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‘Meet the Press’ transcript for Sept. 23, 2007

Transcript of the Sept. 23, 2007 broadcast of NBC's 'Meet the Press,' featuring Sen. Hillary Clinton, D-N.Y., and Former Federal Reserve chairman Alan Greenspan

MR. TIM RUSSERT:  Our issues this Sunday:  the Iraq war, healthcare, campaign fund-raising and more.  Our Meet the Candidates 2008 series continues.  A former first lady, she has served as United States senator from New York for seven years and is now the front-runner for the 2008 Democratic presidential nomination.  With us, Hillary Rodham Clinton.

Then, a Sunday morning exclusive.  The former chairman of the Federal Reserve’s new book, “The Age of Turbulence,” is making headlines in Washington and on Wall Street.  Our guest, Alan Greenspan.

But first, joining us now is someone who’d like to be the first woman president of the United States, Senator Hillary Clinton of New York.

Welcome back to MEET THE PRESS.

SEN. HILLARY CLINTON (D-NY):  Thank you, Tim.  It’s great to be back with you.

MR. RUSSERT:  Senator Clinton, you told Newsweek magazine that the war in Iraq was the most important vote you cast in the U.S. Senate.  I’d like to begin there.  You spoke to a labor union this week, and this is what you said. Let’s watch.


SEN. CLINTON:  I have voted against funding this war, and I will vote against funding this war as long as it takes.

(End videotape)

MR. RUSSERT:  As you well know, you voted to authorize the war, voted to fund the war at least 10 times.  Are you now saying that you will not vote one more penny for the war in Iraq?

SEN. CLINTON:  Tim, I am saying that, and, you know, I’ve been guided by what I believe is the principle that should govern any decisions that a member of the Senate or anyone in public life makes, and that is I try to do what I think is best for my country and for the troops who serve it.  And I have seen no evidence that this administration is willing to change course in any significant way.  We’re now nearly at 3800 dead, we have more than 30,000 injured.  The Iraqi government has failed to fulfill its part of the bargain to deal with the political issues that all of us know have to be addressed.  I don’t think the Bush administration has pursued the diplomatic agenda the way that it needed to be pursued.  And there is no military solution.  And these extraordinary, brave young men and women should begin to come home out of refereeing this sectarian civil war.

I voted against funding last spring.  I understand that we’re going to have a vote shortly about funding, and I will vote against it because I think that it’s the only way that we can demonstrate clearly that we have to change direction.  The president has not been willing to do that, and he still has enough support among the Republicans in the Senate that he doesn’t have to. And so, on occasion after occasion, I have made it clear that if the president does not begin to extricate us from Iraq before he leaves office, which apparently, based on what he himself has said, he will not, when I am president, I will immediately ask my secretary of defense, the Joint Chiefs of Staff, my security advisers, to tell me exactly what the state of play is.  I don’t believe we even know everything we need to know about what the plans for withdrawal are, how best to implement that.  And I will end our involvement at the level that we’ve seen that has not proven to be successful.

MR. RUSSERT:  The Daily News, your home paper in New York, said that your positions on Iraq remain a tangle of contradictory and shifting elements, and I want to go through those and see if we can sort it through for the viewers and the voters.  A new brochure that you’ve passed out to the voters in New Hampshire says this:  “Hillary will begin immediate phased withdrawal with a definite timetable to bring our troops home.”

When you were last on MEET THE PRESS, I asked you specifically about a definite timetable to bring troops home, and this is what you said.  “I think that would be a mistake.” So don’t—“We don’t want to send a signal to the insurgents, to the terrorists that we’re going to be out of here at some, you know, date certain.  I think that would be like a green light to go ahead and just bide your time.”

And then in December of ‘06:  “I reject a rigid timetable that the terrorists can exploit.”

And a year ago in September of ‘06:  “I’ve taken a lot of heat from my friends who’ve said, ‘Please, just, you know, throw in the towel and” “let’s get out by a date certain.’ I don’t think that’s responsible.”

You’ve changed your mind.

SEN. CLINTON:  Well, the circumstances on the ground have certainly compelled me to continue to evaluate what is in the best interest of our country and our troops.  And it became unfortunately clear to me that if we were to maintain the failed policy of this president, we will be entangled in Iraq with many more deaths, with very little to show for it, Tim.  I have the highest admiration for General Petraeus and for his officers and the men and women on the ground in Iraq.  But there is no military solution, and the failure of the Iraqi government and of the Bush administration to deal on either the political or the diplomatic front has put our young men and women at risk. There is no doubt that they can fulfill whatever military mission they’re given; they have.  They were asked to get rid of Saddam Hussein and they did. They were asked to give the Iraqis the security for fair and free elections and they did.  And they were asked to give the Iraqi government the space and time to start making these very difficult political decisions.  Our military did everything it was asked to do.  Unfortunately, I don’t think that the Iraqi government or the Bush administration has done what only they can do. And the only way to begin to keep faith with the men and women who are serving us is to begin to bring them home, and that is what I think we have to do now.

