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CNN "State of the Union with Candy Crowley" - Transcript: Economic Recovery


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CROWLEY: Treasury secretary, Jack Lew, is here. Thanks for coming by.

LEW: Good to be with you, Candy.

CROWLEY: Want to have a general question about the economy and play for you something the speaker of the House said this week.


REP. JOHN BOEHNER, (R) SPEAKER OF THE HOUSE: The president pivoted this week to jobs, as he has been known to do on occasion, and under the president's leadership, our country has fallen into the new normal of slow growth, high unemployment, and stagnant wages. And I think it's unacceptable.


CROWLEY: Take his characterization of the economy. Is there anything in there -- slow growth, would you agree with that?

LEW: You know, Candy, I think the characterization does not reflect where the economy is or where it's come from. I think, if you look at where this economy was four years ago, it was in free fall. We had --


CROWLEY: Right. He's not suggesting it is better than it was in, you know, that first year, but where is it now, right now?

LEW: I think, if you look at where it's come, we've had 40 months of job growth, four years of economic growth. The president's the first to say we'd like to grow faster and we'd like to be creating more jobs, and we need policies to do that. That's what he did this week. He gave a speech about what it takes to build a stronger, more vibrant middle class.

CROWLEY: Would you agree its slow growth?

LEW: The economy is showing signs of growth, and the resilience of the American economy and the American people is showing through. I think what the American people needs is for Washington to do its work, for Washington to stop creating crises, and for Washington to concentrate on the things that the president's spoke to last speech, making sure that the American family could have jobs, security in their home and in their health care, education for their children and a security retirement. And as soon as we can get on with that debate, the better.

CROWLEY: As you know, one of America's former great cities, Detroit, is trying to file for bankruptcy at any rate. Is there a federal bailout for Detroit?

LEW: Candy, Detroit's got serious financial problems. They've been a long time in the making. We stand with Detroit. And we've been working with them with technical advice, working with the kinds of normal programs the federal government has to see if there's anything we can do to help.

In the treasury department, I've made resources available helping to take down blighted properties, to help communities come back from the recession. I think the issues that Detroit has in terms of problems with its creditors, it's going to have to work out with its creditors.

CROWLEY: You know, we bailed out big banks. We bailed out the auto industry. We bailed out speculative home builders. And here is a major American city, whereby the way, the minority population of the overwhelming is the majority population. And there's no help from the federal government.

LEW: Let's be clear, candy. In the middle of the economic crisis, we were saving the American economy. We were in free fall. If we hadn't taken decisive action, we would have had a massively worse problem than what we even had. So, I think the situation in 2009/2010 was unique, and it's something that hopefully we never see again.

CROWLEY: But no major federal help that you can see for Detroit. That's different on its own.

LEW: Detroit and, you know, through the normal federal programs will continue to work with them.

CROWLEY: And Detroit has just sort of shrunk before our very eyes. This is something Detroit has to work out.

LEW: Detroit has serious challenges. We support Detroit and its efforts, but Detroit is going to have to work with its creditors.

CROWLEY: OK. Looking ahead for the next three years of the Obama administration, do you see more new taxes coming down the pike in any of those three years?

LEW: You know, Candy, we've had debates about taxes for a long time in this country and in Washington. We made some progress at the beginning of this year. We've closed the gap by raising tax rates to the very high end. We still have a gap in terms of the amount of revenue we need to make sure we can support all the things that we do in this country.

CROWLEY: So, you want to do additional spending to create jobs, particularly, the infrastructure because that also helps businesses, et cetera. But the question is do you foresee that new taxes -- you're talking about a revenue shortage and if you've got a slow economy, there's only a couple of ways, you know?

LEW: Just to be clear on taxes, I think we have some areas of emerging -- not consensus, convergence of views. I think that there's a broad sense the tax code is too complex, that it should be simplified. There's a broad sense that there are loopholes and credits that make the system unfair and distort the economy.

CROWLEY: Let me ask you about the debt ceiling. When will we hit it?

LEW: You know, I think Washington pays entirely too much attention to trying to figure out the day we run out --

CROWLEY: I don't need to know the day. Just circa when do you think that is going to be necessary?

LEW: I've said publicly we can get through Labor Day. And obviously, as we get closer, we'll have a better sense. There is a great deal of danger of trying to pinpoint. Congress should act immediately. Let's remember, we hit the debt ceiling in May. We've been using extraordinary measures since May to pay our bills.

LEW: We'll do that for as long as we can.

There's the risk of trying to focus on the day that you might get it wrong, and Congress shouldn't wait until the last minute. They should just raise the debt limit and take away any cloud of uncertainty about the ability of the United States to pay its bills.

CROWLEY: You know Eliot Spitzer? I'm assuming. You know a lot of the same people, I'm assuming. He knows a lot about Wall Street. He's running for city comptroller in New York. What do you think?

LEW: I actually don't know Eliot Spitzer very well.

CROWLEY: Do you think from his qualifications, he seems like a guy that ought to be able to handle New York City and Wall Street?

LEW: I'm going to concentrate on national politics, not on New York politics.


CROWLEY: On that note, you won't even do national politics. OK. Thank you so much for --


CROWLEY: -- treasury secretary Jack Lew.


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