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November 02, 2007

Interview with Rudy Giuliani

Bloomberg

(Note: the following is a rush transcript of an interview with Rudy Giuliani that will air this weekend on Political Capital with Al Hunt on Bloomberg Television.)

AL HUNT: And we begin the program with former New York City mayor and Republican presidential hopeful Rudy Giuliani. Mr. Mayor, thank you for being with us.

RUDY GIULIANI: Thank you, Al. Thanks for having me.

MR. HUNT: Sir, you have proposed a dazzling array of tax cuts. Keep all of the Bush tax cuts, new tax cuts for investors, individuals, cut the corporate tax rate. Experts like Alan Greenspan say, however desirous, they are not a free lunch; they cost something. Will you offset them with comparable spending reductions?

MR. GIULIANI: Sure, absolutely. I would offset them with a lot of spending reduction.

MR. HUNT: Same amount?

MR. GIULIANI: Roughly, roughly. I think you can - you can assume a little increase to a big increase in receipt. That has always been the case. You know, when they scored the Bush tax cut in '01 and '03, they were about $500 billion off. In other words, the government is getting about $500 billion more back than they thought. But basically the big things that I would do in terms of spending cuts, I would pledge not to rehire half of the civilian employees that retire over the next 10 years. It can be anywhere from 42 -

MR. HUNT: Non-defense or defense?

MR. GIULIANI: Non-defense. Civilian employees. When I first announced this, people said it can't be done. The reality is - it's very interesting - Sarkozy is doing the same thing in France. (Chuckles.) And the reality is it can be done because the government has not taken the benefit of high technology yet.

MR. HUNT: You would agree the big-ticket item is entitlement. Now, you have said that you want a commission. You are a very straight shooter; you have always said no tax increases.

MR. GIULIANI: Right.

MR. HUNT: So therefore you agree there have to be benefit cuts or increase in retirement or eligibility ages, right.

MR. GIULIANI: You have got to come up with something like that, but the reason you have to do it -

MR. HUNT: You would not go at those.

MR. GIULIANI: But the reason you would have to do that - the reason you would have to do that is you would have to have bipartisan support. You can't do this. What I would prefer - first of all, I don't think there should benefit cuts for anybody that is relying on Social Security now, anyone who is counting on it. There is no reason why we can't preserve Social Security. But I do think we can find ways to fund it better. I think that we can make government much more effective, much more efficient. I think it's quite possible to create private accounts, personal accounts, personal options.

MR. HUNT: As a substitute.

MR. GIULIANI: As an option, not as a - not as -

MR. HUNT: Same Bush's plan, basically?

MR. GIULIANI: Yeah, I guess, but more - I think we have to explain to the American people, this is a personal option; if you like the government, stay with the government. So it's a - nobody is going to -

MR. HUNT: An explanation problem as opposed to a substantive -

MR. GIULIANI: I think so. Seventy percent of the American people support personal option for their - the Social Security benefit. Then when you to say to them privatization, then 70 percent go the other way. So this is an explanation problem.

MR. HUNT: Let me ask one more tax question. You have said you oppose increasing taxes on hedge funds or private equity managers. Why is Warren Buffett asked should a multibillionaire like Steve Schwarzman pay a lower tax rate than a fireman who dashed into the Twin Towers in 9/11?

MR. GIULIANI: It isn't a question of comparing him to a fireman -

MR. HUNT: But he does pay a lower rate.

MR. GIULIANI: The reality is how do you encourage a market or how do you discourage a market. And hedge funds, private equity funds, capital gains, these are very, very sensitive to tax rates.

So if you were to increase tax rates, don't go pick a person, pick an industry on private equity, hedge funds - very, very good chance you're going to lose money; you're going to see a lot less financial activity in the United States. You're going to see that money moving to Ireland. You're going to see that money moving to Eastern Europe. You're going to see that money moving to Asia where growth may be better, taxes may be lower.

MR. HUNT: Let's go to health care. You have criticized Hillary Clinton for what you say is -

MR. GIULIANI: (Chuckles.)

MR. HUNT: - is the socialized medicine proposal. Yet experts say that what Mitt Romney did in Massachusetts, what Arnold Schwarzenegger is trying to do in California, namely, requiring everyone to buy health insurance, subsidizing the poor by taxing businesses that don't provide it, is the same approach. Are Mitt Romney and Arnold Schwarzenegger engaged in socialized medicine?

MR. GIULIANI: Well, I think Mitt Romney would tell you it's the same approach, and it's a mistake for the rest of the country.

MR. HUNT: And that is socialized medicine.

