Feb. 15, 2009 -- ABC'S "THIS WEEK WITH GEORGE STEPHANOPOULOS"
FEBRUARY 15, 2009
SPEAKERS: GEORGE STEPHANOPOULOS, HOST
SEN. CHARLES E. SCHUMER, D-N.Y.
SEN. LINDSEY GRAHAM, R-S.C.
REP. MAXINE WATERS, D-CALIF.
REP. PETER T. KING, R-N.Y. [*] (BEGIN VIDEO CLIP)
STEPHANOPOULOS: Good morning, and welcome to "This Week."
The president gets his plan.
REP. NANCY PELOSI, D-CALIF., SPEAKER OF THE HOUSE: We have donesomething today that is transformational for our nation.
STEPHANOPOULOS: But at what cost?
REP. JOHN A. BOEHNER, R-OHIO, HOUSE MINORITY LEADER: Whathappened to the promise that we're going to let the American peoplesee what's in this bill for 48 hours? But, nope, we don't have timeto do that.
STEPHANOPOULOS: And his strategy for sick banks...
SECRETARY OF THE TREASURY TIMOTHY F. GEITHNER: This program isgoing to require a substantial and sustained commitment of publicresources.
STEPHANOPOULOS: ... falls flat on Wall Street.
(UNKNOWN): We wanted real guts and details to this, and wedidn't get it today.
STEPHANOPOULOS: Will the Obama's plans confound the skeptics andfix the economy? Senate, House Democrats and Republicans square off.Our "This Week" debate.
Then, one more pick for commerce secretary bows out.
SEN. JUDD GREGG, R-N.H.: I said yes. That was my mistake.
STEPHANOPOULOS: Is it one more sign that bipartisanship has itslimits? That debate and the rest of the week's politics on ourroundtable with George Will, Cokie Roberts, Sam Donaldson, and DonnaBrazile.
And, as always, the Sunday funnies.
JAY LENO, TALK SHOW HOST: The economy's so bad, Barack Obama'snew slogan, "Spare change you can believe in." That's how bad it is.
(END VIDEO CLIP)
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.
STEPHANOPOULOS: Hello again.
When President Obama signs his $787 billion stimulus plan intolaw on Tuesday, he'll set a new record. It will be the single mostexpensive piece of economic legislation ever in our history, and itpassed without a single Republican vote in the House and only three inthe Senate.
So the voting is done. Let the debate begin.
For that, I'm joined today by four key players from Capitol Hill,Senator Chuck Schumer, the vice chair of the Joint Economic Committee.
Congresswoman Maxine Waters, she's a senior Democrat on the HouseFinancial Services Committee.
Senior Republican on that committee, Representative Peter King ofNew York.
And Senator Lindsey Graham, South Carolina Senate BudgetCommittee.
And I'm going to begin with your governor, Mark Sanford.
STEPHANOPOULOS: Big opponent of the stimulus legislation. And Iwant to show everybody what he wrote in this morning's State newspaperin South Carolina. He says that, "For every job the bill creates,American taxpayers will spend $223,000. If we add the costs of thisbill to the previous efforts of the federal government to deal withthe financial crisis, the American taxpayer is on the hook for $9.7trillion. If the stimulus bill were a country, it would be the 15th-largest country in the world."
Senator Schumer, he says it's going to be a waste, it's not goingto work, and we're going to be paying for it for generations.
SCHUMER: Well, you know, it's easy to say no. We have the worsteconomy we've had since the Great Depression, half a million peoplemore losing jobs every month. The economy's hurdling southward. Yes,this is a big, strong, bold package.
It's going to do three things. It's going to keep or create 3million to 4 million jobs. It's going to put money into the hands ofthe middle class so they spend it in the stores and restaurants andget the economy going. And it's going to create an infrastructurethat not only puts people to work, but leaves something after, Godwilling, we get out of this. To do nothing risks a depression.
STEPHANOPOULOS: So what's wrong with that?
GRAHAM: Well, I wanted to do something. I think we do need astimulus package with a focus, and that's create jobs in the nearterm. Eleven percent of the appropriated money in this bill hits in2009. Most of the money in this bill is in entitlement spendingthat's not going to create jobs.
