CNBC - Transcript

Interview

CNBC - Transcript

MS. BURNETT: The president talked at length about his take on the economy and all of the headwinds it faces earlier today. Here for a CNBC exclusive interview, Senator Charles Schumer joining us now from Capitol Hill.

Senator Schumer, we appreciate your being with us. You know, interesting listening to the president earlier today, he spoke about -- I'll quote him here -- we've had a good economic -- pretty good economic run here in our country, six years of growth, we've had 51 straight months of increased job employment, the longest period of uninterrupted job growth. And he went on from there. You say that he's out of touch?

SEN. SCHUMER: Yeah, the president is out of touch. You talk to anyone in the markets, they're very worried about the freeze in the credit markets. Obviously, the housing problem is getting greater. Even what the president brags about, job creation, compare this: An average of 72,000 jobs a month under Bush; 240,000 a month under Bill Clinton.

And the president's solutions are tiny, at best. We need real help here. We need the credit markets to be reassured. We need to get a handle on the mortgage crisis. We need to do something about our balance of trade issues. And the president sort of whistles blithely along like everything is good. That's not the America most Americans are in, whether it's on Wall Street or Main Street.

MS. BURNETT: Well, it's interesting, you know, Treasury Secretary Hank Paulson's going to be speaking in a few moments, actually here, and he's going to talk about his mortgage plan where they're trying to freeze interest rates for some of the hardest-hit homeowners in this country. You know, but this weekend Alan Greenspan said: I wouldn't freeze interest rates, I'd actually give cash directly to the homeowner.

SEN. SCHUMER: Right. When somebody like Alan Greenspan, a died- in-the-wool conservative, thinks the administration isn't doing enough and that their plan isn't going to accomplish much, the administration should be worried.

And many of us have been talking to them for months. I'll never forget when the credit crisis first hit and I was hearing it from people all over Wall Street, and I called the Treasury and the Fed and they didn't even realize the extent of the problem.

And I think one of the real problems here is we know what to do, we know the solutions, particularly to the mortgage crisis.

MS. BURNETT: Well, what is the solution? I don't know it.

SEN. SCHUMER: The solution is very simple. And that is, on the one hand you need somebody to help those who are about to go into foreclosure but are prime borrowers do workouts. There is no one there because 80 percent of these people don't have banks anymore; the money's been, you know, cut up and sold into 40 pieces, and there's no one in charge.

And second, you need some money for the workouts, which should come out of Fannie and Freddie. Those are not government subsidies. That is not a bailout. That's what would have been done if banks were in charge, as in the old days.

And just about every expert, Democrat and Republican, says we should do this, but the administration seems to have these sort of ideological handcuffs: no government involvement. And they come up with a solution that is goofy, that doesn't really work, saying, oh, the mortgage processors maybe can lean on the mortgage borrowers -- the mortgage lenders to go along with the solution.

At best, it will cover 12 percent of the mortgages about to go in foreclosure. And with the economy precarious, you need stronger medicine than that.

MS. BURNETT: Let me ask you one more question, sir. I know you're tight on time, and I don't want to take much more of it. But the AMT, another big issue, and we've been hearing talk of a $51 billion price tag to go ahead and put the band-aid so it doesn't affect an additional 19 million Americans next year.

SEN. SCHUMER: Right.

MS. BURNETT: But our understanding is, at the latest vote status there's no way to pay for it.

SEN. SCHUMER: Well, the bottom line is we Democrats would prefer to pay for it and have come up with a solution to pay for it, but the Republicans and the White House are saying don't pay for it at all. We believe we're the fiscally responsible group.

Having said that, we have to put this patch on the AMT; we can't allow it to get worse. And our first choice: Do it and pay for it. Our second choice: Do it and not pay for it. The worst choice of all would be to let it lapse, to not do any patch at all and let it get worse.

MS. BURNETT: All right. Well, thank you very much, Senator Schumer. We appreciate it. And thanks again for your patience today. Talk to you soon.

SEN. SCHUMER: Thank you. Nice to talk to you. Bye.

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