'This Week' Transcript: David Axelrod

Jan. 18, 2009 — -- ABC'S "THIS WEEK WITH GEORGE STEPHANOPOULOS"

JANUARY 18, 2009

GEORGE STEPHANOPOULOS, HOST DAVID AXELROD, SR. ADVISER TO PRESIDENT-ELECT OBAMA

[*] STEPHANOPOULOS: Good morning, and welcome to a special inauguraledition of THIS WEEK.

(BEGIN VIDEOTAPE) FRANKLIN D. ROOSEVELT, 32ND PRESIDENT OF THE UNITED STATES: Theonly thing we have to fear...

JOHN F. KENNEDY, 35TH PRESIDENT OF THE UNITED STATES: Ask notwhat your country can do for you.

RONALD W. REAGAN, 40TH PRESIDENT OF THE UNITED STATES:Government is not the solution to our problem.

STEPHANOPOULOS (voice-over): As Barack Obama rolls intohistory...

OBAMA: What's required is a new declaration of independence.

STEPHANOPOULOS: We examine the challenges ahead with the nextpresident's closest adviser, David Axelrod.

Plus, an expanded Inauguration roundtable, with George Will,Donna Brazile, E.J. Dionne, Matthew Dowd, and Gwen Ifill.

And as always, the "Sunday Funnies."

CONAN O'BRIEN, HOST, "LATE NIGHT WITH CONAN O'BRIEN": Obama ismaking the trip three days early because it's Amtrak and even he onlyhas so much hope.

(END VIDEOTAPE)

ANNOUNCER: From the heart of the nation's capital, THIS WEEKwith ABC News chief Washington correspondent George Stephanopoulos,live from the Newseum on Pennsylvania Avenue.

STEPHANOPOULOS: Hello, again. Barack Obama has been all overWashington these last two weeks. But the president-elect was formallywelcomed to the Capitol last night when his vintage trained pulledinto Union Station just before 7.

Obama began the day, Michelle Obama's 45th birthday inPhiladelphia. Stopped in Wilmington to pick up the Bidens.

(BEGIN VIDEO CLIP)

VICE-PRESIDENT ELECT JOSEPH R. BIDEN, JR.: Happy birthday, kids!Welcome to Wilmington.

(END VIDEO CLIP)

STEPHANOPOULOS: Then they rolled slowly south, emulating AbeLincoln's Inaugural train ride and echoing Lincoln's words.

(BEGIN VIDEO CLIP)

OBAMA: But appeal not to our easy instincts, but to our betterangels.

(CHEERING AND APPLAUSE) (END VIDEO CLIP)

STEPHANOPOULOS: The (INAUDIBLE) back showed the crowd's goodcheer, and they are not alone. A new ABC News poll out this morningshows that 80 percent of Americans approve of how Obama has handledthe transition. And 79 percent just like him.

The last incoming president with support like that was RonaldReagan in 1981. All that is happy news for our headliner thismorning, David Axelrod.

Welcome back to THIS WEEK.

AXELROD: Thanks, George.

STEPHANOPOULOS: So you're going into the White House on Tuesdaywith the public rooting for you.

AXELROD: Yes. I think the public is rooting for us, and moreimportantly, rooting for the country. We know -- I think everybodyknows we have big problems. I think the striking thing about yourpoll and all of the polling I've seen is this combination of optimismand realism.

People are hopeful about the future, but they understand we havereally serious problems.

STEPHANOPOULOS: And I want to talk about how do you get thebalance right? Because as our poll -- as you say, people are prettyrealistic, also pretty upset. Ninety-four percent say the economy isin bad shape? That is as bad as we have ever seen?

AXELROD: I want to find the 6 percent who think it's in goodshape.

STEPHANOPOULOS: Well, exactly. But the president-elect in allof his policy speeches over the last couple of weeks keeps on sayingit's going to get worse before it gets better. What -- and obviouslythat's based on briefings. What exactly do you know and what shouldpeople expect?

AXELROD: Well, look, we -- obviously the reason that he camehere two weeks early was to begin work on an economic recoverypackage. But any economist will tell you that even if we moverapidly, it takes a little while for this to move through the systemand to put the brakes on what is the most serious economic downturnwe've had in many, many generations.

STEPHANOPOULOS: So are we talking doubt-digit unemployment, ayear-long recession, another year?

AXELROD: That's what we're trying to avoid, George, is double-digit unemployment. We're trying to take some measures that willcreate 3 million to 4 million jobs the next couple of years, to put --to try and slow down this plummeting employment.

And I think we can do that. But I think it's fair to say thatit's going to take not months but years to really turn this around.

