'This Week' Transcript: Larry Summers & Michael Steele

Feb. 8, 2009 — -- GEORGE STEPHANOPOULOS HOSTS ABC'S "THIS WEEK"

FEBRUARY 8, 2009

LAWRENCE H. SUMMERS, DIRECTOR, NATIONAL ECONOMICCOUNCIL

GOP CHAIRMAN MICHAEL STEELE

GEORGE STEPHANOPOULOS, HOST

STEPHANOPOULOS: Welcome to "This Week."

After bitter debate...

SEN. LINDSEY GRAHAM, R-S.C.: Look at this bill. This bill hasgot to be done by tonight.

SEN. BARBARA BOXER, D-CALIF.: Holding up a bill, theatrical.Did you ever do that when George Bush was president?

STEPHANOPOULOS: A deal in the Senate.

SEN. SUSAN COLLINS, R-MAINE: At a time of crisis, we can worktogether.

STEPHANOPOULOS: Can Congress pass the president's test? Willthe plan forestall more staggering job loss? And what can be done toshore up failing banks and save peoples' homes? Questions thismorning for the president's top economic adviser and the RepublicanParty's brand-new chairman.

STEELE: Get ready, baby. It's time to turn it on.

STEPHANOPOULOS: Michael Steele and Larry Summers, only on "ThisWeek."

Then...

OBAMA: This is a self-induced injury. I screwed up. This is abad mistake.

STEPHANOPOULOS: ... President Obama's first setbacks. That andthe rest of the week's politics on our roundtable with George Will,Robert Reich, Newt Gingrich, and Claire Shipman.

And, as always, the Sunday funnies.

JAY LENO, TALK SHOW HOST: You can tell a lot of these CEOs don'tget it. They said, "Well, that's $500,000 a month, right?"

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.

(END VIDEO CLIP)

STEPHANOPOULOS: Hello again. It is all about the economy. Latelast night, senators filed the latest version of the stimulus dealthey hope to pass Tuesday, and that same day, President Obama's teamis likely to unveil its latest version of the bank bailout plan.

Here to discuss all that this morning, the president's topeconomic adviser, Larry Summers.

Welcome back to "This Week."

SUMMERS: Good to be with you, George.

STEPHANOPOULOS: Let me start out by putting up a little chartthat shows the House and Senate versions of this stimulus package.Let me show our viewers that right now. The overall cost is about thesame, the House $820 billion, Senate $827 billion, but the compositiondifferent. The Senate has about $100 billion more in tax cuts, but$40 billion less in state aid, $20 billion less in education, $15billion less in payments to individuals, some other differences.

I know that, when the president was meeting with these moderateRepublican senators this week, including Senator Susan Collins ofMaine, he told them he endorsed their efforts to scrub the bill ofwhat they called excessive spending. Does that mean the presidentprefers the Senate version to the House version?

SUMMERS: No, the president feels that, above all, we need amajor program enacted very quickly that will create 3 million to 4million jobs. He believes we need to perfect it in every way we can.

If there are programs that aren't going to serve importantpurposes, they should be -- they should be eliminated. He certainlybelieves that. He's open to good ideas from both -- from both sides.

But we're going to have to look at both these bills, assuming theSenate bill passes, as most people expect at this juncture, and craftthe best possible approach going forward.

STEPHANOPOULOS: But some...

SUMMERS: There are certainly good ideas in both versions, andwe'll have to draw from those ideas in creating an ultimate vehicle,but the most important thing is that people come together and createthe 3 million to 4 million jobs. You know, there's 90 percent overlapnow.

STEPHANOPOULOS: Well, let's...

SUMMERS: We've got to get to closure on the last 10 percent,George.

STEPHANOPOULOS: Some of the critics of the Senate bill say thatthe most important elements have been -- have been brought down. PaulKrugman, writing on his blog this morning, said, "Some of the mosteffective and most needed parts of the plan have been cut." He'sciting especially that $40 billion in state aid.

And he goes on to say that, "My first cut says that the changesto the Senate bill will ensure that we have at least 600,000 fewerAmericans employed over the next two years."

SUMMERS: There's no question we need -- we need a large,forthright approach here. There are crucial areas, support for highereducation, that are things that are in the House bill that are very,very important to the president.

STEPHANOPOULOS: But will the Senate bill produce fewer jobs? SUMMERS: There's no question -- no question what we've got to dois go after support for education. And there are huge problems facingstate and local governments, and that could lead to a vicious cycle oflayoffs, falling home values, lower property taxes, more layoffs. Andwe've got to prevent that.

So we're going to have to try to come together in the conference.And the president is certainly going to be active in sharing his viewsas that process -- as that process...

STEPHANOPOULOS: That's what I'm trying to get at. If he -- ifhe shares his views...

SUMMERS: ... goes on.

STEPHANOPOULOS: ... is he going to be saying, "Wait a second.Move this more to the House side, because I don't want this educationand state spending cut, or move it more to the Senate side"?

SUMMERS: George, I don't think this is about the House bill orthe Senate bill. It's about the best bill for America.

STEPHANOPOULOS: So which of the ideas are better?

SUMMERS: There are respects -- there are respects in which bothbills can surely be improved, and the president's going to work asthoughtfully and aggressively as he can to move this process along,drawing on the -- drawing on the very important strengths that arecontained in both these bills.

STEPHANOPOULOS: But it sounds...

SUMMERS: There are certain priorities -- education, health care,infrastructure investment -- that the president is certainly not goingto want to lose sight of.

SUMMERS: At the same time, he has insisted that this not beWashington business as usual, no earmarks. We don't engage inwasteful programs just because they're a tradition or someone'sprerogative.

So it's not going to be a matter of choosing between twoproducts. It's going to be a matter of creating the best possiblebill we can for the country.

STEPHANOPOULOS: So it sounds like what -- it sounds like whatyou're saying is the president's overall message is, "There's greatoverlap here. I might as president prefer to have more educationfunding, but the most important thing right now is to get this done."That's his most important goal.

SUMMERS: The most important thing is to get this done for thesake of an economy that lost 600,000 jobs in one month alone. That'sas many jobs as there are in the state of Maine. So coming together,making sure that the investments are as productive as they possiblycan be, that's the president's priority.

STEPHANOPOULOS: As you know, the overwhelming majority of SenateRepublicans and House Republicans are opposed to this bill. And theSenate Republican leader, Mitch McConnell, said the other day thatDemocrats have failed to learn the lessons of history.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, R-KY., SENATE MINORITY LEADER: The big-spending programs of the New Deal did not work. In 1940, unemploymentwas still 15 percent. What got us out of the doldrums that we were induring the Depression was the beginning of World War II.