FOX News Sunday host Chris Wallace began by interviewing Sen. John McCain (R-AZ). McCain declared the budget to be massive generational theft, said we should let more banks fail and GM enter bankruptcy, and promised to help Obama’s housing plan pass.
Next Wallace spoke with Gov. Tim Kaine (D-VA), the new Chairman of the DNC. Kaine defended Treasury Secretary Geithner and walked through four elements of Obama’s plan to solve the financial crisis, and said the financial rescue will be more difficult than an economic stimulus plan because it must be globally coordinated.
George Stephanopoulos hosted a roundtable of Sen. Claire McCaskill (D-MO), Sen. Evan Bayh (D-IN), Sen. Richard Shelby (R-AL), and President Tom Donohue of the U.S. Chamber of Commerce on ABC’s This Week. McCaskill said to be patient and let the stimulus package realize effects and that there is a psychological lag to the state of the economy. Shelby declared TARP a failure and said we must not have a TARP II. Donohue disagreed, noting that TARP’s main objective was injecting liquidity, which he said succeeded. Bayh argued that a company too big to fail must operate under a different set of rules and also that the budget bill is too large.
Host David Gregory met with Sen. Lindsey Graham (R-SC) and Sen. Chuck Schumer (D-NY) on NBC’s Meet the Press. Graham began lauding the Fed’s TALF plan to get credit flowing again. Schumer walks through three main points of Obama’s economic recovery plan – stimulus, foreclosure abatement, and financial reform – and blamed the severity of this mess on consumer confidence and eight years of spending more than we earned.
Schumer described two types of nationalization – good nationalization and bad nationalization – and said Republicans are touting the policies of Herbert Hoover and want to return to the “Reagan days.” Despite having 37 earmarks, Graham wants the spending bill to be vetoed because of earmarks.
White House Budget Director Peter Orszag was first on the lineup for host Bob Schieffer on CBS’s Face the Nation. Orszag described the GOP alternative to the budget as one of tax cuts for the wealthy and corporations, a Medicare program that covers 80% of healthcare cost, and a social security plan that invests in the stock market. He said the Obama administration is like a “relief pitcher stepping into the ninth inning” with the 2009 budget and that they will start fresh with the 2010 budget.
Rep. John Boehner (R-OH) was Schieffer’s other guest. He said the government needs to lead by example by freezing spending.
SEN. MCCAIN ON FNS: Sen. John McCain (R-AZ) was first on FOX News Sunday. Host Chris Wallace began the interview on the economy. McCain didn’t want to commit to saying the 21% decline in the markets is Obama’s fault – the so-called “Obama Bear” – and that he’ll leave that up to the experts.” Still, he declared that we are committing massive generational theft through the trillions of dollars Obama is spending.
McCain followed up by arguing that we should have let more banks fail and GM should enter bankruptcy, renegotiate union contracts, and come out leaner and stronger. On Obama’s housing proposal, McCain described it as similar to the one he campaigned on and will work hard to help it pass.
On the possibility of additional stimulus, McCain hopes we can give more tax cuts and give small businesses incentives, noting the lack of help to what he called a major driver of jobs in America. McCain also decried Obama’s “fundamental policy decisions” supporting protectionism and welfare.
Wallace next brought up the Rush saga, which McCain called a distraction. Instead of arguing about who is the leader of the party, we should be discussing things like job losses and the economic crisis.
Wallace mentioned that this morning Iran announced they launched a new long-range missile. McCain said its not surprising and called it a “great threat” to Israel and that we’re going to face a serious international crisis. Also, although the current administration wants to take a different tone diplomatically than the previous administration, McCain said he hopes Obama remembers the lessons learned over the last eight years, including Russia’s aggression against Georgia.
GOV. KAINE ON FNS: Gov. Tim Kaine (D-VA), Chairman of the DNC, was Wallace’s next guest. Kaine first pointed out that the market had already slid from 14,000 to the 8,000’s prior to Obama inauguration and that the President is working hard to put steps in place to get the economy growing again.
Wallace hit a similar tone as the last two weeks, asking why Treasury Secretary Geithner still has no clear plan to solve the financial crisis. Kaine said that four important elements of this plan are already in place:
1. A capital cushion for some of the banks
2. Home foreclosure plan
3. Get securitization occurring again
4. Using private investment to start purchasing bad assets
Kaine also noted that unlike the economic crisis to which we can pass a stimulus bill, the financial crisis is worldwide and must be coordinated with other countries
Wallace next brings up executive appointments. He alleges that Obama has 800 senate confirmable jobs to appoint but that only 44 have been nominated, with 28 being confirmed, and, significantly, other than Secretary Geithner not one has been nominated in Treasury, leaving the Treasury understaffed. Kaine said that history shows it takes time to get these appointments through, and that 50 appointments have been made that are not senate confirmable.
