Fox News Channel Interview - Transcript

Interview

Fox News Channel Interview - Transcript

FOX NEWS CHANNEL INTERVIEW WITH SENATOR CHARLES SCHUMER (D-NY)

SUBJECTS: ECONOMIC STIMULUS PACKAGE, TOM DASCHLE

INTERVIEWER: JON SCOTT

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MR. SCOTT: The Senate is debating the president's massive economic stimulus package. A new Gallup Poll says most Americans want Congress to pass some sort of stimulus plan, not necessarily though the current version. Gallup finds just about 38 percent of Americans like the plan the way it stands now. Almost as many people want major changes to the bill. About half of those polled do think spending all that cash will help the economy somewhat.

Here to talk about what the final version could look like after all the horse trading, New York senior Senator Chuck Schumer. He serves on the Finance and Banking Committees. He also chairs the Joint Economic Committee, in short, a very powerful member of the U.S. Senate.

Senator Schumer, good morning.

SEN. SCHUMER: I wouldn't go that far.

MR. SCOTT: All right. Well, I think your fellow senators would say so.

SEN. SCHUMER: Thank you.

MR. SCOTT: And let's talk about this thing. Are we going to get over $1 trillion with this thing before it gets out of the Senate, do you think?

SEN. SCHUMER: No, I don't believe so. We're trying to keep things down. The House did a good job; they were at about $819 (billion). We're now at $890 (billion), but that's because the Alternative Minimum Tax relief, which we must do to prevent middle class people from just getting gorged by the Alternative Minimum Tax added another $70 billion, but that makes it a tax cut and brings it closer to what the Republicans wanted. They want 40 percent tax cuts, it's now 36 percent.

MR. SCOTT: So much of the problem right now seems to revolve around the banks. I've heard so many complaints from people, builder friends of mine who say the banks just aren't lending money. How do you go about fixing that problem? I know that's one of your areas of concern.

SEN. SCHUMER: Well, yeah, that's the next thing down the road, you know, the banks have been given a large amount of money, but we haven't seen much lending, although today, Citigroup, I think, they're getting the message announced $36 billion in new lending and the idea of this TARP, which was not executed well was not to help Wall Street, it was to help Main Street through banks, through Wall Street.

Now, how do you fix these banks so they start lending again? Well, the big problem is they have a lot of these assets on the books that are very weak and so they don't want to lend. They're worried about those weak assets. An idea that is gaining currency is not to do a bad bank, not to have the government buy all the bad assets, first, it would cost a fortune, and second, you don't really know how to value them presently and if you did value them as low as people think you might send a lot of banks into trouble.

So an alternative that's getting a lot of currency is for the federal government to insure the bad assets at an amount below what the banks have them on the books now, so in other words, let's say the asset was originally $1 and now it's worth 80 cents on the banks' books, the federal government would insure it at 65 cents. The banks would take the first hit, but they wouldn't be looking into an abyss and say, hey, it could go to zero or 20, I better not lend money and they will lend money. The banks would have to pay an insurance fee, that's for sure and the value would be done by a third independent party. They'd pick the 65 based not on the value today, but on the value two, three years from now if, God willing, the economy recovers.

It costs the government less. It makes the banks pay first, and most of all, it would get lending going again and that's the key, lending to small business, lending to homeowners, lending to car owners, getting money out into the economy is crucial because, you know, we've still got a nice strong body and we've got a good brain, but our heart isn't pumping, that's the financial system.

MR. SCOTT: Last question for you, senator, regarding the future of Senator Tom Daschle, the president's nominee to be Health and Human Services Secretary. Senator Jim DeMint of South Carolina is saying that he believes that Daschle should withdraw his nomination.

Do you think he's in that much trouble?

SEN. SCHUMER: I don't. Senator Daschle came before the Finance Committee yesterday, Democrats and Republicans. We had an extensive report on what happened. Clearly, it was a bad mistake and Daschle was the first to come up with this in June of 2008. He told his accountant he had to pay for these cars, he didn't realize it and the accountant began to prepare or said he would prepare the tax returns in the next year to do it.

So one of the things we learned that may help Senator Daschle that it wasn't discovered by the administration's vetting team, but rather by Daschle himself much earlier and he brought it to the attention of the administration's vetting team when he was chosen as a potential nominee for HHS.

MR. SCOTT: All right. Senator Chuck Schumer of New York, thank you.

SEN. SCHUMER: Nice to talk to you, Jon. Thanks. Bye-bye.

END.

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