Transcript: Health Care Debate

himself, when they passed the nearly $800 billion stimulus, said, you know, this is in part so that we can avoid approaching double-digit unemployment. So now that we're at double-digit unemployment, I think there are a lot of people out there who are frustrated having listened to the promises.

And you've got an interesting phenomenon where I think you've got people out around the country very concerned about unemployment, concerned about the direction of the economy, watching folks back here in Washington and not having a sense that people in the White House in particular, but also in Congress, are really addressing the issue, really dealing with it.

And I would add that the -- the interesting thing that you've seen this week is Democrats piling on and the extent to which, you know, the White House is now being criticized very openly and publicly by Democrats, saying things like, we're tired of walking the plank. We're tired to casting tough votes on things like cap and trade, which they will pay a price for back home, while the president seems to sort of float above all of this.

REICH: Yes, Liz, I think that the real mistake the White House made is, number one, low-balling the stimulus. It should have been much greater than, you know, the $700 billion, $800 billion.

STEPHANOPOULOS: That just wouldn't have passed.

REICH: Congress -- well, you know, George, at that time, nobody knew how big the problem was going to be, and the administration at least could have started higher. A lot of that stimulus was tax breaks that were temporary. We know that tax breaks that are temporary don't really create much spending. You've got to have more.

Secondly, the mistake was to say unemployment, our goal is to get it no higher than 8.2 percent. Well, now it's 10.2 percent.

STEPHANOPOULOS: So it's the over-promising problem?

REICH: And it over-promised.

WILL: Well, a quarter of the stimulus has been spent, and the administration is saying it's been a rousing success and such a failure we need a third stimulus, forgetting the February 2008 stimulus that preceded the January 2009 stimulus.

Now, we had, thanks to Jonathan Karl of this network this week, we got a look into some of this terrific job creation, such as the 317 jobs

created at the Head Start in Augusta, Georgia, which turned out to be 317 people who were already hired got raises, and nine jobs created in Campbellsville, Kentucky, by an $809 boot order from the Army. I mean, bogus jobs with bogus industries in nonexistent...

(CROSSTALK)

REICH: ... arguing that the -- that the stimulus had no effect?

STEPHANOPOULOS: Because I want to bring...

(CROSSTALK)

WILL: I think -- I'll tell you one effect it had. It has extended unemployment by extending unemployment benefits.

(CROSSTALK)

STEPHANOPOULOS: Let me just bring in -- bring in another chart here to -- on this. And it shows a selection in the New York Times yesterday. Three different independent firms -- IHS, Global Insight, and macroeconomic advisers at Moody's Economy.com -- all showing, by 1 to 3 percentage points, GDP would be lower but for the stimulus.

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