Twenty-seven percent of the bill is now tax cuts. That's downsignificantly. And of those tax cuts, most of them, only $3 billiongoes to small business.
Seventy-five percent of the people in this country work for smallbusiness. Of a $787 billion bill, $3 billion is directed to small-business people. I think we missed the mark a long way. We increasednew government; we did not increase new jobs.
STEPHANOPOULOS: And, Congressman Waters, when this bill came outof the Senate at the end of the week, your speaker, Nancy Pelosi, hadto quell a mini-revolt among House Democrats who actually take anopposite view from Senator Graham. They thought the bill wasn't bigenough, and they didn't like the cuts, particularly in state aid,education aid, that came in the Senate.
WATERS: Absolutely. We worked very hard on that bill in theHouse. And as you know, many well-known economists say that thisshould be a trillion-dollar bailout bill, that we need to put moreinto our economy.
And we worked very hard on education, as you know. Our schoolsare in great disrepair in this country. We have children going toschools in deplorable conditions, and so we wanted more money inschool construction. We thought, not only does that create jobs, it'san investment in the future.
And so those kinds of programs we really, really wanted to fightfor. As it turns out, we have through the conference committeeaccepted the amendments from those Republicans who were willing tostep up to the bat and at least do something for the people of thiscountry. And so we lost on some of it, but it's a big win for allfamilies and all Americans.
STEPHANOPOULOS: Only three Republicans, Congressman King, in the-- in the Senate, zero in House. And I have to say, it -- itsurprised me that zero Republicans in the House went along with this.And, for example, I know that you support infrastructure spending. Iknow you support Medicaid aid to the states, yet you -- you vote no onthis. Was this more taking one for the team so the Republicans couldbe unified?
KING: No, not at all. First of all, I do support the Medicaidprovisions in the bill. But as far as the infrastructure, less than9.5 percent of the bill goes to infrastructure on transit and highwayconstruction. That was a key part to me, which was really severelydiminished.
As far as taxes, actually, Lindsey says 27 percent. Really, it'sonly 18 percent in new tax credits, because the fact that the AMT wasput in, which would have been factored in anyway. So it's really only18 percent in tax relief. We give more tax relief to the arts than wedo to small businesses.
And, you know, obviously, we have to do a lot. I supportedstrong infrastructure, strong tax relief. We didn't do it. Andthat's why you have people even like Alice Rivlin, who was BillClinton's budget director, testified against the stimulus bill, MartinFeldstein, who had -- had been for it is now against it, and the CBOsays, over a 10-year period, it's going to diminish the economy, bringdown the GDP, and actually cause a reduction in wages.
SCHUMER: Yes, the bottom line is, first, there's good -- goodhelp for small business. The NOL provision is kept in forbusinesses...
SCHUMER: ... below 15 -- it allows businesses that have hadlosses to take those losses now so they don't have to pay tax instead,can put people to work. And there's going to be more for smallbusiness in the economic plan that the president is announcing.
The bottom line is this: This -- the -- when you ask people whatyou need to do about this economy, the number-one thing all economists-- Martin Feldstein, who wanted a bigger package -- he wanted adifferent one, but a bigger one, he didn't want no -- all of them saythe great danger we face, George, is what they call a deflationaryspiral, prices keep going down.
And once you get into that spiral deeply, you don't know how toget out. That's what the Great Depression was. To a lesser extent,that's what happened in Japan for 10 years. And we need to get out ofit. And this is a jolt to the economy. It's a strong jolt.
It's not perfect, but it certainly is a lot better than doingnothing and a lot better, frankly...
KING: But no one suggested we do nothing, Chuck.
SCHUMER: But, well...
KING: No one suggested we do nothing.
SCHUMER: ... you know what? To say that $50 million in the artsis a reason to vote against it -- now, I happen to think the arts isan economic engine in New York, and I would be for that provision, butyou might disagree with it.
But to say that's the reason to vote against a bill, when thereare -- still on infrastructure, if you add it all in, there's close to$100 billion. If you -- it's including water, and sewer, and high-speed rail. If you talk about the FMAP relief, that is much greater.That is 100 times greater, just about, than the money to the arts.
