Clinton Rips Bush Fiscal, Tax Policies

Former President Clinton slammed President Bush's fiscal and tax policies in an interview broadcast today on ABC News' "This Week."

It was Clinton's first televised interview with George Stephanopoulos, now host of ABC News' "This Week," since Stephanopoulos worked in the Clinton White House.

"Tax cuts are always popular," Clinton said. "But about half of these tax cuts since 2001 have gone to people in my income group, the top 1 percent. I've gotten four tax cuts.

"Now, what Americans need to understand is that that means every single day of the year, our government goes into the market and borrows money from other countries to finance Iraq, Afghanistan, Katrina and our tax cuts," Clinton added. "We depend on Japan, China, the United Kingdom, Saudi Arabia and Korea primarily to basically loan us money every day of the year to cover my tax cut and these conflicts and Katrina. I don't think it makes any sense. I think it's wrong."

Clinton also discussed bringing world leaders together to combat the world's chronic problems -- including extreme poverty, global warming and religious conflicts -- as well as the Hurricane Katrina recovery effort and Hillary Clinton's political future.

The interview follows:

GEORGE STEPHANOPOULOS: Mr. President, good to see you again.

FORMER PRESIDENT CLINTON: Thank you, George.

STEPHANOPOULOS: We're here on your initiative, and I want to talk about that, but let's begin with Katrina. President Bush has brought you into the recovery effort, but he's not taking all of your advice. You say roll back the tax cuts for the wealthy. He says no tax increase of any kind. We're spending $5 billion a month in Iraq, probably $200 billion on Katrina. Something's got to give.

CLINTON: Well, that's what I think. I think this idea -- I think it's very important that Americans understand, you know, tax cuts are always popular, but about half of these tax cuts since 2001 have gone to people in my income group, the top 1 percent. I've gotten four tax cuts.

They're responsible for this big structural deficit, and they're not going away, the deficits aren't. Now, what Americans need to understand is that that means every single day of the year, our government goes into the market and borrows money from other countries to finance Iraq, Afghanistan, Katrina and our tax cuts. We have never done this before. Never in the history of our republic have we ever financed a conflict, military conflict, by borrowing money from somewhere else.

STEPHANOPOULOS: The president is not going to move. What do Democrats do?

CLINTON: They should continue to oppose it, and they should make it an issue in the 2006 election, and they should make it an issue in the 2008 election. And they should hope, to goodness, for the sake of our country, that the cows don't come home before we have time to rectify it.

I mean, sooner or later, just think what would happen if the Chinese -- We're pressing the Chinese now, a country not nearly rich as America per capita, to keep loaning us money with low interest to cover my tax cut, Iraq, Afghanistan, and Katrina and at the same time to raise the value of their currency so their imports into our country will become more expensive, and our exports to them will become less expensive. And by the way, we don't want to let them buy any oil companies or anything like that.

So what if they just got tired of buying our debt? What if the Japanese got tired of doing it? Japan's economy is beginning to grow again. Suppose they decided they wanted to keep some of their money at home and invest it in Japan, because they're starting to grow?

We depend on Japan, China, the United Kingdom, Saudi Arabia and Korea primarily to basically loan us money every day of the year to cover my tax cut and these conflicts and Katrina. I don't think it makes any sense. I think it's wrong.

STEPHANOPOULOS: Is there anything coming out of this initiative here that you can apply directly to Katrina and the poverty we saw revealed there?

CLINTON: Oh, yes, we have raised quite a bit of money for Katrina here. And former President Bush and I, you know, we were asked to raise money. We already have $90 million to $100 million. And what we're trying to do is make sure that our money goes directly to the poorest people who have been dislodged by working with church groups and others. We're working on some mechanisms now to do that, and we'll have some announcements in the next week or so.

But I think there will be a lot of money coming forward from the federal government. A lot of it will be necessary, you know, to build the infrastructure, rebuild the fabric of life and not simply in New Orleans but along the Gulf Coast.

