Video: Lawmakers debate stimulus compromise
Transcript of: Lawmakers debate stimulus compromise
MR. GREGORY: Let, let's get -- I want to get to the -- we're going to get to some of the cuts and whether they're wise in just a moment. But Larry Summers , top economic adviser to the president, said this bill should be timely, targeted and temporary. This is opposition to that, in this bill, as voiced by Senator Roberts on the floor of the Senate . Let's listen.
SEN. PAT ROBERTS (R-KS): This bill's not timely. CBO estimates that only 15 percent of this stimulus package will be spent in 2009 ; 37 percent, 2010 ; remaining part spent in 2011 and beyond. Half the money -- less than half the money will be spent by the end of next year. This is not immediate relief that families and businesses desperately need now to help get the economy back on track.
MR. GREGORY: Now, Senator, let's be clear. The administration says 75 percent of the spending will be paid out in the first 18 months. That does not change the fact that there is significant -- there's a significant amount of money that is paid in the out years of this, beyond 2010 . That is long-term spending that doesn't necessarily stimulate jobs up front, true?
SEN. McCASKILL: Well, but what it does is it stimulates investment in certain sectors. For example, some of the money that's going to spend out in a little more time than the first two years is some of the investment in new jobs and green technology ; you know, retrofitting all our buildings. But more importantly, finding a way to get out from underneath the thumb of foreign oil long term. That is an incredibly important investment for our country. And if you look at this whole bill, it is -- that is not correct. A lot of it -- the vast majority of this bill will spend out quickly. It's not going to be enough, David , to keep us from losing jobs in this country. But to do nothing? Do we really think we can sit around here in Washington watching this job loss and just try another tax cut for really wealthy people like George Bush did? I don't think so.
REP. PENCE: Yeah, David .... That's absolutely false.
MR. GREGORY: But why not separate some of the long-term spending, Senator?
SEN. ENSIGN: Absolutely.
MR. GREGORY: Separate it for a separate appropriations process.
SEN. ENSIGN: This is what I've been saying all along. There are some things that we need to go quickly on, but there are -- the long-term spending, we should do it carefully and we should take our time on it. There's not a hurry on that. If it's not going to be spent for two years, let's take that out and let's do it right.
But the other thing, to get back to what Congressman Frank said, is that, you know, we're going to be laying off teachers and firefighters. You know, that's just fearmongering. We're not going to be doing that in any of the states . The states have grown, in their budgets, faster than population growth , faster than inflation for the last several year -- actually, probably about the last 15 years. Their budgets are bloated, the federal government 's budget is bloated. What we should be doing is cutting back. Instead of just spending money , we should eliminate wasteful Washington spending and also require the states to have some fiscal discipline. Here's what this bill does. It sends the money to the states , and not only do we have them not have to make the tough cuts that they should be making, we actually encourage them to spend more because to be able to get the money , they have to spend more. And, and this just encourages more wasteful spending.
MR. GREGORY: Congressman Frank:
REP. FRANK: Well, first of all, on the bloated spending, this comes from a man whose party controlled the federal government -- House , Senate and White House -- for six years. We've had it for two. And in fact, we didn't have the presidency. So the bloated spending, once again, you're getting...
SEN. ENSIGN: I agree to that, Barney . I agree.
REP. FRANK: But -- may I finish now? Well, if you agree, we -- I guess I would've been more impressed if you'd done something about it, not just agree. You were in power for six years. The spending that we have now was set by six years of Republican spending; excesses in a number of areas, I agree. Secondly, the notion that we're not laying off policemen, firemen and teachers is simply, factually untrue. And this argument that the states are bloated. I look at my state of Massachusetts , there are terrible problems in other states as well because of the collapse of the housing market , because of the lack of tax revenues , and I'm very prepared. Let's have that argument.
MR. GREGORY: All right.
REP. FRANK: Do the state -- does sending money to the states mean that when they don't lay off people, that that's a bad thing?