STEPHANOPOULOS: You know, some Democrats have some doubts aboutthe job creating potential of this plan. Senator Kent Conrad, thechairman of the Budget Committee was on Bloomberg News just the otherday. And he said he doesn't think you're going to be able to createthe kind of jobs you're talking about.

Take a look.

(BEGIN VIDEO CLIP)

SEN. KENT CONRAD, D-N.D.: I have my doubts. I don't think, youknow, the -- most of the assessment is that this will reduceunemployment from what it would otherwise be by 2 percent. Mypeople's analysis suggests maybe only have of that.

(END VIDEO CLIP)

STEPHANOPOULOS: Are you over-promising?

AXELROD: Well, look, I don't think, first of all, his people andour people may have some dispute and we'll find out what the truth is.But here is where we are. We have to act. We have to try. It's notenough to be a doubter. It's not enough to question, not when we'rein the situation we're in.

We believe that this is a well-conceived approach to the problemwe face. It's extraordinary and it's painful to have to do in termsof our debt. But it's something we have to do or we run the risk ofthat scenario that you suggest, double-digit unemployment.

STEPHANOPOULOS: Senator Conrad is still signaling that he'sgoing to support the plan. But Republicans are expressing even moredoubts and more criticism even though I know the president-elect wantsto get significant Republican support.

The House Republican leader, John Boehner, was out the other day,and he said that his side was not even consulted on the preparation ofthe package that is going to be put forward in the House.

(BEGIN VIDEO CLIP)

REP. JOHN A. BOEHNER, R-OHIO, HOUSE MINORITY LEADER: Oh my God,I don't even -- my notes here say that I'm disappointed. I just can'ttell you how shocked I am at what we're seeing.

(END VIDEO CLIP)

STEPHANOPOULOS: He says this is going to lead to another era ofborrow and spend, and not going to produce the jobs you talk about.

AXELROD: Well, with all due respect to Congressman Boehner, wedo want to work with him and we do want to work across the aisle. Butone of -- there is a Congress...

STEPHANOPOULOS: Why not consult with them on a package that... AXELROD: Well, there have been consultations, George. And therewill continue to be consultations. But let's remember why we're inthe mess we're in. Part of it is that when the Clinton administrationleft office, we were running record surpluses and the policies thatwere put in place doubled our debt in a matter of a few years.

And I didn't hear some of the voices who are speaking out nowmoralizing about that then. So we ought to put all of the politicsaside and do what's best for the country. Right now the country is inan economic emergency. And we need to act.

And I don't think people are going to have much tolerance for thekind of customary Washington. Now having said that, I think thatthere are legitimate discussions to have.

The president-elect has said, you know, he's not delivering theseideas to Capitol Hill on stone tablets. I mean, he is coming there tohave a consultation and to come up with the best possible program.

So we're going to consider all of these facts. But let's notengage in the kind of political back and forth that has bogged us downso much in the past.

STEPHANOPOULOS: The other substantive point that Boehner makes,he circulated a fax sheet, he says, if you look at $825 billionpiece of legislation, 3 million jobs, that's $275,000 a job. Is thatthe most efficient way to create jobs?

AXELROD: George, he's missing the fundamental point. We're notjust spending money to create jobs, we're investing money tostrengthen this economy. We're investing in areas like energyindependence. We're investing in creating the classrooms of the 21stCentury for our kids to give us the kind of education system we need.

We're investing in computerizing the health care records of thiscountry so that we can reduce costs and improve care. These thingswill pay long-term dividends to this country. And we've been verycareful about that.

We're not being frivolous. We're being thoughtful about how wemake these investments.

STEPHANOPOULOS: But you would concede, $275,000 a job is a highprice to pay, isn't it?

AXELROD: Well, I'm not signing on to that particular figure. Ithink preventing this country from sliding into as deep an economyemergency as we've seen since the Great Depression, preventing double-digit unemployment, and laying the groundwork for the future in theseareas that mention and others I think is a worthy thing to do.

STEPHANOPOULOS: The president-elect has called for a NationalDay of Service tomorrow. And some of your allies have said you canreally put some meat behind that at about $25,000 a job by greatlyexpanding public service opportunities like AmeriCorps, the way FDRdid with the Civilian Conservation Corps. Why not put that in the package?

AXELROD: Well, we will be expanding service programs...

STEPHANOPOULOS: In this legislation?

AXELROD: Well, I don't know if we're going to do it in thislegislation, but we're going to do it and we're going to greatlyincrease our efforts to involve people at the local, grassroots levelin service projects.

But this is a situation where the impetus has to come from thegovernment. Only the government can marshal the resources to reallyblast us out of the morass we're in right now.

STEPHANOPOULOS: And part of that morass, of course, is this --the cascading failures of the banks that we've seen over the lastseveral weeks and months, even last week.

