'This Week' Transcript: David Axelrod

ABC'S "THIS WEEK WITH GEORGE STEPHANOPOULOS"

JANUARY 18, 2009

GEORGE STEPHANOPOULOS, HOST DAVID AXELROD, SR. ADVISER TO PRESIDENT-ELECT OBAMA

[*] STEPHANOPOULOS: Good morning, and welcome to a special inaugural edition of THIS WEEK.

(BEGIN VIDEOTAPE) FRANKLIN D. ROOSEVELT, 32ND PRESIDENT OF THE UNITED STATES: The only thing we have to fear...

JOHN F. KENNEDY, 35TH PRESIDENT OF THE UNITED STATES: Ask not what your country can do for you.

RONALD W. REAGAN, 40TH PRESIDENT OF THE UNITED STATES: Government is not the solution to our problem.

STEPHANOPOULOS (voice-over): As Barack Obama rolls into history...

OBAMA: What's required is a new declaration of independence.

STEPHANOPOULOS: We examine the challenges ahead with the next president's closest adviser, David Axelrod.

Plus, an expanded Inauguration roundtable, with George Will, Donna Brazile, E.J. Dionne, Matthew Dowd, and Gwen Ifill.

And as always, the "Sunday Funnies."

CONAN O'BRIEN, HOST, "LATE NIGHT WITH CONAN O'BRIEN": Obama is making the trip three days early because it's Amtrak and even he only has so much hope.

(END VIDEOTAPE)

ANNOUNCER: From the heart of the nation's capital, THIS WEEK with ABC News chief Washington correspondent George Stephanopoulos, live from the Newseum on Pennsylvania Avenue.

STEPHANOPOULOS: Hello, again. Barack Obama has been all over Washington these last two weeks. But the president-elect was formally welcomed to the Capitol last night when his vintage trained pulled into Union Station just before 7.

Obama began the day, Michelle Obama's 45th birthday in Philadelphia. Stopped in Wilmington to pick up the Bidens.

(BEGIN VIDEO CLIP)

VICE-PRESIDENT ELECT JOSEPH R. BIDEN, JR.: Happy birthday, kids! Welcome to Wilmington.

(END VIDEO CLIP)

STEPHANOPOULOS: Then they rolled slowly south, emulating Abe Lincoln's Inaugural train ride and echoing Lincoln's words.

(BEGIN VIDEO CLIP)

OBAMA: But appeal not to our easy instincts, but to our better angels.

(CHEERING AND APPLAUSE) (END VIDEO CLIP)

STEPHANOPOULOS: The (INAUDIBLE) back showed the crowd's good cheer, and they are not alone. A new ABC News poll out this morning shows that 80 percent of Americans approve of how Obama has handled the transition. And 79 percent just like him.

The last incoming president with support like that was Ronald Reagan in 1981. All that is happy news for our headliner this morning, David Axelrod.

Welcome back to THIS WEEK.

AXELROD: Thanks, George.

STEPHANOPOULOS: So you're going into the White House on Tuesday with the public rooting for you.

AXELROD: Yes. I think the public is rooting for us, and more importantly, rooting for the country. We know -- I think everybody knows we have big problems. I think the striking thing about your poll and all of the polling I've seen is this combination of optimism and realism.

People are hopeful about the future, but they understand we have really serious problems.

STEPHANOPOULOS: And I want to talk about how do you get the balance right? Because as our poll -- as you say, people are pretty realistic, also pretty upset. Ninety-four percent say the economy is in bad shape? That is as bad as we have ever seen?

AXELROD: I want to find the 6 percent who think it's in good shape.

STEPHANOPOULOS: Well, exactly. But the president-elect in all of his policy speeches over the last couple of weeks keeps on saying it's going to get worse before it gets better. What -- and obviously that's based on briefings. What exactly do you know and what should people expect?

AXELROD: Well, look, we -- obviously the reason that he came here two weeks early was to begin work on an economic recovery package. But any economist will tell you that even if we move rapidly, it takes a little while for this to move through the system and to put the brakes on what is the most serious economic downturn we've had in many, many generations.

STEPHANOPOULOS: So are we talking doubt-digit unemployment, a year-long recession, another year?

AXELROD: That's what we're trying to avoid, George, is double- digit unemployment. We're trying to take some measures that will create 3 million to 4 million jobs the next couple of years, to put -- to try and slow down this plummeting employment.

And I think we can do that. But I think it's fair to say that it's going to take not months but years to really turn this around.