MR. GREGORY: But, Senator, you said about the House bill that in fact they did bloat it up with some spending, and they provided ammunition to Republicans to shoot this thing down and take over some of the political argument . Is that still what you believe?
SEN. McCASKILL: I, I, I do think that there was some spending in the bill that was makeup for a starvation diet under the Bush administration , some important priorities of our party; frankly, of the American people . And the question is does it belong in the stimulus bill or does it belong in the appropriations bill ? I think some of the money that we cut in the compromise to get the votes that we, that we have was, in fact, spending that more appropriately should go in a, an appropriations bill .
MR. GREGORY: Should more be cut?
MR. GREGORY: Should more be cut in the conference, do you believe? More spending be cut?
SEN. McCASKILL: I think we've got a good mix right now. It's 60-40; 40 percent tax cuts , 60 percent spending, give or take 1 or 2 percentage points. And by the way, our bill is 90 percent the same as the House . The 10 percent difference was some of the cuts that we made in some of the things that could be put in an omnibus appropriations bill or an appropriations bill .
REP. PENCE: Look, look, I, I got, I got to jump in here. You know, what you're hearing these two very distinguished colleagues say, what Nancy Pelosi said on the House floor, what President Obama said Thursday night in that harsh partisan speech, I, I give them all credit -- excuse me -- I give them all credit for candor. Speaker Pelosi goes to the floor and says this is about changing the direction of the federal government . Well, I thought we were trying to create jobs. We, we've got all year long to have these debates...
MR. GREGORY: Right. But, Congressman, where do you...
REP. PENCE: ...about investments.
MR. GREGORY: Hold it. But, Congressman, where do you...
REP. PENCE: This, this -- what we ought to be doing...
MR. GREGORY: But, sir...
REP. PENCE: Forgive me. What we ought to be doing is fighting to create jobs.
MR. GREGORY: But, Congressman, if you create -- if you spend this amount of money , if you -- where is it going to go? As, as a columnist put it this week, it's not going down a rabbit's hole. If you create demand for goods and services, doesn't that create jobs?
REP. PENCE: Look, there's an enormous amount of economists who think this is the wrong way to go . Some 300 published a full-page ad this week.
MR. GREGORY: But you're not saying that government spending doesn't create jobs.
REP. PENCE: There's not a consensus. Government spending can, on the margin, create jobs. But let's be clear. John F. Kennedy , Ronald Reagan and after the towers fell in 2001 proved that the way you, you jump-start the economy, the way you jolt a free market economy ...
MR. GREGORY: Mm-hmm.
REP. PENCE: ...into action is by giving working families and small businesses more of their dollars. And let me say, what the Republicans came forward with, at the president's request -- I know after Thursday night it doesn't seem like the president's very interested in other ideas anymore. But at the president's request, Republicans put together an alternative that was targeted to middle-class families, a tax cut this year of up to $3400, and targeted to small businesses .
REP. FRANK: Let me go back...
MR. GREGORY: All right.
REP. PENCE: This is -- this whole rhetoric about tax cuts for the rich is a nonstarter.
MR. GREGORY: Final thought on this before we turn to banking, Congressman.
REP. FRANK: Yeah. George Bush 's tax cuts were for working families who make $150,000 or more. In fact, Bill Clinton -- the most successful economic period we've had recently in America was after Bill Clinton got many of us to vote to raise taxes on upper income people. And in fact we did that in '93, and no Republicans voted for it. We didn't get any bipartisan help then. We, in fact, had a very successful economy for, for the, for the rest of his term.
But the last point, though, is that this is spending, and there's a contradiction here. On the one hand, they say things are bloated and have to change; on the other hand, they say the trouble with this bill is it's trying to make change. Yeah, the bill isn't simply putting money into the same holes, it is trying to make some change while you are spending.
SEN. ENSIGN: That's right.
REP. FRANK: But I do believe that cops and firefighters getting paid and not getting laid off helps the economy.