CNBC NEWS CHANNEL INTERVIEW WITH REP. JIM JORDAN (R-OH) AND REP. JOSEPH CROWLEY (D-NY)
SUBJECT: THE ECONOMIC STIMULUS PLAN INTERVIEWERS: MELISSA FRANCIS AND LARRY KUDLOW
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MS. FRANCIS: Congressional leaders tentatively agreeing on the $790 billion stimulus plan -- Larry just gasped -- (chuckles) -- is expected before the weekend. But is the revised package the right medicine for the ailing economy?
We have a couple of congressmen here to weigh in, Republican Jim Jordan from Ohio; also with us right now, we have Democrat Joseph Crowley from New York.
Thanks to both of you for joining us.
REP. CROWLEY: Thank you.
REP. JORDAN: Thank you.
MS. FRANCIS: Representative Jordan, let me -- Congressman Jordan, let me start with you.
REP. JORDAN: Yeah.
MS. FRANCIS: According to the Congressional Budget Office, by the end of 2010, this plan is supposed to create 1.2 to 3.6 million jobs, and increase GDP by 1.1 percent or 3.3. First of all, that's an enormous range. Are you comfortable with the low end of this range, based on what it's costing?
REP. JORDAN: Well, the CBO is pretty good at predicting, but I would argue that this is not a stimulus plan. I mean, all you've got to do today is look at the front page of the Washington Times. There's an article on there about $30 million in this plan to help the saltmarsh mouse in a wetlands restoration project.
I mean, what we need to be doing is reducing the tax burden. This works every time it's tried. Reduce the tax burden on families, small business owners, entrepreneurs. That will create more jobs than what's in the study you cited. That will help our economy grow much more than this idea that we're going to spend our way back to prosperity. If spending was going to get us out of this mess, we'd have been out of it a long time ago, because, frankly, that's all that Congress has been doing, that's all the government has been doing over the last year-and-a-half.
So the CBO usually has pretty good numbers, but we could have higher numbers, more job growth, better economic activity, if we did the right thing, which is reduce the tax burden. This idea of spending is not going to get us there.
MR. KUDLOW: Mr. Crowley, I want you to comment on what Mr. Jordan just said. A lot of supply-siders would have said slash the business tax rate.
REP. CROWLEY: Right.
MR. KUDLOW: Abolish or reduce the capital gains tax. Let's help investors who are on strike, let's help businesses that create jobs. In your opinion, sir, does this stimulus package do that job?
REP. CROWLEY: I think it does stimulate our economy -- will stimulate this economy. What I'm hearing from Jim is, unfortunately, more of the same-old-same-old we've heard over the years. It really is "Just say No," continue to say no to anything the president has put forward.
I can tell you that this bill is much more bipartisan than has been reported. There are certainly tax cuts in here for small businesses. There are certainly tax cuts here for Americans -- 95 percent of Americans will see a reduction in their taxes this year in this bill.
This is an emergency, Larry. This bill has to get out. Economists have said this to us over and over again. We need to get this economy stimulated.
MR. KUDLOW: Yeah -- yeah --
MS. FRANCIS: But Congressman Crowley, let me ask you, are you comfortable? Is this it? Are we going to need another stimulus package?
REP. CROWLEY: No, I don't -- and listen, quite frankly, Melissa, I don't think anyone has said that this is it. This wasn't it --
MS. FRANCIS: Do you think we're going to need another one?
REP. CROWLEY: This wasn't it when we passed a $150 billion stimulus package last year, a $700 billion package last year as well under the former administration, the Bush administration. And this is the first -- it's an attempt to deal with this crisis on the Obama administration.
MS. FRANCIS: So we're going to need more?
REP. CROWLEY: There will be more. There's no question about that. We'll have to do more.
REP. JORDAN: Well, and let me just --
MR. KUDLOW: Well, Mr. Jordan --
REP. JORDAN: Let me just say one thing. Joe talked about it this has bipartisan support. The only bipartisan activity on this bill is those against it. There was 178 Republicans that voted against it, and 11 Democrats who joined us and said this is the wrong way to go, because people understand -- the American people get it -- that you can't spend your way to prosperity.
We've got to remember an old line from Milton Friedman: There is no free lunch. Deciding that we're going to spend our way back to -- is just totally wrong. And it's not more of the same. More of the same is what they're doing, big government spending.
REP. CROWLEY: This, unfortunately, Jim -- Jim, unfortunately, has become a political decision of your party to vote against the president's stimulus plan at all costs.
REP. JORDAN: We have a plan. We have our own plan.
REP. CROWLEY: At all costs, to vote against the stimulus.
