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January 16, 2009

Interview with Rahm Emanuel

Charlie Rose

Charlie Rose:
Great to see you.

Rahm Emanuel:
Nice to see you.

Charlie Rose:
Tell me I d why the president-elect wanted you in this job. Because he had to tell you in order to convince you to leave something that you loved.

Rahm Emanuel:
Well, first of all, it is something I loved. I loved Congress. It was a great job serving the constituents of the north side of the city of Chicago. It not so much what he said to me, although he did make a persuasive case about working for him. But I think, as we had talked a little earlier before the show started, he did lay out -- and we've talked many times through the campaign periodically -- that this a moment of peril for America and also a moment of possibility for America, and that where you could effect change the most. And when you weigh that -- although, clearly Congress has its appeal to me personally, and you can make change from Congress, and you could just see it just this last week -- that the type of things that we wanted to do, both of us, but it's his presidency, that the place you can most impact people's lives leave your thumbprint where they can improve their lives and have that most immediate impact is from the White House. And although I gave something up personally for my career and also personally --

Charlie Rose:
Your family stays in Washington and in Chicago.

Rahm Emanuel:
Yes. That the White House was a place to make that most immediate change. And I cannot think of a better person to work for and help him see through his agenda than president Obama.

Charlie Rose:
You seem to be different.

Rahm Emanuel:
That's because I'm fully medicated. [unintelligible]

Charlie Rose:
Sleep.

Rahm Emanuel:
That's right. Sleep deprivation.

Charlie Rose:
He's cool. You seem to be hot.

Rahm Emanuel:
Mm-hmm.

Charlie Rose:
He is from the left. You seem to be from the center. You are different religions. You have different educational backgrounds. You've wanted different things in your life.

Rahm Emanuel:
Well, first of all, let me go at the premise a little. First of all, we do share a lot in common, the notion --

Charlie Rose:
Chicago, politics.

Rahm Emanuel:
Chicago, the passion that politics is about a place of possibility. But we're also both children of immigrants and that the notion that this is a special country that has given us special opportunity. And although you've noted differences in style, I don't think in the core of why we chose a life of public service -- again, this is his presidency, not mine, et cetera. But our friendship and our sense of -- as former colleagues, I as a member of Congress, him as a senator, but our friendship is in that same sense of what politics can do for people. And so, yeah, we have different styles.

Charlie Rose:
How would you characterize the difference?

Rahm Emanuel:
Well to the substance I actually don't -- the one thing that I would slightly disagree. You say I'm of the center, and he's of the left. I would say both of us are about the future. And we don't --

Charlie Rose:
And it has no label?

Rahm Emanuel:
Not only label, but it doesn't matter which road you take to get there, as long as it's about building a future that's stronger and better for the people we -- that you serve. To -- you asked a question about style.

Charlie Rose:
How would you define the differences in terms of personality and temperament because his campaign had the famous slogan, "no drama, Obama."

Rahm Emanuel:
Mm-hmm.

Charlie Rose:
You are infamous in this town for drama.

Rahm Emanuel:
Oh, let me say that I think what we do share stylistically is a sense of -- maybe I'm more expressive of it -- a sense of impatience to get things done to help people. Amy, my wife always jokes that if we had a fourth child, she's like to name it Patience. That will be a subtle, regular reminder --

Charlie Rose:
You would say the word patience all the time.

Rahm Emanuel:
But maybe it would seep in. But you know what? I'll give you example. I mean, you know -- Charlie, you know this. I care deeply about the children's health bill, helped negotiate it for President Clinton. Got out on the floor. This is for 10 million children whose parents work full time and don't have healthcare. I'm not sure when you're fighting against insurance companies patience is a virtue. I think for those kids whose parents work full time, they deserve somebody who's going to get there and work with a little impatience to rock the system to get it done. And the truth is President-Elect Obama knew what he was doing when he was hiring me. I mean, he knew what he was getting, I should say.

Charlie Rose:
He clearly did. And that's what I'm trying to get at.

Rahm Emanuel:
Okay.

Charlie Rose:
He clearly knew that. In fact, one of the things he said was, I need somebody to cover my back. And you're that.

