FTN - 4/27/03

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BOB SCHIEFFER, Chief Washington Correspondent: Today on Face the Nation, the SARS epidemic and a debate on President Bush's tax cut.

With deaths from Severe Acute Respiratory Syndrome rising daily worldwide, U.S. health officials are concentrating on how to keep the disease from becoming an epidemic in the United States.

But just how dangerous is it? We'll talk to the head of the Centers for Disease Control, Dr. Julie Gerberding.

Then two Republican senators with very different ideas will debate President Bush's tax cut. We'll hear from Lindsey Graham of South Carolina and Lincoln Chafee of Rhode Island.

Then I'll have a final word on business ethics. But first, just how bad is SARS, on Face the Nation.

ANNOUNCER: Face the Nation, with CBS News Chief Washington Correspondent, Bob Schieffer.

And now from CBS News in Washington, Bob Schieffer.

SCHIEFFER: And good morning again. Dr. Gerberding, the director of the Centers for Disease Control, is here in Washington. She was here for, I guess, the White House Correspondents Dinner last night and was good enough to drop by and talk to us this morning.

Well, Dr. Gerberding, let's get right to it. Are we overdoing this business about SARS? Is this as bad as we keep hearing that it is?

DR. JULIE GERBERDING, Dir., Centers For Disease Control: Well, you know, we're still learning as we go forward. But I think what we can say right now is, in the big picture, this isn't like influenza. If it was influenza, we would have it everywhere by now.

We can contain this, but we've got to remain vigilant. And I think where we need to be concentrating our efforts is in the health care facilities and in the traveling arena, not generically throughout the general public.

SCHIEFFER: Well, what do you mean by that? Are you saying that we're taking too many precautions right now? Are these warnings too dire that are being put out?

GERBERDING: No, I think the warnings and the alerts are appropriate. They're very specifically targeting travelers to this part of the world or returning travelers that need to be reminded to seek medical attention if they get any symptoms of SARS.

The health care setting is the one where we're especially concentrating on in this country, because, looking at what's happened elsewhere, we see that that's really the place where the disease is leaking out into the community. If we can't protect our health-care providers we will put our communities at risk.

SCHIEFFER: So you're saying that this does not spread the way that flu does, people walking down the street get flu, there is something in the air, or whatever, from others who have it. You're saying this is not how this is contracted?

GERBERDING: Well, it's mainly spread through direct face-to-face contact. So in that sense, it's somewhat like flu. But the difference is that the people who have it now are relatively small in number and, in this country in particular, we know who they are. They're the people returning from affected areas.

It hasn't moved from those people into schools or nursing homes or the general population. So we don't have a general hazard here so far. We have a hazard that's limited to very specific groups. And our containment measures can target those groups, and so far seem to be successful.

SCHIEFFER: So what does that mean? That means you isolate people who have it in the hospitals? You take special precautions, the people who deal with them?

GERBERDING: The first thing is to make sure that we are finding the cases early. And in this country we're casting a very broad net. So we're including people in our potential definition of SARS that probably don't have SARS, but we are erring on the side of identifying them and isolating them so that there's not transmission.

If they're in the hospital, the health-care workers use what's known as airborne and contact precautions to minimize any chance of spread through the air or through direct person-to-person contact.

If the person is in their home, we're putting their household contacts on an active monitoring program so that somebody's checking in to make sure that they're not developing early SARS. And, of course, if a contact did get early SARS, they, too, would be then put in isolation.

SCHIEFFER: Well, is this a deadly disease? Do people who contract it generally die?

GERBERDING: Fortunately, most people who contract it do fine. But about 6 percent of people do develop the very severe lung failure and go on to die. And it's a tragic outcome if you're in that group of people or family members that are dealing with that. But it is not uniformly fatal by any stretch of the imagination.

SCHIEFFER: Well, do we know now what it is? Will there be a vaccine developed?

GERBERDING: We're optimistic that we'll get a vaccine. I think our strategy right now is let's work really hard to contain this until we have better tools, like a vaccine or a drug treatment. But we are at least a year away from any kind of vaccine that would be useful in people.

SCHIEFFER: How bad is it in China? There's no question that they underplayed this when we first learned about it. What happened there?

GERBERDING: Well, I think the disease was incubating and kind of percolating through certain regions of China before it came to the light of day. And that created the opportunity for it to move into a number of regions and a number of cities.

We don't really still know what's going on in the rural areas. But some of the news from some of the cities is very positive, where they are not seeing widespread transmission there.

SCHIEFFER: Do you think there is any chance that this could become something like AIDS, kind of a third-world epidemic? Is it at that point yet?

GERBERDING: I don't have a crystal ball, but I would say that the most likely scenario right now is that we'll see spread, and we'll have to work very hard at containment. And if we do the kinds of common-sense public-health measures that we know can work, we ought to be able to prevent this from becoming a global pandemic.

