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CNBC/Wall Street Journal Democratic Candidates Debate - Part 1

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Date:
Location: New York, NY


September 25, 2003 Thursday

HEADLINE: CNBC/Wall Street Journal Democratic Candidate Presidential Debate 2004

ANCHORS: BRIAN WILLIAMS

BODY:
BRIAN WILLIAMS, host:

The closing bell on Wall Street. Both indexes down at the end of trading as we look at the numbers this final end of the trading session this Thursday.

Hello and welcome. We are going to talk about those numbers and what drives them.

For the next two hours, all 10 Democratic candidates for president assembled in one room. The debate begins now.

Announcer: From CNBC and the Wall Street Journal, the DEMOCRATIC CANDIDATES DEBATE. Now from Pace University in New York, here is Brian Williams.

WILLIAMS: Hello and welcome. CNBC and the Wall Street Journal, the co-sponsors, want to welcome you here and thank you for being with us.

In a way, the stakes could not be higher as we gather for the next two hours here on the campus of Pace University in lower Manhattan. We have an extraordinary field of Democratic candidates, extraordinary, for one, for its size. We are one short of an official NFL roster at 10.

Time is absolutely critical, so we will begin with the introduction of the candidates. We must tell you their order on the stage was randomly chosen by lottery, and we ask our friends assembled here in the audience to hold whoops, hollers and applause until the last name is read.

From Florida, Senator Bob Graham. From Missouri, Congressman Dick Gephardt. From Connecticut, Senator Joe Lieberman. From Massachusetts, Senator John Kerry. From North Carolina, Senator John Edwards. From Arkansas, retired General Wesley Clark. From Vermont, Governor Howard Dean. From New York, the Reverend Al Sharpton. From Illinois, Ambassador Carol Moseley Braun. And from Ohio, Congressman Dennis Kucinich.

We have a distinguished panel of journalists, questioners here today as well. I am joined by three of my colleagues in the business of politics and the economy: Gerald Seib from the Wall Street Journal, Ron Insana from CNBC, and Gloria Borger, also a CNBC colleague. Our thanks as well from all the organizers here today to the Democratic National Committee staff and their chairman, Terry McAuliffe.

Now to the rules, the eat your peas portion of our broadcast. All answers to direct questions will be given 60 seconds and just 60 seconds. Any response or rebuttal, at the moderator's discretion, I am supposed to add right here, will be given 30 seconds. As 60 winds down into 15, a light, clearly visible to all the candidates on the stage, will start flashing. And as 15 reaches zero, we will hear this sound. (Bell rings) Somewhere at "Jeopardy" they're wondering where it went.

Without further delay, we should probably get into the questioning, and this is that moderator discretion we talked about earlier, General Clark, we're going to begin with you.

A few moments ago on live television, the political editor of the Wall Street Journal called you "the hot story" here at this debate before we had even started. The American people are certainly anxious to learn more about you and anxious to know things like allegiance. And we want to clear something up. On May 11th of 2001, as reported in US News & World Report, you address the Republican Party Lincoln Day Dinner in Arkansas, expressed your support for the leadership of Ronald Reagan; for that matter, the leadership of our current President George W. Bush, his immediate staff and Cabinet, and indicated they were needed in place. Did you believe it then? Do you believe it now?

General WESLEY CLARK: I think it's been an incredible journey for me and for this country since early 2001. We elected a president we thought was a compassionate conservative. Instead, we got neither conservatism nor compassion. We got a man who recklessly cut taxes. We got a man who recklessly took us into war with Iraq. I was never partisan in the military, I served under Democratic presidents. I served under Republican presidents. But as I looked at this country and which way we were headed, I knew that I needed to speak out. And when I needed to speak out, there was only one party to come to. I am pro choice, I am pro affirmative action, I'm pro environment, pro health. I believe the United States should engage with allies. We should be a good player in the international community, and we should use force only as a last resort. That's why I'm proud to be a Democrat.

WILLIAMS: Governor Dean, let's throw a little discretion around. How about a rebuttal? Do you believe this is a Democrat you're standing next to?

Governor HOWARD DEAN: I think that's up to the voters in the Democratic Party to determine. I think the issues in this campaign are jobs and who can deliver them, which I have. I think the issues in the campaign are health insurance, which I've delivered. And those things are important. But the biggest issue in this campaign is the question of patriotism and democracy. I am tired of having John Ashcroft and Dick Cheney and Jerry Falwell and Rush Limbaugh lay a claim to patriotism and lay a claim to the American flag. That flag belongs to every single one of us, and I am tired of having our democracy hijacked by the right wing of this country. Those are incredibly important issues too, and they're going to be central to the debate in this campaign.

WILLIAMS: Governor, your time for that has expired.

Next question will go to, in order, Senator Kerry, Governor Dean, and General Clark. We're going to hear a lot about one figure tonight, that's $87 billion. It's been said it's more or less the down payment on the war with Iraq, the war with Afghanistan, the ongoing war on terrorism. Can we please tonight have your vote, up or down, yes or no, and, if yes, how do you pay for $87 billion? Senator Kerry, beginning with you.

