CNN "Lou Dobbs Tonight" - Transcript

Interview

Inverviewer: Lou Dobbs

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DOBBS: The growing debate over whether this economy requires another federal stimulus package is underway. The original $787 billion package has been barely been spent, only a fraction of it, and the administration and Congress, many in those two, say another round may be need, and it's only been four months.

We're joined now by Allen Sinai, chief global economist, president of Decision Economics, the governor of the state of Pennsylvania, Ed Rendell, a Democrat -- good to have you with us, governor -- Governor Congress Brian Bilbray, Republican of California, and Congresswoman Loretta Sanchez, a Democrat from California. She is now on the floor of voting and will join us here in just a moment.

I want to say thank you to all of you for being here. Let's start out with the stimulus package. Less than 10 percent of this package has been spent, yet we're hearing cries and calls for a second stimulus package.

Let me ask you, if I may, Governor Rendell, what your reaction is. Do you need it? Do you think it makes sense to call for it now?

GOV ED RENDELL, (D) PENNSYLVANIA: It's really premature, Lou. I believe the president is right saying it can't be off the table, but it's far too early to tell whether we need it.

In Pennsylvania, we have spent literally $1 billion of the $16 billion that we're going to get under the stimulus program. Although we've contracted out over 65 percent of our road and highway projects, work has begun on about 50 percent of them. But it's just begun in the last couple of weeks.

Remember, it's less than four months since the plan, the Pennsylvania Transportation Plan, was approved. That's an incredibly fast time to get the work beginning.

So let's see how it does. Let's see the impact that it has.

DOBBS: Congressman Bilbray?

REP. BRIAN BILBRAY, (R) CALIFORNIA: Well, Lou, any bill put together in the dark of night, you're asked to vote for within a matter of hours without anybody reading it, has -- is fraught with problems. And right now, it looks like the price tag is very high.

In fact, the projection of the reduction in unemployment, or the control of unemployment, is about an 85 percent -- I mean, 85 degrees off. They figured it would flatten out, and it's continued to climb.

I think that we just have to understand that we need to be more smart in government, quit trying to throw money at every problem and start talking about substantive reforms rather than always asking the taxpayers to foot the bill.

DOBBS: Have you got a date certain. Congressman, as to when we'll see a smarter Congress?

BILBRAY: It's about time when the voters start -- they said they wanted a smarter Congress last election. No one promised that the change that they were talking about would only be change left in people's pockets after the federal government spent all the money.

DOBBS: I didn't mean in any way to set you up for that expression, that partisan expression, congressman.

Let's go to, if we may, before I ask you the question, Allen Sinai, Warren Buffett quoted on ABC's "Good Morning America," this is what he had to say about the first stimulus bill.

(BEGIN VIDEO CLIP)

WARREN BUFFET, BERKSHIRE HATHAWAY: Our first stimulus bill seemed to be was liking take a half a tablet of Viagra, you know, and then having also a bunch of candy mixed in. Everybody is putting it thing for their own constituencies. It doesn't have really quite the wallop that might have been anticipated.

(END VIDEO CLIP)

DOBBS: Well, Allen, you're quoted in a "Wall Street Journal" as saying it lags, monetary-fiscal policy should be allowed to work through the system. You have the likes of Warren Buffet, Nobel Prize winning economist and "Times" columnist Paul Krugman saying bring it on, another round. What do you think?

ALLEN SINAI, DECISION ECONOMICS: We have to let this one work its way out. It's hardly begun. The tax cuts started April 1. People are saving money. That's probably healthy long-run. And the spending, the outlay part of the stimulus, it just takes time to get it going.

I think if -- we need a time, and by the fourth quarter, the beginning of the fourth quarter, we're not seeing much in the way of results, then we ought to -- we can talk now about what might be necessary in another stimulus package. But it's too early to call this one out.

DOBBS: It appears that you're all in your various perspectives in agreement on that issue. Yet, there is a drumbeat that is obviously building in Washington, D.C.

Unique in all this is the claims that people did not know how bad the recession was back in February, did not know the extent of it. Yet, we're talking about the largest stimulus package in American history.

