NBC "Meet The Press" - Transcript

Interview

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Joining us now, Republican Senator John Cornyn of Texas and Democratic Senator Chuck Schumer of New York.

Welcome, both of you, back to MEET THE PRESS. Let me start on this developing story out of Iraq. Senator Cornyn, this comes as U.S. forces are in the middle of withdrawing from that country; is it a wake-up call to you, a question about whether Iraq is up to securing its own country?

SEN. JOHN CORNYN (R-TX): Well, it's certainly a reminder that Iraq remains a fragile country and that the insurgents are going to try to test the Maliki government and the Iraqi government to see whether they have what it takes as they know we are drawing down our troops. I thought Thomas Friedman had a good column on that this morning, talking about we can't take our eye off Iraq as we turn our gaze toward the challenge in Afghanistan.

GREGORY: And yet, Senator Schumer, indeed that's where the debate is, it is about Afghanistan...

SEN. CHARLES SCHUMER (D-NY): It is.

GREGORY: ...not about Iraq.

SEN. SCHUMER: But it also shows you how hard it is to do this. Here we've had General Petraeus, he's done a very good job, our soldiers have done a good job, we've spent a lot of time there, a trillion dollars, of course, over 4,000 lives lost, and it's still not all that stable. It shows you how hard this is going to be in Afghanistan.

GREGORY: Have we won in Iraq?

SEN. SCHUMER: Well...

SEN. CORNYN: I think we've certainly made great progress. You know, I wouldn't declare a victory or say we've won, but it certainly is much better than anyone even...

GREGORY: Mm-hmm.

SEN. CORNYN: ...hoped for just a few months ago.

SEN. SCHUMER: If, if the goal...

GREGORY: It's premature?

SEN. SCHUMER: ...if the, if the goal has--if the goal was to stop terrorism, that link between Iraq and terrorism has long been exposed as false. If the goal is to bring stability, it's still a 50/50 proposition even after all we've done.

GREGORY: We'll get to Afghanistan in just a few minutes, but I want to start with this very controversial issue of executive compensation and get into the decision that the administration made this week. Let's put it up on our screen, it summarizes; the top seven firms who've gotten bailout money have been told now by the Obama administration, by Ken Feinberg, the special master for pay, that the top 25 executives will see their pay slashed. Now, the reality is, Senator Schumer, this may feel good to a lot of people who don't like the bailouts, don't like these companies. Is this anything more than punishment?

SEN. SCHUMER: I think it is. First of all, look, these are companies that had real, real trouble and had to be bailed out by the government. The average American justifiably says, "Hey, I work hard, I don't make much of a salary. I did nothing wrong, now my taxpayer dollars are going here." At the very least, these executives, in terms of their own salary, can tighten up. Ken Feinberg, who's a very smart, down-the-middle, practical guy, says it will not hurt the effectiveness of these companies.

GREGORY: But he doesn't know that.

SEN. SCHUMER: Well, nobody knows it...

GREGORY: Right.

SEN. SCHUMER: ...but he's a pretty good judge. And when the president chose him, he was not choosing somebody who would just be out there to punish.

GREGORY: But...

SEN. SCHUMER: He was choosing somebody with effective solutions. And just this week, David, the Fed did a very revolutionary thing. I mean, I, I thought it was amazing what they did. They said, "We are going to look at the compensation systems, the way, way compensation works, for 28 of the largest companies in America," not for punishment--the Fed is not an agency that punishes these institutions--but because the pay may have led to undue risks. And we have to do this...

GREGORY: All right.

SEN. SCHUMER: ...in a careful way, in a nonvindictive way, but it's something that has to be seriously examined.

GREGORY: All right. But, Senator Cornyn, if the results of these actions by Ken Feinberg and by the Obama administration lead to an exodus from these companies of some of the very people who can help stabilize the companies and therefore help them pay back the bailout money, then why would you do this?

SEN. CORNYN: Well, that's a very real concern. And the people who are being punished now by having their compensation capped, we're not...

GREGORY: Do you think it's just punishment?

SEN. CORNYN: I think it's hard to interpret it as anything other than that. I would distinguish between, though, David, where the taxpayers are essentially shareholders in these companies, these companies would not exist but for the largess of the American taxpayer. So I, I consider this a different situation than if government just tried to cap executive compensation in the private sector.