MR. RUSSERT:  Let me bring you back to October 10th of 2002 when you stood on the floor of the United States Senate and voted to give George Bush the authority to go into Iraq.  Let’s listen.

(Videotape, October 10, 2002)

SEN. CLINTON:  Saddam Hussein has worked to rebuild his chemical and biological weapons stock, his missile delivery capability and his nuclear program.  He has also given aid, comfort and sanctuary to terrorists, including al-Qaeda members.  Any vote that might lead to war should be hard, but I cast it with conviction.  So it is with conviction that I support this resolution as being in the best interests of our nation.

(End videotape)

MR. RUSSERT:  As we sit here this morning, Saddam rebuilding a nuclear weapons program, just not true; giving aid and sanctuary to al-Qaeda, debatable.  Your vote in the best interests of the nation.  Do you believe that your vote was in the best interest of the nation?

SEN. CLINTON:  Well, I cast a sincere vote based on my assessment at the time, and I take responsibility for that vote.  I also said on the floor that day that this was not a vote for pre-emptive war.  I thought it made sense to put inspectors back in.  As you recall, Saddam had driven out the UN inspectors in 1998 and the situation in Iraq was opaque, hard to determine, and I thought that it made sense to put inspectors back in.  Now, obviously, if I had known then what I know now about what the president would do with the authority that was given him, I would not have voted the way that I did.

But the real question before us today is what do we do going forward?  We are continuing to lose Americans in Iraq.  We are continuing to see the failure of the Iraqi government.  We see no change in real policy that moves us toward a political resolution from our own administration because I think even they have to admit that the tactical success that we’ve seen in al Anbar province and dealing with al-Qaeda in Iraq is not going to resolve the ongoing sectarian civil war that is besetting Iraq.  So I think, Tim, that, obviously, from my perspective what I’m focused on is what to do now, and I take that as seriously as I can, which is why I’ve said I will not vote for additional funding unless it is part of an overall policy to begin to deal with these other problems that we face in Iraq.

MR. RUSSERT:  But, Senator, besides the vote to authorize, there are three other important votes during that time period.  Here’s how Congressional Quarterly wrote about it:  “A Byrd amendment to assert Congress’ right to declare war was rejected,” you voted against that.  The amendment by Senator Durbin “that would have require Iraq’s weapons of mass destruction program to be an ‘imminent’ rather than a ‘continuing’ threat,” you said no to that.  And an amendment by Carl Levin “that would allow Congress to vote on authorizing force only after President Bush had exhausted all options with the United Nations,” more diplomacy, you voted no on that.  You seem very determined at that time to march to war.

SEN. CLINTON:  Well, I also voted, Tim, to limit the president’s authority to a year.  That was another one of Senator Byrd’s amendments which I strongly supported.  It was not successful.  I have seen, obviously now, what has occurred by this president’s use of the authority that he was given, and I regret the way that he used authority.  But I think it’s important to recognize that the United Nations is a very important tool in international diplomacy, in peacekeeping to bring the world together.  But I do not want to give the United Nations a veto over actions taken by any president.

I believe you have to work with the United Nations.  And I saw my husband, when he believed it imperative to take action in Bosnia and Kosovo, unable to get congressional authority to act, unable to pull together the United Nations, but working with NATO to take action against ethnic cleansing.  Every situation is different.  At the time, I thought it did make sense to go back to the United Nations to put inspectors on the ground.  But I don’t believe it’s in the best interests of our country to give the United Nations what amounts to a veto over presidential action.  I think that the Congress and the president should determine what presidential action should be.

MR. RUSSERT:  Is it fair to say that the most important vote you cast in the Senate, in your own words, on authorizing the war in Iraq, was wrong?

SEN. CLINTON:  It’s fair to say that the president misused the authority that he was given, and if I had the opportunity to act now based on what I know now, I never would’ve voted that way.  But I think it’s important to take responsibility and then to try to deal with the situation that we face today. You know, we can talk about 2002 or we can look forward to what is a continuing involvement in a sectarian civil war with no end in sight, and I believe it’s imperative that we try to create a political consensus to move the president and the Republicans in Congress to extricating us from this civil war.  And I’ve said many times that if the president does not do it before he leaves office, when I am president I will.

MR. RUSSERT:  Let me show you an ad that has caused a lot of controversy in this debate about Iraq. took this ad out, “General Petraeus or General Betray Us?:  Cooking the Books for the White House.” Do you believe that General David Petraeus has betrayed the American people?

