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Bill Griffeth Speaks with White House Ways and Means Chairman Charles Rangel and Louisiana Congressman Jim McCreary on "Power Lunch"

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WHEN: November 8 at 1:30PM ET
WHERE: "Power Lunch"

The following is the unofficial transcript of a CNBC interview with Charles Rangel, House Ways and Means Chairman, and Jim McCreary, Louisiana Congressman, on CNBC's "Power Lunch" today. All references must be sourced to CNBC.

In an interview with CNBC's Bill Griffeth, Rangel and McCreary discuss the vote on Rangel's bid to reform tax.

GRIFFETH: A VOTE ON HOUSE WAYS AND MEANS CHAIRMAN CHARLES RANGEL'S BID TO TRY AND REFORM THE ALTERNATIVE MINIMUM TAX COULD COME AS EARLY AS TOMORROW. IT'S MOVED VERY RAPIDLY, TO TRY AND RELIEVE 24 MILLION AMERICANS FROM BEING SUBJECT TO THE AMT WHILE AT THE SAME TIME FINDING A WAY TO PAY FOR THAT REFORM BY RAISING TAXES ON HEDGE FUNDS AND PRIVATE EQUITY AND SOME OF THE NATION'S WEALTHIEST AMERICANS. JOINING US IS WAYS AND MEANS COMMITTEE CHAIRMAN RANGEL AND THE RANKING MEMBER OF THE COMMITTEE LOUISIANA CONGRESSMAN JIM McCREARY.I APPRECIATE YOUR TIME.I KNOW HOW BUSY YOU'VE BEEN TODAY WITH OTHER VOTES AS WELL.THANK YOU FOR JOINING US. CHAIRMAN RANGEL, YOU HAVE TO BE DISAPPOINTED THAT YOUR COUNTERPARTS, THE DEMOCRATIC LEADERS OF THE CINCINNATI ARE NOT AS ENTHUSED AND IT DOESN'T LOOK LIKE THIS BILL WILL PASS THE SENATE.

RANGEL: DON'T GET ME INVOLVED IN WHATTHE SENATE WILL OR WILL NOT DO.QUITE HONESTLY, IT'S BEEN MY RECENT EXPERIENCE THAT THEY HAVENO RESPECT FOR THE CONSITU TION IN SO MANY ISSUES.THEY BELIEVE THAT ONCE REPUBLICANS AND DEMOCRATS AGREE OVER THERE, THE HOUSE OF REPRESENTATIVES HAS NO VIEW.ON THIS, I THINK WE'RE GOING TO FINDS OUT THAT CONSTITUTIONALLY IS THE WAYS AND MEANS COMMITTEE THAT RAISES THE REVENUES.

GRIFFETH: REALISTICALLY IF IT DOES NOT PASS THE SENATE, IT MEANS WE GO THROUGH ANOTHER ONE-YEAR PATCH ON THE AMT, YES?

RANGEL: THAT'S WHAT WE'VE GOT TO DO NOW. BOTH JIM AND I AGREE THAT WE CANNOT REFORM THE SYSTEM AS WE WISH WE COULD AND ELIMINATE THIS TAX TOGETHER.WE BOTH AGREE RIGHT NOW WE HAVE TO HAVE A ONE-YEAR EXTENSION, A PATCH AS YOU CALL IT. OUR QUESTION IS THAT WE TOTALLY BELIEVE THAT THIS TAX BURDEN SHOULD NOT BE PAID FOR BY BORROWING MORE MONEY, AS MR. BUSH DID BEFORE, IN PROVIDING A TAX BENEFIT OR THE REMOVAL OF A TAX PENALTY.THAT IS THE ISSUE FOR TODAY AND FOR TOMORROW.

GRIFFETH: BUT CONGRESSMAN McCREARY, YOU HAVE TAKEN ISSUE WITH THE LONG-TERM EFFECTS OF A REFORM OF THE AMT AS IT STANDS NOW WHERE IT WOULD ESSENTIALLY RAISE TAXES ON MANY SO-CALLED MIDDLE CLASS AMERICANS DOWN THE ROAD.

MCCREARY: YES, WHEN HE SAYS WE AGREE THAT YOU DON'T WANT TO PAY FOR THE ONE YEAR PATCH ON THE AMT IN INCREASING THE DEFICIT, HE MEANS YOU, WE DEMOCRATS, NOT WE REPUBLICANS.WE THINK THAT YOU SHOULD NOT PAY FOR A ONE-YEAR PATCH ON THE AMT WITH A TAX INCREASE ON SOMEBODY ELSE.

GRIFFETH: HOW DO YOU PAY FOR IT, THEN?