SCHUMER: So let me just say this.
SCHUMER: We had a lot of people who said, "Take this out, takethat out."
WATERS: That's right.
SCHUMER: Most of those things were taken out, and they stillvoted against the bill.
KING: ... so much is missing, and that's the reality.
WATERS: We took the amendments from those three Republicans whowere willing to step up to the bat.
KING: In the House, no one was allowed to take -- no Republicanwas allowed to take part in the process.
KING: Not one Republican was allowed to take part in the processin the House.
WATERS: That's -- that is not -- that is not the truth.
KING: It is the truth.
WATERS: As a matter of fact, we should focus on, when you hadthe opportunity to participate, why not do what those three moderateRepublicans did? Step up to the plate; offer your amendments. Youknow, we took all of their amendments.
Do you know we reduced the neighborhood stabilization program bya couple of billion dollars? We reduced Head Start, Early Start,school construction. We took the amendments. And so all those who...
KING: The fact is...
SCHUMER: And one other thing...
KING: ... not one Republican was allowed at the table in theHouse of Representatives when the bill was...
KING: I'm talking about the House.
SCHUMER: Let's just look at the Senate. The two biggestamendment that we accepted were Republican amendments, $70 billion --you disagreed with it -- Senator Grassley, AMT, $38 billion, housingrelief, Senator Isakson. They still voted against the bill.
STEPHANOPOULOS: Let me bring Senator Graham back into this now.
SCHUMER: We don't know what more to do in terms ofbipartisanship.
SCHUMER: Well, how about the Senate?
GRAHAM: If I may say, if this is going to be bipartisanship, thecountry's screwed. I know bipartisanship when I see it. I'veparticipated in it. I've gone back home and gotten primary opponentsbecause I wanted to be bipartisanship.
There's nothing about this process that's been bipartisanship.This is not change we can believe in. You rammed it through theHouse. You started out with the idea, "We won. We write the bill."The markup, Chuck, in the Senate took an hour and 45 minutes. What'sthe AMT got to do with creating jobs?
SCHUMER: ... Republican amendment.
GRAHAM: We had every Republican...
WATERS: It is a Republican amendment.
GRAHAM: ... vote for a $440 billion stimulus package that cuttaxes, had infrastructure spending, and helped people who were out ofwork. We blew it when it came to coming together here. Let's don'tblow it on housing...
STEPHANOPOULOS: And now, but, Senator, your -- your governor,who I started with, Governor Sanford... GRAHAM: Yes.
STEPHANOPOULOS: ... is suggesting that he may not take the money-- that is $8 billion -- for the state of South Carolina, about 5percent of our gross product.
GRAHAM: It won't be that -- it won't be that much, but...
STEPHANOPOULOS: Should -- if he refuses the money, will youstand by him?
GRAHAM: I think it would be smart for South Carolina to take themoney, because South Carolina is going to have to pay the money back.The average taxpayer gets $8 of tax relief, but their children get $1trillion of debt.
GRAHAM: So could we have done better? Yes.
STEPHANOPOULOS: ... return it to the Treasury Department?
GRAHAM: Well, at the end of the day, it won't come to theTreasury. It would be spent in some other state. So what I thinkwe've done is blown an opportunity to help the economy by -- we shouldhave started with housing and banking, because this is good moneyafter bad, unless you spend housing and banking.
And the question people need to understand is, how much more doyou need to fix housing and banking? $350 billion left in the TARP isnot even close to fix housing and banking. And every dollar we wastein here and every policy change in this bill that could have wentthrough the normal process is an opportunity loss for this country.
STEPHANOPOULOS: That brings me to the next -- I do want to getinto the banking and the housing provisions, but there was one moreprovision in this stimulus package that I want to ask you about,Senator Schumer. At the last minute, a new executive compensationprovision was brought in that would cap bonus pay for executives atthese financial institutions that have received TARP money at a thirdof their salary.