SEN. CLINTON:  Absolutely not.  He is a man of great honor and distinction who has served admirably.  I don’t condone anything like that, and I have voted against those who would impugn the patriotism and the service of the people who wear the uniform of our country.  I don’t believe that that should be said about General Petraeus, and I condemn that.  I didn’t think it should’ve been said about Senator Cleland or Senator Kerry.  I think it’s important that we end this kind of attacks on the patriotism of those who serve our country.

But let’s be clear about this:  This is not a debate about an ad.  This is a debate about the direction we should pursue in Iraq, and if we focus on an ad, even though we have all voted, in one way or another, to condemn it and believe that we should cease any such impugning and attacks on anyone who serves our country, then, again, we’re not focused on what the real problem is.

The real problem is a policy in Iraq that has failed, and unfortunately, it is clear that the president does not intend to change direction before he leaves office.  That means we will lose, as we have every month this year, more Americans than we lost last year.  And there is no end in sight, and the president has 15 months left.  And I really believe that the country is against his policy, a majority of the Congress is against his policy.  But a very concerted effort in the Senate by Republicans who continue to support the president has prevented us from implementing the kind of guidelines, benchmarks, timelines that actually reflect the reality on the ground.  And I’m going to continue to fighting for that in the Senate and when I’m president to begin moving as expeditiously and responsibly as I can to bring our troops home.

MR. RUSSERT:  Is it fair to--(clears throat) excuse me—is it fair to say, then, that this ad was an unhelpful distraction to the real debate about the war, and you wish that had not taken it?

SEN. CLINTON:  Well, when I voted for Senator Boxer’s resolution, that was certainly clear.  I do not condone, and I do condemn any effort to impugn the patriotism and the service of anyone who’s worn the uniform of our country.  I think it should be across the board because, as you certainly know well, many people who have served with distinction, like Senator Kerry or Senator Cleland, have been the subject of extraordinary attacks.  Let’s end this, and let’s focus on what we do to support our troops.  I believe the best way to support our troops is to begin to bring them home.

MR. RUSSERT:  And should refrain from similar ads in the future?

SEN. CLINTON:  Everyone should, Tim.  Everyone should.


SEN. CLINTON:  This is not the way that we should conduct ourselves in the country.  We should stay focused on what we need to do to support our troops and to extricate us from Iraq.  But I don’t want to see the debate about where we go in Iraq turned into a debate about any ad.  Instead, let’s stay focused on what we should be doing in the Congress to fulfill our responsibility to bring our troops home and to give them the support they need in a very difficult situation for which there is no military solution.

MR. RUSSERT:  Let me turn to healthcare.  You introduced a bill, obviously, in 1993 when you were first lady working with President Clinton, on this big issue of universal healthcare.  It was—got nowhere.  It was considered too big, too expensive.  You now have introduced a much more scaled down program focusing on use of insurance companies to bring the 40-plus million uninsured under coverage.  Chris Dodd, one of your Democratic opponents, has said this: “While she talks about the personal scars she bears, the personal scars borne by the American people are far greater.  The mismanagement of the effort in,” ‘93 and ‘94, “has set back our ability to move toward universal healthcare immeasurably.” Do you believe, in all candor, that your mismanagement of healthcare in ‘93 has created a situation where, for 13 years, 47 million Americans have not had healthcare and they are paying the price for your mismanagement and intransigence in 1993?

SEN. CLINTON:  Well, Tim, I’m proud that we tried in ‘93 and ‘94.  We were trying to do the right thing.  Obviously, we made a lot of mistakes.  But I am proud that we set a goal of trying to provide healthcare to every American. And I didn’t quit.  You know, I kept working.  I was very involved in passing the Children’s Health Insurance Program and getting vaccines for kids to be immunized and making sure that the drugs that they took were appropriately tested for children.  And I continued to try to get healthcare for our Gulf War veterans and, in the Senate, to make sure that our Guard and Reserve members and their families have healthcare.  So this has remained a passion of mine.

But I’ve also learned a lot of lessons, and I’m bringing those lessons with me into this campaign.  The goal remains the same:  How do we provide quality, affordable healthcare for every American?  But this is a much different plan than what was proposed back in ‘93, ‘94.  This is not government-run healthcare; it does not create any new bureaucracy.  In fact, it is very clear in saying that if you are satisfied with the healthcare you have, then you keep it.  It is absolutely part of my plan.