STEPHANOPOULOS: The Gulf Coast.

CLINTON: Yes; you know, keep in mind, Mississippi was devastated. Everything from a mile in Mississippi was blown down, and Alabama, but we've got to do that.

STEPHANOPOULOS: Excuse me; the problems of race that were tied to poverty here, and I know you don't think there's any conscious racism at play in the response, but we saw one more time blacks and whites looked at this event through very different eyes. What can President Bush do about that, and looking back, do you think there was anything more you could have done as president?

CLINTON: Well, I think we did a good job of disaster management.

STEPHANOPOULOS: But the racial divide.

CLINTON: Well, I think we did a good job of that. For example, we had the lowest African-American unemployment, the lowest African-American poverty rate ever recorded. We had the highest homeownership, highest business ownership, and we moved 100 times as many people out of poverty in eight years as had been moved out in the previous 12 years.

This is a matter of public policy, and whether it's race-based or not, if you give your tax cuts to the rich and hope everything works out all right, and poverty goes up, and it disproportionately affects black and brown people, that's a consequence of the action made. That's what they did in the '80s; that's what they've done in this decade.

In the middle, we had a different policy. We concentrated tax cuts on lower income working people and benefits to low-income people that helped them move from welfare to work, and we moved 100 times as many people out of poverty. We know what works, and we had a program that was drastically reducing poverty, and they got rid of it. And they don't believe in it.

And I don't think that it's race-based, but it has a class impact. And in Louisiana, if what you do affects poor people disproportionately, then, it will disproportionately affect black people. Now, there were a lot of poor people in St. Bernard Parish who were white who were also hurt.

But I think the fundamental problem there was, it's like when they issued the evacuation order: That affects poor people differently. A lot of them in New Orleans didn't have cars. A lot of them who had cars had kinfolk they had to take care of. They didn't have cars, so they couldn't take them out.

STEPHANOPOULOS: And they couldn't get gas.

CLINTON: And they couldn't get gas.

Then, you had another thing nobody's talked about: a lot of these people never had any home insurance, didn't have any flood insurance. Everything they owned was in their little home. And if we really wanted it to do it right, we would have had lots of buses lined up to take them out and also lots of empty vans so that everybody with no kind of home or flood insurance could have been given a little bit --

STEPHANOPOULOS: The mayor probably should have had those buses.

CLINTON: A little bit of it.

Maybe the mayor, maybe the governor. But all I can tell you is that when James Lee Witt ran FEMA, because he had been both a local official and a federal official, he was always there early, and we always thought about that. But both of us came out of environments with a disproportionate number of poor people.

I think that we were sensitive to the racial issue, but I think we were sensitive to the economic issue. And you can't have an emergency plan that works if it only affects middle class people up, and when you tell people to go do something they don't have the means to do, you're going to leave the poor out.

STEPHANOPOULOS: You said you didn't want this conference to just be about talk. You wanted it to be action. Can you total it up over the three days that you've gotten --

CLINTON: Looks like now, we're not quite through yet, but it looks like we're at about $800 million worth of commitments. And they're very specific, and they've written cards out, you know, with their commitments. And we're going to have people during the year that check in, see if they need help making them, and we're going to give reports, progress reports between now and next year. So everybody is going to know whether we've kept our commitments or not.

STEPHANOPOULOS: Take us out 10 years. It's 2015. What do you want the Clinton initiative to have achieved? And will it be the center of your public life?

CLINTON: Well, it won't be the center, because what I'm trying to do is to provide a forum to empower other people. But I'm doing my own projects now, you know, the disaster project here, the tsunami [project] abroad, the AIDS project, which is the biggest thing I'm doing in terms of the number of lives it's affecting. We are getting medicine to 175,000 people now, which is 25 percent of all the people who have been added since 2003 in the poor countries.