Kaine disagreed that Obama should focus entire on the economic crisis and forestall cap and trade plans and tax increases, describing our energy issues, exorbitant healthcare costs, and economic crisis interrelated. He pointed to the role healthcare costs played in GM’s high cost structure as an example.
The Virgnia governor called Obama’s decision to decrease tax deductions on the wealthy one of the “painful decisions” necessary to cut the deficit and that while earmark reform should be enacted, Obama’s budget still has a 25% decrease in earmarks from the 2005 year high.
Finally, Kaine defended the DNC’s decision to put up a billboard in Rush’s hometown of Palm Springs, claiming he would not have approved this decision except Rush said he roots for the President to fail.
SEN. MCCASKILL (D-MO), SEN. BAYH (D-IN), SEN. SHELBY( R-AL), PRES. DONOHUE ON TW: Host George Stephanopoulos hosts a roundtable on ABC’s This Week that includes Sen. Claire McCaskill (D-MO), Sen. Evan Bayh (D-IN), Sen. Richard Shelby (R-AL), and President Tom Donohue of the U.S. Chamber of Commerce.
The show began with Sen. McCaskill saying its too early for a second stimulus package and that since job losses are a lagging indicator its not always the best data point to use when deciding whether more stimulus is needed. She also pointed to another “lag” – the psychological one. It takes time before people realizing things are getting better, something she thinks will happen near year-end.
Shelby argued that we need to straighten out the banking system and get banks lending again, as long as we don’t have TARP II which he said failed, and that we should close some of the big banks.
Donohue disagreed, noting that TARP had a very important value – injecting liquidity – and that its not practical to close a big bank as they are integrated throughout the global economy. Instead, we should buy those assets away from the banks and put them in an institution that would have both public and private money.
Bayh said that if any organization gets so large that its too big to fail, they need to operate under a different set of rules since some risk is transferred to the taxpayers. An opponent of Obama’s spending bill, Bayh said it has a substantive problem and perceptual problem: substantively, it has too much deficit spending – if we just continued last year’s level of spending, Bayh claims taxpayers would save $250 billion over the next 10 years – and perceptually, Bayh points out that while Americans are tightening their belt, it looks like the government is immune from the problems most people face.
Shelby actually supports the spending bill, saying its time to get it behind us and move on.
Steph asks McCaskill why, as an unequivocal opponent of earmarks, she supports the spending bill. She replied that she’s done everything she can to reject the process of funding through earmarks and that she dropped another bill to reform the process further, but that she can’t sit on the sidelines on every budget.
Bayh walked through a distinction between TARP, the stimulus bill, and the spending bill. TARP was intended to inject liquidity and the government should receive most of the money back. The stimulus bill was supposed to be focused “like a laser” on stabilizing the economy. The spending bill, however, is just general government spending and is increasing at many times the rate of inflation. He thinks Congress should show that they are willing to sacrifice for the good of the American people.
Steph next asked Shelby if he can defend the earmark process as he has more earmarks than 40 other Senators. Shelby replied that he could, though he accused Obama and Bush of being the biggest earmarkers.
Donohue declared that if we talked as much about jobs as we talk about earmarks, we’d be better off. He later pointed out that 45% of the spending in the health care business is from the government and that solutions are more challenging because of the increased complexity and cost related to the industry. Still, he supports the President’s efforts, in part because of the need to have information technology play a larger role.
Donohue called Obama’s proposal to lower deductions on the wealthy “dead on arrival.”
Finally, McCaskill said she’s not sure she has the votes to pass the Employee Free Choice Act Employee Job Loss Act, but that its unfair that a secret ballot is necessary to start a union but not to dissolve a union.
SEN. GRAHAM (R-SC) & SEN. SCHUMER (D-NY) ON MTP: On NBC’s Meet the Press, host David Gregory held a discussion between Sen. Lindsey Graham (R-SC) and Sen. Chuck Schumer (D-NY).
