Feb. 15, 2009 -- "If this is going to be bipartisanship, the country's screwed." Sen. Lindsey Graham, R-S.C., said this morning, arguing that Republicans were left out of negotiations over the economic stimulus bill.
"I know bipartisanship when I see it. I've participated in it. I've gone back home and gotten primary opponents because I wanted to be bipartisan. There's nothing about this process that's been bipartisanship. This is not 'change we can believe in' ... We blew it when it came to coming together here," Graham, a member of the Senate Budget Committee, said in an appearance on "This Week with George Stephanopoulos."
The bill, which President Barack Obama is expected to sign into law on Tuesday, passed without a single Republican vote in the House and gained only three GOP votes in the Senate.
But Sen. Chuck Schumer, D-N.Y., who joined Graham on a bipartisan panel to debate the stimulus, argued that Democrats made concessions to please Republicans.
"We don't know what more to do in terms of bipartisanship," he said. "Let's just look at the Senate. The two biggest amendments that we accepted were Republican amendments... They still voted against the bill."
Graham: 'We Blew It'
In response Graham noted that, in lieu of the $800 billion package that passed in the Senate, Republicans had supported a $440 billion plan "that cut taxes, had infrastructure spending and helped people who were out of work. We blew it when it came to coming together here."
Graham's own Governor, Mark Sanford, is suggesting he may not take the roughly $8 billion in stimulus funding for South Carolina.
"For every job the bill creates, American taxpayers will spend $223,000. If we add the cost of this bill to the previous efforts of the federal government to deal with the financial crisis, the American taxpayer is on the hook for $9.7 trillion… If the stimulus bill were a country, it would be the 15th-largest country in the world," Sanford wrote in The State this morning.
Graham, however, said Sanford should take the funding: "I think it would be smart for South Carolina to take the money because South Carolina's going to have to pay the money back. The average taxpayer's gets to get $8 of tax relief, but their children get $1-trillion of debt."
Waters: Moderate Senators 'Stepped Up to the Plate'
On the House side of the debate Rep. Peter King, R-N.Y., supported Graham's argument. "Not one Republican was allowed to take part in the process in the House," said King, a member of the Financial Services Committee.
But Rep. Maxine Water, D-Calif., disagreed. "That is not the truth," she said. "As a matter of fact, we should focus on, when you had the opportunity to participate, why not do what those three moderate Republicans did? Step up to the plate; offer your amendments. You know, we took all of their amendments."
Waters, also a member of the Financial Services Committee, went further arguing that more money was needed to stimulate the economy.
"Many well-known economists say that this should be a trillion-dollar bailout bill, that we need to put more into our economy," she said.
"We have children going to schools in deplorable conditions, and so we wanted more money in school construction. We thought, not only does that create jobs, it's an investment in the future. And so those kinds of programs we really, really wanted to fight for. As it turns out, we have through the conference committee accepted the amendments from those Republicans who were willing to step up to the bat and at least do something for the people of this country. And so we lost on some of it, but it's a big win for all families and all Americans," Waters said.
The bipartisan panel also tackled the bank bailout and the debate over whether the remaining $350 billion in TARP funds will be enough to save the banking system.
Graham: '$350 Billion Is Not Enough'
"I know $350 billion is not enough to deal with the toxic assets and jump-start housing," Graham asserted. When asked how much more he believes is needed, Graham explained "some people tell me over a half a trillion dollars. And after this exercise of TARP I and now the stimulus bill, it makes it harder for everybody here to go back to the public and say, 'Please give us more money,' because we seem irresponsible."
While Treasury Secretary Tim Geithner's plan, outlined last week, had several different elements -- including setting up a new public-private partnership to buy toxic assets, new capital injections and a new stress test for the banks -- he did not reveal how much more money would be required, and several economists are now saying that what's really needed is nationalization of the banks.
Obama, however, has disagreed, telling ABC News' Terry Moran last week that "we want to retain a strong sense of private capital fulfilling the core investment needs of this country."
Graham said that he is open to the idea of nationalizing the banks.
"I think if you put most of our major banks under a stress test, they're going to fail... This idea of nationalizing banks is not comfortable, but I think we have gotten so many toxic assets spread throughout the banking and financial community throughout the world that we're going to have to do something that no one ever envisioned a year ago, no one likes, but, to me, banking and housing are the root cause of this problem. And I'm very much afraid that any program to salvage the bank is going to require the government....I would not take off the idea of nationalizing the banks," he said.
Schumer again disagreed, arguing that nationalization will not be necessary. "You can have a big, bold, successful plan without nationalization. That's what the administration is trying to do," Schumer said.
The panelists also responded to the new executive compensation provision added to the stimulus that would cap bonus pay for executives at financial institutions that have received TARP money at a third of their salary. Opponents, including those in the Obama administration fear the provision would lead to a "brain drain" and that workers would be lost to foreign banks or that it would promote a salary increase at the banks.
"Senator Dodd put together a provision, and it's a provision that I think is strong and tough, and we need strong and tough," Schumer said in response. "And Wall Street has to learn, if you're going to take money, billions of dollars, you're going to have to limit executive comp. I disagree with the administration in this sense. I have no problem if companies want to get out of this program and get out of the 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 have some limits...on executive compensation."
"I look forward to the debate between Chuck Schumer and President Obama on this issue," King joked. "I will say, I agree there should have been some caps. I think this went too far, and I think it can be counterproductive."