But the Clinton Global Initiative has the power, the potential to affect the largest number of people in a positive way, because we're giving people a forum where they not only talk and learn, but do. You can't come here unless you promise to do something. And I believe that this whole nongovernmental organization movement is really the sort of new thing about governance and working on public problems in the 21st century.

It's not anti-government. We had as many public officials here as we could get from the Bush administration, from the Congress, from the other countries of the world, but they have to work together. So if we do this together for 10 years, I think there will be a measurable impact on some of the world's most severe problems.

STEPHANOPOULOS: Let's talk about John Roberts. You had two picks to the Supreme Court, Justice Breyer and Justice Ginsburg. Republicans voted for them overwhelmingly in both cases. John Roberts is unquestionably qualified; no ethical problems at all. Why shouldn't Democrats vote for John Roberts in the same proportions Republicans voted for Justice Breyer and Justice Ginsburg?

CLINTON: Well, I think, in fairness, that there is a little bit of difference.

STEPHANOPOULOS: How so?

CLINTON: Because the Republicans knew I wouldn't appoint somebody they wanted on the Court, and they knew that I'd appointed judges that were not extreme left-wingers, that were more or less mainstream judges and were unquestionably qualified.

Now, Judge Roberts is unquestionably qualified by intellect and character and background and by experience, but the next two appointments to the Supreme Court, his and the replacement for Justice O'Connor, can change the balance on a lot of important things. So I think that's —

STEPHANOPOULOS: But he's a one-for-one replacement for Rehnquist, isn't he?

CLINTON: I think that they have to think that. Well, maybe; we have to see -- I think a lot of them would like to know who the other nominee is.

The other thing is there was no issue with my appointees of their refusal to release documents, which I think is still a little bit of an issue in the Roberts case, although I don't know that it would make any difference if he released the documents, since he now says the first documents where he expressed his opinion didn't really reflect his opinion.

But I suspect he probably will be confirmed, but I think for a lot of Democrats, particularly -- And keep in mind, I think the whole idea of the Roe v. Wade issue is a big issue, because Justice Thomas said he'd never even discussed it with anybody, and then, like the minute he got on the Court, he made it clear that he wanted to repeal it.

So I think that the Democrats and some of the Republicans, like Senator Specter, can be forgiven for being somewhat skeptical. I think he'll probably be confirmed. I don't know. Hillary would know better than me, but I think that --

STEPHANOPOULOS: Think she'll vote for him?

CLINTON: -- there's a sense that -- I don't know. I have no idea what she's going to do. I haven't talked to her about it.

But I think there's a sense that there's a lot more at stake here than just any Supreme Court appointment. But I agree that he is qualified by intellect, character, and experience, and he's obviously a very bright man. The only question is whether the Senate has an extra burden here because it's likely to have a significant impact on the balance of Court decisions, depending on who the next nominee is.

I think if President Bush nominated a clear moderate before the vote happened in the Roberts case, he would sail through.

STEPHANOPOULOS: Interesting advice.

Let's talk Iraq for a second. We just had one of the bloodiest weeks of the war. I know you've said that we have to have a strategy for victory and see this through to victory, but a lot of Democrats and also some Republicans like Chuck Hagel look at the situation now and say you know what? We don't have that strategy. We're not winning.

CLINTON: We don't.

STEPHANOPOULOS: We don't have a strategy for victory?

CLINTON: Well, if we do, it's not working right now, at least. But I know what they say.

Let me take a step back a little bit. I did not favor what was done. I did favor the Congress giving the president the power to use force, because when he asked for it in his speech in Cincinnati, he basically made the argument I've made many times, which is Saddam Hussein never did anything he wasn't forced to do, so he needed to know that there would be consequences if he didn't fully comply with the U.N. inspections.

But the administration, then, decided to launch this invasion virtually alone and before the U.N. inspections were completed, with no real urgency, no evidence that there were any weapons of mass destruction there. So I thought that diverted our attention from Iraq and … al Qaeda and undermined the support that we might have had.

