'This Week' Full Transcript: Dec. 13, 2009

Dec. 13, 2009 — -- ABC'S "THIS WEEK WITH GEORGE STEPHANOPOULOS"

DECEMBER 13, 2009

SPEAKERS: GEORGE STEPHANOPOULOS, HOST

REP. ERIC CANTOR, R-VA.

LAWRENCE H. SUMMERS, DIRECTOR, NATIONAL ECONOMICCOUNCIL

[*] STEPHANOPOULOS: Good morning and welcome to "This Week." The economy front and center.

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PRESIDENT BARACK OBAMA: We are not yet creating jobs at a paceto help all those families who've been swept up in the plunge (ph).

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STEPHANOPOULOS: Jobs, health care, deficits.

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(UNKNOWN): This is the greatest act of generational theft...

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STEPHANOPOULOS: What more must the president do? How willCongress respond?

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(UNKNOWN): This job killing agenda is making it worse.

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STEPHANOPOULOS: Questions this morning for our headliners, thepresident's top economic adviser, Larry Summers, and the number twoRepublican in the House, Eric Cantor.

Then...

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OBAMA: Clear-eyed, we can understand that there will be war andstill strive for peace.

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STEPHANOPOULOS: Is the Nobel speech an Obama doctrine? That andthe rest of the week's politics on our roundtable with George Will,Arianna Huffington from the Huffington Post, former White Housecounselor Ed Gillespie, John Podesta from the Center for AmericanProgress, and April Ryan of American Urban Radio Network.

And as always, "The Sunday Funnies."

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CRAIG FERGUSON, TALK SHOW HOST: Did you see President Obama'sChristmas card? Some people are angry that it doesn't contain theword "Christmas," but I think the message is there. The card showsthree wise men asking for bailout money. It's very good...

(END VIDEO CLIP) STEPHANOPOULOS: President Obama is just back from Oslo with hisNobel, heading back to Copenhagen for those climate talks, leavingbehind health care talks that appear to be stalling in the Senate, andpoll numbers that have been falling to their lows of 2009. Ourroundtable is standing by to debate all this. They may weigh on Tigertoo, but let's check in first with our headliners, Larry Summers,President Obama's top economic adviser, and Congressman Eric Cantor,the House Republican whip. Gentlemen, welcome to both of you.

SUMMERS: Good to be with you.

STEPHANOPOULOS: And Mr. Summers, let me begin with you, andlet's start with just the overall economic situation right now,especially on jobs. We saw that drop in unemployment in November, butprivate economists predict that unemployment is likely to head backup. Mark Zandi sees it peaking at about 10.6 percent next year.Others say it could go up to 11 percent. Is that in line with yourforecast?

SUMMERS: George, here is what I know. We were talking aboutdepression, we were talking about the financial system collapsing.Today, everybody agrees that the recession is over, and the questionis what the pace of the expansion is going to be.

These things happen in stages. First, GDP goes up. That hashappened. Then, hours that are worked by workers who already have jobsgo up. That's starting to happen. Then employment goes up. We gotvery close to that this year, this month, with only 11,000 jobs lost.And then unemployment starts to come down. So these problems weren'tmade in a month or a year, and they are going to take a substantialtime to solve. But what we can take satisfaction from is that we'vewalked back from the brink. And you know, forget what we say. Mostprofessional forecasters are now looking for a return to job growth byspring.

Now, when job growth starts, more people are going to be lookingfor work, so it will take a little longer for the unemploymentstatistics to come down, but make no mistake, we were losing 700,000 amonth when President Bush turned the economy over to President Obama.The number last month was 11,000.

STEPHANOPOULOS: Let me pin you down on that, though. Youbelieve the economy is actually going to be creating jobs in thespring.

SUMMERS: That is the judgment of most professional forecasters.That's right, George.

STEPHANOPOULOS: So given that...

SUMMERS: If you look at the employment statistics, they willshow employment growth. They were showing losing 700,000 a month.Last month, they showed losing 11,000 jobs. They will bounce frommonth to month, but I believe that, as do most professionalforecasters, that by spring, employment growth will start to beturning positive. STEPHANOPOULOS: So given that, we saw the president allowed (ph)some job creation ideas earlier this week. What is the upper limit onwhat he will sign into law in terms of new job creation measures earlynext year? $100 billion?

SUMMERS: The president is going to work with Congress to dowhat's necessary. George, it's a bit of a Washington thing to putthis in terms of price tags. For example, the president is doing awhole set of things, working with other...

STEPHANOPOULOS: But the American people want to...

(CROSSTALK)

STEPHANOPOULOS: It's not a Washington thing.

SUMMERS: To promote our exports. That doesn't have a -- thatdoes not have a direct cost. But the president has talked about doingthings for infrastructure. It doesn't cost anything to encouragebanks, as the president will be doing, to meet their responsibilitiesand expand the flow of credit to small business.

We're in a very different -- we are in a very special kind ofeconomic situation, and frankly, jobs have to be the top priority, andevery bill is going to be a jobs bill going forward. We hope we canfind common ground. We emphasize support for small businesses,repairing the nation's infrastructure. These ought to be things thateverybody can agree on.