Rahm Emanuel:
Oh, absolutely. Look, this is about loyalty. We have done a lot together as colleagues. We've done a lot together as friends. And my job is to see through his agenda and make sure not only it passes Congress, that part of the agenda, that's one piece of Pennsylvania, you know, the two sides of Pennsylvania Avenue. But it's also -- there's another road that leads into the Oval Office. And that's been from the Oval Office out. And that's the Main Street. And make sure the people of Main Street know they have a person who gets up every day, rolls up his sleeves and is trying to make sure that their voices are heard in that office. And so my job is to make sure that -- and there's parts of the job that are different. There's not just one piece of it. You're an advisor. You're a counselor. You're a person who implements an agenda. You're a person who makes a staff work to make sure the president's agenda gets through and also that he has all the options available to make those choices. So there's different -- and then sometimes you're an ambassador for him. So there's different parts of that. And it requires different skill sets, each of those things. And certain days, you'll be good at them, certain days, you won't be. But the mission, to make sure what President-Elect Obama sees for this country and wants to see for this country is executed both from his White House staff through Congress and also the American people know what that vision is so they can follow through and see how he can help, A, improve their lives, and change America's standing in the world.

Charlie Rose:
Was it important to him that you were a powerful figure in Congress and that you knew the Congress, and he knew that what he was going to need, especially with Democrats, is somebody who knew them and could speak their language in a way that they could understand?

Rahm Emanuel:
A little way through this interview, I'm wondering whether you should have him answer these questions rather than me. Look, he -- look, we had talked -- I mean, he knows what I had done in Congress to help us win both the Congress as well as help us not only win the Congress, but help us move an agenda through. He knows that I what I had done working in the White House before. And he also knew that I had private sector experience, and that I saw it through.

Charlie Rose:
In the banking business.

Rahm Emanuel:
In the financial sector, yeah, in the investment banking business. You know, I'm reminded -- let me just divert for one second. Josh Bolton, President Bush's chief of staff had, in early December, a breakfast for all the chiefs of staff to come together. I don't think another chief has ever done that. And so there were 13 people there, including Secretary -- former Secretary of Defense Rumsfeld, Vice President Cheney was there, Howard Baker was there.

Charlie Rose:
Ken Duberstein.

Rahm Emanuel:
Ken Duberstein, Leon Panetta, Mack McLarty, Sam Skinner. I'm leaving others off, so I don't want to do that. Andy Card was there. Secretary Rumsfeld said, you know, your advantage is that we -- none of us had were that you were here before, and --

Charlie Rose:
You said two different White Houses.

Rahm Emanuel:
And that you had worked in Congress. I said, yes, all those assets are also my liabilities. All the members of Congress know you on a first name basis. I can't be the head of legislative affairs. I've got to be the chief of staff. So they know me as colleagues. I know their districts. And so that's an advantage and it's slightly a disadvantage. Having worked in the White House before N your mind's eye, your DNA is wired for a guy you used to work for. I'm working for a new person. So you've got to rework --

Charlie Rose:
Tell me about that. That's fascinating.

Rahm Emanuel:
Why is that fascinating?

Charlie Rose:
Because you've got to rewire. You worked with Bill Clinton, now you work for Barack Obama.

Rahm Emanuel:
Well, you know --

Charlie Rose:
And so you've got to rewire. I mean, the whole definition of wee requiring means I've got to change because this is a different guy.

Rahm Emanuel:
I think -- well, it's his presidency. And, you know, making that change. But you have -- you know -- what is it -- let me try to illustrate this as the clearest example. This is not going to come off well. You used to -- you know, you could brief President Clinton before a press conference. He'll have -- you know, at his desk, doing a crossword puzzle, NCAA March Madness is over here, you know, something else as the phone calls are coming in, and you're, Mr. President, let's get this down to a one, two, three. And he can have all that stimuli coming in, and he -- you know -- and you'd have to kind of knock on the door, rip it apart, get it done. I, at one point, early on, we were trying to prep before a press conference and I said to president Obama, let's get this down to a one, two, three. He kind of looked at me and says, I got it. You know, and so you've got to kind of -- those [unintelligible] you know, I was -- the old DNA was kind of coming through, and you realize -- and he's got a very -- you know, his -- you know, President Clinton would have a lot of stimuli going on all around, you know, he's got a TV here, he's got a crossword puzzle here. You're trying to prep for a press conference. Somebody's saying, So and so's on the phone. He is -- and he has a very cool sense about what it is he wants to communicate how he wants to communicate, and he knows where he is. So you've got to rewire to the person, their style, their substance and their vision. And I think, you know --

Charlie Rose:
Yeah, all right.

Rahm Emanuel:
We've worked very closely over the last six weeks. We're getting there.

Charlie Rose:
What surprises him about you working as close as you have?

Rahm Emanuel:
Well, let me say this about the last election which I thought was fascinating, and I don't remember it ever happening in American history, or at least recent American history.
let's leave it that way. And I've said this to you, Charlie, I think before, is President Clinton was a baby boomer, President Bush was a baby boomer. Our nominees before, Al Gore and John Kerry, both baby boomers. They -- this is not an insult. With John McCain, they went back a generation, and with President-Elect Obama, our party went ahead a generation. No two parties at that time, at a moment in time in origin went this way, split. But you could see he was part of the future where the country was changing, it reflected the type of exchange that he was. He, I just think, as you say, what is different about him --let me just illustrate one thing that has just gotten done this week, which was the able to get a vote successful in the senate on the financial stabilization front. As you know, not very popular. The American people are very angry at the titans of the industry. They're angry at the administration for how the -- the present administration for how it used though funds.

