Election 2008 Obama vs. McCain | Clinton vs. McCain | Latest 2008 Polls | Latest 2008 News

March 28, 2008

Clinton on "Political Capital with Al Hunt"

Bloomberg

AL HUNT: Senator Clinton, thank you for joining us.

SENATOR HILLARY CLINTON (D-NY): Thank you. It's good to talk to you, Al.

MR. HUNT: You and your Democratic opponent this week spoke on the crisis in housing and financial markets and sounded a lot alike. What do you think voters should know is your single biggest policy difference with Senator Obama on these issues?

SEN. CLINTON: Well, I've been doing this for a year now. I started last March sounding the alarm about what was happening in the sub-prime mortgage market, again in August, October, November, December, and certainly this year as well. I've been very specific about what I thought needed to be done. Yes, we do need to try to make up for the lax regulation and absence of oversight of the mortgage market that has led to many of the problems we face.

We do have to try to stabilize the credit market now, but we're still missing the main problem, and I think both of my opponents have really, unfortunately, failed to grapple with the difficulties we confront. We have to try to stem the foreclosure crisis. That is at the root of our credit and market challenges. So I've been very specific. I think that there should be a moratorium on home foreclosures, voluntarily entered into, but certainly pushed vigorously by the administration. I think we should have a voluntary freeze of interest rates for the next five years to try to stabilize the housing market.

I have proposed a $30 billion fund to help communities and states deal with the consequences and I was pleased to have Senator Obama join my proposal a few days ago.

MR. HUNT: That famous 3:00 a.m. phone call to the White House - more likely to come from the Treasury or the Federal Reserve than the Pentagon.

SEN. CLINTON: (Chuckles.)

MR. HUNT: Why would you be more ready than he is for that?

SEN. CLINTON: Well, I think that I have the advantage of experience, having been in a White House that had the greatest economic record in many years in terms of fiscal responsibility and job creation and an effective anti-poverty agenda that lifted more people out of poverty than any time in our history. I think the people who are advising me have the respect and credibility that the markets and Americans will look to. I think that my work in -

MR. HUNT: More so than the people advising him?

SEN. CLINTON: Well, I think, you know, people like former Secretary Rubin are pretty hard to beat when it comes to managing the economy. I think Senator McCain is taking a hands-off approach, which is part of the reason we're in the mess we're in. And I think Senator Obama hasn't really added much to the debate. We face a lot of difficult problems, Al. You know that. You cover this. But whether it's the falling dollar or the squandering of our balanced budget and surplus and our increased indebtedness or the bad policy choices that have been made by this administration or the failure of the Fed or any other government agency to really step in soon enough to deal with the mortgage and credit crisis, we need a strong hand. And I think I am much more prepared and ready to deliver that.

MR. HUNT: You and Alan Greenspan have traded compliments over the past year. He, of course, left the Fed two years ago, but how would you assess his regulatory performance leading up to this crisis?

SEN. CLINTON: Well, I think there's enough blame to go around for all of us. I don't think the administration or the Congress under the Republican leadership. I don't think that the financial markets themselves, the homeowners. I mean, we were living in a period of "irrational exuberance," to quote the former chairman. And I think he's been very forthright in saying that he missed it. You know, I think you have to look at his entire record and context, but he's also come forward and been much more forward-leaning than the administration has been willing to embrace to date.

So I would like to get, you know, the voices of experience at the table to try to help us figure out how we can do something like the Dodd-Frank proposal with perhaps the additional back-stop guarantee that I favor because, Al, I don't think we're going to work our way out of this economic crunch we're in and recover our footing in the global economy if we don't tackle the foreclosure crisis. We've got a potential of 2.2 million households to go through foreclosure this year. So I'm just calling for kind of hands-on, practical approaches that I believe would work.

MR. HUNT: We're going to take a short break. We'll be back in just a moment.

(audio break.)

MR. HUNT: Welcome back. Senator Clinton, you've mentioned foreclosures several times. The New York Times, which is supporting you, editorialized last week that the best idea to prevent foreclosures is Senator Obama's call to amend the law so threatened borrowers can have their mortgages modified in bankruptcy court. Your reactions?