Now, but what's done is done. Now, the question is, after 58 percent of those people voted, after there has been a heroic but so far unsuccessful effort to put together a constitution that everybody can buy off on, that the world would be better off if this enterprise did not fail and if the 58 percent of Iraqis who believed in it were given the chance to govern themselves in a stable and secure environment. I also think they will want us to leave as soon as they can defend themselves.

So the stated strategy of trying to develop the security and police forces to the point where they can defend themselves I think is the correct strategy. The problem is we may not have, in the short run, enough troops to do that.

STEPHANOPOULOS: Would you put more troops in now?

CLINTON: I don't know if they can, and I think it's even more important not to let Afghanistan fail, even more important. You know, you've got civilian contractors moving out of Afghanistan. We had a record week of casualties there last week. Every time we put a soldier in Afghanistan, we get a soldier from NATO.

STEPHANOPOULOS: So we're losing in Afghanistan, at risk of losing in Iraq. What do we do right now? What should the new strategy be?

CLINTON: Well as I said, I don't know, because I'm not president, I don't know what his military options are. I don't know how many troops he's got where. But I know my view is if there is a reasonable chance that this constitutional process can be completed and that it will not be rejected under the terms that govern the vote, once that happens, I think that will give another boost to the civilian government. Then, I think that we will know how long it takes to train enough and equip enough forces that they ought to be able to defend themselves. When that happens, I think we can begin drawing down our presence.

But my problem with setting a date certain for withdrawal now is I always assumed that whoever I was competing against was smart. And suppose you were running the Iraqi insurgency, and I know you, and I know how smart you are. If I told you I was going to leave in six months, 12 months, or 18 months, and you could survive that long, there's no way in the wide world you would join the political process.

Now, let's look at the other thing: When the IRA says they're going to give up arms, and they want the international body to observe the blowup, and they want the representative of the Catholics and Church of England, the Protestants to observe the blowup, what does that say? They say they've decided they've got more to gain from the political process than from continuing the conflict.

When 13,000 armed guerrillas and paramilitaries in Colombia give up their weapons and rejoin civil society, and President Uribe, who's been so tough on them, offers them a chance to reconcile, why are they doing that? Because they know they're not going to win anymore, and they want to be part of a political process. [In Rwanda,] when the Hutu soldiers came home in response to President Kigami's welcome and rejoined civil society and did their community atonement work, why did they do that? Because they knew they couldn't win anymore.

So the reason I don't want to see an announcement made is I see no reasonable prospect that this insurgency can be transformed into a political process, and the Sunnis who are alienated will come back if they know all they have to do is wait. It may not work. I've never known whether it would work. All I know is a majority of the Iraqis would like it to work. We'd be better off, and the Middle East would be better off if it did work.

A lot of good Americans have given their lives; thousands of others have been horribly wounded. So I have been in a position where I wanted the strategy to work. Whether it will or not, I don't know. But the only thing I would sacrifice it to is if I thought we were going to lose in Afghanistan. We cannot lose in Afghanistan. We cannot let the Taliban come back. We cannot let Karzai fail. We cannot relax our efforts to try to keep undermining al Qaeda, because that's still by far a bigger threat to our security.

STEPHANOPOULOS: You know, we're just about out of time. What's the Democratic bumper sticker in 2008?

CLINTON: Let's get the country back together, move the country forward again.

STEPHANOPOULOS: Not buy one, get one free?

CLINTON: No, get the country back together, move the country forward again. I have no idea what's going to happen. My family has an election in 2006, and I don't want to look past it. You know, I always say if you look past the next election, you may not get past the next election.

The country in 2008, and I think in 2006, will be in a desperate mood to come together and move forward. I think they're going to reject ideological solutions that are not fact-based, and I think they're going to want a government that works.

STEPHANOPOULOS: Mr. President, thank you very much.

CLINTON: Thanks.