Senator JOHN KERRY: Well, let me begin, Brian, by, first of all, saying I hope the fact that the ticker is down in both measures is not a reflection of the fact that all 10 of us are meeting here today. Secondly, let me say that if George Bush rebuilds Iraq the way he rebuilds the United States, they're going to lose three million jobs over the course of the next two years. I believe the 87 billion is at issue. I have introduced an amendment, together with Joe Biden, that calls on shared sacrifice in America. We need to ask the wealthiest people in our country to bear some of the burden as our troops and as the middle class in America is bearing the burden. And so I believe if we're going to pass any money at all, it ought to come at the expense of President Bush's ill-advised, unaffordable tax cut which is driving this country into deficit.

Secondly, there are some other conditions that I think are critical and, until I know how that comes out in the struggle, I can't tell you exactly which way I'm going to vote.

WILLIAMS: Governor Dean:

Gov. DEAN: I believe the $87 billion ought to come from the excessive and extraordinary tax cuts that this president foisted upon us that mainly went to people like Ken Lay, who ran Enron. But I think the test of leadership is not doing what's popular, I think it's doing what's right. I stood up against all the president's tax cut and I find it somewhat surprising that some folks are supporting some of the Bush tax cuts. They are a mistake. The middle class never got a tax cut for us to defend. Their college tuitions went up; their property taxes went up. Fire and police and first response services are going down, and local people are having to pay for that. So I believe not only should we get rid of the $87 billion worth of tax cuts to pay to support our troops, even though I did not support the war in the beginning. I think we have to support our troops. I also believe we ought to get rid of the entire Bush tax cut, it is bad for the economy and it has not created one job.

WILLIAMS: Is that an up or down yes or no on the 87 billion per se?

Gov. DEAN: On the $87 billion for Iraq...

WILLIAMS: Yes.

Gov. DEAN: ...we have no choice, but it has to be financed by getting rid of all the president's tax cuts.

WILLIAMS: General Clark:

Gen. CLARK: Well, Brian, if I've lear—learned one thing in my nine days in politics, you better be careful with hypothetical questions, and you've just asked one. Now, look, this $87 billion is the first we've heard from this administration of any—anything like a reasonable estimate of what the down payment is. Congress needs to really go after this figure. What is the strategy? What will make this operation a success? What will it take to exit? How do we get international support in there? There are dozens of questions to be asked on this. We need to make this operation a success, we need to support our troops, but we need answers on this. And the final answer that we need is the president needs to tell us how he's going to pay for it. This can't be in addition to the deficit. We want to see where the money's coming from.

WILLIAMS: To my colleagues on the panel, Gerry Seib from the Wall Street Journal:

GERALD SEIB (Wall Street Journal): Brian, let's continue the Iraq line with Senator Lieberman and Senator Graham, because for you it's not a hypothetical. Where do you come down on the $87 billion? Your colleagues have suggested paying for it, at least in part, by rolling back the top Bush tax cuts. Is that the way to go? Should the wealthy pay for Iraq and Afghanistan? Senator Lieberman, let's start with you.

Senator JOE LIEBERMAN: That is certainly my first choice as to—as to how we should finance this $87 billion. The fact is that the only Americans sacrificing today for our policy in Iraq, which is critical to our national security and world security, are the 140,000 Americans who are there in uniform for us. And, of course, we all agree that if George Bush had a better, more multilateral foreign policy, we wouldn't have to finance this alone. Again, he went to the United Nations this time like—like a beggar and was turned down by the nations of—of the world. But we have no choice but to—but to finance this program for two reasons. We have those 140,000 American troops there. We need to protect them. We need to protect them, and bring them home safe to their families. Secondly, we are involved in a great battle in the war on terrorism. Those terror—terrorists have poured in there. They're attacking Americans. They're attacking the institutions of civilization: the United Nations, Jordanian embassy, Muslim mosques. We cannot afford to lose this fight.

WILLIAMS: Time is up. Senator Graham:

Senator BOB GRAHAM: I will support whatever is required for the troops in Iraq. I will not support a dime for the profits of Halliburton. We have two clear issues. One, support of the troops. I believe that should be done by eliminating the tax breaks for the wealthiest of Americans and using that to pay the cost of occupation of Iraq. For the rebuilding of Iraq, I believe that we should look to the Iraqi oil source in the same way that in the 1990s we looked to the Mexican oil source in order to finance the bailout plan that we had for them. The policy that the administration is following in Iraq is typical of their policies elsewhere. It is disrespectful of other nations. We need to be inviting in to participate in this occupation. And it is anti-patriotic at the core because it's asking only one group of Americans, those soldiers in Iraq and their families, to pay the price of this occupation.

WILLIAMS: Gerry:

SEIB: Turning on Iraq to Congressman Kucinich and Reverend Sharpton. You've both been outspoken critics of the war, have said in fact you'd bring the troops home. But the fact is that, as of now, the troops are there, the United States is committed. Would you vote—will you vote yes or no on the $87 billion? And if the answer is no, what's the message you would send to the troops who are there today?

