TRANSCRIPT Newt Gingrich Talks with George

STEPHANOPOULOS: Now, to the Republicans and former House speaker Newt Gingrich. He's calling on President Bush to come up with a State of the Union that responds to the Iowa and New Hampshire earthquakes with a change agenda.

GINGRICH: That poses an interesting question for Senator Clinton, Senator Obama, Senator McCain.

Are they willing, this year; are they willing, in February and March, to translate their rhetoric into reality, or is it just a political gimmick?

And if the president would offer that, I think the country would rally...

STEPHANOPOULOS: Well, Senator Kerry didn't want to comment on Bob Shrum's book.

STEPHANOPOULOS: I'm sure you want to comment on yours, the book "Real Change," Mr. Speaker. What kind of change are you talking about there that you're calling on the president to announce?

GINGRICH: Look, I think there are dramatic changes we need in this country. I think that the votes in Iowa and New Hampshire were overwhelming endorsements of change in both parties. And I think that a State of the Union that got up and said, here are 10 or 12 or 15 things we can do together in the next 90 days, and challenge -- after all, you've got Senator McCain, Senator Obama, Senator Clinton -- it would be useful to challenge both parties in the House and Senate.


GINGRICH: To respond to the American people.

We produced a platform of the American people at American Solutions. And it's at the back of our book "Real Change." It's also at Every single item on the list has a majority of Democrats, majority of Republicans, majority of independents favoring.

The easiest one is making English the official language of government.

STEPHANOPOULOS: The No. 1 issue right now -- I take it that that could be easy -- the No. 1 issue right now is the economy. A lot of fears we're going to be in a recession. What could the president do right now and the Democrats respond to on the economy?

GINGRICH: Look, I think the first two things the president and the Congress can do on the economy is cut spending. If you'll notice, you have a primary in Michigan, a state which artificially had a recession, because its government is so bad, its taxes are so high, its unionized work rules are so destructive, that Michigan was in a recession when the rest of the country was growing.

Other than the states hit by Katrina, Michigan, which had been hit by a Democratic governor, Democratic legislature that had raised taxes -- yet none of the candidates are willing to be radical enough.

Part of -- real change focuses -- a long section on Detroit. Detroit has gone from 1.8 million people in 1950 and the highest per capita income in the United States, to 950,000 people, and it ranks today 62nd in per capita income. And yet nobody wants to get up and say the total truth.

The truth is, large bureaucracies are destructive. High taxes are destructive. The system we've built discourages any business from opening up in Detroit. The schools don't deliver. They do deliver paychecks. They do take care of the union. But they don't deliver for the kids. And this is at a time when if you're an African- American male and you drop out of high school, you have a 73 percent chance of being unemployed and a 60 percent chance of going to jail.

So I think we need dramatically deeper and more fundamental change. Let me just...

STEPHANOPOULOS: But I'm not sure you're going to be able to enact that in the next three or four months. You're talking about cutting spending. The Democrats are putting up proposals saying they want to extend subsidies for mortgages for heating oil, for unemployment benefits. So there's a big...

GINGRICH: Fine. So -- but let's take things the American people agree on. The American people agree you ought to make it easier to build oil refineries in the United States if you want to bring down the price of oil.

The American people agree that you ought to set up prizes for major breakthroughs. And that would be very different than the system we've used since World War II.

The American people, in fact, agree that we ought to have tax credits for people who are willing to go to greater conservation for their homes. I mean, far beyond just how do I subsidize your heating oil, how do I make it unnecessary for you to buy as much heating oil? And there are dramatic things we can do in conservation.

But the point I make is that the Congress and the president, rather than say, that's an interesting political campaign, now let's get back to politics as usual in Washington. The Congress and the president do have an opportunity to listen to the American people, who are saying that real change does matter, and the real change is what they want.

And I think it would be a pretty good contest for the two parties to say, so how much can you deliver in the next three or four months, as opposed to seeing politics in Washington over here and politics in America over here.

STEPHANOPOULOS: Even though there are very different visions of change from both parties.

But let's talk a little bit more about where the campaigns are going right now. On the Republican side, you've got two primaries and caucuses so far -- actually, three, Wyoming. Mitt Romney won Wyoming, with the big ones of Iowa and New Hampshire, two different winners. And now it looks like Mitt Romney may be ahead in Michigan.

If you end up with three different winners in the first three primaries and caucuses, are you heading toward a brokered convention?

