'This Week' Transcript: Larry Summers & Michael Steele

GEORGE STEPHANOPOULOS HOSTS ABC'S "THIS WEEK"

FEBRUARY 8, 2009

LAWRENCE H. SUMMERS, DIRECTOR, NATIONAL ECONOMIC COUNCIL

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 has got to be done by tonight.

Obama's top economics adviser Larry Summers is shown on "This Week with George Stephanopoulos," on Sunday, Feb. 8, 2009.

(ABC News)

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 work together.

STEPHANOPOULOS: Can Congress pass the president's test? Will the plan forestall more staggering job loss? And what can be done to shore up failing banks and save peoples' homes? Questions this morning for the president's top economic adviser and the Republican Party's brand-new chairman.

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

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

Then...

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

STEPHANOPOULOS: ... President Obama's first setbacks. That and the 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't get 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. Late last night, senators filed the latest version of the stimulus deal they hope to pass Tuesday, and that same day, President Obama's team is likely to unveil its latest version of the bank bailout plan.

Here to discuss all that this morning, the president's top economic 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 chart that shows the House and Senate versions of this stimulus package. Let me show our viewers that right now. The overall cost is about the same, the House $820 billion, Senate $827 billion, but the composition different. The Senate has about $100 billion more in tax cuts, but $40 billion less in state aid, $20 billion less in education, $15 billion less in payments to individuals, some other differences.

I know that, when the president was meeting with these moderate Republican senators this week, including Senator Susan Collins of Maine, he told them he endorsed their efforts to scrub the bill of what they called excessive spending. Does that mean the president prefers the Senate version to the House version?

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

If there are programs that aren't going to serve important purposes, they should be -- they should be eliminated. He certainly believes 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 the Senate bill passes, as most people expect at this juncture, and craft the best possible approach going forward.

STEPHANOPOULOS: But some...

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

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 that the most important elements have been -- have been brought down. Paul Krugman, writing on his blog this morning, said, "Some of the most effective and most needed parts of the plan have been cut." He's citing especially that $40 billion in state aid.

And he goes on to say that, "My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans 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 higher education, 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 do is go after support for education. And there are huge problems facing state and local governments, and that could lead to a vicious cycle of layoffs, falling home values, lower property taxes, more layoffs. And we'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 views as that process -- as that process...

STEPHANOPOULOS: That's what I'm trying to get at. If he -- if he 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 education and state spending cut, or move it more to the Senate side"?

SUMMERS: George, I don't think this is about the House bill or the 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 both bills can surely be improved, and the president's going to work as thoughtfully and aggressively as he can to move this process along, drawing on the -- drawing on the very important strengths that are contained in both these bills.

STEPHANOPOULOS: But it sounds...

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

SUMMERS: At the same time, he has insisted that this not be Washington business as usual, no earmarks. We don't engage in wasteful programs just because they're a tradition or someone's prerogative.

So it's not going to be a matter of choosing between two products. It's going to be a matter of creating the best possible bill we can for the country.

STEPHANOPOULOS: So it sounds like what -- it sounds like what you're saying is the president's overall message is, "There's great overlap here. I might as president prefer to have more education funding, 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 the sake of an economy that lost 600,000 jobs in one month alone. That's as many jobs as there are in the state of Maine. So coming together, making sure that the investments are as productive as they possibly can be, that's the president's priority.

STEPHANOPOULOS: As you know, the overwhelming majority of Senate Republicans and House Republicans are opposed to this bill. And the Senate Republican leader, Mitch McConnell, said the other day that Democrats 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, unemployment was still 15 percent. What got us out of the doldrums that we were in during the Depression was the beginning of World War II.