SEN. CLINTON: I just don't think that's adequate. I'm not against it; it might have to be part of a comprehensive approach, and there's a fundamental unfairness in the bankruptcy code where bankruptcy judges have jurisdiction to decrease the amount of liability on a second home, but not a first home. But I think that is a cumbersome, lengthy process, and it throws it into the courts. Why on earth would we bail out Bear Stearns with federal taxpayer dollars, give a $168 billion stimulus package that consists mostly of rebates to taxpayers, none of which will get to the heart of the problem, which is the foreclosure crisis.

MR. HUNT: Senator, some of the most important financial deregulation occurred in the Clinton administration, breaking down barriers for commercial banks to sell securities and investment banks to make mortgage loans. Given the current crisis, did that go too far and would you like to see Glass-Steagall restored?

SEN. CLINTON: Well, I think that there were some benefits to the deregulation, but as with any kind of change in legislation, a lot of what many of us hoped would be done wasn't done with a Republican Congress, which was very adamant in trying to push this forward, and you know, there was support within the administration.

I have argued, and have acted as such as a senator, that we need greater regulation of this deregulated financial services industry. We don't have enough transparency, we don't understand - and I not only speak for myself; I speak for a lot of very experienced investors - we don't understand a lot of these new investment vehicles that have been at the core of much of the credit problem that we're facing.

MR. HUNT: But would you restore -

SEN. CLINTON: I think it's been every generation - well, I don't know that you'd restore it exactly as it was, but I am in favor of additional regulation of 21st-century, you know, quality because I think we need to look at the global economy today. You know, the global economy when Glass-Steagall passed was not what it is today. The global economy when it was deregulated is not what it is today. I have been calling for a comprehensive, global framework for this new investment environment we're in. We have to deal with things now that didn't exist, like sovereign wealth funds, and try to figure out the best approach. We have to deal with these new investment vehicles, which are non-transparent and very complex. We have to figure out what to do with financial institutions that now have access to the Fed's discount window, that aren't in any way regulated like commercial banks are.

MR. HUNT: What do you think the chances are, a year from now, if there is a President Hillary Clinton, that you will still be mired in a deep recession?

SEN. CLINTON: Well, I'm hoping we can avoid a deep recession. I think if we were to act vigorously now we could. Ten months is a long time in a fast-moving economy like ours. I don't think that the markets alone will pull us out of this. We have to restore confidence and trust, and we have to look like we're in charge of our fiscal destiny, something that I believe the Bush administration has not exhibited for seven years.

So I think we will be facing difficult economic problems, the extent and depth of those on January 20th, 2009, I don't predict. But I will exercise very hands-on leadership in our economy; I will have the very best minds around me, people with experience and credibility here at home and around the world. Because remember, Al, this is a piece of a much larger puzzle. We have seen the value of the dollar plummet; we've seen oil skyrocket. The cost of everything for average middle-class families is gone up, while average wages under the Bush administration have fallen $1,000. So we've got to pay attention to Wall Street, but we really have to pay attention to Main Street, and that's kind of president I would be, to fight to make sure that the real economy works again for hardworking Americans.

MR. HUNT: Senator Obama released his complete tax returns for 2000 through 2006, and called on you to do the same. Will you, by April 15th or April 22nd, release not just summaries of your tax returns but the full returns?

SEN. CLINTON: That's what I intend to do. I intend to do it as soon as we can get them all ready and available.

MR. HUNT: And they will be the full returns?

SEN. CLINTON: Yes, that's the intention.

MR. HUNT: Let me ask a final question. More and more Democrats worry about a protracted fight that could endanger the party in the fall. The Gallup poll this week showed 28 percent of your supporters now say they would not vote for Senator Obama; 19 percent of his supporters say they wouldn't vote for you. On Friday, Senator Pat Leahy said this is hurting the party's prospects in the fall, and called on you to drop out.

SEN. CLINTON: (Chuckles.) Well, first of all, I disagree that this is hurting the party. I think this has been very good for the Democratic Party. You know, maybe, Al, I've been in too many elections going back too many years, but this has been a pretty positive and civil one by any standard that I'm aware of, and I think it's brought millions of new people into the process.

But we're going to have a unified Democratic Party because although there are differences in experience and qualifications and record and plans between Senator Obama and myself, I think that there are much greater differences between either of us and Senator McCain.

MR. HUNT: Senator Hillary Clinton, thank you for joining us and thank you for joining us. We'll see you again next week.

About Us | RSS | Contact | Advertise | Privacy Policy         © RealClearPolitics 2008