Representative DENNIS KUCINICH: The message is no. I will not vote for the 87 billion. I think we should support the troops, and I think we best support them by bringing them home. Our troops are at peril there because of this administration's policy. And I think that the American people deserve to know where every candidate on this stage stands on this issue, because we were each provided with a document, a security document that more or less advised us to stay the course, don't cut and run, commit up to 150,000 troops for five years at a cost of up to $245 billion. Matter of fact, General Clark was one of the authors of that document that was released in July. So I think the American people deserve to know that a candidate—and I'm the candidate who led the effort in the House of Representatives challenging the Bush administration's march towards war. I say bring the troops home unequivocally, bring them home and stop this commitment for 87 billion, which is only going to get us in deeper. After a while, we're going to be sacrificing our education, our health care, our housing, and the future of this nation.

WILLIAMS: Congressman.

Rep. KUCINICH: Bring them home.

WILLIAMS: Reverend Sharpton:

Reverend AL SHARPTON: Well, first of all, as—as the only New Yorker, I want to welcome General Clark to New York, and I want to welcome him to our list of candidates. And don't be defensive about just joining the party. Welcome to the party. It's better to be a new Democrat that's a real Democrat than a lot of old Democrats up here that have been acting like Republicans all along.

In terms of your question, I would unequivocally vote no because I think to continue to invest in a flawed and failed policy is not wise or prudent. It is really to try and chase bad investment with bad investment. The signal it would send to troops is that we really do love them. Real patriots don't put troops in harm's way on a flawed policy. We would send a signal that we're not going to ask you fight for health care, for the children of Iraq who don't have it or the children in South Carolina or New York. That's the signal. That's real patriotism.

WILLIAMS: Reverend Sharpton, thank you.

The questioning continues with Gloria Borger.

GLORIA BORGER (CNBC): This is for Senator Edwards and Congressman Gephardt. I want to get to the realm of the possible right now when it comes to this $87 billion, because I'm hearing Senator Kerry say, 'Until I really know how it kind of works out, I'm not sure how I'm going to go.' I hear Governor Dean say, 'Well, we want to get rid of all the president's tax cuts to finance it.' But it is a Republican Congress, as you well know that, so that is not likely to happen very quickly. So let me start with you, Senator Edwards. How would you vote on the $87 billion?

Senator JOHN EDWARDS: Well, what's happening, Gloria, is we have young men and women in a shooting gallery over there right now. It would be enormously irresponsible for any of us not to do what's necessary to support them. The second thing is when we went to Iraq, we, the United States of America, assumed a responsibility to share, and I emphasize share, with our allies and friends the effort to reconstruct. That does not mean George Bush should get a blank check. He certainly shouldn't get a blank check under these circumstances. So the answer to your question is, we will vote for, I will vote for what's necessary to support the troops. But we have a lot of questions that need to be answered first. We have to find out what—how he plans to bring our allies in, how much control he plans to give up in that process. We need to find out what, in fact, is our long-term plan there, how much money he plans to—to spend over the long term. He's given us no long-term budget nor any idea of about how he plans to pay for it. So I think there are a lot of questions that have to be answered. And as one of the people on this stage who has the responsibility, I take that responsibility very seriously.

WILLIAMS: Did you have a rebuttal to the senator?

BORGER: Well, just a quick little follow-up. I take it that means you might vote for something less than $87 billion. You might vote for something less and cut off money for reconstruction or whatever.

Sen. EDWARDS: Let me give you a simple answer. I will vote for what needs to be—what needs to be there to support our troops that are on the ground there. I will not vote—I will not vote for the additional money unless and when we have an explanation about our allies coming in and what we're going to do to share the costs with others.

BORGER: Congressman Gephardt, can you get specific?

Representative BILL GEPHARDT: Gloria, we've got to get answers to very important questions. I don't think you can assume that Republicans are just going to vote for whatever the president asks for either. We've got some tough questions to ask. What's the money go for? Are we going to just pay for the rehabilitation of Iraq? Is that part of this money, when we can't remodel schools in the United States, can't, apparently, get the electric grid straightened out in the United States, are we going to build an electric grid in Iraq? And who's going to help? I've been telling this president for over a year and a half, 'If you want to deal with Iraq, you've got to get help.' He still doesn't have the help. It's incomprehensible to me that he could go to the UN the other day and come away empty-handed. He is not leading on this issue. He needs to come to the Congress with answers to a lot of hard questions before Congress can make that decision.

WILLIAMS: Gloria.

BORGER: Now I'm going to ask the $87 billion question to Ambassador Moseley Braun. And I—obviously, you do not have a vote in Congress on this, so it's a little easier for you to talk about it. But do you think it's a smart move for your fellow Democrats out here to be sort of split on this decision on this vote the way they are?