STEPHANOPOULOS: You know, some Democrats have some doubts about the job creating potential of this plan. Senator Kent Conrad, the chairman of the Budget Committee was on Bloomberg News just the other day. And he said he doesn't think you're going to be able to create the kind of jobs you're talking about.

Take a look.

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD, D-N.D.: I have my doubts. I don't think, you know, the -- most of the assessment is that this will reduce unemployment from what it would otherwise be by 2 percent. My people's analysis suggests maybe only have of that.

(END VIDEO CLIP)

STEPHANOPOULOS: Are you over-promising?

AXELROD: Well, look, I don't think, first of all, his people and our people may have some dispute and we'll find out what the truth is. But here is where we are. We have to act. We have to try. It's not enough to be a doubter. It's not enough to question, not when we're in the situation we're in.

We believe that this is a well-conceived approach to the problem we face. It's extraordinary and it's painful to have to do in terms of our debt. But it's something we have to do or we run the risk of that scenario that you suggest, double-digit unemployment.

STEPHANOPOULOS: Senator Conrad is still signaling that he's going to support the plan. But Republicans are expressing even more doubts and more criticism even though I know the president-elect wants to get significant Republican support.

The House Republican leader, John Boehner, was out the other day, and he said that his side was not even consulted on the preparation of the package that is going to be put forward in the House.

(BEGIN VIDEO CLIP)

REP. JOHN A. BOEHNER, R-OHIO, HOUSE MINORITY LEADER: Oh my God, I don't even -- my notes here say that I'm disappointed. I just can't tell you how shocked I am at what we're seeing.

(END VIDEO CLIP)

STEPHANOPOULOS: He says this is going to lead to another era of borrow and spend, and not going to produce the jobs you talk about.

AXELROD: Well, with all due respect to Congressman Boehner, we do want to work with him and we do want to work across the aisle. But one of -- there is a Congress...

STEPHANOPOULOS: Why not consult with them on a package that... AXELROD: Well, there have been consultations, George. And there will continue to be consultations. But let's remember why we're in the mess we're in. Part of it is that when the Clinton administration left office, we were running record surpluses and the policies that were put in place doubled our debt in a matter of a few years.

And I didn't hear some of the voices who are speaking out now moralizing about that then. So we ought to put all of the politics aside and do what's best for the country. Right now the country is in an economic emergency. And we need to act.

And I don't think people are going to have much tolerance for the kind of customary Washington. Now having said that, I think that there are legitimate discussions to have.

The president-elect has said, you know, he's not delivering these ideas to Capitol Hill on stone tablets. I mean, he is coming there to have a consultation and to come up with the best possible program.

So we're going to consider all of these facts. But let's not engage in the kind of political back and forth that has bogged us down so much in the past.

STEPHANOPOULOS: The other substantive point that Boehner makes, he circulated a fax sheet, he says, if you look at $825 billion piece of legislation, 3 million jobs, that's $275,000 a job. Is that the most efficient way to create jobs?

AXELROD: George, he's missing the fundamental point. We're not just spending money to create jobs, we're investing money to strengthen this economy. We're investing in areas like energy independence. We're investing in creating the classrooms of the 21st Century for our kids to give us the kind of education system we need.

We're investing in computerizing the health care records of this country so that we can reduce costs and improve care. These things will pay long-term dividends to this country. And we've been very careful about that.

We're not being frivolous. We're being thoughtful about how we make these investments.

STEPHANOPOULOS: But you would concede, $275,000 a job is a high price to pay, isn't it?

AXELROD: Well, I'm not signing on to that particular figure. I think preventing this country from sliding into as deep an economy emergency as we've seen since the Great Depression, preventing double- digit unemployment, and laying the groundwork for the future in these areas that mention and others I think is a worthy thing to do.

STEPHANOPOULOS: The president-elect has called for a National Day of Service tomorrow. And some of your allies have said you can really put some meat behind that at about $25,000 a job by greatly expanding public service opportunities like AmeriCorps, the way FDR did with the Civilian Conservation Corps. Why not put that in the package?

AXELROD: Well, we will be expanding service programs...

STEPHANOPOULOS: In this legislation?

AXELROD: Well, I don't know if we're going to do it in this legislation, but we're going to do it and we're going to greatly increase our efforts to involve people at the local, grassroots level in service projects.

But this is a situation where the impetus has to come from the government. Only the government can marshal the resources to really blast us out of the morass we're in right now.

STEPHANOPOULOS: And part of that morass, of course, is this -- the cascading failures of the banks that we've seen over the last several weeks and months, even last week.

