CNBC Closing Bell - Transcript

Interview

CNBC Closing Bell - Transcript

MS. BARTIROMO: In an exclusive interview, I asked the president about those calls and the importance of free trade.

PRESIDENT BUSH: (From videotape.) Well, I -- I -- I've -- I've long worried about protectionism and isolationism here in America. We -- we -- we -- we -- we've had periods of protectionism in our past, and I'm concerned about protectionist sentiment because I believe that a world that welcomes U.S. products, goods and services is a -- is beneficial for American farmers and manufacturers. In other words, if there was more customers for what we produce here in America, the better off the producers will be.

It's also good for consumers that we have open markets. In other words, the more options the consumer had, the less inflationary our society can be, and I think it's good when consumers are able to have a variety of choices.

And so I -- I -- I -- I -- it's going to be very important for me to continue to explain the positive side of trade. In other words, people are getting work. There's a lot of people whose jobs depend on exportation of goods and services. There are people whose jobs benefited as a result of foreign capital coming into our country. I think about the -- some of the auto manufacturers in the South.

But I understand why people are anxious about trade. People are saying, "I may lose my job." In other words, somebody else is going to get my job because of free trade, and what's important for people like me who believe in markets is, one, to explain the economic benefits, but also to assure people that there's trade adjustment programs to help people retrain for better jobs that -- that have got stability.

MS. BARTIROMO: Let me switch to housing. We've had a meltdown in housing. Things are expected to get worse because you've got new rates resetting this fall. Who's to blame -- lenders, borrowers or regulators?

PRESIDENT BUSH: First of all, there's a lot of people who can afford the houses that they live in, and -- and -- and -- and -- and they're going to be fine. There's no question there are particularly some -- some people on the margin that are going to have to -- that are defaulted on their loans, and that troubles me. It troubles me because I want people to be able to stay in their homes. And the solution, it seems like to me, is not more government or more regulation, but to help people refinance their homes; is to -- is to, you know, have some transparent policies as well as counseling policies that find people, identify people and encourage them to go to refinance their home and encourage the lenders to be, you know, refinancers.

What happened, it seems like to me, in the housing -- again, I'm not an expert, but there was a lot of incentives for people to, you know, buy homes.

And so we had a huge supply of homes. And until the supply and demand gets back in balance, you're going to see some softness.

But so far the softness is regional. In other words, it's not a nationwide phenomenon. There are, you know, parts of our country that are doing just fine in their real estate markets.

And, you know, we're paying close attention to it and we're going to make sure that government policy is not counterproductive but consumers can be helped to stay in their homes; for example, through FHA reform.

MS. BARTIROMO: So were the rate cuts enough or would you think to encourage more?

PRESIDENT BUSH: Well, I knew you would try to -- try to suck me into the dialog of monetary policy.

MS. BARTIROMO: (Chuckles.)

PRESIDENT BUSH: But you know full well that the Federal Reserve is independent from the president. I never (sent ?) Ben Bernanke instructions, he didn't expect me to send him instructions, nor do I publicly comment on what I would like to see done on monetary policy. I can talk about fiscal policy all day long; and that is, we're going to keep taxes low and make sure that Congress doesn't overspend the people's money.

MS. BARTIROMO: Let's talk about that, in particular the health care coverage. You vetoed a plan last week to expand health care coverage for millions of low-income children. Why?

PRESIDENT BUSH: First of all, the Democrats are misleading people when they say this is a plan to expand health care to millions of low-income children. The plan that I vetoed would have expanded health care coverage to families making up to 80-something-thousand dollars in some cases, which would have meant people would have been moving from private insurance to public -- to public care. And I don't think that's good. I do support a program that helps poor children, but the program that I vetoed expanded health care, government health care.

By the way, just so you know some of the facts -- I think will interest you -- about a half-million poor children under the program as it exists today don't get coverage. And so my first call to Congress is, let's make sure they get coverage. Secondly, in some states, like six or seven states, the states use the money aimed for poor children -- they spend more money on adults than they do on children.

So my call to Congress was, if you're truly for poor children -- like I am -- let's make sure the program answers that need, and let's not expand the federal role in health care. See, I believe that for some members this was an important step toward the federalization of health care. Really fine people believe that the best health care policy is when the federal government runs it. I believe the best health care policy is to take care of those who can't help themselves, like poor children, and encourage the expansion in the private sector. I'm for private medicine. I want decisions being made between doctor and patient, not between people here in Washington, D.C.

