Copyright ©2009 by Federal News Service, Inc., Ste. 500, 1000 Vermont Ave, Washington, DC 20005 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, Inc. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Internet Service at www.fednews.com, please email Carina Nyberg at firstname.lastname@example.org or call 1-202-216-2706.
MR. KUDLOW: All right, from small business to AIG, do we really believe government can run anything? We welcome back Dr. Tom Coburn, Republican senator from Oklahoma.
Good to see you, Mr. Coburn.
DR. COBURN: How are you, Larry?
MR. KUDLOW: Do you want to just take a quickie at AIG? I don't want to let you go too long because we don't have enough time. But this has become a national uproar.
DR. COBURN: How do you keep good people if you don't pay them properly? You know, I don't know the details on this. They had to know it was coming. The fact is is that's a big company with people who earn a lot based on performance. I'd have to see, you know, how did we do it? How did they accomplish it? You know the whole idea of the government running businesses, you know, we're going down that path, and you're seeing an emotional reaction to something that may have otherwise been a good business decision. I don't know that.
MR. KUDLOW: It's kind of a tough sell, a bunch of derivatives traders that virtually blew up the world and are now completely on the taxpayer dole, and they're all taking bonuses. I mean, you know, sir, if it was some insurance agents who had a good year, I'd probably think differently, but these guys were the financial weapons to mass destruction, to quote Warren Buffett. And Jack Welch said that Geithner and the Treasury should just step in and say, hey, this is the way it's going to work, pal.
DR. COBURN: Well, I think they have. We as taxpayers essentially own that business, and they're going to do what we end up saying. So I think that's going to happen. Like I said, I don't know the details. But the danger is, are we going to be making those same decisions at GM and Chrysler and every other business that we end up getting our hands a hold of to try to save it? And market forces are pretty good, and we ought to watch market forces and let them help us and not worry about too big to fail.
MR. KUDLOW: All right. President Obama today meeting with small businesses. He says, we're going to give you more TARP money, and we're going to give you bigger loans from the Small Business Administration. It just doesn't sound like a real incentive plan to me. Your thought?
DR. COBURN: Well, at the same time, you're taking away their capital gains, and the government costs for every employee you have is going to grow by 50 percent from over $6,000 to over $9,000 per year, per employee. I'll tell you, the best thing to help small business is get the government regulations out of their face, the onerous ones that don't have anything to do with health and safety. We could see a whole lot more productive capacity there. His bill is going to mandate that they're going to supply insurance or pay for it whether they supply it or not. So we can say, we're going to loan you more money, but we're going to pile all these costs on you. What small business needs is the ability to compete and a government that doesn't interfere at every level with what they're trying to do, with no clear purpose in mind and no metrics to measure it and let small-business people be successful.
MR. KUDLOW: Why don't we just give them 100 percent cash expensing, immediate write-off for investment which will help jobs? What's wrong with that?
DR. COBURN: I don't have any problem with that. There's not a problem with that. But remember, turn it around, at the same time we're going to do that we're going to tax any capital gains that they might make in their business, which, to me, is totally counterproductive.
MR. KUDLOW: Now, I think for the smaller small businesses, they're waiving cap gains for a period of time. I heard that from Austan Goolsbee on our network today.
DR. COBURN: For two years.
MR. KUDLOW: Yes. So you make it permanent is what you're saying.
DR. COBURN: Sure, sure.
MR. KUDLOW: Let me ask you another one. There's a Rasmussen poll out today that shows the vast majority of U.S. workers don't want to be unionized, and I want to ask you about this card check bill which is, you know, front and center in this policy debate. You all are going to have to vote on it sooner rather than later. What can you tell us? Is that going to go through, or will that be stopped?
DR. COBURN: My hope is that it's stopped, but I think it's real important. The card check aspect of it isn't the most dangerous aspect. The dangerous aspect is you're going to have government arbitrators deciding what the final contract is going to be. And so what you're going to do is create an incentive, if you get the card check signed up, you've got a union, they're going to ask for something 100 percent, 200 percent, 300 percent higher than what they know is realistic so that when they finally get to arbitration, a bureaucrat is going to decide, well, this is what you asked for, we'll average what the company offered and what you asked for. And we're going to put small businesses and businesses out of business. We're going to make ourselves non-competitive. We've got to let markets work. And that's a good way to not let markets work.
MR. KUDLOW: Well, you look at that Rasmussen poll. We put it up on the full screen. Eighty-one percent said they do not want to join a union. This bill -- look at that, 81 to 9 percent. That's incredible numbers from a great pollster. Senator Coburn, look, it would take away the secret ballot. I mean, isn't that the most fundamental American political liberty?
DR. COBURN: I think it is a political liberty, but you've got to understand how this works. I'm going to come up and twist your arm and get you to sign this card, and I'm going to do it in front of your peers, and then you're not going to have an opportunity to vote in secret that you really didn't want it.
MR. KUDLOW: Senator Tom Coburn, I appreciate it, sir.