Transcript: 'This Week' Economic Debate

DONOHUE: Now, I can get pretty close to that issue. We need to do something -- I'm not sure all three of those companies -- and I'd like to see the three end up being two -- but if there are going to be any resolution here, General Motors has to be willing to be very, very tough and take the big step, if they have to. Otherwise, they're not going to get any place with their unions or be able to deal with the franchise rules in the states on the dealers.

This is an issue which I believe that all of us have a similar view about. I don't think it's exactly the same when you start looking at the banks.

The senator's right in the long term. We have to take some of these really toxic banks and straighten them out. This senator is exactly right that 90 percent of the banks in the country are doing a great job. The only thing is, 25 million small businesses can't get their money from banks.

We have to get the asset back -- lenders back in business. We have to put individuals in the position to do what they've always done, is to lend to small companies. Those guys create the jobs.

STEPHANOPOULOS: Let me bring this back to the issue at the top, the congressional agenda right now, spending bill more than $400 billion, more than 8,000 earmarks. Senator Bayh, you're one of two Democrats who's come out unequivocally against this bill, in part because of the earmarks, in part because of the size.

Do you think that you're going to be able to prevail? Senator Reid could not get the 60 votes he needed on Thursday.

BAYH: I think ultimately they'll get the votes to pass the bill, George, but I think there are substantive and perceptional problems with this bill. Substantively, the deficit is over $1 trillion. Our national debt is going up more than $1 million per minute. We have to borrow most of this money from abroad, which weakens our country.

I think this is a time to show that we can economize, do better than across-the-board increases that are many times the rate of inflation. So that's my substantive problem.

For example, if we were just to continue last year's levels of spending for the remainder of this year, we'd save $250 billion over the course of the next 10 years to help solve our long-term deficit problems.

The perceptual problem, which I think is just as great, is that, at a time when many Americans are having to tighten their belts, many businesses are having to make tough decisions, it looks as if Congress is just on auto pilot, immune -- immune from the problems that most people face.

BAYH: That undermines confidence in the system. I think we need to keep faith with the American people and show we can do what they do everyday.

STEPHANOPOULOS: Senator Shelby, you're one of the few Republicans who's actually for this bill. Why is he wrong?

SHELBY: Well, I think he's wrong for two reasons. We differ on some things, agree on others.

First of all, this is -- these are a compilation of nine appropriations bills. A lot of people voted for a stimulus bill, a TARP. That's $1.5 trillion. Now they say, "Oh, we'd better not vote for a $400 billion bill to fund the government." I think we ought to fund the government and move on.

Are there some things in this bill that I don't like, I wouldn't vote for if I could? I voted for amendments, you know, to knock things out of it, sure.

But, overall, I think it's -- it's -- we need to get it behind us, and I think we will.

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