CBS "Face The Nation" - Transcript

Interview

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MR. SCHIEFFER: Today on "Face the Nation," another Obama Cabinet pick is in trouble over taxes. And what is Congress going to do about the administration's enormous economic recovery plan?

The Senate's former Democratic Leader Tom Daschle is one of the most popular people in Washington, and his confirmation as Health and Human Services Secretary seemed a sure thing. But now it turns out he neglected to pay some $140,000 in taxes. Is his confirmation in trouble? And how will the Senate deal with the stimulus package? We'll ask the most powerful Republican in Washington these days, Minority Leader Mitch McConnell of Kentucky, and the number-three Democrat in the Senate, Chuck Schumer of New York.

David Brooks, a columnist for The New York Times will be with us for analysis and perspective. And I'll have a final word on the history that keeps on coming. But first, the Daschle nomination and passing the stimulus on "Face the Nation."

(Announcements.)

MR. SCHIEFFER: And good morning, again. Senator McConnell is in the studio with us this morning.

Good morning to you, Senator. Thank you for coming. Well, let's talk first about this thing with Tom Daschle, which kind of stunned people around here because he is one of the most popular people in Washington. It turns out, though, that he owed the IRS $140,000, apparently became aware of this last June, didn't pay up until January 2nd when he was getting ready for his confirmation hearing. Is this nomination in trouble?

SEN. MCCONNELL: Well, let me first say that Tom Daschle is very popular in the Senate. He's been a great public servant for a long time. And all of us know him very well, obviously. In terms of the situation that you described, the Senate Finance Committee is meeting tomorrow to go over this and to come up with recommendations for the rest of us. And I think I'm going to wait until they give me their opinion. But it was a surprise. I just found out about it a few days, as I assume you did, and it is quite a surprise.

MR. SCHIEFFER: Well, obviously, it's an embarrassment for the administration. But does it put senators like you in a hard place?

SEN. MCCONNELL: Well, it does raise some questions about the vetting process. This is now the second time that we've had a similar incident, first with the nominee for secretary of the Treasury and now with Senator Daschle. I think the administration ought to take a look at its vetting process.

MR. SCHIEFFER: All right. Well, let's turn to the stimulus package, this enormous economic recovery package that did pass the House but passed the House with not one Republican vote. Now it's in your lap in the Senate. Can this bill pass the Senate as it is now written, Senator?

SEN. MCCONNELL: I would doubt it. First of all, the Senate is a very different institution. The majority is not able to just kind of run roughshod over the minority in the Senate. The president indicated he wanted this to be a bipartisan proposal. I must say that surely, privately he's embarrassed about the product that came out of the House. The only bipartisanship was the opposition to it -- all of the Republicans and a number of Democrats.

There's a lot of unease among Senate Democrats about this package as well. Now, what that obviously sets up is a situation where changes could be made. We're going to recommend, for example, we go right at the housing problem. We have a 4 percent mortgage proposal where credit-worthy home buyers could buy down their mortgages, they're saving, on the average, $5,600 a year. Let's fix housing first. That's what started all of this.

And second, we think we ought to lower tax rates for medium and low-income people. Those two things alone we think would go right at the problem rather than spending money on -- (laughs) -- you know, 600 million (dollars) for new cars for federal employees in there and $150 million for honeybee insurance. This is nonsense.

MR. SCHIEFFER: Well, I mean, the auto industry sure needs some help. What's wrong with the government buying cars?

SEN. MCCONNELL: (Laughs.) I doubt if the government buying $600 million worth of automobiles would provide the kind of stimulus that we're talking about here. And we certainly don't need honeybee insurance.

Look, this thing needs to be targeted right at the problem. If we're going to spend this enormous amount of money, you know, this is huge money. Someone said the other day that if you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn't have spent $1 trillion. Looking at it another way, it's more than we've spent on all of the wars since 9/11. This is a lot of money. If we're going to spend anywhere near this, Bob, we need to target it directly. It needs to be timely, temporary and targeted.

MR. SCHIEFFER: If it came to it, would Republicans filibuster this bill if it was not to your liking?

SEN. MCCONNELL: Well, that term is thrown around a lot. In the Senate, it routinely takes 60 votes to do almost everything. It doesn't necessarily mean you're trying to slow a bill down. But a supermajority is required for virtually everything in the Senate and certainly for something that's close to a $1 trillion spending bill it will.

MR. SCHIEFFER: Well, let's talk about some more things. Should it be a smaller package overall? We're talking about something I don't think anybody really knows how much this is as it's now outlined, but between 800 (billion dollars) and $850 billion. Should it be a smaller amount?