And there are reports this weekend in the newspapers that your team is now considering going back to the original TARP approach, to the original rescue approach where you buy up all of the toxic assets of the banks, put them in a government agency, get them out of the banks once and for all, and that's going to be the only way to get confidence back in the banking system.

Is that what the president wants to do?

AXELROD: Look, I don't want to get into the details of how we're going to administer the TARP. Our team will be discussing those details in the days after Tuesday. But I think it's clear that it has to be administered in a much different way.

First of all, the point is to get credit flowing again to businesses and to families across the country. That hasn't happened with the expenditure of the $350 billion.

STEPHANOPOULOS: And following up on that, Tom Friedman in The New York Times today says that the president, as soon as he gets into office, should call in the 300 top bankers in the country into the East Room and basically read them the riot act and tell them to get lending again.

Will you follow that advice?

AXELROD: Well, I think he is going to have strong message for the bankers. We're not -- we want to see credit flowing again. We don't want them to sit on any money that they get from taxpayers.

The other things that we have to deal with is transparency. No one can really tell you exactly where the money went, how it was spent, it's not easy to follow even for people in government. And we have to deal with that. We have to begin to address the housing issue in a way it hasn't been addressed yet.

So there are a lot of things that have to be done differently. And we have to make sure that the money doesn't got to excessive CEO pay and dividends, when it should be going to lending.

STEPHANOPOULOS: The man you want to administer this, of course, is Tim Geithner, President-elect Obama's choice for Treasury secretary, revealed this week that he didn't pay about $34,000 in back taxes when he was working at the IMF.

What do you say to Americans who say it just doesn't seem right that the person who's going to be overseeing the Internal Revenue Service didn't pay $34,000 in back taxes.

AXELROD: Well, he has paid those taxes, George, when it was pointed out that he had made a mistake on his taxes.

The mistake he made, which when he was overseas serving our country in the IMF was that -- everyone agrees it's a common mistake that people working overseas make.

He's corrected it. I think, when people look at Tim Geithner, they should look at a guy who's devoted his life to public service, who is an integral part of solving another international financial crisis in the 90s and has vast experience and great insights.

He is precisely the kind of person we need in the Treasury right now. And I think, when people get to know him -- and he's going to testify this week -- I think he's going to inspire great confidence.

STEPHANOPOULOS: Confident he'll be confirmed?

AXELROD: I am confident.

STEPHANOPOULOS: Let's look ahead to the inaugural speech. I know you've been working with the president-elect on that. He and Michelle were asked about that yesterday on the train trip.

(BEGIN VIDEO CLIP)

OBAMA: She's heard me speak before.

(LAUGHTER)

(OFF-MIKE)

MICHELLE OBAMA, WIFE OF PRESIDENT-ELECT BARACK OBAMA: But I think -- I think (OFF-MIKE) speech (OFF-MIKE)

B. OBAMA: That's not what you're supposed to say in front of the press.

M. OBAMA: Oh, I'm sorry.

(LAUGHTER)

(END VIDEO CLIP)

STEPHANOPOULOS: Well, I know you're not going to make that mistake. You're -- you're well-qualified in setting expectations. But if you can just give us a sense -- did we really see the president hitting the themes, yesterday on the train trip, that he's going to hit in the inaugural?

And is the animating theme of the speech responsibility; everyone in the country is going to have to take responsibility for our future?

AXELROD: Well, that -- you know, George, one thing about Barack Obama is his themes have been consistent, not just through this campaign but through his public life, from his convention speech in 2004 through today.

So I don't think you're going to be surprised by what you hear. I think he's going to talk about where we are as a country but also who we are as a people and what responsibilities accrue to us as a result of that, and what we have to do to move forward.

So I'm not going to handicap whether...

(LAUGHTER)

... it's going to be a great speech, a good speech, or -- but I have great -- I have confidence in the message that he wants to deliver and I don't think you'll be surprised by it.

STEPHANOPOULOS: Finally, on Wednesday, the president -- the next president will call in his military commanders. Will he ask them, as he promised in the campaign, to come back with a plan to withdraw American forces from Iraq in 16 months?

AXELROD: Well, that was a -- that was something that he's consistently said. He believes that that is a reasonable timetable. We've moved a great distance from the time he started talking about that, and now we're in an area where everyone agrees that we should be on a path to withdrawing those troops.

And he is going to begin that process, as promised, on that day.

STEPHANOPOULOS: He'll give the command?

AXELROD: Yes.

STEPHANOPOULOS: David Axelrod, thanks very much.

AXELROD: OK, great to be with you, George.

END

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