Ambassador CAROL MOSELEY BRAUN: I stand with the mothers of the young men and women who are in the desert in Iraq and who, right now, are in a shooting gallery without even sufficient supplies to sustain themselves. And so it is absolutely, I think, critical that we not cut and run, that we provide our troops with what they need and that we not just blow up that country and leave it blown up. We have a responsibility. Following in on that responsibility means we will have to vote some money. The estimates vary as to what that is. Almost a year ago, I called on this president not to go into Iraq, and I called—I called on the Congress not to give him the authority to go into Iraq. And at the same time, asked the question, 'Mr. President, how much is this going to cost?' He didn't answer the question then. He's not answering the question now. But I believe it's going to be important for us to come up with the money to make certain that our young men and women and our reputation as leaders in the world is not permanently destroyed by the folly of preemptive war.

WILLIAMS: Ambassador, thank you. We gave you back the two seconds back for clearing your throat, so we're even steven.

The questioning continues with CNBC's Ron Insana.

RON INSANA (CNBC): Thank you, Brian. I'd like to turn to President Bush's tax cuts and your plans for them. Congressman Gephardt and Governor Dean have suggested they will roll back the increases in the child tax credit and some other middle-class tax benefits.

Senator Kerry, you have suggested that anyone who walks away from the middle class is not a true Democrat. Are your colleagues abandoning the middle class?

Sen. KERRY: We Democrats fought hard to put those tax cuts in place, Ron. Those represent the efforts of Democrats to try to reach the middle class of America. The 10 percent bracket wasn't George Bush's idea; it was our idea. It was in keeping with the spirit of our party to try to help the average American get ahead in a country where increasingly average Americans are getting stomped on, where there's an unfairness in the workplace, where corporate executives, as we've seen, are walking away with millions and sticking the average American with the bill. I think Governor Dean is absolutely wrong, and he's wrong in his facts. The fact is that 32 million American couples get about $1,000 out of the tax cut. The fact is that 16 million American families get 1,500 to $3,000 from it. Just ask Ted Walsh and Mya Gloss in Barrington, New Hampshire. He's a firefighter, she's a teacher. If Governor Dean has his way and Congressman Gephardt, they're going to pay $3,000 additional taxes. We can cut the deficit in half, we can be fiscally responsible, but we don't have to do it on the backs of the middle class.

WILLIAMS: Senator, thanks.

We're going to divert and go to Governor Dean, as we owe you a response. And we'll treat it as a full minute because it is a response to Ron's direct question.

Gov. DEAN: With all due respect to Senator Kerry and the others from Washington who voted for these tax cuts, this is exactly why the balance—the budget is so far out of balance, Washington politicians promising people everything. You can have tax cuts, you can have insurance, you can have special education. We cannot win as Democrats if we take that kind of oppo—if we take that kind of tack. Tell the truth. We cannot afford all the tax cuts, the health insurance, special ed imbalance and the budget, and we have to do those things. The fact of the matter is that 60 percent of Americans at the bottom got $325. That is not a tax cut. Whatever you got out there in tax cuts, the majority of Americans saw their kids' college tuition go up, their property taxes go up because people like the friend—Senator Kerry's friend in Barrington got laid off because of the enormous tax cuts and no money coming to the states. Let's call this one right. Let's be fiscally responsible and balance the budget. Bob Graham and I are the only people up here that have ever balanced a budget, and I think we ought to balance this budget and not promise more than we can deliver.

WILLIAMS: Congressman Gephardt, you get to answer a full question.

Rep. GEPHARDT: Thank you. I don't agree with John. I think that's the wrong policy, and let me tell you why. This plan has failed. The president's economic plan has failed. And we should not keep half of a failure or a quarter of a failure or two-thirds of a failure. If it's failed, let's change the policy. Let's do something else. That's why I have a health care plan that I think will stimulate the economy much more than the Bush tax cuts, will create more jobs, put more people to work and solve a major, major problem that we have for every American. The other thing I'd say is if you do what I'm saying, we'll go back to the Clinton tax code. That was a good tax code. I led the fight in 1993 to put those changes in place. It worked, and my plan will put more money into the average family than the Bush tax cuts in total.

WILLIAMS: Senator Kerry, I'll give you 30 rebuttal.

Sen. KERRY: Again, with Governor Dean, Governor Dean didn't balance his budget alone. The federal government gave him about 21 percent of that budget in order to help balance it. And the fact is that going back to the Clinton tax cuts doesn't create another job, it puts a burden on current predicament of middle class Americans. They lose their current revenue. What's kept America's economy moving in the last two and a half years has been consumer spending. If all of a sudden when we're trying to recover, we suck a whole lot of money out of those consumers, we are not going to be able to keep the economy moving. It's the wrong policy, we can have the deficit cut in half...

WILLIAMS: Time.

Sen. KERRY: ...the way Bill Clinton did it...

WILLIAMS: Time.

Sen. KERRY: ...and I believe we don't have to do it on the backs of the middle class.

WILLIAMS: Time's up for rebuttal. Ron, you can continue your questioning.

INSANA: General Clark, in your eighth day as a politician, you began to outline some of your economic priorities. You suggested you would keep some of the middle class tax breaks but essentially get rid of much of the rest. You spent time as an investment banker. Don't you believe that lower capital gains taxes, lower dividend taxes, not only help the rich and Wall Street but also help to create jobs and help the economy overall?