SEN. SCHUMER: Right.

SEN. CORNYN: But I would say that there is growing apprehension at government intervention all across the, the spectrum, from car companies...

GREGORY: But my--but the question I asked is if the goal here is to pay back the TARP, if you ultimately hurt the companies by forcing people to leave because--as, as an executive told me this week, the economy's getting better, the phones are starting to ring, people will leave. If the goal is to pay back the TARP, how do you do that if you risk an exodus from these companies because they don't want to stick around with pay caps?

SEN. SCHUMER: Well, again, I think you have to be careful. The system that Feinberg implemented is supposed to keep them around; less salary, more stock, and stock that vests over a period of time so they have an interest in staying with the company and making it work.

SEN. CORNYN: I think there's probably less here than meets the eye. They'll find--the companies certainly'll probably find some other alternative means to compensate their executives to keep them there. But I don't think we should for a minute think this substitutes for real regulatory reform, which is a debate that Congress has not really begun in earnest, waiting till after the healthcare debate has concluded.

GREGORY: AIG is going to pay more bonuses next March, 200 million in bonuses to the same group, not necessarily the same people who were responsible for the credit default swap collapse. Andrew Cuomo, the New York attorney general, has said that--he said past March that those names of people getting those bonuses should actually be released publicly. Do you think that's appropriate?

SEN. SCHUMER: Well, I don't have a problem with that. Again...

GREGORY: They should be shamed, in other words?

SEN. SCHUMER: No, it's not shamed. Once you get government money, and this is hundreds of billions of dollars, you're in a different ballpark. You can't play--I agree with John, I don't think the government should set salaries for companies that are private. I believe the shareholders should have more power. And in fact, I've been pushing something, I think it'll be in the reform bill, called a shareholder bill of rights. It's their responsibility. But when the government is giving massive amounts of money and these people would be out on the street except for the government money, the rules are different.

GREGORY: Let me turn to the healthcare debate and the issue of the public option. Here's where the public stands on the idea of a government-run plan that would be alongside private insurance to drive down costs: 61 percent of Americans support the idea of a public option. Senator Schumer, you're very involved in this. Will the final bill on healthcare reform have a public option?

SEN. SCHUMER: I believer Leader Reid is leaning strongly to putting a level playing field, state opt-out public option in the bill. He's been...

GREGORY: Explain just for a second how that would actually work.

SEN. SCHUMER: OK. There are some, many of my colleagues on the Democratic side, who would like to see it be a much more government-oriented program; the government sets the rates, a Medicare rate or Medicare Plus 5, you're forced to take it, etc. What I've been proposing is something a little more in the middle. The government would set it up. We need some competition for the insurance companies, and many of us believe this is the only way to get real competition. But then after three months, where they give it some money to get going, it would have to play by the same rules as the insurance companies, the same rates, the same reserves, the same requirements.

GREGORY: Right.

SEN. SCHUMER: It would have to pay the loan back over a period of years and, most importantly--and people are worried about this, some, anyway, many--it would negotiate rates with the providers just like an insurance company. But in states where there is only one insurance company or two--40, 40 of the 50 states, two insurance companies dominate the market. The only real way or one of the best real ways to bring costs down is a new entity competing.

GREGORY: OK.

SEN. SCHUMER: The insurance company industry will not do it on its own.

GREGORY: And the point is...

SEN. SCHUMER: The government would. And it's--and the one other thing I'd say, and this is really important: You're not required to take the government option. It's not a government plan being forced on people. That was the rhetoric in August. It's an option.

GREGORY: Mm-hmm.

SEN. SCHUMER: If you don't like your--the private insurance, go to the public option.

GREGORY: All right.

SEN. SCHUMER: If you like the private insurance, stick with it. But even there, the public option will force them to be a little better.

GREGORY: But you don't--well, well, where are the votes? Conservative Democrats, Olympia Snowe, are they going to sign up for this?

SEN. SCHUMER: OK, Leader Reid--and there's nobody better at counting the votes than he is, he's a wizard at it and people don't give him enough credit for it...

GREGORY: Mm-hmm.

