PBS "Newshour with Jim Lehrer" -Transcript

Interview

MS. WOODRUFF: And to look at how Republicans plan to appeal to voters' pocketbooks, we turn now to Senator Chuck Grassley of Iowa -- he serves as ranking member on the Finance Committee -- and Congressman Adam Putnam of Florida; he's the chair of the House Republican Conference.

Good to see both of you.

Senator Grassley, to you first: The economy was hardly mentioned on the floor of the convention last night. Tonight, one of the themes is prosperity. Is that an accurate description of the state of the American economy right now?

SEN. GRASSLEY: Well, first of all, I think Republicans, like everybody, has to be sensitive to people that are on the edge of losing a job and show sensitivity towards that. We also -- a lot of people that maybe might not be hurting, but there's a lot of anxiety about the Congress -- I mean about the economy -- so you have to show sensitivity to that.

On the other hand, there are a lot of other things by which you historically measure the economies that are very good measures of the economy right now. And I think one of the things that we have to make clear between now and November is the tax increase that the Democrats are going to put on the people in 2009 and beyond is going to be very, very detrimental to the economy and really hurt the economy, and you can't increase taxes at a time when the economy is level.

MS. WOODRUFF: Congressman Putnam, what is the McCain message to the electorate going to be on the economy, and how about that fine line of dealing with the fact that for the last eight years it's been a Republican administration in charge?

REP. PUTNAM: Look at the things that are causing the anxiety that's out there about the American economy. You know, people are concerned about rising costs of living, the inflationary effect of the lack of a national energy policy. People are concerned, obviously, about unemployment rates ticking up.

But you know, one of the things that we believe has been an important contrast between Senator McCain's vision and Senator Obama's vision is the need to put in place an energy policy that's an all of the above, putting investments and creating jobs in this country, rather than sending $700 billion to someone else.

That not only impacts the direct job creation in renewable fuels and alternative fuels but it also has an important effect of helping keep costs down that spill over into agriculture and fertilizer and inputs and food costs and groceries and health care and everything else.

MS. WOODRUFF: So Senator Grassley, energy, a big part of the economic message from the campaign this fall?

SEN. GRASSLEY: When you think of the increase in the cost of living that just has rapidly gone up after being very flat for six or seven years, you find energy being at least a third of the reason for the increased costs of food and it has a ripple effect through the entire economy.

But the most important thing is we have an opportunity to make use of our own natural resources through drilling where we know there are resources available. You know, we're about the only country in the world that doesn't use our natural resources to the greatest extent we can, and for our economic security as well as our national security we ought to be keeping that money at home. We shouldn't be sending it to countries that are going to train terrorists to kill Americans.

And that's a very important aspect of the economy and people understand it with $4 gas, and it's something that is making an impact now on the Democratic members of Congress as we're seeing them come back from the summer break maybe willing to talk about drilling, and they were not willing to even let a vote on that in either the House or the Senate in the month of July when we could have been solving this problem.

MS. WOODRUFF: Congressman Putnam, we heard Senator Grassley a moment ago mention John McCain's plan to keep the tax cuts in place -- the Bush tax cuts; the Obama camp coming back and saying, we believe in tax cuts for the middle class, but we don't believe those tax cuts ought to stay in place for those earning over $200,000 a year. How does the McCain camp go after that other than by this message of they're going to raise your taxes and we won't?

REP. PUTNAM: Well, they have been kind enough to admit that they are going to raise your taxes, and that is true and it will impact not only -- we're not just talking about rock stars and Hollywood celebrities and people like that. I mean, we're talking about small businesses who pay at the individual rate.

When they talk about putting a surcharge on people making $150,000 a year or more, or $200,000 -- but I've heard both figures -- you're talking about small businesses. You're talking about small family farms that are paying at the individual rate; you're talking about small construction companies; you're talking about realtors who work out of their spare bedroom. You're talking about frankly the backbone of the American economy.

And so it's really a pretty lethal concoction for an economy that's already on the bubble for them to be openly talking about raising taxes, and the people who will bear the brunt of that are the people who are really the engines of job creation throughout the nation.

MS. WOODRUFF: Senator Grassley, go ahead.

SEN. GRASSLEY: Could I add to that just please?

MS. WOODRUFF: Sure.

SEN. GRASSLEY: History tells us that when Democrats campaign on a platform of a middle-income tax cut and just taxing the rich, candidate Bill Clinton said that in 1992 and in 1993 they passed, almost with only Democrat votes, the biggest tax increase in the history of the country that not only taxed the wealthy but taxed the middle class and even the lower middle class. So I don't know that you can believe a candidate that's only going to tax the 5 percent of the wealthiest people and solve all the problems that we have -- budget and social and programmatic.

MS. WOODRUFF: Congressman Putnam, when the Democrats come back and say, "Wait a minute, this Republican argument we hear election after election that we're the party of tax and spend isn't going to fly this year," what's the response?

REP. PUTNAM: Well, you know, we have a track record of reforming the tax code and lowering the tax burden on all Americans, not picking winners and losers. You see, their fundamental economic policy is to pick winners and losers, and it's a farce that they can draw some line in the sand and say everyone above this line has an obligation to pay more.

We believe that if you want to fundamentally keep the economy strong, allow us to compete in a global marketplace, you want to keep the tax burden low, you want to keep the regulatory burden in check and allow people by their own initiative to pursue their piece of the American dream.

MS. WOODRUFF: Last question, Senator Grassley: John McCain's campaign manager, Rick Davis, said this week that he thinks this campaign is mainly not about issues but in his words about a composite view of what people take away from the candidate, not issues.

SEN. GRASSLEY: I think when it comes to national security, that's probably very true in the sense of McCain having strong national security background, being a former prisoner of war, fighting to protect our freedoms. But when it comes to domestic issues I think people are very concerned about where candidates stand on the issues because there is anxiety, even considering the fact that maybe a lot of standards that measure the economy tend to be very good. There's a lot of anxiety out there that things are going to get worse. We have to address that anxiety.

MS. WOODRUFF: Senator Chuck Grassley, Congressman Adam Putnam, we appreciate it. Thank you both.

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