SEN. MCCONNELL: It would be good if it could be smaller and actually put lead on the target immediately. The whole idea here is to stimulate the economy immediately. And I think we can figure out how to do that, and I think we can do it more effectively with less money than spending $1 trillion, particularly if we're going to waste a significant percentage of it on things that while they may be very worthwhile aren't going to spend out until year three or year four or ought to be handled through the normal appropriations, for example.

MR. SCHIEFFER: You talk about honeybees and 600 cars and that's just a small part of it. What has to come out of this bill to get you to take a second look at it at least?

SEN. MCCONNELL: Well, the president said he didn't think it ought to have earmarks in it. And you know, earmarks are arguably fine in the normal appropriations process, but what does that have to do with stimulating the economy? We ought to go right at the housing problem and right at tax relief to put money in the hands of consumers who can spend it now. I think we need to exercise some discipline here.

And I think it may be time, Bob, for the president to kind of get a hold of these Democrats in the Senate and the House, who have rather significant majorities, and shake them a little bit and say, look, let's do this the right way.

MR. SCHIEFFER: So you want the president himself to get more involved in this?

SEN. MCCONNELL: I can't believe that the president isn't embarrassed about the products that have been produced so far.

MR. SCHIEFFER: Couldn't you pay a price, too, if this thing does go down? I mean, wouldn't Republicans be blamed when the economy is going down the tubes? I mean, that kind of thing didn't work very well for Herbert Hoover when he didn't want to do anything either.

SEN. MCCONNELL: Well, he did a lot. He did a lot of the wrong things. Look, this is not about blame, this is about getting the economy moving. We don't have an election for two years. The question is let's do it right. I think we can come together on a bipartisan basis. You know, virtually everybody agrees we ought to do something. This is not a question of doing nothing versus doing this. Almost everybody agrees we need to do something. Let's do it timely, temporary and targeted, go right at the problem and do it on an overwhelming bipartisan basis. I think it can still be done.

MR. SCHIEFFER: You think it can still be done. Let me ask you about one other thing and that is Judd Gregg, senator from New Hampshire, a Republican. It looks like that Monday, President Obama is going to name him, if he'll accept the nomination, to be a member of his Cabinet, secretary of Commerce. How do you feel about that?

SEN. MCCONNELL: Well, first, it would be a big loss for the Senate. He's one of our brightest, most capable members. The president certainly has an eye for talent. Senator Gregg has assured me that if this were to happen -- if it were to happen -- it would not change the makeup of the Senate. In other words, whoever is appointed to replace him would caucus with Senate Republicans. So I think it would have no impact on the balance of power in the Senate.

MR. SCHIEFFER: Well, there is a Democratic governor in New Hampshire. But you're telling me that Senator Gregg assures you that the Democratic governor of New Hampshire would appoint someone who's either a Republican or an independent who would vote with the Republicans.

SEN. MCCONNELL: Senator Gregg has told me that if he were to take this appointment, it would not alter the makeup of the Senate in terms of the majority and the minority.

MR. SCHIEFFER: All right. Senator, thanks so much for joining us. Hope to see you again.

We'll be back with Senator Chuck Schumer in just one minute.

(Announcements.)

MR. SCHIEFFER: And back now with Senator Chuck Schumer of New York, the Democratic leadership in the Senate.

Let me ask you first the question that I asked Senator McConnell and that is Senator Daschle, is this nomination in trouble?

SEN. SCHUMER: I don't believe it is, Bob. Daschle is one of the most respected people, particularly in health care. He knows the health care issue. He knows the senators. He knows the politics. At a time when we have to really dramatically overhaul health care because people are hurting, I think we need Daschle as secretary of HHS.

MR. SCHIEFFER: But Senator, I mean, this president came to office saying he wanted government to be more transparent, he didn't want lobbyists, and now this is the second nominee that's come before the Senate who forgot to pay his income tax.

SEN. SCHUMER: Well, Senator Daschle, this was clearly an oversight. He's made recompense. He's admitted it. And I think having him there is really important. And I believe that he will be approved by both the Finance Committee and the whole Senate.

MR. SCHIEFFER: All right. Let's get to the stimulus package. You heard Senator McConnell. He said there's going to have to be a lot of stuff done, a lot of stuff taken out of this bill before Republicans are going to warm to it. What's your response?

SEN. SCHUMER: Well, first and foremost, we need a stimulus bill because the economy is hurting, half a million jobs gone, GDP down 3.8 percent. The overall bill the president has submitted to us, which has largely been passed by the House and being considered by the Senate, is the right bill.

