CARVILLE:   We got to go to break. And we're all dying for our capital gains tax cuts, because we've all made so much money under this administration. 
CARLSON:   I'm dying to hear a single idea, just one. In a minute, we'll ask our guests who should be the next treasury secretary. We have some nominations of our own and we'll tell you about them. We'll be right back.