MCCREARY: YOU SHOULDN'T HAVE TO PAY FOR IT.IT'S A ONE-YEAR PATCH.IN OTHER WORDS, IT JUST FREEZES THE AMT IN PLACE. IT'S NOT A REFORM OF THE AMT AT ALL. RIGHT NOW WE'RE BRINGING IN 18.6% OF GDP AND REVENUES TO THE FEDERAL GOVERNMENT FAR ABOVE THE HISTORIC AVERAGE OF THE REVENUES COMING INTO THE FEDERAL GOVERNMENT WITH THE PATCH IN PLACE. WHAT SENSE DOES IT MAKE TO RAISETAXES ABOVE THAT JUST TO, QUOTE, PAY FOR A ONE-YEAR EXTENSION OF THE AMT?FROM A FISCAL STANDPOINT, IT DOESN'T MAKE SENSE AND FROM AN ECONOMICAL STANDPOINT, IT DOESN'T MAKE SENSE.

GRIFFETH: YOU HAVE TO BE VERY DISAPPOINTED. YOU AND I SPOKE SOON AFTER YOU BECAME CHAIRMAN OF THE COMMITTEE.YOU WERE VERY HOPEFUL THERE COULD BE COMPREHENSIVE REFORM ONA TAX WE ALL 'DEGREE IS PRETTY EGREGIOUS BY AFFECTING PEOPLE ITWASN'T MEANT TO AFFECT WHEN IT WAS ENACTED IN 1969 AND HERE WE ARE TALKING ABOUT ANOTHER ONE-YEAR PATCH AGAIN.

RANGEL: HEY, DON'T TELL ME DISAPPOINTED.HAVING AN OPPORTUNITY OF NOT BEING HIT IN THE HEAD BY REPUBLICANS EACH AND EVERY DAY, HAVING AN OPPORTUNITY TO DISAGREE WITH MY FRIEND, JIM Mc CREARY IN A CIVIL AND DECENT WAY, I'M OKAY. JIM IS S SO ELOQUENT, I'M NOT GOING TO ENGAGE HIM IN HOW YOU DON'T HAVE TO PAY FOR THIS .THIS IS A NEW PHILISOPHICAL THING THAT I HAVE TO GO BACK.THE OLD-FASHIONED WAY IS THIS.DID BUSH EXPECT WE WOULD RECEIVE $50 BILLION FROM THE AMT? TREASURER SAYS YES. ARE YOU REMOVING THE COLONEL HE $50 BILLION FROM THE BUDGET?TREASURER SAYS YES. DOES THE PRESIDENT WANT TO ALLOW YOU NOT TO HAVE THIS TAX COME IN? YES. THERE'S ONLY TWO WAY S TO DO IT IF THEPAY-GO RULES MEAN ANYTHING, SUBSTITUTE THE REVENUE YOU ARE LOSING WITH WITH SOMETHINGELSE AND YOU SEE HOW WE'RE GOINGTO DO THAT. OR CUT THE PROGRAMS BY $50 BILLION.THE THIRD WAY IS BORROW THE MONEY AND NOT PAY FOR IT ANYWAY.NOW, IF HE CAN CONVINCE ME THAT NOT PAYING FOR IT IS THE WAY THAT'S REVENUE NEUTRAL, I'M GOING TO GIVE HIM THE HOUSEHOLD FIGURES THAT I'M GOING TO BORROWSOME MONEY AND EXPLAIN TO THE CREDITORS THAT THIS IS REALLY NOT A PAY FOR, IT'S NOT BORROWING, IT'S JUST A PART OF MY OVERALL INCOME AND HOW MUCH MONEY THAT I HAVE TO SPEND.

GRIFFETH: CONGRESSMAN McCREARY, A RARE OPPORTUNITY.I SAW YOU SHAKING YOUR HEAD.30 SECONDS TO CONVINCE THE CHAIRMAN.

MCCREARY: THE PRESIDENT AS BUDGET DOES NOT ANTICIPATE $50 BILLION. THE PRESIDENT'S BUDGET DOES INCLUDE A ONE-YEAR PATCH THAT ISNOT PAID FOR IN HIS BUDGET.AND I WILL BE HAPPY TO EXPLAIN TO THE CHAIRMAN WHY PAY-GO RULES SHOULD BE USED TO PAY FOR A NEW TAX CUT OR A SPENDING INCREASE BUT SHOULD NOT BE USED TO PAY FOR PREVENTING A TAX INCREASE. THERE IS A DISTINCT DIFFERENCE THERE.

RANGEL: AND IF WE DON'T DO ANYTHING, 23 MILLION PEOPLE WILL BE PAYING $50 BILLION INTO THE TREASURY. AND WE HAVE TO MAKE THAT UP ONE WAY OR THE OTHER.

GRIFFETH: WELL, AS THEY SAY IN CHICAGO WITH THE CUBS, MAYBE WAIT TILL NEXT YEAR, HUH, GENTLEMEN?NO, WE HAVE TO WAIT UNTIL NEXT WEEK.

RANGEL: WE HAVE TO MOVE BEFORE THIS YEARIS OUT.ON THE ONE-YEAR PATCH.

GRIFFETH: FOR LONGER TERM REFORM MAYBE NEXT TIME.

MCCREARY: MAYBE 2009.

RANGEL: WATCH THAT.I'M 77 YEARS OLD.

GRIFFETH: IT'S ALWAYS GOOD TO SEE YOU BOTH.THANK YOU FOR YOUR TIME ONCE AGAIN.CHAIRMAN RANGEL, CONGRESSMAN McCREARY.




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