STEPHANOPOULOS: Well, let me just pin you down, though, one moretime on that. You did lay out a number of ideas that don't costmoney, but extending unemployment costs money. Aid to states andlocal governments costs more money. Investing in infrastructure costsmoney. So what is the upper limit on what President Obama will sign?

SUMMERS: The president is going to do what's necessary torespond to this crisis. He's put a figure of $50 billion on theinfrastructure support that he proposes. His proposals onunemployment insurance are primarily a continuation of the legislationthat the Congress has already passed and that has been put in place.And he recognizes that when we take new steps, we have to do it in thecontext of a framework that is fiscally responsible. We can't justlook in isolation at one measure. We've got to look at the $8trillion in deficit over the next 10 years that the presidentinherited, and start making progress with respect to those deficits.That's what the president did in his budget. That's what the healthcare bill does with the most consequential set of health care reformsthat have ever been put forward, and they are now on the brink ofpassage.

STEPHANOPOULOS: But let me ask you about on health care, becausethe president has said consistently that he wants health care to bendthe cost curve, to bring overall health care costs down. But thisweek, the administration's chief actuary for Medicare and Medicaidconcluded that the Senate health bill would actually increase nationalhealth spending by about $234 billion over the next 10 years. Can thepresident sign legislation that actually increases national healthspending?

SUMMERS: We'll see what legislation ultimately emerges. Thepresident is going to sign legislation that helps the budget over thenext 10 years, helps the budget more over the 10 years after that, andwe're already seeing employers start to respond to the provisionsdirected at influencing health insurance costs. Over time, when thecommission is in place, we will star to see further reforms inMedicare.

And look, George, we've taken an incredibly conservative approachto this. The program includes, for example, significant support forpreventive care. That's not being given any credit, but we know thatover time, better health habits for all of us can reduce costs. Soyes, the legislative process isn't pretty, and it's certainly notpretty on health care. But we will get to a point where we havesignificant reductions in health care costs.

STEPHANOPOULOS: So bottom line, are you saying that if theadministration's own actuaries say that the bill on the president'sdesk increases health care costs, he will not sign it?

SUMMERS: I am saying that the president's bill will meet whathas been the agreed test, that the Congressional Budget Officeassesses the bill and concludes that it reduces the budget deficit.To do anything else would be irresponsible. I am also saying that inthe view of most experts, the judgments made about imposing a fee onCadillac policies, the judgment included in the bill with respect totaking politics out of the process of reimbursing health care, thesupport for prevention contained in the bill goes after some of thefundamental problems in the health care system.

STEPHANOPOULOS: I understand that, but if I heard you correctly,you are saying the bill must reduce the deficit but does notnecessarily have to reduce overall health care costs.

SUMMERS: Look, the criterion for passing a bill is what happensto the budget. That's our budget process. I am telling you thatwe're very confident that this bill will reduce health care costs inwhatever form ultimately emerges from the Congress.

STEPHANOPOULOS: OK, let me ask you just a final question.President Obama is calling in the heads of some of the country'sbiggest banks tomorrow to try to get them to lend more to smallbusinesses and consumers, and that seems to be a big failing so far.You point out that the administration has stabilized some of theprograms, have stabilized the financial industry. But we see thebanks making money, paying back the TARP funds, but not reallyincreasing lending. What more can President Obama do to encouragethat, or is the bully pulpit really his only option?

SUMMERS: Look, he's going to have a serious talk with thebankers. The country did incredible things for the banking industry.Those things had to be done to save the economy, but no major bankwould be intact, in a position to pay bonuses, if that extraordinarysupport had not been provided. The bankers need to recognize that.They need to recognize that they've got obligations to the countryafter all that's been done for them, and there is a lot more they cando, and President Obama is going to be talking with them about whatthey can do to support enhanced lending to customers across thecountry. We were there for them. And the banks need to do everythingthey can to be sure they're there for customers across this country.

STEPHANOPOULOS: OK. Thank you very much, Mr. Summers. Let menow bring in Congressman Cantor. And you heard Larry Summers there,Congressman Cantor. The president is going to be bringing in thebanks for a serious talk tomorrow. What should he say to them?

CANTOR: Well, listen, George, no question that there is a stilla deprivation of credit in this country for small businesses. Andwhen the president meets with the bankers, I hope that the discussioncenters on what seems to be a real overreaction, if you will, on thepart of some auditors in the regulatory arena that are looking at risktaking as something that just shouldn't be done at all. We know inour economy that the prosperity we know has been built on calculatedrisk. What we've got now is a situation where there are so manyperforming loans out there that seem to be called by regulators,because we still have a depression in our asset values. And what I'mhopeful that the discussion occurs is about that, is about trying toget some type of transparency on the part of what regulators areasking of our banks, so that we understand and policy makers inWashington and frankly the small businesses that are looking to thebanks can understand why it is that when they go to their bank,they're not getting their loan.