Senator Santorum on Money & Markets

HAYS: But just how much can the president realistically deliver? Joining us from the Senate gallery in (17:36:30) the nation's capital with some insight is Republican senator from Pennsylvania Rick Santorum. Senator Santorum, welcome to "MONEY & MARKETS."

SEN. RICK SANTORUM (R) PENNSYLVANIA: Thank you. It's great to be with (17:36:40) you.

HAYS: Well, Wall Street kind of mixed in their opinion today. We just had a guest on who (17:36:50) said, come on, we knew he was going to tell us we're heading closer to war with Iraq. We knew he was going to reiterate his plan. Other people saying that they (17:37:00) were struck by maybe they should have expected it, but actually hearing the president give the message that we must go to war with Iraq really made an (17:37:10) impression. In terms of the Senate, does this have an impact or are you guys in the camp that come on, we knew what the State of the Union address was going (17:37:20) to say and this is just one step of many towards war.

SANTORUM: Well, I think it was important for the president to make the case. He's really never made the coherent (17:37:30) case to the American public. It's always been done either by emissaries or in bits and pieces and this was a chance for him to go prime time before (17:37:40) the American public and might I add the world and make that case. And I think he made it very strongly and convincingly. You got to remember that Congress has already approved the president's (17:37:50) ability to go to war and that has not been shaken I don't believe, in the last few months.

HAYS: So then you're not taking seriously Ted Kennedy's, Senator Ted Kennedy's call for another vote?

SANTORUM: Well, this is (17:38:00) - I mean you're talking about old Europe and new Europe. This is Neville Chamberlain and Winston Churchill and there are those who would like to appease, but I think the president (17:38:10) made it very, very clear, that those people (17:38:20) could Monday morning quarterback the attack on the United States and that gives him no solace. What he wants is to make sure that he defends this country and does so (17:38:30) in a way that he is comfortable with and that's moving forward (17:38:40) in the plan that he's laid out last night.

HAYS: Senator I think many people are getting concerned and (17:38:50) especially (INAUDIBLE) a Republican you're concerned that this move toward war is having a very major dampening effect on the economy, on the markets. There's a hope for a quick decisive (17:39:00) victory if we go to war but a worry that it won't be. It could drag on and that next year, when the Republicans are trying to keep their hold (17:39:10) on the White House, a weak economy could come back to undermine the president.

SANTORUM: I would argue that not following through on the president's promises would have a much more (17:39:20) deleterious effect on the markets over time and on our economy over time because then we would have someone emboldened in the middle east who could (17:39:30) be a purveyor of terrorism and one major terrorist attack with weapons of mass destruction, I guarantee you, we'll have a much more negative effect on this economy and (17:39:40) these markets than what will be I believe a relatively short war and a stabilized Iraq and a democratic Iraq in the near future. So I think it's a gamble that is (17:39:50) not much of a gamble and it's certainly worth taking for the national security of this country.

HAYS: Senator, we're hearing so much chatter out of Washington from both sides, not (17:40:00) just Democrats or Republicans who think that the elimination of the tax on stock dividends is just 100 percent elimination, it's just not the right proposal for right now and (17:40:10) that maybe the president will back away from it and focus more on other aspects of the package like making tax cuts permanent, speeding them up et (17:40:20) cetera. You're shaking your head. I guess you don't agree.

SANTORUM: No I don't agree. I am a very strong supporter of the president's elimination of the double taxation of dividends. He's got a plan that's a good (17:40:30) plan short term. He accelerates the rate cuts. He also does some great things on depreciation, but what he does in the long term is important.

Yes, we need jobs and we need (17:40:40) a recovery sooner, but what he's done with the double taxation of dividends is really do something for the long-term stable growth of our economy and it's (17:40:50) going to be good not just for the markets. It's going to be good not just for those who are shareholders or want dividends.

It's going to be good for (17:41:00) the average working American because what we have now done is put equity on a level playing field with debt and we've encouraged corporate CEOs to look at (17:41:10) giving shareholder value not just by appreciating their stock price in many cases through mergers, acquisitions or other unwise or risky business strategies, but by paying dividends out (17:41:20) to their shareholders.

And I think in the long run that's going to benefit the average worker who unfortunately loses their job as a result of the mergers and (17:41:30) acquisitions and downsizing that results as a result of these I would say leveraged buy outs and risky schemes on the part of CEOs around the country.

HAYS: Senator Santorum, thank you (17:41:40) for joining us today, appreciate your taking the time.

SANTORUM: You bet.