But if you’re one of the 47 million Americans without health insurance, or one of the many millions that have health insurance except when it comes time to get the care that your doctor says you need, and the insurance company refuses payment, then you are going to have access to the same health choices menu that members of Congress do.  I proposed that back in ‘93, ‘94, and ran into a firestorm of opposition from the Congress.  But I think a lot has changed in the last 14 years.  A consensus has developed about what we need to do to try to reach quality, affordable healthcare.  So among the many choices that will now be available to Americans, similar to what are available to members of Congress, we will have a public plan option for people who wish to choose that.  If it is outside the reach of people—because remember, Medicaid will still take care of the very poor, we will still have the Children’s Health Insurance Program for children.  But if it is out of the reach of affordability, we’re going to have healthcare tax credits for individuals, and we’re going to try to provide some healthcare tax credits as well to small businesses.

You know, I believe strongly that a consensus has developed, because people, you know, who didn’t approve of what we were trying to do or who were on the sidelines have seen what has happened.  It is not only a moral imperative that we try to cover everyone, it is now an economic necessity.  The employer-based system has lost coverage for many people in the last years.  We have jobs being lost in our country because we are not competitive economically.  We certainly see that most clearly in industries like the auto manufacturing industry, but there are others that are affected as well.  We have a lot of inefficiencies in the system.  You know, we spend more money than anybody in the world, but we don’t get the best outcomes for all that money we spend.  So I think that business, labor, doctors, nurses, hospitals and, most importantly, families understand we’ve got to come together and try to solve this problem.  And it will require the drug companies and the insurance companies changing the way they do business, because the way they do business now is not sustainable.

So I’m very confident that we can put together the kind of bipartisan coalition that you know so well is needed, particularly in the Senate, to get anything done, because this plan builds on what works in America, but takes aim at what doesn’t and comes up with some very commonsense ways of trying to fix out problems.  And I’ve been very pleased by the positive response that I have received from independent experts and people who have evaluated it.  So I think we’re off to a good start and I look forward to debating healthcare with my Republican opponent, whoever that might be, starting in the spring.

MR. RUSSERT:  Let me turn to campaign fund-raising, because it’s been—politics and money has been an issue that is of grave concern to the American people.  As you well know, this gentleman, Norman Hsu, was a big fund-raiser for you.  This is how the Wall Street Journal reported on it. “Senator Hillary Clinton will return $850,000 in campaign contributions raised by a major fund-raiser who has come under federal investigation on multiple fronts.  Clinton said she would refund contributions to about 260 donors who were recruited by Norman Hsu, a businessman and Democratic fund-raiser.  The $850,000 is the largest ever returned by a candidate because of questionable fund-raising methods.” Also, Mr. Hsu gave free trips to Las Vegas for several of your campaign aides, all expenses paid.  You talk about the politics of change.  Is this changing the way Washington does business?

SEN. CLINTON:  Well, I’m very much in favor of public financing, which is the only way to really change a lot of the problems that we have in our campaign finance system.  You know, as soon as my campaign found out what I and dozens of other campaigns did not know, that he was a fugitive from justice, we took action.  And out of an abundance of caution, we did return any contribution that we could in any way, no matter how indirect, link to him.  And I believe that we’ve done what we needed to do based on the information as soon as it came to our attention.  But we’ve gone even further, Tim, and we’re installing even additional kinds of checks because, you know, it was something that my campaign and other campaigns going back to 2003 did not uncover in all the vetting that we do.  But the real answer here is public financing, and I’m going to work very hard in my time in the Senate and then in the White House to try to get to a public financing system that we can support under the constitution, because, as you know, we’ve got some constitutional issues we have to address, because that is the answer to all of these issues that have arisen.

MR. RUSSERT:  But, Senator, as you well know, back in 1996 campaign, this man, Johnny Chung, a—very similar circumstances and he plead guilty to illegally funding of money, and he was quoted as saying, “I see the White House is like a subway.  You have to put in coins to open the gates.” How do you convince the American people that you have changed, that you are not going to be the recipient of this tainted money?

SEN. CLINTON:  Well, this is a problem for every campaign, Tim, and, you know, you have donors—I have more than 100,000 donors, the vast majority of whom have given me less than $100.  And every campaign does the best job it can.  But whether it’s campaigns or any other aspect of American life, you try to be as vigilant as possible, but sometimes things get through the net and then you act as quickly as you possibly can, which my campaign has.  I am very much aware of how difficult it is to find out everything, but we’re taking extra steps to see if we can’t make sure that any information anywhere is available to us.  But, remember, every campaign missed this.  Law enforcement authorities in California obviously did not catch this.  So we’re going to do what we can to make sure it doesn’t happen.  But, again, the real answer is we’re spending an enormous amount of time, money and effort raising money, mostly to be, you know, clear to go on television.  And we have got to solve this.  It is not good for our political system.  It is certainly not the way that most people I know who run for office and want to try to do something good for their constituents and their country want to be spending all of their time.  And we’ve got to figure out how we’re going to address it, and there has to be a way that public financing becomes the law of the land.

