CBS’s Smith Claims ‘Coffers Are Not Full,’ Need More Taxes

On Monday’s CBS "Early Show," co-host Harry Smith talked to John McCain supporter Carly Fiorina and Barack Obama supporter Senator Claire McCaskill about the respective economic plans of the presidential candidates: "Bear market blues. Wall Street returns from the holiday as gas prices set another new record. Can either candidate calm America's fears?" At one point, Smith asked Fiorina: "How do we do all of this stuff? And we're not making more money, the tax rolls are not growing, the coffers are not full. We're just talking about deficit -- if nobody's going to get taxed, isn't this just going to be deficit city?" (audio available here)

While Smith did not feel the "coffers" were "full," at least not full enough for him, in reality, government tax revenue has tripled since 1965 and since the Bush tax cuts took effect in 2003, corporate income tax revenue has reached its highest level in over 20 years.

Smith began the segment by touting a new CBS poll: "The economy remains a major issue for voters as we head into the fall elections. In fact, a recent CBS News poll shows 78% of Americans think the economy is in bad shape." Considering the "Early Show’s" declaration of a recession last week it’s easy to understand such poll results.

Earlier in Monday’s segment, McCaskill explained Obama’s commitment to helping the middle class: "Instead of tax policies that George Bush and John McCain support, which were all about the few, the powerful, the wealthy, his plan is all about middle-class families, Harry. Their ability to pay for things-" Smith then interjected: "He has guaranteed that he will not raise taxes for anyone who makes less than $250,000. Can he guarantee that unequivocally?" McCaskill replied: "Absolutely. And that means no capital gains taxes, so that help for small business is there for anyone under $250,000. No more taxes. No tax hikes for anyone."

Smith then asked Fiorina about how the "coffers are not full," however, his final question to McCaskill was not nearly as critical: "Senator McCaskill, a final word, Barack Obama, he rolls out his plan this week. What's the big takeaway?" That softball gave McCaskill the opportunity to declare: "The big takeaway is he needs John McCain to step up, help him sponsor another stimulus package right now. Right now. It's $50 billion, that's just two months in Iraq, Harry, two months in Iraq. And we can do more right now to help families that are really struggling just to pay to get to work every day."

Here is the full transcript of the segment:

7:00AM TEASER:

HARRY SMITH: Bear market blues. Wall Street returns from the holiday as gas prices set another new record. Can either candidate calm America's fears?

7:02AM SEGMENT:

HARRY SMITH: First, the long holiday weekend is over, Wall Street gets back to work with a market now in bear territory. Deirdre Bolton of Bloomberg Television joins us. Good morning, Deirdre.

DEIRDRE BOLTON: Good morning, Harry. Hot and gloomy that's not just the weather it is the market forecast for July too. The Dow, as you mentioned, in a bear market, so that means it's fallen 20% from its most recent high back in October 2007. Last week's losses, they completed the longest streak of weekly declines in four year's time. So record energy prices that's certainly one component, one reason for the gloom. Right now, oil is moving lower in overseas trade but it's all relative, prices still above $142 a barrel. Now some traders say the next big mark is $150 a barrel and it's not going to take that long to get there. If you were on the road this Fourth of July weekend you already noticed how much more expensive it was to pay for gas. Prices are at a record $4.11 per gallon, that is a new national average. Another factor contributing to the negative market sentiment, people are really worried about holding on to their jobs. Employers cut jobs for the sixth straight month in a row in June. So the question out there, are there any bright spots? Well, stocks are getting so cheap that some strategists say it is time to buy. They predict the S&P 500 will be up around 18% by January 2009. But if history is any guide, it's a little ambitious, the last time the markets were this low, 2001, it took nine months to get back on track. So, Harry, it seems like cautious optimism is still the best kind, at least for the moment.

SMITH: Very, very cautious optimism. Deirdre Bolton, as always, thanks so much from Bloomberg TV. The economy remains a major issue for voters as we head into the fall elections. In fact, a recent CBS News poll shows 78% of Americans think the economy is in bad shape. So both candidates are headed out on the campaign trail this morning to stress their economic plans. Joining us from Arlington, Virginia is Carly Fiorina, an economic advisor to Senator John McCain. And from St. Louis, Senator Claire McCaskill of Missouri, a supporter of Barack Obama. Good morning to you both.

CLAIRE MCCASKILL: Good morning.

CARLY FIORINA: Good morning, Harry.

SMITH: Carly, let me start with you. Tell me one thing, the one thing you can guarantee John McCain is going to do the first day he takes office that will have an important and dramatic effect on the economy?

CARLY FIORINA: Make it easier for small businesses to hire and grow. And that's critical because small business is the one place in the economy that is still adding jobs. About 400,000 people have lost their jobs so far this year. But in that same period small business has created 233,000 jobs. In fact, small business is the engine of growth in this economy. It produces about 70% of the jobs. And so everything that John McCain is focused on in terms of tax policy, in terms of making sure that energy costs are under control is very much focused on helping small businesses grow and hire.

SMITH: Alright. Let's go to Claire McCaskill. The one thing Barack Obama will do on day one that will help Americans from coast to coast with their pocketbooks?

CLAIRE MCCASKILL: He will go to Congress and begin working in a bipartisan fashion to change our tax code to help out the middle class. Instead of tax policies that George Bush and John McCain support, which were all about the few, the powerful, the wealthy, his plan is all about middle-class families, Harry. Their ability to pay for things-

SMITH: He has guaranteed that he will not raise taxes for anyone who makes less than $250,000. Can he guarantee that unequivocally?

MCCASKILL: Absolutely. And that means no capital gains taxes, so that help for small business is there for anyone under $250,000. No more taxes. No tax hikes for anyone. In addition to that, a $1,000 tax relief for middle-class families. No taxes for seniors that make 50,000 or less.

SMITH: Yeah.

MCCASKILL: We're talking about changing the tax code to help out those who need it instead of those very few at the top.

SMITH: Alright. Carly, let me ask you this. How do we do all of this stuff? And we're not making more money, the tax rolls are not growing, the coffers are not full. We're just talking about deficit -- if nobody's going to get taxed, isn't this just going to be deficit city?

FIORINA: Well, first I must say I'm a little confused by Senator McCaskill's comments because Barack Obama has actually promised that he will double the capital gains tax, just as an example, from 15% to 30%. But let me just say that John McCain is very clear, that part of what has to happen here is not simply that we not tax America. And there's only one candidate who promises not to raise taxes. That's John McCain. But we also have to reduce the size of government spending. The government spending has grown 60% in the last seven years. Government spending is out of control. And so we must bring that back into control without a doubt.

SMITH: Senator McCaskill, a final word, Barack Obama, he rolls out his plan this week. What's the big takeaway?

MCCASKILL: The big takeaway is he needs John McCain to step up, help him sponsor another stimulus package right now. Right now. It's $50 billion, that's just two months in Iraq, Harry, two months in Iraq. And we can do more right now to help families that are really struggling just to pay to get to work every day.

SMITH: It sure is going to be an interesting week. Carly Fiorina, thank you so much. Senator Claire McCaskill, appreciate it.

FIORINA: You're welcome.

SMITH: You bet.

MCCASKILL: Thank you.