And so the -- I'm vetoing the bill.

I'm working hard to see that it's not overridden, that my veto is sustained. And then I'll be willing to work with the Democrats to focus the program on poor children.

MS. BARTIROMO: One Democrat -- and I do admit this was a Democrat saying, look, all of a sudden you found fiscal discipline now and you veto this. But how come you signed the farm bill, you signed the highway bill and others passed by Republican Congresses that substantially exceeded your initial targets?

PRESIDENT BUSH: I would remind that person that over the course of my presidency we have been able to reduce the federal deficit substantially. As I told you, it's down to 1.2 percent of GDP, which is historically low, very low. And I was able to do so working with the Congress, and at the same time fight a war and make sure our kids had the support and troops the equipment they needed, and kept taxes low. In other words, the fiscal policy of low taxes and setting fiscal priorities here in Washington has worked. And we're on our way to balancing this budget, and it's going to be very important for Congress not to overspend nor raise taxes.

MS. BARTIROMO: What do you think of Senator Clinton's idea, the kid bond idea? It sounds similar, actually, to your idea of a private account for Social Security.

PRESIDENT BUSH: What my idea in social security was is that rather than putting your money into a trust that was not generating a rate of return that was fair, that you ought to be allowed to take some of your money and set it aside in a personal account. But that's your money already contributed. In other words, it's setting aside a part of the portion of your contribution in the Social Security system, which I think is vastly different from what she proposed.

MS. BARTIROMO: Do you think that her plan is a good one?

PRESIDENT BUSH: I'm not going to interject myself into the presidential campaign yet.

MS. BARTIROMO: You have more than a year left in your second term. What are your goals for the economy for the rest of your service here?

PRESIDENT BUSH: Well, first is to keep taxes down and keep -- you know, and to have good, wise fiscal policy. To work with Congress and say, "Look, let's set priorities and meet those priorities," and be willing to use the veto if they want to overspend, which, at initial blush, it looks like they're going to try to do.

And secondly is to keep opening up markets for U.S. goods and services. One of the reasons why our third quarter growth was good was because of exports. In other words, when we export, it means growth in our economy. When we export, it means people are going to work. And so try to get these free trade agreements passed. Continue to work on energy policy that makes us less dependent on foreign sources of energy.

And so I've got an important agenda that -- and win the war on terror and protect the homeland, by the way. One of the best economic measures we can do is make sure we don't get attacked again. As you know, the attacks of September the 11th crippled our economy for a short period of time -- I wouldn't say "crippled," it's not the right word -- damaged our economy for a short period of time. And -- you know, and we'll keep working night and day to make sure we protect the American people.

MS. BARTIROMO: So is Social Security off the table at this point or will you try to fix it in your remaining time?

PRESIDENT BUSH: You know, I'd like to, but, remember, I'm the person that has laid this issue out in my State of the Union address and talked specifically about how to address Social Security. Whether or not Congress has got the will to step up and try to get something done, I don't know. We'll continue to try. My door is open. I'd like very much for people of both parties to come in and say, you know, you gave us a good starting point, you gave us a good idea; let's get together and get something done, because Social Security and Medicare, the unfunded liabilities inherent in those programs are -- are -- are two of the most significant fiscal challenges this country faces. I mean, this is a -- this is a real problem for us that we got to get done.

MS. BARTIROMO: Did you see the Republican candidate debate? What did you think? Who came out a winner?

PRESIDENT BUSH: Were you there?

MS. BARTIROMO: Yes, I was. I was the co-host.

PRESIDENT BUSH: See, you're trying to hoax me into saying -- you had brilliant questions.

MS. BARTIROMO: (Laughs.) That's not what I'm looking for, Mr. President.

PRESIDENT BUSH: I didn't watch. I didn't watch. I was --

MS. BARTIROMO: What did you think of Fred Thompson joining the --

PRESIDENT BUSH: I've been watching. You know, people are going to try to get me to comment on the -- on the primaries, and I'm not going to do it. I will tell you I believe that whomever we nominate will win the general election. Our candidates are going to be talking about being tough on these terrorists and keeping taxes low, and that's a winning message.

MS. BARTIROMO: Any advice for them?