MR. RUSSERT:  Senator, before you go, answer a question I’ve heard from Democrats as I travel around the country, and that is they like Senator Clinton, they respect Senator Clinton, but they’re afraid that she’s too polarizing, that her negatives in the national polls are in the high 40s, the highest of any Democratic candidate.  And that she would be incapable of uniting the country behind healthcare, behind withdrawal from Iraq, because she just is too divisive.

SEN. CLINTON:  Well, Tim, those are the things that were said about me in New York, as I’m sure you remember.  And I worked very hard to give people accurate information about who I am, what I stand for, what I will do, and I was extremely gratified to win in 2000 and even more so to be re-elected with nearly 67 percent of the vote.  And I was very pleased that a lot of that vote came from Republicans and independents.  You know, I carried a lot of those counties that George Bush had carried just two years before, carried 58 of New York’s 62 counties and, as you know, there’re a lot of red parts of New York.

Because I think it’s important that you look at how I have sought common ground and found it in the Senate.  I also have stood my ground against things that I did not approve of, like privatizing Social Security.  As I’ve traveled around the country, my support has grown.  Anyone who gets the Democratic nomination is going to be subjected to the withering attacks that come from the other side.  I think I’ve proven that I not only can survive them but surpass them.

So I believe that, both from the experience that I’ve had in political campaigns and what I have done over the years to, you know, keep coming back and fighting back, I’m the best positioned to win, but more importantly, I think I am in the best position to lead starting January 2009.  I’m doing well around the country, and I’m very pleased that people are really making up their own minds about me and not, you know, by being swayed by what second- or third-hand somebody said to them, and I believe that’s what will happen in this campaign.  And as I go forward in it every day, I’m even more encouraged that I’m putting together a winning campaign not only for the nomination, but for the White House, because that’s when the hard work starts.  We have a lot ahead of us to restore our position in the world, to rebuild our economy and our American middle class and to reform our government and to reclaim the future for our children.  And that’s what I’m committed to doing.

MR. RUSSERT:  Senator Hillary Clinton, thank you very much for sharing your views.

SEN. CLINTON:  Good to talk with you, Tim.  Thank you very much.

MR. RUSSERT:  And you can watch more of Senator Clinton and her seven opponents for the Democratic nomination, a debate this Wednesday night in New Hampshire at Dartmouth College, 9 PM Eastern on MSNBC.  That’s Wednesday at 9 PM on MSNBC, the Democrats will debate.

Coming next, Alan Greenspan speaking out and creating a stir at the White House and on Wall Street.  The former chairman of the Federal Reserve is next right here only on MEET THE PRESS.


MR. RUSSERT:  The former chairman of the Federal Reserve, Alan Greenspan, his new book, “The Age of Turbulence” after this station break.


MR. RUSSERT:  Alan Greenspan, welcome back to MEET THE PRESS.

MR. ALAN GREENSPAN:  Thank you, Tim.

MR. RUSSERT:  Let me pick up on some interviews that you’ve given this week as you’ve been touring, talking about your book, “The Age of Turbulence.” You said this:  “I think Bill Clinton was the best Republican president we’ve had in a while.” Republican?

MR. GREENSPAN:  I’m sure he doesn’t like that joke, but if you look at his record compared to what I think appropriate policy ought to be, he’s for free trade, he’s for globalization, he was for welfare reform, fiscal restraint and—true enough, he’s not a Republican.  I’m sorry, President Clinton, I didn’t mean to say that.  But I must say, I had to follow an awful lot of your particular guidelines and found them very compatible with my own.

MR. RUSSERT:  He did raise taxes.

MR. GREENSPAN:  He did raise taxes, and I must say I could have done without that.  But, look, democracies are compromise, and you do what you can so that the majority of the people support you.

MR. RUSSERT:  You also said this:  “The Bill Clinton administration was a pretty centrist party.  But they’re not governing again.  The next administration may have the Clinton administration name but the Democratic Party has moved very significantly in the wrong direction.” Hillary Clinton’s party is not Bill Clinton’s party?

MR. GREENSPAN:  All I can say is that they’re taking positions which he, as president, veered away from.

MR. RUSSERT:  Such as?

MR. GREENSPAN:  Whole area of trade, for example, which is a very critical issue because it’s not only the issue of trade, it refers to the globalization and how one views what is the driving force in this world which creates prosperity.

