CNBC "CNBC Reports" - Transcript
Interview
CNBC "CNBC REPORTS" INTERVIEW WITH REP. CAROLYN MALONEY (D-NY) AND REP. SCOTT GARRETT (R-NJ) INTERVIEWERS: BILL GRIFFETH, DONNY DEUTSCH, JIMMY PETHOKOUKIS, RON INSANA
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MR. DEUTSCH: Okay, the House passing a $3.6 trillion budget blueprint just about an hour ago. The vote, guess what guys? Surprise, surprise, split right along party lines. Imagine that. Democrats for, Republicans against.
Representative Carolyn Maloney is a Democrat from New York. She chairs the Joint Economic Committee. Representative Scott Garrett is a Republican from New Jersey on the Financial Services Committee.
Let me start with you, Congresswoman Maloney. You know, I'm a Democrat and I'm always -- yeah, yeah, everything. But let me ask you the question before these guys jump in and ask you. All is fine and good, this budget is predicated on 4 percent growth in the coming years, which most economists say is kind of wacky, even on a good day. So how do you explain that to me?
REP. MALONEY: Well, we're going to have to work hard to get to that 4 percent. But it certainly was a change in direction. It moves our country in the direction that President Obama ran on. He said he would invest in education, health care and move towards energy independence. The budget also invests in infrastructure, creates jobs and --
MR. DEUTSCH: No, I understand what it wants to do but you're not explaining to me that even Orszag said this will bankrupt up, that 4 percent growth is a big stretch. What happens if we don't get there?
REP. MALONEY: Well, we're just going to have to get there. We're going to have to work hard, and we're going to -- basically, Donny, as the president said, when you're driving off a cliff, it's time to change directions. The American people voted for a change in direction. This budget is a change in direction, and it does exactly what he said he would do -- education, health care, everything.
MR. PETHOKOUKIS: Congresswoman, if we don't get that great growth, won't we have another change in direction? Might Democrats reconsider? I don't know. Maybe they might want to extend those Bush tax cuts completely if we have some sort of double-dip recession, if we're in a period of weak growth. Might there be another change of direction? Should we maybe keep those Bush tax cuts?
REP. MALONEY: Well, let me say that the budget is a budget blueprint. It's an outline. And moving forward, it can be adjusted. But he has been in office roughly 60-plus days, and already we've passed a stimulus package to help put Americans back to work. We've passed, at least in the House, a step to stabilize housing and put a floor for the downward spiral of housing prices. And Scott and I are working together on the Financial Services Committee to help stabilize our financial markets that are very important and are institutions so that our economy can get up and running again and put Americans back to work.
MR. GRIFFETH: And Representative Garrett, my colleagues here are doing the heavy lifting for you. You're not having to --
REP. GARRETT: You just keep on going. (Laughter.)
MR. GRIFFETH: Yeah, I know. But let me just ask you. I know that the Republican platform, if you will, on the budget right now, you would like to extend those tax cuts, you want to rein in spending, to some degree. The tax cut thing aside, is this the time to be cutting spending? Couldn't that money be spent to try and grow this economy some more?
REP. GARRETT: Well, as your previous guest indicating, not much really has changed fundamentally in the economy in the sense of how we got here in the first place. And I think you always have to say, before you come up with a solution, you have to say, how did we get here? How did we get here in the first place? Well, there was just too much leverage. There was too much spending. There was too much deficits out there, both by families, businesses, corporations and certainly by the federal government. And so the comment earlier about the people voted for a change, I think they did, I think they wanted a change from the Bush years when he was doing all those things, spending too much money, borrowing too much money. And we get a budget that basically does the same thing but on steroids here. We're borrowing even more money, we're spending even more money. That's not going to get us out of this situation. And if you're correct that we don't get to that 4 percent growth, I want us to be in a position where we're able to make that change in direction again and have a little bit in reserve, if you will, to put the brakes on or do something else. We can't do that when we're just going out of control on spending.
MR. INSANA: Bill, if I may. During the Bush years when in fact the size of the government debt doubled during that eight-year period, it put the economy on steroids. Spending does not create recessions, spending gets you out of recessions. There is no private sector alternative.
MR. GRIFFETH: My point exactly.
MR. INSANA: Yeah, there's no private sector alternative at the moment to fill the void that exists in the capital markets, so the government has to step in.
REP. GARRETT: But when the government --
MR. INSANA: I would say, however, it can be better constructed than it currently is. But the government right now is both the buyer and the lender of last resort in what would otherwise be a deflationary depression.
MR. GRIFFETH: And I think you would agree, Congressman Garrett, that to compare the Bush years spending with what's happening right now, two very different eras. I mean, that was a much, much better economy than we face right now. Why would you want to cut spending now just because the Republicans spent too much money in the previous administration?
REP. GARRETT: Well, remember, it was the other side of the aisle who was saying that the Republicans, and I agree with them, that they were spending too much money and they were borrowing too much money. But you don't get out of this recession by spending even more on the federal side. Any time any dollar that we spend down here comes from one of two places, right? We either tax it out of the economy or we borrow it from some other place and, eventually, our kids are the ones who have to pay for it. So unless you honestly believe in Keynesian economics that somehow or other you can get the economy going by taking your money, more money out of your paycheck or more money out of your kid's inheritance or the money that they're going to have to spend in the future and spend it today, unless you honestly believe that --
MR. DEUTSCH: Guys, we've got to wrap here. But before we go, very, very quickly, I have tremendous respect for both of you. Do you guys ever when you get off camera say to each other, yeah, I had to say that but I believe x? Do you guys ever go have a beer together and say, you know, maybe it's not as black and white and maybe it's somewhere in the middle?
REP. GARRETT: There are certain things in the middle. And I know, as you were just saying a moment ago, we do work together on the committee.
MR. DEUTSCH: I mean, do you kind of hug and say, you know, let's hug it out? (Laughter.) And you know, maybe we're not that far apart.
(Cross talk.)
Thank you so much.
REP. MALONEY: We're going to work together. And I think the best legislation is always bipartisan.
REP. GARRETT: But on this issue, I think we are a little bit separated.
REP. MALONEY: Look at the mess we inherited. We had to change course.
END.
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