Fox News - Transcript

Interview

Fox News - Transcript

MR. SMITH: One city at the center of this crisis is obviously New York City. With the money from Wall Street, the city would have extreme trouble functioning. Ten percent or more of all New York State revenue comes from taxes on those folks on Wall Street. But should the rest of the country be paying, in essence, for that?

With us now is Democratic Senator from New York Chuck Schumer. Sir, good to see you. Thank you.

SEN. SCHUMER: Good afternoon.

MR. SMITH: It looks as if our city and our state are in a bit of trouble, and that could be an understatement. But how do you sell that part of this to the rest of the country, Senator?

SEN. SCHUMER: Well, look, when the president first proposed a $700 billion bailout no strings attached, no one was for it, not even New Yorkers. We were getting calls overwhelmingly against it. Then some of us worked to put in protections for taxpayers, for homeowners, for oversight, and then people began to say, well, it's getting better.

Now what's happened is two things. First, Harry Reid, very intelligently, added some money right for Main Street. For instance, this bill has relief for the AMT, the alternative minimum tax. That clobbers New Yorkers, and not just wealthy ones. People making $50(,000), $75(,000), $100(,000), $125,000. And there will be real relief there. And that doesn't go through Wall Street, that goes right to the taxpayer.

And second --

MR. SMITH: You're talking -- go ahead, please. I'm sorry.

SEN. SCHUMER: And second, there's money that directly helps businesses that are going to invest and save -- small businesses, large businesses, not financial businesses. So now there's some help that doesn't go through Wall Street to, quote, "help Main Street," but goes directly to Main Street. That makes it more palatable to many, in the Senate and the House.

MR. SMITH: Who -- on the right and the left, in your estimation -- who are the kinds of people who would still be against this, and why?

SEN. SCHUMER: Okay. The far right and far left are both opposed. Far right; no government involvement. The problem with that argument is -- Herbert Hoover used it in 1930. We had a financial crisis but not an economic crisis. Hoover said do nothing; the Great Depression was created.

There are those on the far left who say, nothing to help Wall Street. The problem is that Wall Street is tied up with Main Street. Right now we're hearing of car dealerships closing because people can't get car loans; small businesses closing because they can't get loans; even families that depend on rolling over some credit card debt being told no and really being in big trouble.

So the two are related. But there are some on the far left saying do it all through the bottom up, do it all through the homeowners, buy back all the mortgages, and let Wall Street get better that way. And that's -- you know, that's an argument that's reasonable, but it was not what the president proposed, and we probably don't have time to do it given the perilous state of our economy, even though I might prefer that, starting from the beginning.

MR. SMITH: What sort of message do you receive, and maybe how should your constituents and the rest of us around the country process the news that a company like General Electric needs to raise $15 billion in capital urgently, and insists this bill must pass directly or it sounds as if GE is saying they may be in trouble?

SEN. SCHUMER: Well, I wouldn't name any specific companies, but some major industrial, non-financial companies are teetering on the edge. And that's because they depend on financing. They need $15 billion to roll over every day, and if the banks are in trouble and say no, the company has real trouble. So this is affecting everybody.

And I think that we have to make sure that those who did wrong on Wall Street are -- A, they don't make the profits. We've done that. In other words, should this bad paper that the government's buying up come back up to regular value, better value, in three, four, five years, the warrants we've required be put in make sure the taxpayer gets paid back before the shareholder, bondholder, exec.

And second, we have to make sure this doesn't happen again, which means changing and toughening up the regulatory structure. That will take too long to do right now. It would take a month or two, and Lord knows what would happen to the economy. But it's got to be job one next year when we get back.

MR. SMITH: I'm almost out of time, Senator. But you mentioned Herbert Hoover just before the --

SEN. SCHUMER: Yes.

MR. SMITH: Just before the Great Depression.

SEN. SCHUMER: Yeah.

MR. SMITH: You know, one thing he did do, Senator, if memory serves, was raise taxes 25 to 65 percent. And that seems, in hindsight, to have put the banks in a horrible credit crunch and crisis. And I wonder if some of you on the Democratic side have considered whether raising taxes in this climate might be disastrous.

SEN. SCHUMER: Yeah, I don't think anyone -- this package does not propose raising any taxes. Hoover had a laissez-faire policy; let it all work itself out in the financial -- when the banks had a crisis. It had nothing to do with raising taxes. That was different. That was much later, after the economy went down. But at the beginning he said --

MR. SMITH: Well, we don't want to do that --

SEN. SCHUMER: He said --

MR. SMITH: -- if the economy (lets ?) down this time, right?

SEN. SCHUMER: Right. Well, that's right. But the Hoover point is, he did nothing to help the financial services industry, and then it spread to the whole economy and created a great depression. We ought to avoid that, as well.

MR. SMITH: Senator Schumer, very good of you. Good luck up there today.

SEN. SCHUMER: Nice to talk to you.

MR. SMITH: Thanks for thinking about us, I hope.

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