MR. RUSSERT:  When the book first came out, The Washington Post’s Bob Woodward wrote the story, a front page story, and this is how he characterized it:  “Alan Greenspan, who served as Federal Reserve chairman for 18 years and was the leading Republican economist for the past three decades, levels unusually harsh criticism at President Bush and the Republican Party in his new book, arguing that Bush abandoned the central conservative principle of fiscal restraint.

“He expresses deep disappointment with Bush.  ‘My biggest frustration remained the president’s unwillingness to wield his veto against out-of-control spending.  Not exercising the veto power became a hallmark of the Bush presidency.  To my mind, Bush’s collaborate-don’t-confront approach was a major mistake.  The Republicans in Congress lost their way.  They swapped principle for power.  They ended up with neither.’”

Which bill should the president have vetoed?

MR. GREENSPAN:  A whole series of them.  First of all, let me just say that remember that if failure to veto is a problem, the real problem are the bills that should be vetoed.  My major concern was not with the administration, but what I saw was a deteriorating position with respect to policy on the part of the Congress when both Houses were under Republican rule.  And it’s that which I found to be extraordinarily debilitating to the outlook.  I basically think that the president’s failure to veto to try to collaborate and to try to find ways to get compromises on bills, in retrospect, didn’t work.  And I think the consequence is that, effectively, the Republican Party lost its way.

MR. RUSSERT:  The issue of tax cuts is front and center in your book and has been the topic of debate in Washington this week.  You write candidly that Senator Kent Conrad, Democrat from North Dakota, Robert Rubin, then President Clinton’s economic adviser, came to you and said, “If you testify before the Senate and embrace the Bush tax cut plan, it’s going to open up the floodgates and it’s going to encourage people to give big tax cuts.” And that’s exactly what happened, you say, much to your consternation, that you didn’t specifically endorse the plan.  A frequent critic of yours, Paul Krugman, has weighed in on in this, and this is the way he describes it, and I want to give you a chance to talk about it.

“When President Bush first took office, it seemed unlikely that he would succeed in getting his proposed tax cuts enacted.

“Then Alan Greenspan, the chairman of the Federal Reserve, testified before the Senate Budget Committee.  Suddenly, his greatest concern, the ‘emerging key fiscal policy need,’ he told Congress, was to avert the threat that the federal government might actually pay off” “its debt.  To avoid this awful outcome, he advocated tax cuts.” “The floodgates were opened.

“And Mr. Greenspan has just published a book in which he castigates the Bush administration for its fiscal irresponsibility.  Well, I’m sorry, but that criticism comes six years late and a trillion dollars short.

“If anyone had doubts about Mr. Greenspan’s determination not to inconvenience the Bush administration, those doubts were resolved two years later when the administration proposed another round of tax cuts even though the budget was now deep in deficit.  And guess what?  The former high priest of fiscal responsibility did not object.  And in 2004 he expressed support for making the Bush tax cuts permanent—remember,” those “are the tax cuts he now says he didn’t endorse.”

MR. GREENSPAN:  There are so many questions to—that raises, that I’ll try to get them—try to give you short answers.  First of all, the notion that I was extraordinarily powerful and my word carried great weight is not in evidence on such issues as Medicare where I, for years, have raised alarms about the size of the problems.  My views were wholly disregarded.  I could give you a long list of things in which I had strong views, nothing happened.  So all of a sudden, I become this powerful force in moving tax policy.

Now, there’s a fascinating problem.  The 2001 tax cut was a very unusual tax cut in the sense that it confronted, for the first time in 150 years, the possibility that we would actually eliminate the debt in the United States. And it was that concern which creates major problems with respect to accumulating assets.  When you have $500 billion surpluses, when the debt is effectively zero, creates huge holdings of private assets by the federal government, and for reasons I express in the book, I think that’s very bad idea, and I must say, Bill Clinton agreed with me on that issue.

With respect to the question of whether I changed my mind, the answer is I did change my mind.  Because, when it became apparent that the huge surpluses that most every analyst in the business was projecting were disappearing, I went back to my old position, which is namely, I am in favor of lower taxes, lower spending, and specifically a cut in taxes which reduces the double taxation dividends.  When that occurred, mainly in 2003 and 2004, I said, yes, I would like to see the tax cuts, but they are contingent on meeting what was then the law, namely PAYGO, which was their mechanism in the 1990 act which required that all budget proposals be neutral.  And so, effectively, as a number of congressmen asked me in hearings, well, then, “Do we understand you correctly that you would like the tax cut, but unless it is matched by reductions in spending, you would oppose it,” I said, “That is correct.  That is my position.” I did change my view.  It wasn’t in 2007; it was a lot earlier than that.

MR. RUSSERT:  Do you believe either political party has stepped up to the crisis we face with Social Security and Medicare in the coming years?

MR. GREENSPAN:  I do not.

MR. RUSSERT:  How big a crisis will that be?