Charlie Rose:
They spent 350 billion, I'm not sure how that was spent. They wanted to make sure the way the next 350 billion is spent --

Rahm Emanuel:
And no loan seemed to be move and the credit doesn't seem to be flowing --

Charlie Rose:
Things are not getting better. As far as they see and feel.

Rahm Emanuel:
Right. If you were doing politics, the very play out of the huddle would really be more like a running play. You would not throw and 80-yard pass -- okay? On a wet football, okay? And he had to make -- he was evaluating it. There was a political -- if you played it out, you would play a different set of plays. Roll up the children's healthcare bill. Roll up the pay equity bill, get your main economic recovery act for 3 1/2 million jobs and roll up that, and have each success bill your political capital. You don't roll out -- you're not even president. You haven't even taken the oath of office, and you call a play in for a 80-yard pass, the first one from the huddle. And he evaluated the pros and cons, saw what was the possibility, knew that -- and this is a new lose proposition. You have to win. You don't have a margin of error. And you're going to take what has now become known as a tarp, the financial stabilization fund, and you're not president, but you're going to use all your political capital. If you lose, you lose.

Charlie Rose:
And that's your first big act.

Rahm Emanuel:
And you're not president. No president, before being sworn in, has gotten a major accomplishment through a Congress. No president in American history before being sworn in moved a major piece of legislation. That was major, $350 billion. And it was unpopular.

Charlie Rose:
He had the administration's health, and they were working --

Rahm Emanuel:
Yes, absolutely. 46 Democratic votes, six Republican votes, done in one week, and not the normal political rank. And it was debated in the last campaign and not very popular. Nobody wants to stand next to it. And so he evaluated -- that's all the lead up. He had his economic advisors, what was the pluses and minus. He had his political advisers, what was the plus and minuses. Asked for another day to think about it. We had one more call. He came in, he did his security briefing. I went to him, I said, Mr. President, we are at that fork. He said let's go. He had decided, knew -- he weighed everybody's decision, took political -- the legislative advice, the political slash advice, took his economic team, what was needed at a time. And remember, this is a new lose proposition. You win or you really personally lose. And he made his call. We're going. He was on the phone, notified the president, Bush, called Harry Reid, called Senator McConnell, said this is why I think we need to do it. Not even sworn in yet. Then went and did, I think, close to about 15 phone calls. Sent Larry Summers and myself up there. We were up there on the senate side, and the bill passed in a bipartisan fashion, not the normal screaming that you'd see in Washington. So both in substance and then in style, I think you can really see the impact of -- we'll have our differences. While there will be differences, while we will debate the policy, we need not be partisan or just do it for pure political posture. I think in this last page, if you look at it, I think the American people will see the change he's already bringing to Washington. There could have been a lot of room for political posturing in that legislation, easy. As a person who knows something, I think, about politics, I was a freebie if you --

Charlie Rose:
Yes. It was low hanging fruit, as they say.

Rahm Emanuel:
So I complement the president-elect for what he -- how he did, that I think there is a lot to be said to both Senator Reid, he's leadership, Senator Dodd, Senator Durbin, as well as Senator Kyle, a member of the Republican leadership who voted for it, Senator Alexander, and we also called -- the president-elect did and I did, the others to thank them for their leadership.

Charlie Rose:
Do you know what it says to me? It says boy, this economic crisis is even worse than you imagined it was, and that you -- every day you look at things that are alarming, and you know it's got to be the -- you know, the riveting focus of what you do, and that you have got to be prepared to take some dramatic steps that you never imagined you would have to do, but you have seen the danger. You have seen how deep unemployment could go. You have seen how difficult it is to get the credit markets moving.

Rahm Emanuel:
But one is, you know this is my operative theory which is you never allow a serious crisis to go to waste. There is an opportunity to do big things. But it's an opportunity when you think you couldn't do something, because people knew this is a moment of peril, but also a moment of possibility. I think the -- we are inheriting, we as a country, not just the administration and the Congress, a country in the worst economic condition since the great depression. The greatest commitment of American troops overseas since '68 in the height of Vietnam. That's the moment in time in American history now. I think that you'll see that his vision is to begin to turn the economy around, working again for the middle class of this country, because you couldn't have a strong economy if you don't have a strong middle class. And putting in place policies that not only produce jobs day, but competitiveness for the future and then as you noted earlier, that not just deal with Iraq and Afghanistan, but most importantly, the hunger that's around the world for America's leadership to once again restore not just our position. They are hungrying for us to lead by example. And I think that at this time the country -- the world is watching as much as America is hoping for President-Elect Obama's success, the world is hoping for it, because they crave America's leadership at this time on so many fronts and they're waiting for it.