GINGRICH: I think you are currently in a period of indecision. I think you had Governor Romney, in all fairness, I mean, Governor Romney played under the rules and he won Wyoming. And the other guys could have gone and contested him, and they didn't. He actually has more delegates right now than either Huckabee or McCain, although they got more news as the winners of their two prospective things.

My personal guess is that Romney's going to win Michigan. It is -- you know, his father was governor three times. He does have residual name I.D. there. Plus, he's prepared to spend the resources. And nobody who is really serious about this business should underestimate that Governor Romney, if he has the will to do it, can stay in this race longer than anybody else.

STEPHANOPOULOS: Because he has got deep pockets.

GINGRICH: He just has deep personal pockets.

The way the McCain/Feingold law currently discriminates against the middle class, is it sets up a system by which, you know, if you're the mayor of New York and you're Bloomberg and you're worth $11 billion, you can contemplate buying the presidency and get away with it. If you are a self-, you know, a multi-millionaire governor and you want to, you can buy a nomination.

GINGRICH: But it's an objective fact. I mean, Governor Romney is not doing anything that isn't legal.

STEPHANOPOULOS: The Web site Daily Kos, which supports Democrats, is actually urging Democrats to cross over and vote in the Republican primary, vote for Mitt Romney so that the Republican race is wide open and it takes them forever to come up with a nominee.

GINGRICH: You know, but this may be a big mistake, for this reason. Nothing is more killing in politics than boredom. This country -- and I said -- you remember I was on this show last year saying this. This country began deciding Iowa about four days out. This country apparently began deciding New Hampshire about a day out.

Because apparently 20-some percent of the Democrats decided the last day. The idea that the Republicans have to be organized before Labor Day or they will be out of the race, I think, is a fundamental misunderstanding of television, the Internet, you know, YouTube, all the things we now communicate with.

A very exciting Republican party that actually talked about ideas and actually had a fight over the platform based on real ideas, I think might be a more interesting party than one which nominates somebody who's boring for five months.

STEPHANOPOULOS: And some of the Republican blogs are actually suggesting this may be the best hope for you, for Newt Gingrich.

GINGRICH: The best hope for me is to have people buy real change and allow me to...

STEPHANOPOULOS: Well, I know you want people to buy that, but they suggest...

GINGRICH: I'm having a good time being me. I don't have...

STEPHANOPOULOS: They suggest a brokered convention might turn to you. Are you...

GINGRICH: I do not think -- I think a brokered convention would pick one of the people who had filed for president. But I think the process -- after all, it was, you know, Abraham Lincoln was running third and won the convention. He didn't come in first on the first ballot.

And so, I just think there's nothing unhealthy about the Republican Party having a serious discussion. We are at the end of the George W. Bush era. We are at the end of the Reagan era.

We're at a point in time where we're about to start redefining -- as a number of people have started talking about, we're starting to redefine the nature of the Republican Party in response to what the country needs.

STEPHANOPOULOS: On the Democratic side, last year, you were quite bullish on Hillary. You said she had about an 80 percent chance of being president.

You tempered that a little towards the end of the year. You thought she was making mistakes in Iowa by being too tough on Barack Obama. Does she have the edge right now, do you think, on the Democratic side?

GINGRICH: I think she has a narrow edge, but not a big one. I think that she learned. She changed. I said in my podcast this last week that I thought part of the courage of both John McCain and Hillary Clinton helped them get through New Hampshire.

She was -- you know her vastly better than I do. I thought she was a much more open, much more real person the last four or five days. And in that sense, the challenge from Obama has been very good for her. The clip you used a few minutes ago, however, was back to the more disciplined, more aloof, more austere Hillary, and I'm not sure that that version necessarily wins.

The other thing we don't know yet is South Carolina's the first race, with a large number of African-American voters. I mean, the amazing thing about Senator Obama is that he's really the Bobby Kennedy/Gene McCarthy candidate. He represents the reform...

STEPHANOPOULOS: Those are very different candidates. You're saying he's a merger of the two.

GINGRICH: He's a reform upper-middle class, if you look where their vote patterns were as compared to Lyndon Johnson. And I thought it was slightly strange of Senator Clinton to identify with Lyndon Johnson last week. I mean, this is not the sort of thing one reaches out to do automatically.

If he can actually take the reform wing of the party, the people who voted for Bill Bradley, which was a big part of his base in New Hampshire, and can actually add to it the African-American community by a large margin, then I think she has a very serious problem as you get to bigger states. And you have to assume that this could go on, I think, well past February 5th.

STEPHANOPOULOS: I think those campaigns are starting to think that as well. Mr. Speaker, thanks very much.

GINGRICH: Great to be with you.