SEN. SCHUMER: ...and I and others have been talking to liberal Democrats, moderate Democrats, conservative Democrats. The liberals, they like it stronger, but they're willing to live with level playing field, opt-out. The more moderate Democrats, there are some who actually like it. As long as it's a level playing field, they're comfortable with it. There are others who say that, "I'm not sure I like it, but I won't hold up passage of the bill." I think we're very close to getting the 60 votes we need to move forward, and my guess is that the public option level playing field with the state opt-out will be in the bill. But Leader Reid will make that decision after he talks to everybody several times.

GREGORY: That's an important development. You believe the Democrats are close to 60 votes in the Senate for healthcare reform.

SEN. SCHUMER: Correct. Correct.

GREGORY: Senator Cornyn, can you with live this idea?

SEN. CORNYN: David...

GREGORY: Would you vote for it?

SEN. CORNYN: David, the majority leader is a, is a good vote counter, but I think even he was surprised when 13 Democrats voted with the Republicans to reject $300 billion in additional red ink in the form of the Medicare reimbursements for doctors vote that occurred last week. I think the majority are recognizing that he has big problems keeping Democrats together, much less attracting Republicans to vote for it. And the reason is we have maxed out our credit card as a government. We are at a $12 trillion debt limit; for the second time in the Obama administration the Democrats are going to ask Congress to vote to increase the--that debt limit.

GREGORY: Who do you blame for that, by the way?

SEN. SCHUMER: Yeah. Good question.

SEN. CORNYN: Well, I think $1.1 trillion in stimulus spending. Forty-three cents out of every dollar being spent being borrowed money today; with a healthcare proposal which has phony assumptions and that will never occur, like $500 billion in Medicare cuts which actually won't solve the problem of reducing premiums, but will rather increase premiums for people currently with insurance and will impose a tax on middle-class taxpayers. I mean, this is a bad formula. We could, I think, create good competition if you allowed people to purchase insurance policies in other states...

SEN. SCHUMER: David, I just...

GREGORY: All right.

SEN. CORNYN: ...rather than the public option, which is a Trojan horse for a single-payer system.

SEN. SCHUMER: I want to say something about those costs.

GREGORY: OK, quick response, then I want to move on. OK.

SEN. SCHUMER: Because you, you have to--let's talk reality here. We're trying, in our healthcare bill, to have it paid for so it doesn't raise the deficit a nickel. When they had the big Medicare increase, $400 billion, they didn't even try to pay for it. We're trying to pay. We've said we will pay for the war in Afghanistan. One trillion dollars, war in Iraq, they didn't pay a nickel for it. The debt in January, when George Bush left, voted for by lock, stock and barrel with all the Republicans was much, much greater. Now Barack Obama and we Democrats, this is counterintuitive but true, are really trying to get a handle on balancing the budget and we're making real efforts to do it. That's why health care is more limited than people would want it to be. And we--they say, "Well, it's not good enough." Well, join us and help us. But you sure didn't try to make it all good when you were in power.

SEN. CORNYN: Well, David, I hope the Democrats will join with us to, to pass real entitlement reform to deal with these growing deficits. Senator Conrad, Senator Gregg have a proposal, Senator Feinstein and I have a proposal that was referenced by 10 moderate Democrats who wrote a letter to Harry Reid this last week saying don't count on us as an automatic vote for raising the debt ceiling unless you're going to deal with these deficits and the growing part of spending.

SEN. SCHUMER: But the bet..

GREGORY: All right, hold on. I want to get to a couple of other issues...

SEN. SCHUMER: OK.

GREGORY: ...just a couple of minutes left. First, Afghanistan; as the president decides about his strategy, the former Vice President Dick Cheney was outspoken this week. This is what he said.

(Videotape, Wednesday)

VICE PRES. CHENEY: Having announced his Afghanistan strategy in March, President Obama now seems afraid to make a decision and unable to provide his commander on the ground with the troops he needs to complete the mission. The White House must stop dithering while America's armed forces are in danger.

(End videotape)

GREGORY: Senator Schumer, dithering?

SEN. SCHUMER: Well, you know, Afghanistan, I agree with Joe Biden. He said when we hear Dick Cheney, we remember seven years of neglect of Afghanistan that once again now President Obama is going to have to deal with. He's dealing with it in a thoughtful, careful way. He's listening to everybody. He will not be rushed to judgment. It's a--I, I'm wrestling with it myself, and boy it's difficult. There is no good answer. But for Dick Cheney, after seven years focusing on Iraq, the wrong place, instead of Afghanistan, to now say, "It's a few months into this administration, they'd better come up with a solution," that's not fair or right.