REP. JORDAN: We'd just like to be in the room and have a chance to put our plan forward.
REP. CROWLEY: I'll tell you, quite frankly, last year, last fall, I didn't agree with everything that President Bush wanted --
REP. JORDAN: I didn't either. I voted against the bailout plan.
REP. CROWLEY: -- or that Secretary Paulson wanted last year. But I believe that it's in the interests of our country to do what's right, and that is to get this economy moving again.
REP. JORDAN: Well --
MR. KUDLOW: I want to ask Mr. Jordan -- I want to ask Mr. Jordan, this plan's going to go through. It's going to make it.
REP. JORDAN: Yes, unfortunately, it is.
MR. KUDLOW: So, all right, let's move on. Have you gone out and had your assistant get you airplane tickets to China, to ask and beg the Chinese to buy the $2-1/2 trillion worth of bonds needed to finance this? And we've got some estimates now from my friend Dan Clifton, a Wall Street analyst.
REP. JORDAN: Right.
MR. KUDLOW: The budget deficit this year and next year may come in at 12 to 14 percent of GDP.
REP. JORDAN: Of GDP. Right. Right.
MR. KUDLOW: We've never seen numbers like this.
REP. JORDAN: Never like it. This is scary.
MR. KUDLOW: And I've never seen numbers like this, and I've been around a while. How are we going to pay for this?
REP. JORDAN: Larry, your point is exactly right. What we're doing is immoral. It is wrong to saddle our kids and grandkids with this kind of debt. You're exactly right. We're going to be 10 to 12 percent of GDP. Never in the history of this nation have we ventured into this kind of territory. You've got to go back to World War II, where we had 6 percent of GDP. People thought that was scary. We're now going to be 12 --
REP. CROWLEY: (Off mike) -- after we doubled the national debt under the Bush administration.
REP. JORDAN: We're going to be at 12 percent of GDP. This is wrong, to do this to our kids and our grandkids. And you're exactly right. Who's going to finance this debt?
MR. KUDLOW: Well, Mr. Crowley --
REP. CROWLEY: Larry -- Larry -- Larry -- Larry --
MR. KUDLOW: Mr. Crowley, have you been -- I just want to ask you, sir, have you been to China? Have you ever seen -- have you ever talked to the Chinese bond buyers?
REP. CROWLEY: I have been to China, Larry.
MR. KUDLOW: They're going to be our new best friends. There's no question about that.
REP. CROWLEY: Larry, I have been to China. But let me say something to you. I have three children, as well. I'm concerned about the future of our country and their growth and their opportunities. So I'm not here to sell to anyone -- least of all, the Chinese -- or most of all, the Chinese. But let me say this. It is time to stop the doom and gloom. We have to start to instill in the American people confidence again. And quite frankly, this kind of talk is not helpful.
MR. KUDLOW: Then your president needs to --
REP. CROWLEY: We need to move forward. We need to move forward. Pass this package.
MR. KUDLOW: I don't think we need any of this stuff.
REP. JORDAN: Yeah -- (chuckles) -- exactly.
MR. KUDLOW: I think the economy actually is starting to turn up. I don't think we need any of this stuff. I'm sorry.
REP. CROWLEY: Well, Larry -- Larry, I think there is bipartisan support for moving forward.
MR. KUDLOW: Well, I know it's --
MS. FRANCIS: All right --
REP. CROWLEY: And even more than is being said in the vote that took place in Congress.
MS. FRANCIS: Congressman Jordan, let me ask you, because we don't have a lot of time left --
REP. JORDAN: Yeah. Yeah. Sure.
MS. FRANCIS: A lot of people have said today we have to wait and see what happens, how much comes out of this bill, how much stimulus we really get. How patient do you think the American public is right now before they need to see results?
REP. JORDAN: The American public want a stimulus package. They don't want a big-spending, federal government, programmatic plan that's out -- which is what this bill is. They want a stimulus, but they understand. Small business owners and families keeping more of their money via tax cuts will work. We have a plan that will do that. We'd like to be in part of the debate. They understand what's going on.
I was at a wrestling meet for my son two weeks ago, after the vote where we all voted against it and 11 Democrats joined us, walking across the gym floor, someone in the --
MS. FRANCIS: Did they "Boo" you?
REP. JORDAN: No, they yelled out "Great vote, Jordan," because they understand big federal government spending is not the answer.
MS. FRANCIS: All right, guys, we've got to leave it there. Thanks to both of you gentlemen for joining us.
REP. CROWLEY: Thank you.
REP. JORDAN: Thank you.
MS. FRANCIS: We appreciate it.