CNBC "Power Lunch" - Transcript

Interview

MS. CARUSO-CABRERA: Joining us now for an exclusive Power Lunch interview is Senator Bernie Sanders of Vermont.

Senator, thanks so much for joining us.

SEN. SANDERS: My pleasure, Michelle.

MS. CARUSO-CABRERA: As you can imagine, we have an audience that is very in favor of shareholder rights and also property rights, et cetera, et cetera, so we are pleased to have on somebody who calls himself a socialist. Tell us why it is that you think that they should help --

SEN. SANDERS: Well, this has nothing to do -- this has nothing to do with socialism. This has to do with common sense. You know, the American taxpayer, because of the greed on Wall Street, the irresponsibility, the recklessness of Wall Street, had to come up with $700 billion to bail these guys out. And the theory behind the bailout is, we've got to loosen up credit. We have to make sure that banks can lend to small businesses, stimulate the economy, create jobs.

And now what we're learning is that the major banks, the major financial institutions who have received tens of billions of dollars of taxpayer money are saying, oh, no, we're not going to be lending that money out. What we're going to be doing is continuing to give huge bonuses to Wall Street executives or we're going to be paying out dividends or we're going to be getting involved in mergers and acquisitions. That's not why the taxpayers -- and I have to tell you, I voted against that bill for a dozen different reasons -- but that's certainly not the theory as to why Wall Street got that money.

MS. CARUSO-CABRERA: Do you think you were lied to?

SEN. SANDERS: Well, I think you heard a lot of rhetoric during that period is that as part of this bailout, we are going to put an end to the excesses on Wall Street and we're going to curb compensation packages.

MS. CARUSO-CABRERA: But was Hank Paulson honest with you, do you think?

SEN. SANDERS: I think we have got to make it very clear right now that bonuses are not given out to Wall Street. That was an outrage.

MR. KNEALE: Senator Sanders, your proposal, frankly -- I mean, it looks rather punitive and even mean-spirited. It's one thing to say take bonuses away when you're getting federal money. Take them away from all of the big brass hats who got us into this mess, I can understand that. But you want bonuses deprived to -- of every Wall Street employee. So a secretary at Goldman Sachs who could get a 30,000 (dollar) or $40,000 bonus and put some of that back into the economy, you want her not to get the bonus either. But she did nothing wrong.

SEN. SANDERS: Dennis, Dennis -- I'm not sure -- I'm not quite sure what world you are living in. In my state and to the northern tier of this country, you know what people are worried about? Not $30,000 bonuses. They're worried about whether they could --

MR. KNEALE: But you want to deprive secretaries of bonuses, Senator Sanders.

SEN. SANDERS: Excuse me. Excuse me. They're worried --

MR. KNEALE: Why do that?

SEN. SANDERS: -- excuse me. They are worried about whether they're going to be able to heat their homes. They're worried about whether they're going to hang on to their health insurance. They're worried about whether they're going to send their kids to college.

MR. KNEALE: That's great. I understand what that's got to do with Wall Street.

SEN. SANDERS: You're talking about secretaries. In my state, $30,000 is not a bad salary. To talk about bonuses and -- for people at the lowest end of that ladder is absurd. But it's not just the secretary --

MR. KNEALE: Furthermore, Senator Sanders, you want them to be prohibited from paying on dividends.

SEN. SANDERS: -- you're talking about -- you're talking about millions of dollars going to CEOs who have been greedy, who are parading their huge compensation packages.

MR. KNEALE: And you're talking about taking bonuses away from rank- and-file low-level people who did nothing wrong, and that just seems wrong. But furthermore, you want banks to not be allowed to pay dividends at all.

But if you look at the institutional shareholders for Citi, for Morgan Stanley and the others, you'll see that some of the biggest holders are mutual funds in which millions of Americans like -- I'm in Fidelity Magellan, they're a big holder in all those big banks. If you don't let them pay dividends, I'm not going to get dividends into my mutual fund. But I didn't do anything wrong and you're penalizing me.

SEN. SANDERS: But you may not have done anything wrong, but the taxpayers of this country are saying -- what they're saying very clearly is first of all, most of them didn't like this bailout to begin with. But the theory behind the bailout was not primarily to give bonuses to millionaires. The theory behind it was to stimulate the economy by creating easier credit, by getting money out to small businesses. And I think there will be outrage, not only on Main Street, not only all over this country, but in Congress when we hear that some of that money is going to acquisitions and mergers, that some of that money is going to bonuses, primarily to top-ranking --

(Cross talk.)

MR. KNEALE: Okay. One last thing. By taking dividends away, you've just made the stock less attractive, which means the government's investment in the banks is now worth less money. You just hurt the government investment that you're trying to help.

SEN. SANDERS: Well, I think we should take a look at what the original package was about, and my understanding is the original package was about loosening up credit and stimulating the economy. It might be a good idea if we did what you said.

MR. KNEALE: Well, thank you for being here, Senator Sanders. We appreciate it.

SEN. SANDERS: My pleasure.

MR. KNEALE: Come on back on and we'll wrestle some more. Thank you, sir.

SEN. SANDERS: Okay.

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