Gen. CLARK: I think that what we need to do in this economy is go back and look at our overall position for a deficit. We started with a $5 trillion surplus, we went to a $5 trillion deficit projected over 10 years. Now, this administration hasn't had a real economic strategy. All it's had is a tax cut policy. We're faced with a very serious deficit problem. We need to keep the—we need to go back to the top 2 percent and repeal those tax cuts. We need to put all the government spending programs on the table, including the military programs. We need to then have no new programs unless you can pay as you go. And then we need a simpler, fairer, more progressive tax code. And I'll be coming out in a few weeks with my own economic plan to address the deficit. It will be a central point of focus of my administration, and I think it's a tough problem. But it's a problem we as Americans, if we work together and bring together on this issue, we can solve it and still achieve the goals we need.

WILLIAMS: I want to turn to taxes for a little bit here. There's a lot of talk, as you well know, in Washington, about deferring tax cuts, rolling back tax cuts, but let's talk about the guarantee not to raise taxes, perhaps.

And Senator Graham, why don't I begin with you. Are you willing to say here and now those famous words in a Graham presidency, there would be no new taxes?

Sen. GRAHAM: No, and you don't have to watch my lips saying that word. I—I believe it's irresponsible for any candidate, particularly a candidate for the president of the United States, to make an announcement in advance that they would never seek to increase federal revenue or reallocate the responsibility for paying the cost of the federal government. In the first year of President Bush's administration, this country, this city, was struck with a horrendous terrorist attack which has resulted in billions of unanticipated new responsibilities for the federal government. What we are doing now is we are asking our children and our grandchildren to pay for these costs. We're writing a deficit bill the likes of which we've never seen, which we are not going to assume responsibility for but ask our children.

WILLIAMS: Senator Lieberman, direct question, 60 seconds. Same question. Would you exert the same sort of caution or can you say that revenue, existing revenue, would be enough, no new taxes under a Lieberman administration?

Senator JOSEPH LIEBERMAN: Same answer that Bob Graham gave. It's the—it's the right answer, and immediately, as president, I would attempt to repeal the Bush tax cuts on the highest income Americans. They—they don't need it. It's sent us into deficit that will—will cost the middle class, and as Bob said, our children and grandchildren, all sorts of money in the future. There's a choice here, and I want to take it to a larger point. The debate going on between us is really a debate about whether we want to take the Democratic Party back to where it was before Bill Clinton transformed it in 1992 or whether we want to take it forward. And some of my opponents here, including Howard Dean, Dick Gephardt, want to repeal all the taxes. That, as John has said, would mean a middle class tax increase. Bill Clinton was for a middle class tax cut. Some would spend over $3 trillion. That would put us as much into debt as George Bush has done and take all that money out of the Social Security trust fund. Some forget that Bill Clinton was for trade that created jobs, and they're against trade today.

WILLIAMS: Time.

Sen. LIEBERMAN: I want to build on a Clinton/Gore record and create 10 million new jobs...

WILLIAMS: Time, Senator.

Sen. LIEBERMAN: ...in the first four years of my administration.

WILLIAMS: Time, Senator. To Gloria.

BORGER: Let's go to Senator Edwards on this question. If, as president, you decide to cancel tax cuts, that means the people's taxes are naturally going to go up. Yet a lot of people here say that that is not a tax increase. So how can you tell voters that their taxes will increase but they are not getting a tax increase?

Sen. EDWARDS: Well, here's what I say to voters. What I'm going to do is something dramatically different than this president is doing. Everyone on this stage is against Bush's tax cuts for the rich, but there's something more radical than that going on here. What this president is doing is trying to shift the tax burden in America from wealth to work. He wants to eliminate the capital gains tax, the dividends tax, the estate tax, all the taxation of wealth or passive income on wealth, and shift that tax burden to people who work for a living. It's an enormous mistake. The middle class working people made this country what it is today and I would say to Governor Dean and Dick Gephardt, I grew up in a middle class family whose taxes they're talking about raising. For a family of four who makes about $40,000 a year, we're talking about almost $2,000. Two thousand dollars that can be used to pay a lot of bills. What we ought to be doing instead is empowering those families, helping them buy a house, helping them invest, lowering their capital gains rate so we improve the—expand the investor class in America.

WILLIAMS: Senator, time. Gloria again.

BORGER: Reverend Sharpton and Ambassador Moseley Braun, many of you here around this table were talking today about tax cuts for the middle class vs. tax cuts for the wealthy. This leads me to ask a very basic question of you, and that is how do you define rich in this country?

Rev. SHARPTON: Well, I think clearly, rich are those that are above a certain income bracket, that are able to, without any concern, pay for their livelihood and their family. I think what we're hearing here, though, is something that is particularly disturbing to me. I think that we're not tax cuts, we're talking tax shifts, and what—what President Bush has offered, and some are supporting, is to give us $300 at the end of the day when we bring about an economy where interest rates go too high, where mortgage lending can't happen for people right here in Queens. My two daughters are here tonight. Would I rather give them $300 that if they buy a pair of sneakers apiece, the $300 is gone, or would I rather them be able to buy a home and have interest rates where they can have a home mortgage? If you talk to the American people like that, they will understand the fallacy of that. And that's not about reading lips because we've read Bush's lips. They lied. He said that there are no tax cuts yet he calls the shift where state tax, sales tax and property taxes went up.