Now, the opponents of this, including those in the Obamaadministration, have a number -- they say it's going to lead to abrain drain, workers are going to go to foreign banks. They say it'sgoing to force the banks to pay back that TARP money before it is theright thing to do. They also say it might have the perverse effect ofactually increasing salaries at the banks. So why put this in now?
SCHUMER: Well, first, you know, Wall Street has to get it. Andthe bottom line is, the average American says, "I go to my desk. I goto my assembly line. I do the right thing. I make no mistakes. Andnow I'm worried about being laid off. There are declines in pay andbenefits. My paycheck stretches less."
And yet it seems that a lot of the people on Wall Streetbasically messed up and they continue to get high salaries. Sothey're...
STEPHANOPOULOS: But you don't (inaudible) this is going tobackfire?
SCHUMER: No, let me say two things about it. First of all,Senator Dodd put together a provision, and it's a provision that Ithink is strong and tough, and we need strong and tough. And WallStreet has to learn, if you're going to take money, billions ofdollars, you're going to have to limit executive comp.
I disagree with the administration in this sense. I have noproblem if companies want to get out of this program and get out ofthe program quickly, that's their business and that's their right.And I think that's just fine.
But if you're taking federal money, you're going to have to havesome limits...
WATERS: They're not going to get out.
SCHUMER: ... on exec comp.
STEPHANOPOULOS: Does any of you disagree? Or is everybody inunanimity on that point?
KING: I look forward to the debate between Chuck Schumer andPresident Obama on this issue.
No, I will say, I agree there should have been some caps. Ithink this went too far, and I think it can be counterproductive.
GRAHAM: Can -- can I -- can I suggest why Chuck is right?
WATERS: The president is going to sign the bill with theprovision in it. And you're absolutely right. They (inaudible) thiswould be a disincentive to talent and that it would be refused on WallStreet. However, they're now saying, you know, they are going to haveto live with it. And I'm -- he's going to sign the bill.
GRAHAM: And the reason -- the reason that we're doing thingsabout CEOs, like Chuck has described, is because people were burned onTARP I. And the big loss of this bill is it's not going down wellwith the public. I think it missed its mark in terms of stimulatingthe economy. It grew the government more than stimulating theeconomy. It's going to be hard for us to go back after this bill toask for more money for housing and banking.
STEPHANOPOULOS: But do you think that's going to be absolutelyessential? Secretary Geithner, when you were...
STEPHANOPOULOS: ... would not say how much more would be neededfor the banks.
GRAHAM: I know $350 billion is not enough to deal with the toxicassets and jump-start housing.
STEPHANOPOULOS: How much more is needed?
GRAHAM: You know, some people tell me over a half a -- half atrillion dollars. And after this exercise of TARP I and now thestimulus bill, it makes it harder for everybody here to go back to thepublic and say, "Please give us more money, because we seemirresponsible."
There are things in this bill that make the public want to throwup. They know it doesn't create a job. It just creates moregovernment. And we blew it.
WATERS: I don't see anything in this bill that would makeanybody want to throw up. This was exciting...
GRAHAM: Changing welfare rules in this bill?
WATERS: The welfare rules were not changed in this bill. As amatter of fact...
STEPHANOPOULOS: It does relieve some work requirements, doesn'tit?
KING: Work requirements and also total benefits.
GRAHAM: Doubling the size of...
KING: And it also takes out the verification of illegalimmigrants.
STEPHANOPOULOS: Congresswoman Waters, finish...
WATERS: Yes. What this bill does is give tax breaks to 95percent of American workers. We've had tax breaks from the previousadministration for the richest 1 percent in America. Now the Americanworkers are going to get a break.
When you couple these tax breaks along with the jobs that aregoing to be created in the infrastructure, you're going to have notonly people who have been losing jobs back in the workplace, but we'regoing to save jobs and keep businesses from laying off people.
This is exciting. And this gives hope. This is a beginning.This is a long-term investment...
GRAHAM: If I may...
WATERS: ... in our economy.
STEPHANOPOULOS: ... Congressman King?
KING: The Congressional Budget Office says, over the period of10 years, it's going to deflate gross domestic product and bring downwages. So you voted for a bill that's going to bring down...
KING: ... workers' wages under the guise of making people feelgood in the short term.