MR. GREENSPAN:  Social Security is not a big crisis.  We’re approximately 2 percentage points of payroll short over the very long run.  It’s a significant closing of the gap, but it’s doable, and doable in any number of ways. Medicare is a wholly different issue because, remember, right now, with the current entitlement, we can afford Medicare.  It’s easily refunded.  We’re going to double the size of the retired population.  And by all of the analysis I go through in the book, it’s very evident to me that we are not able to actually deliver on the Medicare we are promising, and I think that is marginally unethical to immoral because we are promising to people who have not yet retired a fairly significant Medicare package which, if they knew they weren’t going to fully get, they would take actions now—maybe retire later, do different things—and I think everybody has been avoiding this issue.  We avoided it in the Social Security Commission in 1983, and everyone’s done—been doing it since.  Then it was more than 20 years before.  We’re now right at the point where if we don’t act we’re going to be in very serious problem—trouble.

MR. RUSSERT:  Are we heading towards a recession?

MR. GREENSPAN:  We’re heading towards a slowdown.  Whether that actually leads to a recession is dependent on things we can’t forecast at this moment. My own guess is the odds are less than 50-50 that we’re heading to a recession.  But there is no question we’ve got significant pressure on home prices, which are expected to move down quite—could conceivably get considerably lower.  And that will curtail the net housing wealth of the American household.  And history tells us that causes some weakness.  It’s too soon to call this one way or the other, frankly.

MR. RUSSERT:  You mentioned housing.  There’s been a lot of debate about your role with the so-called housing bubble, your whole role in terms of subprime interest rates for housing.  This is how Conde Nast, the—Portfolio, wrote about it, John Cassidy.  He said this:  “In 2004, as the subprime boom was cranking up, Greenspan advised homeowners to switch from fixed-rate mortgages to adjustable-rate loans.” “April” of “2005” at “a speech that probably now haunts him, he said, ‘Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country.  Where, once, more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risks posed by individual applicants and to price that risk appropriately.’” Are you responsible for this bursting of the housing bubble?

MR. GREENSPAN:  No.  Shall I explain?  First of all, I did make a speech in February of 2004 in which I explained a fairly interesting analysis by the Federal Reserve staff which said that there were a lot of, a lot of home buyers who would do far better were they to take adjustable-rate mortgages, because they weren’t going to live in the home long enough and the price they were paying to get the fixed-rate mortgage was exceptionally high.  Now this, incidentally, was not subprime, this was prime adjustable rates.  A week later I shows up—show up at the Economic Club of New York, and, with a thousand people asking me all sorts of questions—I shouldn’t put a thousand, a thousand people there and a couple people asking me questions, the question that came up right at the top, “Are you, in this—in this day, disparaging the 30-year mortgage?” Because the issue was that vs. adjustable rate.  And I said, “No, on the contrary.  When I take out a mortgage, I take out a 30-year fixed-rate mortgage.” I was referring to a special, small category of people. But it had nothing to do with subprime.

But with the whole housing boom, we’re dealing with a world problem.  More than two dozen, two dozen nations are experiencing exactly what we are experiencing.  In fact, our housing price boom is less than the average, and this is very clear—this very clearly calls for a global explanation, not for an individual explanation of what central banks do.  And, indeed, central banks around the world have largely lost their power to affect long-term mortgage rates because it’s global forces which are pushing it, and we proved it.  We tried to raise the rate in 2004 and we failed.  We tried again in 2005 and we failed.  And so it’s very clear to me that central banks, ourselves, the Federal Reserve, included, had very little control over the extent of that boom.

MR. RUSSERT:  Another comment in your book has caused a lot of debate, and here it is:  “I am saddened that it is politically inconvenient to acknowledge what everyone knows:  the Iraq war is largely about oil.” You were asked about that on the “Today” program, and this is how you answered.

(Videotape, “Today”)

MR. GREENSPAN:  I was expressing my view.  Saddam Hussein was obviously seeking to get a chokehold on the Straits of Hormuz, where about 18 million barrels a day flow from the Middle East to the industrial world.  Had he been able to get ahold of a nuclear weapon and indeed move through Kuwait and into Saudi Arabia and control the Straits of Hormuz, it would’ve caused chaos.

(End videotape)

MR. RUSSERT:  What evidence was there that Saddam Hussein had acquired or was trying to acquire a nuclear weapon, or was trying to get a chokehold on the Straits of Hormuz?