WILLIAMS: Reverend.

Rev. SHARPTON: That's a tax hike where I come from.

WILLIAMS: Rev—Reverend, thank you.

Gloria.

BORGER: Ambassador Moseley Braun, who is rich and who is in the middle class?

Amb. BRAUN: The—the—the economic policies, the trickle-down economics that this administration has given us has created a situation probably in recent—in our memory—that we've never seen before in our memory of embedded wealth, entrenched poverty and a shrinking middle class. That, it seems to me, is the antithesis, the opposite, of what the American dream is all about. And so, what we are not—we're not talking about class warfare, which I think is suggested by your question. This is not holding it against someone for doing well. But as people do well, I think they have a responsibility to build community. And that means getting away from an ethos of greed that we have seen all too much of in recent times and making certain that the economy works for every American and that opportunity is kept alive in this country.

WILLIAMS: Ambassador, thank you.

Congressman Kucinich, you talk often about your family history in this country and your background in the state of Ohio. How do you define rich these days?

Rep. KUCINICH: Well, I think it's defined when you consider that the top 272,000 taxpayers are getting as much of a benefit under the Bush tax cut as the bottom 129 million. So I think that's what is happening in this society is there is a maldistribution of the wealth.

And I'm disappointed that my fellow colleagues here haven't continued to make the connection between the rising deficit and the war in Iraq, because unless we commit ourselves to get out of Iraq, get the UN in and get the US out, we're going to see rising deficits. They're talking about spending hundreds of billions of dollars for this war. And if you look at the maldistribution of wealth, it's going to be accelerated by this war. Are we going to have tax cuts for the wealthy and then ask people later on to increase their taxes? Are we going to have the Pentagon budget go to $550 billion within eight years and ask the people to pay more taxes? I think we have to reorder our priorities. It begins with getting out of Iraq and putting money again into health care, into education, into job creation.

WILLIAMS: You set us up nicely, Congressman, for the focus of our next segment.

We are going to take a break. Our focus tonight, of course, overall, is the economy. Our time frame, two hours. Our guests, the 10 declared Democrats in the race for president. We're joining you this evening from the campus of Pace University in New York. We'll continue right after this.

Announcer: THE DEMOCRATIC CANDIDATES DEBATE 2004 is sponsored in part by...

(Announcements)

WILLIAMS: We are back. From the campus of Pace University in Lower Manhattan, the presidential debate with all the 10 declared candidates in the Democratic Party for president. Just one housekeeping note. Fairness is enormously important to us. We are running a clock on all answers, all rebuttals. And it is our—we will do our level best that everything come out on time and even at the end of this evening.

We'll resume the questioning with Congressman Gephardt.

You have a lot of union support, Congressman. They've put a premium, it is said, on not just creating new jobs but protecting old ones. This week, your spokesman called Senator Kerry a "knee-jerk supporter of free trade." Is that fair, Congressman?

Representative DICK GEPHARDT: Well, the fight for labor unions and working families is in my bones. My dad was a Teamster and a milk truck driver, and I'm very proud of what he stood for and represented in my life and in my family's life. And I'm proud to have the support of working families.

This administration has declared war on the middle class. They've lost more jobs in the last two and a half years than the last 11 presidents put together. He's lost more jobs than Herbert Hoover almost. This is a colossal disaster for the president and for the country. We need to have a policy to build new jobs in this country. Part of it is fair trade, not just free trade. Everybody here—most everybody here voted for NAFTA, voted for the China agreement. I did not. I led the fight against it. That's the kind of trade policy we need that globalizes with fairness and standards around the world, so work wherever it is performed...

WILLIAMS: Time.

Rep. GEPHARDT: ...is given a fair wage...

WILLIAMS: Congressman.

Rep. GEPHARDT: ...for their hard work.

WILLIAMS: Congressman, thank you.

Senator Kerry, you have accused Governor Dean of playing on workers' fears and advocating protectionism and saying that under him it threatens to throw the economy into a tailspin. Is that fair?

Sen. KERRY: Yes, it is fair because Governor Dean on a number of occasions across the country has said very specifically that we should not trade with countries until they have labor and environment standards that are equal to the United States. That means we would trade with no countries. It is—it is a policy for shutting the door. It's either a policy for shutting the door if you believe it or it's a policy of just telling people what they want to hear.

I think there—there's a middle ground that's smart for America. No president can shut the door to globalization and no president should. President Clinton traded. We created 23 million jobs in the 1990s. We balanced the budget. We paid down the debt. We brought more women into the work force than any time in American history. We lifted a hundred times the number of people out of poverty of Ronald Reagan. We can do that again, but we have to enforce trade agreements. We have to be fair in our trade. And I intend to sign no trade agreement that doesn't have adequate labor and environment standards. I'm going to raise the enforcement level, but I'm not going to shut the door because that would depress the economy of our country.