SCHUMER: I just want to say this. Every one -- every one of the435 House members and 100 senators can find some provisions they don'tlike in this bill. Ninety-five percent of this bill -- 98 percentdoes three things: creates of preserves jobs, builds infrastructure,and puts money into the pockets of the middle class.
You know, there's a time for quibbling and there's a time forcoming together. This was a time -- President Obama reached out to alarge number of people -- this was a time to come together.
And, you know, I am disappointed. When George Bush proposed hisprogram, it was all tax cuts, not one single investment program. Weall voted for it...
WATERS: That's right.
SCHUMER: ... because we thought the country had to cometogether.
SCHUMER: We could have said, Peter, "It didn't have this; itdidn't have that." This was a time to come together.
KING: This isn't quibbling, though. We're talking about seriousdifferences.
GRAHAM: Well, why didn't we? Why didn't we?
KING: And we're talking about bipartisanship. House Republicanswere not allowed at the table. They were not allowed any inputwhatsoever into the formation of this bill or changing the bill in anyway.
GRAHAM: A $1.1 trillion debt passed onto the next generation issomething to quibble about. The tax provisions that would havecreated jobs were gutted. The Isakson amendment was gutted. It was a$15,000 refundable tax credit...
SCHUMER: You didn't vote for the bill.
STEPHANOPOULOS: ... houses.
GRAHAM: Well, OK, so... (CROSSTALK)
SCHUMER: He didn't vote for the bill when it was in there.
GRAHAM: ... so you punish the taxpayer? You punish the persontrying to buy a home?
SCHUMER: No, no, we're going to get a better provision.
GRAHAM: The carry loss back provision for business was $67billion in the Senate. The compromise version was $4 billion. Thetax provisions that would have created jobs were replaced by spending.Four hundred dollar checks goes to the consumer. It's about $8 in acheck -- in a pay period. We tried this last year. That's not goingto create any jobs.
WATERS: That's only one portion of this bill.
GRAHAM: That's most of the tax cuts.
WATERS: No, it's not all of the tax cuts.
SCHUMER: And let me say one other thing.
GRAHAM: You gutted the tax provisions for business.
SCHUMER: On the floor of the Senate -- where there was an openprocess, Peter -- but on the floor of the Senate, I heard over andover again, "This is a trillion dollars that we're not paying for it."I never heard that mentioned when it came to the Iraq war, which is $1trillion which we're not paying for. I never heard it mentioned whenGeorge Bush changed a surplus of $300 billion into a deficit of over$800 billion.
SCHUMER: So -- so all of a sudden, all of a sudden...
SCHUMER: ... the reason to be against this is deficit spending.But when it was Iraq war or tax cuts for the highest-income people, wenever heard it.
STEPHANOPOULOS: I think we heard a lot of different reasons tobe against it (ph), and I want to move on to the banks.
KING: ... Iraq war, too, Chuck.
STEPHANOPOULOS: I want to move on to the banks, because this isthe next big issue coming.
GRAHAM: This is a big issue.
STEPHANOPOULOS: And, you know, what we're seeing is many moreeconomists that -- as I talked about, Secretary Geithner's plan hadseveral different elements, setting up a new public-privatepartnership to buy these toxic assets, new capital injections to thebank, didn't say how much money would be required, a new stress testfor the banks, but we all saw that reaction in the markets.
Now, they may have reacted about it because they didn't get whatthey were hoping for, which was a big bailout. But a lot ofeconomists now are saying that what is really -- what could be needed,is, bite the bullet, nationalization.
Nouriel Roubini, one of the men who saw the -- the crisis coming,said nationalization is the answer in today's Washington Post.President Obama says no.
(BEGIN VIDEO CLIP)
OBAMA: Sweden has a different set of cultures in terms of howthe government relates to markets, you know, and -- and America'sdifferent. And we want to retain a strong sense of private capitalfulfilling the core investment needs of this country.
(END VIDEO CLIP)
STEPHANOPOULOS: But, Congresswoman Waters, Mr. Roubini andothers say we're all Swedes now, that we should just do what they didwhen they faced their crisis. They nationalized the banks, and theycame out of it OK.
