CNBC "Kudlow & Company" - Transcript
MR. KUDLOW: Senator Joe Biden needs a top-three finish in Iowa to keep his campaign going. I spoke to the Delaware senator about baseball, steroids, Iraq and taxes. And I began with Iraq moving in the right direction. Take a look.
(Begin videotaped interview.)
SEN. BIDEN: Well, I think it is moving in the right direction militarily, but we need a political solution, Larry, and that's why the Biden exit strategy that got 75 votes in the Senate as well as it's now going to pass the House, which says let their constitution work, make it a federal system. That's what the constitution says. And right now, though, the administration is stuck, as our military says, without any real political movement on the ground. Unless they compromise among themselves in Iraq, we could have 500,000 troops there, and it won't solve the problem.
MR. KUDLOW: What do you make of this story? I guess this morning's or yesterday's USA Today things are going well in Iraq. They say Democrats are lost in time, the surge is succeeding.
SEN. BIDEN: Well, I don't think the surge is succeeding. The military is succeeding, as they always do. Remember what the president said, Larry. He said he is going to plus-up the troops, send more troops to, quote, "provide breathing room" for the Iraqi competitors, the Sunni, Shi'a and the Kurds, to reach a political agreement. As the number-to general there said, the window is closing quick. If they don't have a political agreement, this will all be for naught. We have a shot, the president should move.
MR. KUDLOW: You know, a year ago or so -- this is an oddball indicator, but I know you don't mind talking about business and financial stuff -- Iraqi bonds, Iraqi debt, 55 cents on the dollar last August, 11.5 percent yield. Today they have rallied to 64 cents, down to 9.9 percent yield. Money managers in the United States say Iraq bonds are the hottest bonds of the emerging market. Isn't that a sign of financial confidence in the conduct of the war?
SEN. BIDEN: Well, Larry, I'll leave it to you to read the markets. But I can tell them one thing. Unless they get a political settlement, that is Sunnis agree to stop killing Kurds and vice-versa when America leaves, absent that, it won't matter much.
MR. KUDLOW: And there's another story in The Wall Street Journal today that's sort of hopeful about oil. I guess Iraqi oil production is now back to pre-war levels, about 2.5 million barrels a day. That may grow some more. It's throwing off huge volumes of revenues. Your thought on that? I mean, isn't that another one of these positive indicators?
SEN. BIDEN: It is a positive indicator. Look, the violence is down, Larry. That's a fact. But as you know, as well as I do, most of the major oil companies are going to make their decisions on whether they're going to invest the 50 (billion dollars) to $60 billion the Iraqis need in the ground to maximize their oil output will be based upon whether or not they end up with a political settlement. Who's in charge? Where's the power? Who's going to make the decisions? How do they split the oil up?
MR. KUDLOW: I mean, isn't it possible that Bush policies, and particularly Petraeus policies, are essentially following through in ways that you yourself have promoted down through the years? First the military, then the political, now we're signing a long-term security arrangement. The economics are doing better. I mean, you may have been right, sir, but maybe your premonitions are coming true.
SEN. BIDEN: Well, no, Larry, again, listen to what Petraeus says. Petraeus says we, the United States military, need a political solution. The Sunnis and the Shi'as to get together to figure out how they're going to deal with that oil, allowing for militias to become the armies within those areas, let people have local control. That's the way it's going to work. That's the way it gets settled. That isn't happening now. There is a chance. The president should use this opening now to get that political settlement which was the whole purpose of the surge.
MR. KUDLOW: All right, let me switch back to domestic issues. A front-page story tomorrow -- former Senator George Mitchell, you know him well, he announced a whole baseball report on steroids abuse and drug abuse. It turns out a lot of new figures are in this report -- superstars, hall-of-famers, Miguel Tejada, Andy Pettitte, Roger Clemens and, of course, the notorious Barry Bonds. Do you have a thought on this?
SEN. BIDEN: Yeah, I do. That's why 12 years ago I passed the first anti-steroid legislation. These guys are a horrible example to all our young kids. You know, all young kids -- you go out to any Little League field, ask who their favorite player is and then ask them do you think he's juiced, and they'll tell you yes. That's a hell of a comment.
MR. KUDLOW: When you visited that issue, and I know you had talked about it earlier, do you want them to leave baseball? If these guys get fingered, if the evidence holds up, Mr. Biden, do you want them to leave baseball altogether?