Now, are there certain things that should come out? Some we've already taken out -- the Mall and the family planning. If there are other little things in there that Mitch McConnell and Republicans don't like, they will come out as well because they are allowed to offer amendments on the floor. If they offer an amendment on some of these things, doesn't pass the smell test.

But let me say this. The package is very much needed. It by and large meets what most economists say is there. And the Republicans won't have the luxury that they had in the House of voting no and still letting it pass. We received one vote in the Finance Committee, on Republican vote for in the Senate. This will pass with Republican votes because it's a good package and because we will make some changes around the edges.

MR. SCHIEFFER: Well, you heard Senator McConnell. He said we've got to go and get right at the housing situation.

SEN. SCHUMER: Yes, I think we can do more for housing. One of the Republican proposals is to raise the 7,500 (dollars) tax credit we give to new home buyers, raise it to up to 15,000 (dollars), do it for all home buyers. That's something that we look favorably upon. Getting mortgages down to 4.5 percent, as Senator McConnell mentioned, that's a good idea. The administration is exploring it. But I think the more likely place for that to be is the TARP bill because President Obama has wisely said put 50 (billion dollars) to $100 billion of that 350 (billion dollars) into mortgages and it could go there. So I think we'll get real agreement on the housing part.

MR. SCHIEFFER: And let's talk about infrastructure spending.

SEN. SCHUMER: I think, Bob, there's a general view among Democrats and Republicans that this does not have enough infrastructure spending, particularly on transportation. Senators Murray and Feinstein will be authoring an amendment to increase infrastructure significantly, 20 (billion dollars) to $30 billion. I've been pushing $5 billion for mass transit which was somewhat neglected. I think that will be included as well.

And so I think that we're going to see an increase in infrastructure for those, both Democrat and Republican. Kit Bond, a Republican who voted for the bill, wants more in infrastructure. We're going to see an increase.

MR. SCHIEFFER: And did you mention 20 (billion dollars) to $30 billion? I mean, these sums that are being thrown around now are just -- does anybody know what $1 billion is let alone $1 trillion?

SEN. SCHUMER: Well, it's true. The sums are huge, but the economic mess we have is huger. When GDP goes down 3.8 percent in one quarter, this whole package is 6 percent of GDP. So in two quarters, this package will be less than the GDP declined. The real worry, the dramatic worry which we all have to be worried about, it's far more important than $150 million for honeybees or whatever, which could be put somewhere else, as Senator McConnell wants, but the worry here is if we get into a deflationary spiral downward and nobody know how to get out of that.

You know when the last one we had was? It was called the Great Depression. So this is serious, serious stuff. And I hope we can come together. I hope Senator McConnell will not do what Leader Boehner did and just say no. Frankly, he doesn't have the luxury because I don't think they want to stop the package.

MR. SCHIEFFER: He says that President Obama is going to have to get into this in a more forceful way to talk to Democrats.

SEN. SCHUMER: President Obama has been in this in a very forceful way and the basic outlines of his package to do three things -- get the economy going by pumping money into it, creating jobs and changing our long-term infrastructure on things like energy and health care IT is exactly what he predicted. So, you know, it's sort of a little bit of a smokescreen to say that Obama's package is different than the House and Senate's. It's largely the same. There were a few things added. Those should not get in the way.

I dare say that there are some Republicans, if you took out the honeybees and took out the National Mall, they'd still vote against it. It may be a diversion. It may be a diversion.

MR. SCHIEFFER: How many Republicans at this point do you think you could count on? I know Senator Olympia Snowe is looking favorably on this bill. But I so far don't see anybody else.

SEN. SCHUMER: Four voted for the appropriations bill, one voted for the finance part of the proposal. I think we will get enough Republicans to pass this, the more the better. But I will say this. I'd rather have a really good bill that helps our economy get out of this mess with 65 votes than dilute the bill and get 80 votes. Most of the Republicans say, we just want more tax cuts. Even Martin Feldstein, the leading Reagan Republican economist, says, no, the tax cuts are not the way to go. And we did tax cuts with George Bush a year ago. We went along completely because Bush was president. There was no spending in there, not even unemployment insurance, and it was regarded as a flop.

So let's not repeat history, let's do something new. President Obama has put together a very strong package. Can we make it better? Of course, we can make it better, the bill that came over from the House, and we will. But we must do something, and it's no time for partisan games.

MR. SCHIEFFER: Senator, thank you so much for being with us. Really appreciate it.

When we come back, we'll be talking to David Brooks of The New York Times.

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