Charlie Rose:
Because they also think the problems are so large that they cannot solve them without America's cooperation and help, and they want leadership.

Rahm Emanuel:
America is that indispensable nation for freedom, and we have a person in a unique time in history who represents so much going on in this country and so much of the possibility of what we can do around the world.

Charlie Rose:
What will be want to say in the inaugural address? What would be the --

Rahm Emanuel:
That everybody should watch Charlie Rose.

Charlie Rose:
I hope so.

Rahm Emanuel:
I think your ratings are fine. I think -- well, a lot of it we talked about. I think -- I mean --

Charlie Rose:
What's important? You got to have -- what we have to do is connect on this level.

Rahm Emanuel:
Well, I think that, first of all, it's not different than what he's talking about in the campaign in this sense.

Charlie Rose:
Or in other speeches.

Rahm Emanuel:
Look. So much of the business and financial leadership of this country let the country down. The culture of anything goes dominated Washington, dominated the corporate suites, and parts of the leadership of this country. And that if you're going to ask America to take responsibility for their country, the leaders have to lead by example. And they, too, have to be responsible. And that feeling of responsibility can't just be a lecture to the American people where they were on the economic or the social strata. It must also be led by example by leaders of this country both in the public and private spheres, that they, too, have to adopt a philosophy and culture of responsibility.

Charlie Rose:
Participation, responsibility, and sacrifice.

Rahm Emanuel:
And so when we talks about, you know, everybody is going to have to give something for the greater whole, is once again kind of touching that nerve or that sense in America not only responsibility that this is the greatest country, we're all lucky to be American citizens, but to have that greatness, you have to give something to your country. And that is what I think you'll see in the speech.

Charlie Rose:
And he will also talk about -- not whether he talks about it, but he has also said with George Stephanopoulos that he understands, you know, that there may be time for a grand bargain, and the grand bargain has to do with tax cuts, it has to do with the stimulus program, it has to do with entitlements, it has to do with a range of things.

Rahm Emanuel:
But I think the basic structure conceptualization of that is when we make these bold investments in our healthcare, modernization, our school modernization, the reforms that we need, they have to be coupled with fundamental reforms of the way we do business. You can't afford anymore $300 billion of cost overruns at the defense department on an annual basis. That's just not acceptable, when other people are being asked to tighten their belt. That you can't continue to afford a healthcare system where we subsidize parts of corporate America above the price that you can get for a better price for $200 billion. That just can't go on. And so what we ask and make these bold investments and take on the possibility of not only creating these jobs, but modernizing America's fundamental infrastructure, we also got to change the way Washington does its business. And you can't accept that's how it used to happen as just acceptable. So there are fundmental reforms that have to happen, the delivery being more effective with that. Savings have to be made, yes. We'll take on those entitlements, but you can't come to the table with what you won't accept. The opportunity is what do we have to do to make the change that is necessary? He's willing to put things on the table. Let me give you an example of this. Personally willing to put things on the table to show that his commitment that -- he'll put some skin in the game. As we're dealing with this economic recovery act that's working its way through Congress, in Illinois, there is a project called future jet. It deals with coal -- different investment in coal sequestration, et cetera. It's a great -- going through a competitive process. The department of energy, past administration, picked Illinois, et cetera. But it's considered by part of Congress as an earmark. President-Elect Obama said that, "I said no earmarks,

Rahm Emanuel:
But he said if you want -- although he believes it's not quote, unquote, the traditional definition. But if I said no earmarks, that applies to everywhere. Even to something I believe is right and is a important investment for America's future and its coal industry. So I think that sends that he's going to put -- he's not going to ask other people to put skin in the game if he's not. That's an example of what he's saying I'm ready to change. And you could take, I think, the American people -- those who walked [?] here, can take a sense -- they passed pay equity reform in the house, passed with bipartisan vote. They based the children's healthcare bill. 40 Republicans in the house voted for it. They just passed, in the senate, the financial stabilization front with six Republican votes and 46 Democratic votes. These things are happening with the bipartisan sense, without the normal screaming. There will be places for screaming. It's politics. They have to have that give and take. But people should know that both in the substance of -- that effects their life, we're bringing change to Washington, and in the style that you're not here to just posture. You're here to --

Charlie Rose:
So you think it's possible to forge this bipartisan that he has spoken about in all these speeches, and that even though you only got six Republican votes in the senate --