But if it does get unleashed in new parts of the world -- you know, every time there is a new country involved, we have to start the process all over. And there are a lot of countries that simply don't have the infrastructure or the capability of that level of containment. So, our best bet right now is to keep it from getting there in the first place.

SCHIEFFER: So if I'm someone sitting out watching this broadcast this morning, someone who has small children, say, how should I -- what should I be doing about all of this?

GERBERDING: Well, right now I think the most important thing is, first of all, to stay informed and keep track of what is going on in the local community. And the health officials at the local level are in the information lead.

But most people don't have to be worrying about acquiring or transmitting SARS. They should pay attention to the travel advisories and not go places that there's advice to suggest that you shouldn't go unless it's essential.

They also should pay attention if they know anyone who has SARS, and be aware that if they've had direct exposure to that person, they need to contact their clinician and, you know, get checked out.

SCHIEFFER: So people should not go to Toronto right now?

GERBERDING: Right now, there is no travel restriction for Toronto. We are alerting people that there is a problem there.

In Toronto, the disease is very contained in the sense that it's in travelers, it's in the health-care workers who have taken care of them, and one group of people who went to a religious meeting there. But they're not seeing it pop up unexpectedly in other parts of the community.

So our information right now does not suggest that the average traveler going to Toronto has anything to be concerned about. Of course if that changes, we'll change our advice. And we are working very closely with Health Canada and the provincial health officials to keep on top of this.

SCHIEFFER: So at this point, you haven't changed it. Well, what about China? Would you go to China these days?

GERBERDING: China is a different situation. First of all, we don't know all of the places where it's being spread there. And we don't really understand who's got it and how they're transmitting it. So we do have a travel advisory for citizens planning travel to China, which basically says, don't go unless it's essential.

As we get more information from the various areas of China, we'll be able to put that into a more precise set of guidance, because there may be areas where it's safe to travel and there may be other areas where we would strongly advise against it. That's one of our priorities right now.

SCHIEFFER: We see a lot of pictures of people in Asia wearing these masks. Is that an effective thing to do in this case?

GERBERDING: Well, there is a role for masks here but not really for the person on the street. The place where the masks come into play is, first of all, for the patient to wear a mask so they don't spread the droplets out into the environment. But also for health care workers in close contact or household contacts of SARS patients, the masks can help protect them.

For the person the street, I understand how frightening this is, and there is a tendency to want to do something, but the masks probably are not the thing that are going to make or break the situation.

We do put a lot of emphasis on hand hygiene, which is something we should all be doing anyway. But you can touch someone or touch something that has the corona virus on it and then touch your face or your mucous membranes. And that is one way that a lot of respiratory viruses are spread.

SCHIEFFER: Dr. Gerberding, it's always great to have you in here. Thank you for coming in and helping us to have a better understanding of this.

GERBERDING: : Thank you.

SCHIEFFER: When we come back, we're going to talk to a couple of people who have very different ideas about something else, this tax cut that the president is proposing. We'll do that in a minute.


SCHIEFFER: Tax cuts: good idea, bad idea? To talk about that, two Republicans -- because this is a controversy that's going on within the Republican Party right now -- from Rhode Island, Senator Lincoln Chafee, who has some real reservations about cutting taxes at this point, and from Clemson, South Carolina, Senator Lindsey Graham, who is four-square behind the president's idea to cut $725 billion in taxes over the next 10 years, a figure that even some at the White House are now saying it may not be necessary to do that, that they might be willing to go along with something considerably less be that.

Senator Graham, why are you so strong for this tax cut right now?

SEN. LINDSEY GRAHAM, R-SC: Well, Bob, I wanted a tax cut with a purpose, and I believe the president's tax plan has a purpose, and that's to create jobs.

I don't know what it's like in Rhode Island, but we've got many counties in South Carolina, Bob, with unemployment 6, 7, 8 percent. The $720-something billion proposal by the president spread out over 10 years represents about two cents on the dollar we'll collect in taxes. Over the next decade, we're going to collect $24.7 trillion in taxes.

I think with the economy being sluggish as it is, even though there are some signs of improvement, now is the time to put money back into the economy with a purpose, and that's to create jobs.

Whether it's 720 or 550 or 350, everybody seems to be for a tax cut. The Democrats voted for $350 billion. My point is, if we're going to have a tax cut, let's make sure it does the things necessary to create jobs and not undermine the president's efforts. And I think we're undermining his efforts now without any real logical reason.

SCHIEFFER: Well, Senator Chafee, let me go to you. You've had some reservations about this whole thing.

I would say, first, that I think all sides agree that the votes at this time are simply not there in the Senate to pass a $725 billion tax cut. Some real questions about whether the Senate would even go along with what the House has done, a $550 billion cut.