WATERS: Well, George, as you know, the word "nationalization"scares the hell out of people. And so the debate has been opened upnow, and that's good. Let's talk about it.
We know that, as we have this capital infusion into these banks,we're owning more and more of them. Citibank is probably almostnationalized with the amount of money that we've put in it. But Idon't think that we are ready to move to the point of a formalizednationalized banking program yet.
STEPHANOPOULOS: Even if it's the only thing that will work?
WATERS: Well, we may get to that point. And I'm not opposed tothat. But I think the discussion is just opening up. This is new forAmerica.
KING: Yes, I think this is probably going to slow down the tempoof your show. I think this is some place where we really should tryto work together. I actually worked with Chuck on TARP I.
SCHUMER: We did.
KING: This is a very, very critical issue. And so let's seewhat Geithner is going to propose. I wish he had been a little morespecific this week. But, you know, I assume that's going to come outsoon. And we really have to...
STEPHANOPOULOS: But as you learned more about what he proposed,were you more comfortable with it?
KING: I'm comfortable with Geithner. I know he didn't pay histaxes; I know all those issues. But the fact is, he is a very smartguy. He understands the issues. And I'm willing to give him thebenefit of the doubt upfront to at least get the debate going and getit on the table.
GRAHAM: The -- the reason I did vote for him is because I -- Italked with Chuck and Pete. He has a good reputation, I think, as asmart guy.
I think if you put most of our major banks under a stress test,they're going to fail. And this idea...
STEPHANOPOULOS: And this stress test is starting this week.
GRAHAM: Yes, this idea of nationalizing banks is notcomfortable, but I think we have gotten so many toxic assets spreadthroughout the banking and financial community throughout the worldthat we're going to have to do something that no one ever envisioned ayear ago, no one likes, but, to me, banking and housing are the rootcause of this problem. And I'm very much afraid that any program tosalvage the bank is going to require the government...
STEPHANOPOULOS: So what would you do now?
GRAHAM: I -- I would not take off the idea of nationalizing thebanks.
WATERS: We've come a long way...
SCHUMER: Let me just say this. George Bush, a very conservativepresident, had more government intervention in the financial systemthan any president in history. But I would not be for nationalizing.I think government's not good at making these decisions as to who getsloans and how this happens.
I think the Geithner plan, despite the fact that the market wasdisappointed it didn't have details -- and I think that was just badsignaling -- is a very good plan. And I think, when the details arelearned...
STEPHANOPOULOS: Explain why.
SCHUMER: I'm going to explain why. When the details arelearned, people are going to like it. First, it's bold and big. Thisidea of dying a death of 1,000 cuts -- this bank is in trouble, wedeal with that, this company is in trouble -- no. You saw headlinesin newspapers, $2.5 trillion when you add in the Fed and everythingelse, even though it's only using the TARP money that we have.
Second, he doesn't go for the mistake, I think, that SecretaryPaulson made, one-size-fits-all. Every bank needs capital injections.Every bank for -- every bank needs bad assets taken off their balancesheets.
Rather, he says, we have four basic tools. We're going toexamine each bank that has trouble and see which policy meets theirneeds. Sometimes it'll be capital injections. Sometimes it'll be badassets. Sometimes it'll be something else. That makes sense. But the third thing which people always discount is this TALF.The TALF goes around Wall Street and gets right to the buyers.
STEPHANOPOULOS: It's the Federal Reserve using their owncapital.
SCHUMER: It's the Federal Reserve using its own capital tobolster the lending markets, and they're going to go right to theconsumer. They're going to look at credit card loans. They're goingto look at home loans. They're going to look at auto loans, which arenow -- you can't get a car loan, even if you have a good creditrating.
SCHUMER: And they're going to look -- they're going to look atsmall business loans. Now, this worked when they did it for twosmaller areas, commercial paper and interbank lending. They're nowgoing to talk about that on a broad basis...
STEPHANOPOULOS: So let me -- let me...
SCHUMER: ... and that should get the economy kick-started.
