Transcript: Robert Rubin Interview

Sept. 17, 2004 -- Both times former Treasury Secretary Rubin has appeared on This Week with George Stephanopoulos, viewers have expressed extraordinary interest. For those who missed his appearance last Sunday, the following are highlights of his interview with George Stephanopoulos.

GEORGE STEPHANOPOULOS: Both the Congressional Budget Office and the Federal Reserve Chairman Alan Greenspan this week says the economy looks like it's on the path towards solid growth after coming out of a soft patch you agree with that conclusion?

ROBERT RUBIN: I think it breaks into two pieces, George. In terms of the shorter term, which I think is what Chairman Greenspan's referring to, through this year and to next year, it looks to me like it's a relatively complicated situation that's quite unclear. We had, as you know, very large job losses over the last three and a half years. We've got declining middle income — inflation-adjusted middle income. And yet, GDP growth up and down.

STEPHANOPOULOS: At the same time, though, what the Republicans came out again and again and again and say look the most important numbers right now, unemployment, inflation, consumer confidence it's very similar to what President Clinton had when he was facing re-election in 1996.

RUBIN: Oh, I think you have a very, very different situation. I think it's a diametrically different situation, George. And that is where the great problem in the longer term for our economy lies.

When President Clinton was facing re-election in 1996, he had re-established fiscal discipline. We had solid growth on a solid basis. What we have right now is we've had growth, although with job loss, and declining, falling inflation-adjusted income for middle-income people and with very large fiscal deficits.

We had sound fiscal basis and projected long-term deficit reduction and, ultimately, surpluses. What you have right now are very large, enormous projected long-term deficits. And I think that's a tremendous threat to our economy. I think, in fact, it's a diametrically different situation than we had in 1996.

STEPHANOPOULOS: You talk about the deficits. The Washington Post has done an analysis of both campaigns spending and tax plans and they say that the Kerry and Bush plans will both add $1.3 trillion to the deficit over the next ten years. Why should voters believe that Senator Kerry would be better on the deficit than President Bush?

RUBIN: Two comments, George. I think that the kinds of deficits that are now projected for the longest term in the United States economy, the Goldman Sachs, for example, an investment-banking firm is projecting a deficit between $5.5 trillion over the next ten years, in contrast to the $5.5 trillion surplus that was projected. For the following three and a half years ago we have had horrendous fiscal policy over the last three and a half years. I think that is an immense threat to our future economic growth.