What do you think is going to happen on this?

SEN. LINCOLN CHAFEE, R-RI: Well, it's going to be interesting.

Certainly the two Republican senators, Senator Voinovich and Senator Snowe, that did not decide to go along with the president's plan are getting a lot of pressure in their states.

John McCain and I opposed the original big tax cut in the spring of 2001. We're also opposed to this.

And now we have Senator Grassley, chairman of the Finance Committee, pledging not to allow a tax cut to come out of his committee higher than $350 billion. So we'll see.

I have to disagree with Lindsey, though, that this is going to stimulate the economy. We've worked so hard through the '90s to get our balanced budget, and now we're getting back into these big deficits. And even President Bush 41 broke his "Read my lips, no new taxes" pledge to get the revenue up. And then of course President Clinton -- and then he lost the election. President Bush 41 lost the election, maybe on that issue.

And President Clinton put in some revenue enhancers, some tax increases, and he lost both houses of Congress, the House and Senate, maybe on that issue.
So it's hard work to get these revenue enhancers in. And what happened? The economy took off. We had the best expanded economy through the '90s because we were balancing our budget.

And we're getting away from that. We're seeing enormous deficits now, and I think it's harmful to the economy.

SCHIEFFER: Well, would you, in fact, go along, Senator Chafee, with a $350 billion cut?

CHAFEE: No, I voted for it just to get it down from the 725 number. I sided with Olympia Snowe and George Voinovich on that. But I don't approve of any new tax cuts until we can control our spending and address these deficits.

SCHIEFFER: So you would be against, and you intend to vote against, any tax cut? Am I understanding what you would say -- what you're saying?

CHAFEE: Yes, that's correct. And we have these enormous pressures on the military to do what we are doing in Iraq and also Afghanistan, homeland security.

These are very, very expensive, just hundreds of billions of dollars that -- and even in Washington, those are big numbers. And we just can't afford another tax cut. It's hurting our economy, in my opinion.

SCHIEFFER: So how does that sit with you, Senator Graham? Here you're seeing Senator Chafee saying, and I think he probably speaks for a number of moderates, that he is not going to vote for any tax cut at this point.

Do you think it's possible to pass a tax cut during this session of the Congress? I mean, just in practical terms here?

GRAHAM: Yes, I do, Bob. I really do think it's possible. I think it's very necessary.

When you use the words "tremendous" and "large" and "irresponsible," you've got to understand what money we're talking about.

Every Democrat voted for a $350 billion tax package in the budget resolution. That's about a nickel, three-quarters of a penny on the dollar we will collect over the next 10 years.

What I am saying is, let's have a purpose behind our tax cut. I fundamentally disagree with Lincoln. I don't think we are going to tax our way into a better economy. Our Democratic colleagues propose $650 billion of additional spending in the budget resolution process. This Congress, since 1998, has not shown fiscal restraint. We need a pro-economic growth package.

The president's plan has a purpose: To eliminate double taxation of dividends will help the stock market. If you could buy stock and receive a dividend from your stock purchase tax-free, you'll never convince me that will not help the stock market, help companies grow and create jobs.

If you eliminate the marriage penalty, increase the child tax credit to $1,000, in my state, where a lot of families live on $40,000 and $50,000 as a couple, it will really help them. It will help consumers.

So now is the time to put money back into the economy for the purpose of creating jobs.

On the other hand, Bob, I will not vote for a tax cut just to say I voted for a tax cut. I will not support any package that comes out of the Finance Committee that undermines the ability of the president's plan to create jobs. You need incentives to buy stock to grow the economy and to get money back into consumers' pockets.

SCHIEFFER: Well, is what you are saying, Senator Graham, is that you are not going to vote for a tax cut unless it is the president's tax cut, unless it's this big number? You are not going to vote for a smaller number, is that right?

GRAHAM: Well, the difference between 350 and 550 is what we're talking about, is a half a cent on the dollar over 10 years, Bob.

The $550 billion, that extra $200 billion, a half a cent, allows you to do something with dividend double taxation.

SCHIEFFER: But, all right...

GRAHAM: We are second to Japan in the world. So, we have got to have the whole elements there or it makes no sense.

SCHIEFFER: So it's 550 for you or nothing.

But let me ask you this, Senator Graham...

GRAHAM: It's a purpose, it's a purpose.

SCHIEFFER: In January of 2000, you said of then Governor Bush's tax cut proposal, the one we're talking about, "It does nothing, in my opinion. It is fiscally responsible to reduce the national debt. This is a large tax cut that's going to eat up all the surpluses if they come about. It doesn't address" -- and then you go on and on, the problems it doesn't address.
Have you flip-flopped on this?

GRAHAM: Well, here's what it doesn't address, back then or now, and that's Social Security. The biggest problem my generation faces is a Social Security system about to go bankrupt because we get less than 2 percent growth on Social Security investment by young workers.