Graham begins by saying the goal is to get credit flowing again and that the TALF plan – which uses federal money to finance the securitization of car loans, consumer credit, and potentially CLOs and CDOs, and other asset-backed securities – should help. He notes that some consumers in South Carolina want to buy a car but are having difficulty getting a car loan and that their biggest fear is that they may get laid off in the next six months. Apparently, he expects opening the spigot of consumer credit via the TALF to help, but he fails to explain why a rational lender shouldn’t be wary of lending money to someone likely to be laid off in only six months.
Schumer points out the three legs of Obama’s economic recovery stool:
1. Major stimulus
2. Housing / foreclosure plan
3. Financial reform
He claims that the key to the President’s plan to stem foreclosures is focusing not on the borrower but the servicer who puts together the refinancing, and since two-thirds of servicers have received TARP, they agreed to set up the President’s plan to refinance mortgages.
Schumer blamed this mess in part on consumer confidence but also said the day of reckoning has come for those who have consumed more than they earned over the last eight years, though he conveniently avoided the topic of how the government can consistently spend more than they bring in and not face the same day of reckoning.
On the budget, Graham called it a “radical, reckless exercise that’s scaring the hell out of everybody who is watching this country’s financial situation,” noting that it triples national debt in ten years, assumes 3.2% GDP growth in 2010 when its clear we won’t achieve that level of growth and a 8.2% unemployment rate.
Schumer then compared those Republicans who want to cut government spending and return to the “Reagan days” and to Herbert Hoover who allegedly said the government should do nothing when we were in a recession. (Ed: the stock market returned 11.3% during the “Reagan days,” while the stock market loses 20% during the first month and a half of the “Obama days.” Both Presidents inherited a disastrous economy. History will judge which “days” will turn out better, but I’d bet the house that “Reagan days” will outperform “Obama days.” A new trade on Intrade, perhaps?
He next says that the goal is not to do the financial rescue quickly as Bush and Paulson did, but do it right, and that the evaluations of the banks are underway and will be finished in a couple weeks.
On bank nationalization, Schumer says there’s good nationalization and bad nationalization. Bad nationalization is the government taking over and running a bank, but good nationalization is effectively receivership, when the government clears out management, wipes out existing stockholders, takes the bad assets off the books and recapitalizes the bank with private dollars and a new private management to run it.
In addition, Schumer said he likes stricter limits on executive compensation and “clawbacks,” where the government can recapture previous years’ compensation.
Graham next said he hopes Obama vetoes the spending bill because of its earmarks and that we need earmark reform, though Graham himself has 37 earmarks and defended their use. Schumer argued that we have more accountability and transparency in the earmark process, noting that all earmarks are online with a Senator’s name attached to it. Further, he said that next year, every request will be put online (not just those accept for the bill), these requests will be available much earlier, and no more than one percent of the bill will be dedicated to earmarks.
Finally, Graham said we should stop talking about Rush at the White House and work with Republicans to solve housing and banking.
DIRECTOR ORSZAG ON FTN: Host of CBS’s Face the Nation Bob Schieffer first interviewed Whie House Budget Director Peter Orszag. Orszag began by saying that despite Democrats becoming increasingly wary of Obama’s budget proposal, once people look at the proposal in more detail, they’ll come around to it.
Orszag said to give the stimulus bill some time to act before talking about a second stimulus package and that this mess has been eight years in the making and that it’s going to take some time to work our way out of it.
He then decried what he called the Republicans’ alternative to the budget, which he says includes:
– $3 trillion in tax cuts for the wealthy and corporations
– a Medicare program that covers 80% of the cost of healthcare
– Social security plan in which your social security fund would be invested in the stock market
Orszag followed up saying that the budget bill was supposed to be done last September but that the Obama administration is like a “relief pitcher stepping into the ninth inning,” insofar as the 2009 budget is concerned. He’s looking forward to starting fresh with the 2010 budget which will be “a lot different.”
Instead of a spending freeze which Republicans are calling for, Orszag says we should invest more in education, clean energy, and healthcare.
REP. BOEHNER ON FTN: Boehner was Schieffer’s next guest, and he began by saying we should freeze spending to lead by example and “show the American people that the government can go on a diet as well,” and that he had a stimulus plan that costs half as much yet creates twice as many jobs. He also said his alternative housing plan that provides a $15,000 tax credit for anyone who buys a home would also be a more effective solution.
Boehner next said that the Rush controversy was created by the White House to divert people’s attention from the spending “binge” they’ve been on.
Furthermore, he doesn’t think the government should inject more money in GM until it shows a viable plan for the long-term, otherwise its just “throwing good money after bad.”