STEPHANOPOULOS: Let me see if we have something of a consensushere. If I'm hearing correctly -- and do correct me if I'm not -- isthat it sounds like you have a consensus here to give Geithner achance. Let's see if these stress tests will work. But if not, itsounds like everyone, except Senator Schumer, is open to a much moreradical infusion of...
KING: I hate to say, I think Chuck and I are somewhat on thesame page here on this. And Lindsey and Maxine are almost on the samepage, which -- I don't know what this means about the world.
GRAHAM: You may have to edit this program.
STEPHANOPOULOS: A new kind of bipartisanship.
KING: I'm sure -- I'm sure President -- I'm sure President Obamais watching this show this morning. I would just urge him not torepeat what happened with the stimulus bill. If everyone is at thetable early on, I think you can see a chance for real progress.
SCHUMER: And, you know, let me just say...
WATERS: So, you know, Chuck, I have to say that I would like tosee a lot more details from Geithner.
SCHUMER: There will be. WATERS: And I am absolutely focused on the foreclosure problem.We have to dedicate a significant amount of that money to dealing withthese foreclosures.
STEPHANOPOULOS: We're going to see that from the president thisweek, right, $50 billion to reduce the -- the cost for most homeownerswho are facing trouble.
SCHUMER: Right. Although, you know, on that one...
WATERS: That's right.
SCHUMER: ... I would try to move it up to $100 billion.
SCHUMER: I agree that the housing area is the key to this.
WATERS: It's the epicenter.
SCHUMER: And dealing with it -- the one thing I think they'regoing to do in housing, which I think is pretty good, is they're goingto focus a little more on the servicer and the bondholder and use somesticks, as well as some carrots...
STEPHANOPOULOS: And so they're going to get...
SCHUMER: ... and get them to the table.
STEPHANOPOULOS: And get them to the table and have them writedown the mortgages so no one is paying more than 31 percent of theirincome. Makes sense to you?
GRAHAM: Yes, it does. And that's why I put $20-somethingbillion in the bill for the FDIC to do that. If you don't stabilizehousing, you're never going to fix this problem. The way youstabilize housing is you try to get control of foreclosures.
WATERS: That's right.
GRAHAM: You try to stop the bleeding of the housing market.
WATERS: That's right.
GRAHAM: That's why you needed the full Isakson amendment to getexcess inventory. You've got a huge inventory problem. You've gotforeclosures that have to be dealt with. And that goes back to banks.
I think we've done too little, too late. I think the TARPopportunity was a missed opportunity. We've soured the public onbailouts. This bill makes it harder for all of us to come togetherand get another $500 billion.
So the country needs to understand this puzzle: banking,housing, and general economy. The general economy will never prove --improve until you do something about credit and banking and housing.And we've just scratched the surface to the major problem this countryfaces. So taking an idea off the table...
SCHUMER: Let me just say...
STEPHANOPOULOS: Let me just say, you put one other idea on thetable. You think it's going to take another $500 billion that hasn'tbeen asked for yet...
GRAHAM: I've been to the Budget Committee...
STEPHANOPOULOS: ... for the banks?
GRAHAM: ... and they tell me that $350 billion left in TARP willnot isolate the toxic assets and jump-start housing.
STEPHANOPOULOS: We're running out of time. I just want to know,do you all agree with that?
STEPHANOPOULOS: Is it going to take more money?
WATERS: ... buy up those toxic assets. They're going to writethem down to about 5 cents on the dollar. Get the private sectorinvolved, and they're going to get rid of all of those toxic assets.
SCHUMER: I would just make one other point.
STEPHANOPOULOS: We have five seconds.
SCHUMER: You can have a big, bold, successful plan withoutnationalization. That's what the administration is trying to do.
KING: And let's -- let's -- and let's try to work together onit. Let's really work together from the start and won't be repeatingthis, what we're doing today.
STEPHANOPOULOS: On that note, we have to stop. Thank you allfor a great, great discussion.
Before we go, a quick shoutout to one of your colleagues. JohnDingell became the longest-serving congressman in American historythis week, big celebration at the Capitol. He first won the Houseseat once held by his father back in 1955.
Congratulations, Congressman Dingell.