PRESIDENT BUSH: I would just tell people what's in -- what's in their heart, you know?

MS. BARTIROMO: Let me ask you about oil, Mr. President; clearly a worry at $80 a barrel. Why is it that we really have not seen a substantial energy plan? We all know that we have to be reliant on foreign oil, but should there be more incentives for hybrids, perhaps a gasoline tax, something?

PRESIDENT BUSH: Well, I think we -- we have had a significant energy bill passed that is comprehensive in nature, that couples good conservation policy with diversification away from oil. I mean, one -- one of the things that has taken place in our country that doesn't get much notice is the advent of ethanol. Right now ethanol is mainly created through the use of corn, and you know, we've gone from about a billion gallons of ethanol to 8 billion gallons of ethanol on an annual basis. And we're spending a fair amount of taxpayers' money on research and development on cellulosic ethanol, which is a fancy word for using, like, wood chips to make ethanol -- or corn stalks or switchgrass. The whole purpose is to incent people to develop the technologies that'll enable us to get off oil. You can't get -- you can't get off oil overnight, but you can diversify away from oil over time, and that's precisely what we're doing now in the most substantial ways of any administration in history.

Secondly, we've got to figure out new ways to produce electricity and actually use old ways in a safe way produce electricity. That's why I'm for clean -- you know, new nuke -- new nuclear power plants because I believe the engineering is safe, and I know that, you know, nuclear power is good for the environment.

MS. BARTIROMO: What can you tell us about the war? How is the war in Iraq going?

PRESIDENT BUSH: Well, I think it's -- there's been a change in Iraq, because people are now beginning to feel more secure. And when people feel more secure, they take a -- more of a risk toward, you know, following their instincts, which is to have a peaceful society under a constitution that they voted for. And so I'm pleased with the security progress. There's more work to be done, but the surge that David Petraeus recommended to me is working. More and more Iraqis are becoming more and more capable of handling their own security. We're moving troops out. As David Petraeus said, we'll be able to reduce, you know, from 20 battalions to 5 -- 15 over till next July, and that's on schedule, it looks like.

The political progress is, you know, is spotty in that they're doing some good things and they need to do others. And I talked to Prime Minister Maliki today and encouraged him to work hard to see if he can't get law out of his parliament that will send a signal to the Iraqis that whether you be Shi'a, Sunni or Kurd, this government is for everybody. And in the meantime, however, there's reconciliation taking place at the grassroots level.

In other words, people are -- people are coming together at the local government and providing services and taking federal monies being distributed throughout the country and using it for the embetterment of their people. And so you're seeing a democracy emerge, and it's exciting. It's in our interest that we succeed.

MS. BARTIROMO: And finally on Iran, shouldn't we be opening up a dialogue? I mean, this conversation about the possibility of going into Iran -- a lot of people say, first, we need to open up a dialogue with them and try to use diplomacy.

PRESIDENT BUSH: I know the first thing that has to happen is the Iranians -- we are using diplomacy. But it's the -- (laughs) -- it's diplomacy of nations coming together, saying to Iran with one voice, give up your weapons ambitions and then you can have a dialogue with the United States. In other words, they know exactly what our position is, and they know what it takes to have a dialogue.

My dialogue has been with the Iranian people, and I'm going to try it again right here. The Iranian people have got to know that their government is isolating them, that their government is making decisions that aren't in the interest of their country, and that this great country doesn't need to be standing alone in the world, relative to the rest of the free world. This country is missing great opportunities through trade to -- for people to embetter their life.

And the government -- if the government would change its policies toward development -- or gaining the know-how on how to make a nuclear weapon, it would be -- benefit the Iranian people. The United States respects Iran and respects the traditions and history of Iran, and we respect the Iranian people. The government of the people is letting the Iranian people down, and they can change and should.

MS. BARTIROMO: Finally, Mr. President, congratulations on your daughter's upcoming marriage.

PRESIDENT BUSH: Well, thank you. It's -- I'm excited about it. She's marrying a good man.

MS. BARTIROMO: Are all the plans in place?

PRESIDENT BUSH: Well, just so you know, my role is to say, "Yes, ma'am." And --

MS. BARTIROMO: (Laughs.) Will you cry?

PRESIDENT BUSH: Oh, I'm sure I will. I love her dearly.

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