SEN. BIDEN: Well, you know, I don't know enough to how much who's involved and it was how much, but I think there's some that should leave baseball. And those who in fact have used in the past, if they set any records, at a minimum there should be an asterisk next to their name. And I think they should all decide. Baseball should decide to police itself, really police itself like they do in the Olympics. And even then it's tough.
MR. KUDLOW: Let's see -- McGwire -- McGwire was kept out of the Hall of Fame by the baseball writers. Would you argue that that is just punishment, apt punishment for some of these others? You've got a couple of hall-of-famers in here for sure, namely Barry Bonds and Roger Clemens. Should they be barred from the Hall of Fame?
SEN. BIDEN: The answer if in fact there is proof that they used steroids that enhanced their performance or human growth hormones, yes, I think they should be out. This is all about personal integrity, about personal capability, not about being juiced up on steroids or human growth hormones.
MR. KUDLOW: All right. Tough on crime -- Joe Biden has always been known as tough on crime. You've submitted a lot of legislation down in the past. You've also been running ads in Iowa. What is your latest proposal on crime in the United States?
SEN. BIDEN: My latest proposal is to reinstate the Biden crime bill. That is, put the COPS program back on the street, add 50,000 cops. This administration used to give -- we used to give $2 billion in aid to local law enforcement. We've cut that to $350 million. This is crazy.
There's crime out here, and violent crime has gone up in every single state around the nation after having gone down 8.5 percent per year for the last 10 years. This is the missed opportunity.
MR. KUDLOW: Is Rudy Giuliani wrong on the campaign trail? He says he led crime down in New York and set a national trend.
SEN. BIDEN: Well, no, he's right. He had about 5,000 Biden cops in that thing, you know, federal cops that were paid for. And he did a good job. That's why I called on Rudy to support the Biden crime bill now. Get those copes back. Put that money back in there, and stop toeing the president's line, Rudy. Help me out! Let's get this thing passed.
MR. KUDLOW: Did he respond? Does he support your bill?
SEN. BIDEN: Well, no, not that I'm aware of.
MR. KUDLOW: Just one last topic. I know the economy came up at the debate this afternoon. Let me get your current thinking on the economy. Obviously, Federal Reserve policy is in the front pages. People are not sure the Fed is doing enough. The subprime crisis continues. Mr. Paulson has proposed a modification of loan contracts with a freeze on adjustable rate subprime mortgages. Your thought, sir?
SEN. BIDEN: Right direction, not enough. And the truth is, as you know better than I do, Larry, we don't know how deep this exposure is. That's one of the problems with the lack of transparency in the hedge funds. So you know, we just have no idea how deep it is.
MR. KUDLOW: You know, you've said in the past you're basically a pro-business senator from the state of Delaware which is a home to all the incorporations and so forth. I know there was a lot of talk at the debate today about raising taxes on so-called rich people, which I regard as raising taxes on successful people and capital and investment. What did you say today? We haven't seen the whole thing. Where did you come out on this tax hike issue?
SEN. BIDEN: Well, I would let most of those tax cuts expire. You know, the $85 billion going this year to the top 1 percent, not something they needed. They didn't ask for it. No negative impact on the economy moving it and putting it into other uses. It would be a hell of a lot better like giving more tax breaks to the middle class who are struggling now trying to figure out how to pay for everything from education to health care to filling up their gas tank -- priorities.
MR. KUDLOW: Well, would the senator from Delaware which is the home of legal incorporations for business, wouldn't the senator from Delaware want to see corporate tax cuts for both large and small businesses to help the economy?
SEN. BIDEN: Oh, they're doing well enough right now with the tax cuts they now have. And I'm not talking about corporate tax cuts, I'm talking about individual tax cuts. What is the thing that's going to move this economy back on track? What are we going to do in terms of those middle-class people who in actual terms are about the same off today as they were in 1972? Look, this whole economy is driven by those people going out and buying products, spending their money, being able to make things grow. And they're in trouble, they're having difficulty.
Larry, they're telling me I've got to do, because I'm supposed to do a live shot somewhere.
MR. KUDLOW: Last one, sir. Do you have to finish in the top three in Iowa? Do you have to finish in the top three in the caucuses to continue the campaign?
SEN. BIDEN: I have to finish in a place probably -- it's possible you have four people bunched up together. If that's the case, I just can't be a distant fourth, no one can, in my view.
MR. KUDLOW: Senator Joe Biden, thank you very much for coming back.
SEN. BIDEN: Thanks, Larry.
(End videotaped interview.)