I do believe, and have always voted for tax cuts. In 2001, we had 12 Democratic senators to lower rates across the board, to increase the marriage -- the child tax credit to $1,000, and to eliminate the marriage tax.

Now we are trying, in this round of tax stimulus, economic stimuluses, Bob, to accelerate the thousand-dollar child tax credit to next year, to eliminate the marriage tax penalty now, and to create an investment climate so that people can grow their business without borrowing money.

Right now, to grow your business, the tax code allows you to write off debt.


GRAHAM: I want to have stock being sold tax-free.

SCHIEFFER: Let's give Senator Chafee a chance to respond to that.

What about that, Senator Chafee?

CHAFEE: In the spring of 2001, Bob, not once was it said that we would get into deficits. Every part of the debate was, we can afford that big tax cut in the spring of 2001.

And what happened? We couldn't afford it. The surpluses could not afford that big tax cut, and we did go back into deficits.

And so I say to Senator Graham that I just don't even think you believe that these tax cuts are going to stimulate the economy.

What I'm trying to figure why these conservatives are pushing the bigger and bigger tax cuts when, traditionally, conservatives have been opposed to deficits.

And all I can figure is that if we get these big deficits, then the pressure will be on to strangle the spending, to strangle what is called the wasteful social spending, whether it's Section XIII or Medicare or Medicaid or Social Security. And I hear from some of the conservatives, the wasteful social spending, Head Start Programs or Pell Grants. And I think that's the tactic.

Once we get these deficits, then we can attack these so-called wasteful social spending programs, which I disagree with. I think these social programs have made a lot of people's lives a great deal better.

SCHIEFFER: Senator Graham, there is a Republican group that's running ads that refers to people, Republicans like Senator Voinovich and Senator Snowe, who are against this big tax cut, as "so-called Republicans," and it even compares them to the French.

GRAHAM: That is totally out of bounds. Lincoln is a friend of mine. We cannot have a Republican majority without Lincoln winning his seat.

I'll be the first to admit, Lincoln, I couldn't win in Rhode Island, and you couldn't win in South Carolina.

This debate is about 350 versus 550. I do believe if you are able to buy stock and you could get a dividend tax-free, people would buy more stock -- that would help our economy.

I do believe now with the sluggish economy you put money back into the economy, you don't take any more out. And this tax cut over a 10-year period is a little over a penny and a half in terms of the money we are going to take from taxpayers.

So I don't want to go beat on Lincoln, I don't want to beat on Voinovich, and I don't want to beat on Olympia Snowe. But Lindsay Graham gets one vote, and Lindsey Graham has an economy in South Carolina where 6 and 7 and 8 percent unemployment exists.

I'm going to stand behind my president to have an economic stimulus package that makes sense and not just arbitrarily pick a number.

SCHIEFFER: All right, Gentlemen...

CHAFEE: Let me just add...

SCHIEFFER: OK, quickly.

CHAFEE: ... could I just add, Bob, that that was the argument given back in the spring of 2001, and it didn't stimulate the economy.

Now it's a new plan, so maybe we should go back and re-address what we did in the spring of 2001 and have the debate on these dividend tax cuts.

SCHIEFFER: All right, we have to end it there. The clock just ran out. Thank you, Gentlemen, for giving us a little background on both sides of this issue.

Back with a final word in just a minute.


SCHIEFFER: Finally today, want to know what offended me the most about the shenanigans of Donald Carty, the guy who ran American airlines?

Well, it was all those apologies he put out after he got caught trying to salt away big bonuses and pensions for himself and the other airline big-wigs after he had convinced the company's pilots, flight attendants and mechanics to take big cuts in their pay and benefits to prevent bankruptcy.

He wasn't sorry for what he's done, of course. He was just sorry he got caught, which brought forth nine apologies.

Well, PR experts and crisis managers make a living by telling business and government leaders in a crunch to do just what Carty did, call a news conference, apologize profusely, say you've learned from the experience and then say it's time to move on. No penalty, of course, just apologize, and most of the time it works.

But what I was thinking about as I watched Carty's numerous mea culpas was how we used to try the same thing when we were kids. "I'm sorry, I'm sorry," we'd cry when we saw my mother coming at us. "A little late for that," she'd reply, just before she whacked us.

Well, happily, the American Airlines board, under heavy pressure from the Flight Attendants' Union, took my mother's approach on this one and fired Carty. Good for them.

But watching these business scandals unfold time after time leaves me wondering. These CEOs all seem highly educated in the tactics of excusing outrageous behavior. But what about ethics? Has that become a foreign language no longer required?

It's too bad my mother's no longer around. She could have taught a whole new course at one of those graduate business schools.

For Face the Nation in Washington, I'm Bob Schieffer.