We are looking at a great deal of fear right now that remains on Wall Street, high unemployment, 9.5 percent by some standards, including discouraged workers on a -- detached workers from the workplace, 16.5 percent unemployment, a loss of some $12 trillion in this economy.

Where do we stand? Governor Rendell in Pennsylvania, do you sense recovery beginning to take hold?

RENDELL: Well, we have 8.2 percent unemployment, significant better than the national average, far too high.

Yes, for the first time I'm seeing business expansion, some of our businesses starting to grow again, coming to us for money to help them expand. I've seen new business start-ups, particularly in renewable energy, Lou.

But I want to make a paint to follow up what our economist said.

DOBBS: Quickly.

RENDELL: If we do have another stimulus, it ought to be 100 percent hard infrastructure, which we know produces jobs and orders for American factories.

DOBBS: As Warren Buffett would put it, all Viagra and no candy.

RENDELL: Absolutely.

DOBBS: Is that a fair way to put it?

We have just been joined by Congresswoman Loretta Sanchez, Democrat of California. Great to have you with us.

REP. LORETTA SANCHEZ, (D) CALIFORNIA: Thank you, Lou.

DOBBS: And if I may ask you, what is your sense? Is recovery beginning to take hold? Or do you in California, the people you represent, in desperate need of as much stimulus as possible?

SANCHEZ: Well, we have seen some of it come down, actually about 20 percent of the stimulus dollars have already come down into the state.

In particular in my area, in Orange County, we're we have the largest flood plain, for example, west of the Mississippi, we've seen $24 million already obligated to the project of making sure that 80 percent of the people who live in orange county will be taken care who are working on that flood issue for the river.

So we're seeing real money come down --

DOBBS: Are you are seeing real improvement in the economy? Do you get the sense there is economic recovery taking hold in Orange County?

SANCHEZ: Lou, remember that Orange County was the seat of four of the six subprime lenders headquarters. We are based in construction of new home construction. That's one of our big industries. So it's been very, very difficult for Orange County.

But what I see happening, and what Chapman University, who does the econometric model for Orange County has said is that this will be a plateau year, where we're sort of trying to find the bottom in housing and the economy. And maybe by the end of the year we'll see better stats.

DOBBS: Congresswoman, the plateau in many parts of the country feels like real progress.

Let me turn, Congressman Bilbray, in your part of California. What does it feel like?

BILBRAY: Lou, look, just like the governor said, instead of putting the money in the transportation issues where you know how you're going to pay for it with user's fees and the future, less than 3.8 percent of the so called stimulus bill was going into those infrastructures that the government is talking about.

DOBBS: OK.

BILBRAY: Most of this was done exactly what Washington usually does, it turns it into --

DOBBS: Congressman in San Diego, your district does it -- we're out of time. Yes or no -- does it feel like recovery?

BILBRAY: No. We don't see major recovery. But the fact is we're seeing struggles back and forth. DOBBS: Allen Sinai, give us your best judgment. Recovery this year?

SINAI: Yes, statistically. I don't mean functionally. It's going to be bad. Terrible jobs market. And Washington will, I think, eventually do more stimulus because it won't be able to stand the high unemployment rate.

But a statistical recovery, yes, by late this year. That means real GDP will grow positively, but not very much at all.

DOBBS: Something of a jobless recovery, unfortunately.

All right, thank you very much.

And Governor, and I want to thank each of you, but Governor Rendell, before I let you go, the story we reported here tonight on those young people, Hispanic and African-Americans, who were denied access to the pool there in Huntington Valley at the Valley Swimming Club, your thoughts very quickly, if we can?

RENDELL: It was even worse. They were actually thrown out. They were originally contracted from the camp to come in, and then something happened, and they were exited.

The State Human Relations Commission has started an investigation. No one is allowed to discriminate in Pennsylvania. We're going to get to the bottom of it.

DOBBS: Yes. It just -- as a young man in our report said to our Suzanne Candiotti, in 2009, who would have dreamed such actions were even possible?

Thank you very much, governor.

Congressman, we thank you have much for being with. Allen Sinai, thank you. We appreciate it.

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