Rahm Emanuel:
Senator Judd Gregg, and I said Senator Kyle, a lot of people in their leadership. Yes, I do think it's possible. I just gave you three examples of legislation moving that's all happened. Part of that is, you know, part of that is being sincere, and, you know, as I said earlier, this wouldn't have happened if it wasn't for what Senator Reid said or Durbin said or Dodd did to help us get it done in the senate, but to their credit, Larry Summers and I were invited up to the -- by Senator McConnell to speak to the senate Republican leadership on the financial legislation. They asked very good questions. Very substantive questions to evaluate they wanted to be for or against it. At the end of the day, we walked out of there, improved our chances of getting bipartisan support and this morning, both the president, as well as I and the vice-president as well made calls to Democrats and Republicans to thank them for that vote. That was not an easy vote.

Charlie Rose:
Speaking of that, one criticism I've heard of the transition is that despite the fact that you were in the house, despite the fact that the president-elect was in the senate, despite the fact that the vice-president was in the senate, you haven't been sparkling in being able to give notification. I'm thinking of whether it's the Panetta nomination or other things.

Rahm Emanuel:
Some innovation has -- we've made our mistakes, and the real test will be, did we learn from it. I think we did. You'll see that with the confirmation --

Charlie Rose:
Fair enough. Holder will be confirmed in your judgment?

Rahm Emanuel:
As a house member, you never want to prejudge the senate, the former house member. I think Eric did a great job for himself yesterday, and I do think he'll get bipartisan support, and you really seeing Senator Orrin Hatch saying he'll be supportive.

Charlie Rose:
Wagner, no problem?

Rahm Emanuel:
I believe that there is -- the support is there for Tim and you can see it, and he will be confirmed as secretary of the treasury.

Charlie Rose:
The world -- you sit in every day on the national security briefings that this president-elect gets. Is it more dangerous than you ever imagined?

Rahm Emanuel:
more dangerous than I ever imagined?

Charlie Rose:
Yeah.

Rahm Emanuel:
I've also imagined that we live in a dangerous world. We are getting an intelligence briefing you didn't get before. And there are a lot of challenges that are going to face America and around the world.

Charlie Rose:
What's the plan for Afghanistan?

Rahm Emanuel:
Charles, that's a second show. I can actually get it out.

Charlie Rose:
Well, I'll take it now or the second show.

Rahm Emanuel:
You know, take it to a second show, and I'm going to have people that are experts on that, as you know, that there's --

Charlie Rose:
But is there a plan in place among your foreign policy team already, in terms of what to do and how many troops and where they come from and how much money and the risk that might be there because it's a different war than Iraq?

Rahm Emanuel:
Well, two things that you can take home first of all, the vice president, as you know, just returned from the region.

Charlie Rose:
Right.

Rahm Emanuel:
As reported.

Charlie Rose:
[unintelligible]

Rahm Emanuel:
On a bipartisan trip with Senator Lindsey Graham, who is very helpful on this effort, and reported directly to the president on that trip. You know that there's going to be an increase in troop level. There is a plan and a review of what's going on in Afghanistan and how we have to approach Afghanistan. But one of the differences is going to be a philosophical one, that you can't approach Afghanistan absent of a theory of the case of both Pakistan and India. And you will also see changes in the way that we think about it. It's not just one country. But there is a regional strategy you've got to have to effect what we're trying to do on the ground in Afghanistan.

Charlie Rose:
Israel now is engaged in the Gaza. what's an Obama administration -- how are they going to be different than a bush administration in the relationship with Israel? And how they see the Middle East?

Rahm Emanuel:
the president of the administration is involved, as you know, in negotiations. Anything anybody said can mess that up.

Charlie Rose:
Exactly.

Rahm Emanuel:
So it's a free zone.

Charlie Rose:
On the other hand, it is said, the following thing, about you because people who know you and another reason you are there, you have no problem whether it's your friends in Israel or people who you don't know but realize are critical to the I shall issue is speaking the plain truth of what has to be done and that you are not -- because of your experience and your temperament not going to accept business as usual.

Rahm Emanuel:
You mean on that --

Charlie Rose:
For that issue.

Rahm Emanuel:
Well, my advise and counsel will be private to the president.

Charlie Rose:
Okay. But now that brings me back to you, and how do you see this role? Because is it a policy role, or is it -- what is the role that you have now, because you have, as you have shown in this conversation, strong feelings about policy. And your role is clearly to shape the president's views and to see that his views --

Rahm Emanuel:
This is his presidency and his policy.

Charlie Rose:
If you can shape it, he wants you to shape it.

Rahm Emanuel:
No, no, one of the things --

Charlie Rose:
Given the benefit of your experience.