MR. GREENSPAN:  There was no evidence he had a nuclear weapon because, my judgment is, he would’ve expressed that he had it and that would’ve created a real problem.  You have to watch that man over 30 years.  First of all, let me just say that it’s very clear, if there were no oil under the sands of Iraq, he would never have gotten the wherewithal, the resources to effectively threaten his neighbors and essentially potentially threaten the rest of the world through a global shortage of oil, which he could’ve done.  The evidence I have is I watched him, one, come up against Iran but moving on Kuwait, threatening Saudi Arabia.  And what his actions, as I observed them year after year, conclude, led me to conclude, he was clearly trying to get control of Middle East oil.  Now, the thought of him in control of Middle East oil and then, with his resources, being able to buy a nuclear device, I found scary. And, indeed, having him out of power was critical to me.  Whether he was deposed by internal means or by war or anything was less important to me than he left.

MR. RUSSERT:  Do you believe the United States should take pre-emptive military action against people who could disrupt our economy?

MR. GREENSPAN:  I think that is a very significant moral problem which we all confront, and, indeed, we had that in spades during the Cold War when there was this major debate which went on about, you know, if you see a missile coming at you, before you can know whether it is really going to create a problem, do you launch a retaliatory attack?  For a democratic society, for one in which civil liberties are so critical to us and individual freedoms, the thought of pre-emptive war is anathema.  And yet people have to consider what would we do?  And I don’t know the answer to that.  I don’t know of anyone who really has an effectively scripted answer to that.

MR. RUSSERT:  Your book has generated response from the president, has generated an op-ed piece from the vice president saying that you’re off the mark.  Has your book—how has your book affected your relationship with people you’ve worked for?

MR. GREENSPAN:  Not to any significant extent because I haven’t had contact with a lot of people since I’ve made a number of my remarks.  But nothing of what I said could come as a surprise to anybody.

MR. RUSSERT:  You have worked for a lot of presidents.  Who was the smartest?

MR. GREENSPAN:  It’s a toss-up between Bill Clinton and Richard Nixon.  They both had—they were both extraordinarily intelligent.  The one thing, however, that Clinton did which I just found awesome was he went before, he went before the Congress in his State of the Union message and somebody put the wrong speech in the TelePrompTer, and for, I don’t know anybody who knew the difference.  And I’m telling you, that requires a degree of intellectual capabilities which is awesome.

MR. RUSSERT:  Who was the most profane?

MR. GREENSPAN:  Richard Nixon, by multiple quantities.

MR. RUSSERT:  Who was the most normal?

MR. GREENSPAN:  Gerald R.  Ford, the most decent man—one of the most decent people I ever met.

MR. RUSSERT:  Who was the most—who was the least knowledgeable about economic matters?

MR. GREENSPAN:  I would say they were all, to a greater or lesser extent, fairly knowledgeable.  There was no—none of the presidents that I worked with was uninformed about most of the key issues in economics.

MR. RUSSERT:  Who put the most political pressure on you?

MR. GREENSPAN:  George H.  W.  Bush.

MR. RUSSERT:  Before we go, I was quite taken by the passage in the book about my colleague, Andrea Mitchell, and your first date.  Here’s Andrea and Alan at the Kennedy Center Honors.  And this is what you wrote about your first date.  “Finally when the holidays arrived, we scheduled a date for December 28, 1984.  It was a snowy night.  It might not be everybody’s idea of first-date conversation, but at the restaurant we ended up discussing monopolies.  I told her I’d written an essay on the subject and invited her back to my apartment to read it.  We did go to my apartment,” “I showed her this essay I’d written on antitrust for Ayn Rand.  She read it, and we discussed it.” Do you often lure women back to your apartment by saying, “You want to see my essay”?

MR. GREENSPAN:  I didn’t have any sketchings or etchings.

MR. RUSSERT:  It all worked out.

MR. GREENSPAN:  It worked out, indeed.

MR. RUSSERT:  Andrea Mitchell and Alan Greenspan, together.  Must have been one, one hell of an essay.


MR. RUSSERT:  Mr. Chairman, we thank you for sharing your views.

MR. GREENSPAN:  Thank you.

MR. RUSSERT:  And you can hear more about that romantic first date about antitrust monopolies with NBC’s Andrea Mitchell.  She’s going to join Alan Greenspan right here for our MEET THE PRESS Take Two Web Extra on our Web site this afternoon,  And you’ll find out what Fidel Castro says about Chairman Greenspan as well.  We’ll be right back.


MR. RUSSERT:  That’s all for today.  Watch MSNBC Wednesday night.  I’ll be moderating the Democratic presidential candidates’ debate at Dartmouth College in New Hampshire, Wednesday night, 9 PM on MSNBC.

We’ll be back next week.  If it’s Sunday, it’s MEET THE PRESS.

Tomorrow night is family day.  If you have dinner with your kids five times a week, they’re less likely to drink, smoke or use drugs.  It’s amazing research.  Have dinner with your kids.