SEN. CORNYN: Americans are fighting and dying in Afghanistan today as they have for the last seven years. I don't understand, for a president who said this is a war of necessity to now question the recommendation of his lead commander General McChrystal...

SEN. SCHUMER: Mm-hmm.

SEN. CORNYN: ...on resourcing the war in order to be successful and win.

GREGORY: Did President Bush and Vice President Cheney provide enough troops to win in Afghanistan?

SEN. CORNYN: I think we've learned that we need a, a change of strategy as, as, as opposed to just raw numbers.

GREGORY: It's a simple question. Did they provide enough troops to win in Afghanistan?

SEN. CORNYN: Well, obviously we haven't yet won Afghanistan.

GREGORY: Right.

SEN. CORNYN: And winning in Afghanistan may be different from Iraq because of the, of the nature of the country.

GREGORY: But did Bush and Cheney provide the troops to win?

SEN. CORNYN: Well, we haven't won...

GREGORY: Right.

SEN. CORNYN: ...so I guess...

GREGORY: So they didn't. You don't think they did?

SEN. CORNYN: But it's a strategy...

SEN. SCHUMER: Well...

SEN. CORNYN: David, the problem is it's not just--as we saw on the surge in Iraq, it's not just the troops, it's the change of strategy.

GREGORY: But to be, but to be, but to be consistent on this...

SEN. CORNYN: A counter...

GREGORY: ...if you say that this president should commit more troops, can't you render an opinion about whether the previous administration that started the war provided the resources to win it?

SEN. CORNYN: Well...

SEN. SCHUMER: Hey, David, we all know the facts here.

SEN. CORNYN: Well, if I can answer the question.

SEN. SCHUMER: Go ahead.

GREGORY: Yeah.

SEN. CORNYN: I think the--my problem with your question, David, is you're assuming that just additional troops will achieve a victory. It will not. What we need is a change of strategy. We need a counterinsurgency strategy such as General Petraeus and General Odierno executed in Iraq.

SEN. SCHUMER: OK.

SEN. CORNYN: If we do that...

GREGORY: Right.

SEN. CORNYN: ...which is what General McChrystal's recommending in Afghanistan, I think our chances of success are good.

SEN. SCHUMER: Just quickly, one, they were so busy with Iraq they didn't pay attention to Afghanistan. And if the right strategy is that we need a new strategy, where was the strategy for seven years? Now, I'm not--I don't want to point fingers of blame. Our soldiers are out there in the fields. But it's a little bit, gee whiz, here Obama's trying--President Obama's trying to come up with a strategy listening to everybody, and immediately the Republicans are pounding and say, "Do this, do this, do this," when for seven years they didn't, either in number of troops or good strategy.

GREGORY: Before we go, Senator Cornyn, you're running, running the elections for, for the Senate for congressman next year. As you look at these races, governor's races in New Jersey and Virginia, where the Democrats are in considerable trouble, what will it say about the Obama presidency, these results from these elections?

SEN. CORNYN: Well, I think the Virginia governor's race particularly is going to be referendum on the policies that the American people have seen coming out of Washington these days. While the president remains personally popular, his policies are not. And the more people learn about them, the more they learn about the growing debt--and indeed, the vote we'll have on increasing the debt ceiling I think will bring that into focus--then I think they--we've seen them reject them. And I think that's what will happen in Virginia. I think it's a, it's a, it's a cautionary tale to, to Democrats in 2010.

GREGORY: Are you worried about 2010?

SEN. SCHUMER: Well, I think that in 2010 the--what's helping us is the Republican Party doesn't seem to have any platform at all. People realize that we are grappling with major issues that have to be grappled with, whether it's health care and Afghanistan. When health care passes, it's going to improve--I think we're going to do real well in 2010. GREGORY: But the mood against the incumbents right now is bad.

SEN. SCHUMER: Well, I think you'll see in 2010 we're going to do pretty well, aided and abetted by no alternative, but also by the fact that these are big problems that we're getting our arms around.

GREGORY: All right. Senators, thank you both very much. The debate will continue.

SEN. CORNYN: Thanks, David.

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