FOX "Your World" Interview With Representative Adam Smith - Transcript

FOX NEWS CHANNEL "YOUR WORLD" INTERVIEW WITH REP. ADAM SMITH (D-WA) INTERVIEWER: NEIL CAVUTO
SUBJECT: STIMULUS' AFFECT ON UNEMPLOYMENT NUMBERS

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PRESIDENT OBAMA: (From videotape.) In the absence of the stimulus, I think our recession would be much worse. States, for example, would have laid off a lot more teachers, a lot more police officers, a lot more firefighters, every single one of those individuals whose jobs were saved. As a consequence, they are still making their mortgage payments.

MR. CAVUTO: So unemployment still rising, but President Obama still says his stimulus is saving jobs, and that that unemployment rate could be still higher without that stimulus. Democratic Congressman Adam Smith agrees. He joins me right now.

Congressman, good to have you. Thanks for coming on.

REP. SMITH: Good to be on, Neil. I appreciate the chance.

MR. CAVUTO: I know what you're saying, I understand what the president's saying. It's a very hard thing to prove, though, right? I mean, I can understand the argument, municipalities and states might be firing teachers or firemen and policemen if they didn't get this dough, but we can never know for sure, right?

REP. SMITH: And I think the thing to remember, and the point the president made and has made, is that this economy is in a very deep hole. I mean, we've been in recession since the fourth quarter of 2007. The economy contracted by over 6 percent in the first quarter of this year. Leading into that, you know, we were already running substantial deficits and a huge debt. We had the housing bubble collapse. We had the financial industry on the brink of collapse. So you know, you're not going to snap your fingers in a few months and make all of that go away. And the president made that point again this morning. We've got a lot of work to do, and we've got to learn as we go.

MR. CAVUTO: Congressman, I never remember -- during the campaign, the president talked about creating jobs. And then after he got inaugurated, it was creating or saving jobs. He added the saving stuff. And that's the one thing I don't understand, because that's all unproven, right?

REP. SMITH: True. But something kind of happened in between when the campaign started and when the president got elected and took office, and that was the huge collapse in September and October of the financial industry, the bursting of the housing bubble. But you're right, I mean, it's a difficult thing to prove except in this much, and that's what the president referenced. Specific jobs that you can point to that have been created or saved because this money was available.

And you can talk about transportation as well. I mean, there are four huge projects in my state, transportation projects totaling well- over 2,000 jobs that are going to be necessary to do. Those projects are funded by the stimulus bill. If the stimulus bill wasn't there --

MR. CAVUTO: Well, you know, you and I can argue the particulars here. And I'm not going to argue the bigger point. One of the things I want to see or get some clarity from you, Congressman, from Democrats, in general, in the majority, when stimulus started, it was to avoid double-digit unemployment, and that stimulus would avoid that. That was exactly --

REP. SMITH: I don't think that's accurate.

MR. CAVUTO: That's exactly what the president said. So now he's acknowledging what other economists are forecasting, double-digit unemployment. So then the one thing that stimulus was supposed to avoid is going to happen, right?

REP. SMITH: Well, the point is what the stimulus was meant to do, and certainly I remember when they made that statement -- I never made that statement, no one --

MR. CAVUTO: So you knew it was bogus when it was being made, right?

REP. SMITH: Well, no. I mean, we didn't know how bad the economy was going to get. But Neil, you have to agree that spending money, putting people to work makes less unemployment. Now, is it, you know, 11 percent instead of 12, is it 9 instead of 10? You know, it's hard to calculate. But when you spend that money -- I mean, the argument about a stimulus package is the short-term benefit that you get. Very few people will argue that if you spend money in the short term, you get a benefit. You do. Is that short-term -- you clearly do. Is the short-term benefit better than the long-term cost? That's what we're balancing.

MR. CAVUTO: And that's what we'll see, Congressman. Thank you very, very much.

REP. SMITH: Okay, thanks, Neil.

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