CNBC - Transcript
Interview
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MS. REGAN: We want to get the other side in here now. Joining us now, Maryland Congressman Chris Van Hollen, Chairman of the Democratic Congressional Campaign Committee.
Congressman, I don't know if you've had a chance to hear all of what Scott Garrett has been saying, but the theme here is that this is too much spending and it's too much spending on social programs, so, in other words, you don't have the money being directed in the right places such as infrastructure.
What's your response to that?
REP. VAN HOLLEN: Well, sorry, I'm just joining you and it's good to be here with you and Scott. I think if you listen to economists like Mark Zandi who was the economic adviser to John McCain in the presidential election, he has said this is about the right mix. You need to have this government investment in infrastructure and providing assistance to our states and local jurisdictions so they don't have to raise taxes or cut teachers and that kind of thing in the economic downturn. That creates a self-reinforcing downward spiral. That's why there are funds in here for our schools. There is school construction money. There are schools for the classrooms to prevent these kind of layoffs.
If you have teachers being fired. If you have policemen being laid off just as if you have companies who have to fire employees, you have that downward spiral, and so this is intended to prevent that from happening.
As President Obama has said, we're fighting against a very rapid drop in the economy and we're trying to save jobs as we also try and grow jobs.
MR. KUDLOW: But Mr. Van Hollen, I appreciate your school construction, but according to the new congressional budget report of $20 billion budgeted, only $8 billion will be spent in the next 18 months. Of $30 billion in highway money, only $10 billion will be spent in the next 18 months. Of $18 billion in renewable energy, only $4 billion will be spent, and, in fact, as we were talking earlier, a lot of people, including myself said, yeah, infrastructure might work where it's necessary and useful, but there's hardly any infrastructure in this bill. The Eisenhower highway program was $500 billion in the '50s; this is $30 billion. The rest of it looks like social and pork barrel spending, sir. That's the beef.
REP. VAN HOLLEN: Well, listen, you have to have a combination of things that spend out quickly and you also want to make the investments we need to make in this country. You know, you can't have it both ways. You can't say there's not enough going into highway and infrastructure, and at the same time, you want to go quickly but not waste money.
We are trying to maximize the amount of funding that goes into highways, bridges, transit, green infrastructure.
MS. REGAN: But is it enough, congressman, I mean, to Larry's point earlier, if you look back at what the Eisenhower administration spent versus what this bill is proposing spending, is this enough to really get the economy going?
REP. VAN HOLLEN: Well, I mean there's a question about whether this is enough, but the Republicans have been saying we've got too much on the investment side. We have too much on the spending side --
MS. REGAN: I mean as far as infrastructure, not the social programs --
MR. KUDLOW: That's right. Trish, I'm saying, congressman, that the social programs and the state aid and the Medicaid, those are social programs, they have nothing to do with stimulus and real economic growth. We can debate those programs, but that ought to be done under a separate piece of legislation.
On the infrastructure stuff, some of which will help, there's not much of it in here, and I think the public is not realizing that this bill is not doing what you all said it was going to do a month ago.
REP. VAN HOLLEN: Look, it's just dead wrong. We have tried to provide the infrastructure funding at capacity, I mean, the system -- you don't want money wasted. I think we all should be able to agree on that fact. We are trying to push these projects out the door as quickly as possible. These are supposed to be shovel-ready projects, but as you know, if you have a big bridge project, you can't spend it all out in 90 days and yet it's worth making that investment, number one --
MS. REGAN: Okay.
REP. VAN HOLLEN: Number two, in 2001 in the economic downturn, President Bush also provided assistance to our communities and the states because every economist will tell you that it's not a good idea for states to be either raising taxes or cutting spending in this kind of environment. It just doesn't make sense.
MR. KUDLOW: I hate to be the skunk that spoils that party, but I think these states spent their keisters off in real terms and now they ought to cut back on spending. When the government pours money in there, not only do you dilute state sovereignty, but you really take away any accountability and responsibility.
Scott Garrett, you are in New Jersey. Is there a state, maybe California, that's any worse in terms of government state spending and now the federal government is going to bail them out, Scott? Does that make any sense?
REP. GARRETT: It doesn't make any sense. Our state has been involved -- they would be involved with deficit spending if our constitution didn't allow it. They've been borrowing and borrowing their way through it, and now just because of this, our governor has come up and set basically a tin cup and hand committee to go to Washington and say, let's make sure that we get as much money out of this deal as we possibly can.
MS. REGAN: Yeah, and I guess that's what discouraging here because a lot of people thought, you know, it's okay to spend money in this kind of a downturn, but you want to make sure that the money is being spent in the right place for the right programs. I want to point out a statistic I mentioned earlier on the program and that actually and Congressman Van Hollen, you might appreciate this. As far as the size of this bill, however, we're only talking about six percent or so of GDP versus 25 percent of GDP that was actually spent and that's on an inflation adjusted basis back at World War II.
So back to my point earlier, is it enough money? And are we spending in the right places?
REP. GARRETT: Well, as far as it is enough money, this spending plan if you can put it into comparison of what this country spent, all the money we spent on the Vietnam War, the Korean War, the Louisiana Purchase, the Marshall Plan and some of NASA's funding as well as a few other things added together, does not come to the amount of money that we will be voting for a little bit later on today in spending and that's just an amazing amount of money without the oversight and you will see so much waste, fraud and abuse, the public will be outraged.
MS. FRANCIS: Congressman Garrett, this is Melissa Francis, I have a quick question for you. What would you like to see California do at this point, I mean, they're talking about handing out IOUs instead of tax returns. It's a complete mess. What specifically do you think should happen in California right now?
REP. GARRETT: Well, they should be able to do what every other business has to do and what every family has to do and that is they should be living within their means and not being bailed out by the taxpayers from a state like New Jersey or other states across the country as well, and so it's for the reason that Larry said before that this just incentivizes poor behavior today and in the future if we allow them to be bailed out.
MS. REGAN: Congressman, stay with us, we have some breaking news on GM -- false alarm, but we will have some breaking news momentarily for you on GM. Back to Congressman Garrett, if you could write this bill in your fashion, in your way, what would be in there?
REP. GARRETT: Well, as a matter of fact, I already have and the Republican Study Committee has put together a piece of legislation that would really be a stimulus bill. It would encourage, incentivize small businesses to actually start growing again, hire people. It would do so by lowering the corporate tax rates, make us competitive internationally, lower the capital gains rates and encourage people to start investing and spending again. It would do an across the board cut for everybody, individuals around five percent, so that you and I at the end of the week would see a larger paycheck and so that we'd be able to pay our bills and be able to invest again as well.
MS. FRANCIS: Representative Garrett, I'm sorry, we're going to interrupt you for a second because we are going to go to Phil LeBeau now who has some breaking news for us.
END.
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