WILLIAMS: Senator Kerry, thank you.

Governor Dean, you have said that the senator from Massachusetts lacks an understanding of the job loss in this country. You have heard the accusation from him.

Gov. DEAN: I think that's true. You know, to listen to Senator Lieberman, Senator Kerry, Representative Gephardt, I'm anti-Israel, I'm anti-trade, I'm anti-Medicare and I'm anti-Social Security. I wonder how I ended up in the Democratic Party. I'm not a new entrant to the Democratic Party. I've been here a long time.

I voted for—I supported NAFTA. I supported the WTO. We benefited in Vermont from trade. But I have spent a lot of time in the Midwest in the last couple of years. Our manufacturing jobs are hemorrhaging. We have to go back and revise every single trade agreement that we have to include labor standards, environmental standards and human rights standards. And if we don't, the trade policy that we seek to help globalize and help workers around the country and the world is going to fail. I want a successful trade policy, but I am no longer willing to sacrifice the jobs of middle-class Americans in order to pad the bottom lines of multinational corporations. Trade has to be fair to workers, not just multinational corporations. And I think Senator Kerry is insensitive to the plight of workers, American workers who have lost their manufacturing jobs.

WILLIAMS: Senator Kerry, rebuttal time, and then perhaps Congressman Gephardt.

Sen. KERRY: Well, I gave a speech in Detroit several days ago which reflects an economic policy that I've laid out over the last years that will address the manufacturing loss.

I'm not insensitive to the jobs. I'm desperately concerned about those jobs. But you don't fix them by pandering to people and telling them you're going to shut the door. You have to grow jobs. We need to—we need to increase our commitment to science in America, to venture capital, to the kinds of incentives that draw capital to the creation of jobs. Democrats can't love jobs and hate the people who create them.

WILLIAMS: Senator.

Sen. KERRY: We need to encourage job creation and trade, but fair trade.

WILLIAMS: Time.

Sen. KERRY: And I've shown how that can happen.

WILLIAMS: Time is up on that.

Congressman, we'll try to get to you. The questioning continues with Gerry Seib.

SEIB: I'd like to turn this question of job loss to Senator Graham, if I could.

What would you do as president, if anything, to either discourage or maybe even punish American companies that take jobs overseas or to deal with allies such as Mexico that have lower labor and environmental standards that make them attractive places for American factories?

Sen. GRAHAM: I am the jobs candidate. And I'm not only talking about what I will do but what I have done. While I was governor of Florida, when the state had a population of approximately 12 million people, I presided over the creation of 1.4 million new jobs in Florida, new jobs that resulted in, for the first time in our state's history, the per cap income in Florida being above the national average, resulted in Florida for three years in a row being recognized as the state that had the best climate for economic development.

I also am the candidate who has the most comprehensive economic plan, Opportunity For All, which lays out the pillars of creating new jobs in America: balancing the budget, making our tax program more fair and progressive, third, investing in America by rebuilding America. If we can afford to rebuild the bridges, the roads, the schools and electric system of Iraq, we can afford to invest in rebuilding America.

WILLIAMS: Senator Graham, thank you.

Before Gerry continues, just been told by our timekeepers again—another reminder—when the bell sounds, we must stop talking. We're getting sloppy and over on time. It'll have to come out at the end.

Gerry, please.

SEIB: Senator Edwards and Reverend Sharpton, on this question of job loss, you both had a fairly tough line. I think, Senator Edwards, you've talked about withholding tax credits from companies that move jobs overseas.

Sen. EDWARDS: I have.

SEIB: Reverend Sharpton, you've talked about punishing companies that move overseas to dodge American taxes. Isn't that, though, a message that builds walls between the US and the rest of the world economy on which our own prosperity has become so dependent? Reverend Sharpton.

Rev. SHARPTON: No. When I say that we should punish companies that go and have offshore corporations to duck taxes, that doesn't affect our standing with any other country. That affects people like Enron that had 3,000 offshore companies to duck taxes. That doesn't hurt other countries in—in terms of our enforcement.

I think what we should say to other countries is the way that we can develop them in proper relationships is to first have a strong country here. We're on an island right now that one side trades trillions on Wall Street, the other side you have people in Harlem and Washington Heights trying to choose between rent and prescription drugs. We have a responsibility to those citizens, and we need to make that responsibility our priority before we try and help to accommodate companies that don't want to stand up for their responsibilities.

We're told the responsible thing to do is serve the country. But if you're a multibillionaire, the responsible thing to do is to duck taxes and to try and downsize employment. That's ridiculous.

WILLIAMS: I'll take a 30-second rebuttal here from General Clark before we continue with Gerry.

Gen. CLARK: Well, I think that American business is the source of jobs and opportunity in this country. We need to look very carefully at how we create positive incentives for business. And we need to go right at the jobs problem in this country. I've got a better job plan in eight days than George Bush had in three years in this country, and it will work, it's significant, and we need to concentrate on creating jobs here.