Rahm Emanuel:
No, no, let me say this. This is a president who is very comfortable with a wide range of views. And my job is to make sure that he will chafe [spelled phonetically] if that's said in a chokehold. He doesn't want group think. And I will fail if it's -- I mean, there's a story to go to how we went add decided to go through on the financial legislation because the group think was not to do it. Speaker Pelosi said, I think that's a mistake. He said, I want us to think about this. And that's how we came out with the opposite answer than we went in with.

Charlie Rose:
You went in with the idea we'll wait and let the Congress do it after we have a new Congress.

Rahm Emanuel:
Well, you don't [unintelligible] our past before your president. You just don't do that. If you are playing it by the book, you don't do that. This is not a time -- this is an extraordinary time that requires extraordinary actions. We took one. President Obama wanted. I will fail as a chief of staff if I try to narrow the choice for him. The chief of staff job -- I served President Clinton as his senior advisor. That was to blend policy, politics and press. The chief of staff job has a -- while those are some of the skills, some of the areas that you need, has a different portfolio. You are kind of one of the final advisors. You have to make sure that what he wants -- like he wants a wide range of views before he makes a decision, and he wants us to challenge the assumptions. I've got to make sure he has that. Second, you also have to manage the White House so it services what his purposes are. Third, there are times you will, as a chief of staff, be an ambassador. That's one of the reasons, you know, I went up and spoke to the Senate Republican luncheon. It was not a luncheon, but Senate Republican meeting, policy meeting, for him with Larry Summers. So you have different roles in the chief of staff job. It's not a thing. I assume, I mean you heard it from him. He does know I have policy background. He would want that. He wouldn't want somebody with a clean slate on that. He would want somebody that knows the politics of an issue. He would want somebody that would also know how to work an issue from a communications standpoint. But the job is to provide him with all that, that he wants, so he can make the decision and then he can have his staff execute that decision. I think there is a lot to see by how he has -- he laid out an agenda, both on the financial legislation, the children's health legislation, major financial recovery act, setting a goal for 3 1/2 million jobs, and then said I'm not really sure I want to say this is the only way to get the 3 1/2 million jobs. I'm not negotiating 3 1/2 million jobs, but I'm opening to different routes to how to get there. And then our goal as his staff, and my goal as chief of staff, is to make sure that the policy apparatus and legislative apparatus is working as a team to make sure his goal is accomplished. This week the legislation was introduced. Senate majority leader Reid and Speaker Pelosi committed publicly to getting it on the president's desk before president's daybreak, and we're on schedule to do that.

Charlie Rose:
This idea of team of rivals, there are a lot of powerful people. A lot of big problems.

Rahm Emanuel:
There is big people matched up with big problems. We've got big problems in this country. As I said to each of the cabinet secretaries, as well as the groups, I don't care whether you say team arrivals or dream team. The operative word is team. And to date, everybody is doing well, our job is to make sure they consistently work as a team. So far that has happened. Nobody should take any sense. These are extraordinary times that require extraordinary people. And I think one of the things that people can step away from and realize, that President Obama is willing to have people with strong ideas, strong capacity who are up to the challenge that the country is facing. If you step back and look at that entire cabinet, Senator Clinton, Secretary of State. Secretary Gates, defense, who has been held on from the other administration. Tim Geithner, at Treasury --

Charlie Rose:
Shaped the policy that he is now --

Rahm Emanuel:
Larry Summers, the NEC, National Economic Council. Very strong people. The comfort that people should take away, the public should take way, is we have put together a cabinet and a White House staff that it is people with big personalities, strong ideas, because the challenges are of the magnitude of the quality of the people the president has assembled.

Charlie Rose:
It's a very strong White House, grant me that. This clearly looks like a government that is going to see an executive branch and a White House that is going to play an extraordinary role in shaping --

Rahm Emanuel:
I think you will have a White House and a cabinet that is strong and a president that consciously -- it wasn't like we parallel -- he didn't parallel park into this. He wanted exactly what he set out to get. And he knew when he was asking Secretary Gates or Admiral Blair at the DNI, he wanted people with strong backgrounds, a diversity of views, and he came to the table with a strong history. Now, that has opportunity, has challenges. Our job, as I say, I said it here. The operative word here is team. And my job as the chief of staff is to make sure both the cabinet and the White House is serving the president, and that we stay away from the traditional -- what, you know, kind of the rivalries --

Charlie Rose:
And if they're not serving the president, what do you do?

Rahm Emanuel:
You'll just have to wait and see. No.

Charlie Rose:
[laughter].