MR. GIULIANI: That is what he says. He says Hillary is trying to do socialized medicine. The core of the problem is the mandate. The minute you mandate something, I don't care if it's healthcare or buying an iPhone, if you mandate it, the price goes up. And the mandate is the mistake. It's proven to be a mistake in Massachusetts

In our kind of an economy, it works much better to encourage people, to make it attractive, make it a good deal, but don't mandate it. I would give everybody a $15,000 tax exclusion - $7500 for an individual. Go buy your own health insurance. You can buy it with tax-free money. If you can buy it for less than 15,000, you have a health savings account. You can build up that health savings account over a long period of time.

MR. HUNT: Let me try a couple of national security questions. Waterboard. You have noted the Congress has not outlawed it, and that you say it's not necessarily torture; it depends on the circumstances. John McCain says you are wrong and he says you haven't served in the military and have no experience in the conduct of warfare. Do you know more about torture than John McCain?

MR. GIULIANI: I can't say that I do but I do know a lot about intensive questioning and intensive questioning techniques. After all, I have had a different experience than John. John has never been - he has never run city, never run a state, never run a government. He has never been responsible as a mayor for the safety and security of millions of people, and he has never run a law enforcement agency, which I have done.

Now, intensive questioning works. If I didn't use intensive questioning, there would be a lot of mafia guys running around New York right now and crime would be a lot higher in New York than it is. Intensive question has to be used. Torture should not be used. The line between the two is a difficult one.

MR. HUNT: (Inaudible, cross talk.)

MR. GIULIANI: And it is very unfair of the members of the Senate and the politicians to try to ask Mukasey to draw that line as an attorney general designate when they refuse to do it as members of the Senate or members of the House. If it's illegal, darn it, well then vote for it. Make it illegal.

MR. HUNT: Okay, another national security - Louis Freeh, former FBI director, a Giuliani supporter, says that you and President Bush on policy would be, quote, "very much joined at the hip," pursuing the same policies of national security. Do you agree basically?

MR. GIULIANI: Well, I don't run away from President Bush; I think he has done some very, very good things. I would be different than President Bush only because I'm different. (Chuckles.) I'd have -

MR. HUNT: Would you pursue the same basic policies?

MR. GIULIANI: I would pursue the same basic policy of being on offense against terrorism.

MR. HUNT: Right.

MR. GIULIANI: What would I do differently? I would add considerably to the size of our military. I would add 10 new combat brigades immediately. I think America - America never made up for the Clinton peace dividend; America never made up for the gutting of the intelligence services that Bill Clinton did. I think those are Tenet's words, by the way, that Bill Clinton gutted American intelligence - 20, 30 percent cuts.

MR. HUNT: One place you have been tough is around Barak Obama, Democratic presidential candidate said the other day that if he were president, he would offer the Iranians economic incentives including membership in the World Trade Organization and a pledge not to seek regime change if they would cooperate on terrorism and the nuclear issue.

MR. GIULIANI: (Chuckles.)

MR. HUNT: Smart move?

MR. GIULIANI: (Chuckles.) No. (Inaudible, chuckles.) I think Hillary - this may be one of the few areas in which I agree with Hillary Clinton that Barak Obama in this area shows a great deal of - a great deal of inexperience and very, very naïve. This is like, you know, begging your enemy to negotiate with you. You don't beg your enemy to negotiate with you; you change the leverage. They totally misunderstand what Ronald Reagan did. Ronald Reagan didn't beg the Soviets to negotiate with us; Ronald Reagan changed the leverage; he changed the power position. Barak Obama doesn't have the slightest idea how to do that. I mean, it's sad actually. He's, like, fallen all over himself begging to negotiate with Ahmadinejad.

And what Barak is trying to do is really naïve. You know, beg a terrorist supporter to come and negotiate with you. Invite him to the White House without pre-conditions. I mean, Hillary Clinton pointed out that that is naïve. Not only is it naïve; it puts you in a very, very weak bargaining position.

MR. HUNT: I'm just so glad that I could get you and Hillary Clinton together, which raises the question - no often. It's been more than 40 years since you had a New Yorker on a national ticket and yet right now the two frontrunners are New Yorkers. What has happened?

MR. GIULIANI: The world is changing. (Chuckles.) I think that - I think there is a real recognition all over the country that we are more the same than we are different. And, boy - if you ask me one thing I have learned from now months and months of this presidential campaign, it's not - the issues in New York are not very different than the issues in Peoria, Illinois, or in Salt Lake City, Utah, or any place you are. People are concerned about the things you're asking me about - not very different in New York than Florida.

MR. HUNT: Mr. Mayor, thank you so much for being with us.

MR. GIULIANI: Al, good to see you.

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