WILLIAMS: Thank you, general.

Gerry, your question for the s...

SEIB: Senator Edwards, come back to you. How do you draw the line between building walls to protect jobs and building walls that create isolationism economically?

Sen. EDWARDS: Well, we should start by saying this is not an academic discussion. Over three million Americans under this administration have lost the self-respect and the self-dignity that comes with a paycheck and a job. That's the starting place. This president doesn't understand that. The thing what we ought to do is have a tax system, to answer your question, that's fair, that values hard work and the middle class over wealth. We, in fact, ought to have trade agreements that have real protections in them that allow our people here at home to compete. But we also ought to close down loopholes in our tax code that give American companies an incentive to go overseas. In fact, I think we ought to go further than that. We ought to give tax breaks to American companies that will keep jobs right here in America. But I think we have to do another thing—that's to protect the jobs we have. We have to create jobs. And in order to create jobs, we ought to identify those places in America where job loss has occurred and say to new business, 'If you'll start there, we'll give you the seed money with the National Venture Capital Fund.' And second, to existing business and industry, 'If you'll locate in an urban area, in the inner city, in a rural area, we will give...

WILLIAMS: Senator, thank you.

Sen. EDWARDS: ...you incentives to go there.

WILLIAMS: Senator, thank you.

Questioning continues with Ron Insana.

INSANA: Thank you, Brian. I—we're talking about a trade-off between jobs and trade. I'd like to switch the conversation a little bit to the budget priorities of the Dem—Democratic Party and jobs.

Senator Lieberman, Ambassador Moseley Braun, you seem to have different priorities in these issues.

Senator, you tout jobs as the main portion of your economic program.

Ambassador Moseley Braun, you have suggested a balanced budget is the utmost priority.

Senator, first, which should be the priority of the Democratic Party: balancing the budget or creating jobs?

Senator JOSEPH LIEBERMAN: We can do both, but the priority has to be to create jobs. I—I've got a—an aggressive, constructive economic plan which I am confident will create 10 million jobs in the first four years instead of losing three and a half billion as George Bush has already done. For the details, I would forward folks to my Web site, joe2004.com, but—you can imagine how happy I was the day Joe Biden announced he was not running for president of the United States—but fiscal responsibility, paying down the debt, is a critical part of creating confidence again in our economy. And incidentally, so, too, is trade. I'm for trade because trade creates jobs. You cannot build a wall around America and create one more job. The last president to try to do that was Herbert Hoover, and it led to the Great Depression. Bill Clinton understood that trade creates jobs, that's why—one in five jobs in America today is dependent on trade. I want to increase trade. I want to force other countries to play by the rules...

WILLIAMS: Thanks.

Sen. LIEBERMAN: ...and that'll create more jobs.

WILLIAMS: Ron.

INSANA: Ambassador Moseley Braun, would you balance the budget first in order to create an environment where the economy is on better footing so jobs can be created?

Amb. BRAUN: You have to create jobs, and you have to get the economy going to create the economic—the—the robustness in the economy that will produce the revenue to balance the budget. I mean, balancing the budget is a priority that will come when we create jobs. And I thought, Joe, you were going to say something about, you know, the party of fiscal responsibility, we've already done it.

When Bill Clinton became president, we balanced the budget and created jobs and had this country on a—on a good economic foot, and—and the people were doing well. We were in a time of prosperity. This administration has not only had a job hemorrhage but sent us into record deficits. Their policy of borrow and pass the buck has given—has—has just simply shifted the responsibilities not only to state and local governments and taxpayers but to our grandchildren. And that's wrong.

We, as the Democratic Party, stands for getting this economy back on track and preserving the promise of the American dream that we will pay our bills as we go.

WILLIAMS: Ambassador, thank you. Ron:

INSANA: General Clark and Congressman Kucinich, Congress has in the past bailed out industries like airlines, like autos, in order to save jobs. There are some in Congress who are worried that there's a looming financial disaster among these government-sponsored entities that provide home mortgages, Fannie Mae and Freddie Mac, and that should something terrible happen there in the wake of an interest rate problem in this economy, we could see systemic financial problem that destroys jobs.

How would you deal, General Clark, first with, a potential problem at a place like Fannie Mae or Freddie Mac?

Gen. CLARK: Well, I think we do have to recognize that home ownership is critical in this country, and we're sustaining our economy right now off the refinancing proceeds of the American family. I've refinanced my home. I'm sure many other people here have and most of my family has. But we don't want anything to happen to these mortgage agencies because they are the ones who are helping to just—to facilitate homeownership. So we really do need to investigate this. This is an area where the way the process works is that if there's a sudden rise in interest rates, these institutions will be in jeopardy. It's time to relook again the real meaning of the federal guarantee, or whether or not there is a fair—federal guarantee behind them. But one thing I would do as president, I'm going to assure that every American has the right to own a home and will maintain his homeownership no matter what might change and what problems there might be in these institutions.

WILLIAMS: General, thanks.

Gen. CLARK: We'll fix this.

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