Rahm Emanuel:
Sweet and gentle, the other side of Rahm will come out. No. I mean -- right now, I don't think -- that's a hypothetical. The good news is I do see -- there are a series of economic meetings I sit through, series of national security meetings. Everybody -- take this comfort. Everybody is -- knows this is a unique time in American history, and they know they're at a critical -- people gave up -- Senator Salazar gave up a senate career. Senator Clinton gave up a senate --

Charlie Rose:
Right.

Rahm Emanuel:
Congress. Secretary Gates repeatedly said he wanted to retire, agreed to stay on. You got a lot of people who are committed to public service. They know this is a unique moment in American history, and this is a unique president at a unique moment in American history so the comfort you walk away with, you have people of high quality who are wanting to serve, and it gave something up themselves to serve in a different role, to serve their country.

Charlie Rose:
There is also this. He has been there and he has said Guantanamo, for example, is tougher and more difficult than I imagined to do what was necessary. He has a relationship with trade unions in America. Is he going to have to say to them that whatever you expected might happen right now on check-offs around what I promised will have to wait. We're going to have to delay it. It's not going to happen as soon as you expected it to happen. I realize how important it is to you, I appreciate that, but it's not going to happen as fast as you want it to?

Rahm Emanuel:
Well, first of all, let's go through this. We're not done yet, but he's very clear on Guantanamo where a arrow is pointed. There will be, eventually, a padlock put on it. It may not happen as fast as everybody wants to do it. Yes, it is more difficult.

Charlie Rose:
More difficult than he imagined, he has said.

Rahm Emanuel:
Okay. But the direction of the policy, where are we heading? That's clear. That goal line hasn't changed. Presence in organized labor, they know and they would agree. First priority, get people working, which is why they are working so hard to pass the economic recovery act. Whether that's building roads or building the broadband. That puts people to work doing important things that are key for jobs today and economic competitiveness down the road. He said he voted for the car check as a senator, he voted for it -- spoke about it as a presidential candidate, understands that it needs to get done.

Charlie Rose:
Is it a priority?

Rahm Emanuel:
Yeah. I mean in the sense of this. There has been an imbalance in this country between quote, unquote, organized labor and management. There is not only one way to solve that imbalance. What are the policies that come from the administration? Who is sitting on the NLRB in the sense of the board that represents the labor relationships board, making sure that we have the policies we have in place, make sure there is not such an inequity in that balance that has been skewed. Bring that back into shape. That's one way to do it. Getting people working again is another way to do it. Making sure other policies and the people in place understand that we want a balance out there.

Charlie Rose:
Where is it as a priority?

Rahm Emanuel:
Well, he's been very clear. It has to get -- it has to get done. But, you know, he is very also clear, we're going to get the children's healthcare bill. We're going to get the economic recovery bill done. We're going to get the financial stability funds needed, and working again for homeowners and for consumers. And we have to get all those done. I think also one of the things you haven't asked, Charlie, and I know -- a big top priority for the president is he wants to see financial regulatory reform passed this year.

Charlie Rose:
I was coming to that. And is he in total agreement with what recommendations Paul Volcker has made?

Rahm Emanuel:
He and I have not talked about that specifically. He has read the Volcker report. I haven't said do you agree with all 17 points --

Charlie Rose:
[talking simultaneously] major items in terms of what Volcker says is necessary, he is on board?

Rahm Emanuel:
The basic --

Charlie Rose:
Spare me the details.

Rahm Emanuel:
The basic thrust that our regulatory system is not up to where the financial system is in the 21st century, absolutely believes. Second, while you have a regulatory system here for what has been the traditional banks, you have a secondary financial system that is not over -- does not have a regulatory overlap, doesn't have any accountability, doesn't have any transparency, and it's that lack of transparency, that lack of accountability that has hurt everybody. And it's the system, and the agencies in charge of it, whether that be the Securities and Exchange Commission or the SFDC, need to be brought up to a level that's equal to where the financial system is.

Charlie Rose:
And what's the priority of, that and when will that take place?

Rahm Emanuel:
Oh, it will take -- I mean he has to decide exactly when he wants to send legislation up, but I know from all our conversations that the financial system thinks, the banks and everything, that they're going to get $350 billion, and that we're not going to do regulatory reform. That is going to happen this year. It has to happen. Part of restoring the system's ability to keep credit flowing is making sure that we have -- one of the problems here is two parties, banks or financial institutions, don't trust each other. Bringing transparency to that system is essential to getting credit flowing again. It's as important as the $350 billion. So it is a top priority. He's talked to Senator Dodd about it, he's talked to Chairman Barney Frank about it. And has been clear that we have to get it done. And he spoke to the senate Democrats this week about that very fact that it must get done and be a top priority this year.

Charlie Rose:
The stimulus bill will be a --

Rahm Emanuel:
Economic recovery --

Charlie Rose:
Economic recovery bill.