And there are reports this weekend in the newspapers that yourteam is now considering going back to the original TARP approach, tothe original rescue approach where you buy up all of the toxic assetsof the banks, put them in a government agency, get them out of thebanks once and for all, and that's going to be the only way to getconfidence back in the banking system.

Is that what the president wants to do?

AXELROD: Look, I don't want to get into the details of how we'regoing to administer the TARP. Our team will be discussing thosedetails in the days after Tuesday. But I think it's clear that it hasto be administered in a much different way.

First of all, the point is to get credit flowing again tobusinesses and to families across the country. That hasn't happenedwith the expenditure of the $350 billion.

STEPHANOPOULOS: And following up on that, Tom Friedman in TheNew York Times today says that the president, as soon as he gets intooffice, should call in the 300 top bankers in the country into theEast Room and basically read them the riot act and tell them to getlending again.

Will you follow that advice?

AXELROD: Well, I think he is going to have strong message forthe bankers. We're not -- we want to see credit flowing again. Wedon't want them to sit on any money that they get from taxpayers.

The other things that we have to deal with is transparency. Noone can really tell you exactly where the money went, how it wasspent, it's not easy to follow even for people in government. And wehave to deal with that. We have to begin to address the housing issuein a way it hasn't been addressed yet.

So there are a lot of things that have to be done differently.And we have to make sure that the money doesn't got to excessive CEOpay and dividends, when it should be going to lending.

STEPHANOPOULOS: The man you want to administer this, of course,is Tim Geithner, President-elect Obama's choice for Treasurysecretary, revealed this week that he didn't pay about $34,000 in backtaxes when he was working at the IMF.

What do you say to Americans who say it just doesn't seem rightthat the person who's going to be overseeing the Internal RevenueService didn't pay $34,000 in back taxes.

AXELROD: Well, he has paid those taxes, George, when it waspointed out that he had made a mistake on his taxes.

The mistake he made, which when he was overseas serving ourcountry in the IMF was that -- everyone agrees it's a common mistakethat people working overseas make.

He's corrected it. I think, when people look at Tim Geithner,they should look at a guy who's devoted his life to public service,who is an integral part of solving another international financialcrisis in the 90s and has vast experience and great insights.

He is precisely the kind of person we need in the Treasury rightnow. And I think, when people get to know him -- and he's going totestify this week -- I think he's going to inspire great confidence.

STEPHANOPOULOS: Confident he'll be confirmed?

AXELROD: I am confident.

STEPHANOPOULOS: Let's look ahead to the inaugural speech. Iknow you've been working with the president-elect on that. He andMichelle were asked about that yesterday on the train trip.

(BEGIN VIDEO CLIP)

OBAMA: She's heard me speak before.

(LAUGHTER)

(OFF-MIKE)

MICHELLE OBAMA, WIFE OF PRESIDENT-ELECT BARACK OBAMA: But Ithink -- I think (OFF-MIKE) speech (OFF-MIKE)

B. OBAMA: That's not what you're supposed to say in front of thepress.

M. OBAMA: Oh, I'm sorry.

(LAUGHTER)

(END VIDEO CLIP)

STEPHANOPOULOS: Well, I know you're not going to make thatmistake. You're -- you're well-qualified in setting expectations.But if you can just give us a sense -- did we really see the presidenthitting the themes, yesterday on the train trip, that he's going tohit in the inaugural?

And is the animating theme of the speech responsibility; everyonein the country is going to have to take responsibility for our future?

AXELROD: Well, that -- you know, George, one thing about BarackObama is his themes have been consistent, not just through thiscampaign but through his public life, from his convention speech in2004 through today.

So I don't think you're going to be surprised by what you hear.I think he's going to talk about where we are as a country but alsowho we are as a people and what responsibilities accrue to us as aresult of that, and what we have to do to move forward.

So I'm not going to handicap whether...

(LAUGHTER)

... it's going to be a great speech, a good speech, or -- but Ihave great -- I have confidence in the message that he wants todeliver and I don't think you'll be surprised by it.

STEPHANOPOULOS: Finally, on Wednesday, the president -- the nextpresident will call in his military commanders. Will he ask them, ashe promised in the campaign, to come back with a plan to withdrawAmerican forces from Iraq in 16 months?

AXELROD: Well, that was a -- that was something that he'sconsistently said. He believes that that is a reasonable timetable.We've moved a great distance from the time he started talking aboutthat, and now we're in an area where everyone agrees that we should beon a path to withdrawing those troops.

And he is going to begin that process, as promised, on that day.

STEPHANOPOULOS: He'll give the command?

AXELROD: Yes.

STEPHANOPOULOS: David Axelrod, thanks very much.

AXELROD: OK, great to be with you, George.

END