Rahm Emanuel:
I want you to get the lingo. I'm here to help you modernize that [unintelligible], okay?

Charlie Rose:
That's important because it's not -- the purpose of it is not to stimulate the economy? The purpose of it is to do something larger and grander?

Rahm Emanuel:
Well, yeah, because -- the purpose is a recovery of the economic system and making sure America's long-term economic competitiveness is strengthened.

Charlie Rose:
How long will it take that to kick in to make a difference in the economy? Because even the president said it's going to get worse before it gets better.

Rahm Emanuel:
Right.

Charlie Rose:
Bernanke made a speech in London, as you know.

Rahm Emanuel:
Right.

Charlie Rose:
Got lots of attention.

Rahm Emanuel:
At the London school of economics.

Charlie Rose:
At the London school of economics. Are we having to accept more pain, more unemployment, more bank failures, more -- as this economic crisis permeates through not only the American but the global economic system.

Rahm Emanuel:
Well, here is, I think, the theory of the case, which is one of the reasons we decided to go early on trying to get the financial stabilization funds, that there are two parts to the economy that are clearly affected. One is the flow of credit, which is the life blood of the economy, and the rising kind of unemployment and the ability of people to have jobs, make a living and spend again. And though we've put together what we believe is a one-two punch and affecting the economy from both sides, not one, which is getting the resources necessary to -- hopefully will be necessary to get the financial system and the banks lending again and credit flowing and getting the economy moving again by putting the middle class back to work building this country and attacking the problem from both sides rather than just kind of fighting with one hand tied behind your back. Now, even while you are doing that, both the economic team as well as the president have been clear that it is going to get worse before it gets better.

Charlie Rose:
And how long will it get worse?

Rahm Emanuel:
I mean, is it -- I don't -- you know --

Charlie Rose:
Fair enough.

Rahm Emanuel:
I'm not, you know, I played -- I play an economist on TV.

Charlie Rose:
You have to have an assumption.

Rahm Emanuel:
I'm not an economist.

Charlie Rose:
But you guys have to have an assumption, and you have to --

Rahm Emanuel:
As you know this, Charlie, you've had your own economic people on this show. People have differing places of when they think this will turn around.

Charlie Rose:
They're not president, and they're not --

Rahm Emanuel:
Right. I understand.

Charlie Rose:
-- running the country's economy.

Rahm Emanuel:
The key thing is our -- and this gets back to the point about never allowing a good crisis to go to waste. Are we going to use this crisis to make the type of reforms we need in K through 12? Are we going it use this crisis to finally wean America's dependence on foreign oil off of where it is? Are we going to make -- use this crisis to finally bring the type of efficiencies and energy policy that we've been so wasteful for as a country? Are we going to start to do things in this moment in time and start to bring the kind of costs we need in healthcare -- cost reforms we need in healthcare to bring the costs of the system down, which is why we're investing in the healthcare IT. Are we going to bring this digitized revolution by bringing baud band to parts of the country that haven't been so we are a most modern and effective economy? If we make those investments, so when we do come out of this recession, we'll not only have produced jobs today, we'll be more competitive down in the future. That's the challenge we're doing. I think if you look at the economic recovery, whether that happens in a year, when that happens in 18 months, the key question is when it has happened, are we a more competitive economy? And I think the key investments in the economic recovery act, lay the foundation for that, which is why the president has been so insistent on this digitized revolution, be that in the medical space, the air and sea space, education space.

Charlie Rose:
Here is the economic recovery plan. Is it a slam dunk in the Congress, or is it thee test for this administration of the first 100 days?

Rahm Emanuel:
You know, as a former member of Congress, never say it's a slam dunk because that's exactly what we get [unintelligible] back up, right?

Charlie Rose:
The president elect loves --

Rahm Emanuel:
Let me say this.

Charlie Rose:
-- basketball terminology.

Rahm Emanuel:
Right. Let me say this: I do think, given what you know today, A, the basic outlines are there for the 3 1/2 million jobs, and B, the speaker of the House and the Senate majority that have been clear that this will be done by President's Day break which is February 12th and that nobody should plan anything because we're not going home until we get it done. That's a great back stop for Congress to finish its work.

Charlie Rose:
You're not going home until you act.

Rahm Emanuel:
Well, you're not going back to your district -- that's right. And so I feel -- I don't want to say I feel absolutely confident. There's a work that has to get done till it happens. But the piece are there. The energy is there, and the purpose is there to move and keep it on schedule. Because as much as the substance is important, and you have to have it right because of the fragility of the economy, timing is as important as each of the investments. And so moving and getting it done by February 12th is an important signal sent to the economy that, in fact, we're going to have a middle class tax cut and we're going to have these key investments.

Charlie Rose:
Fair to say that not -- with an awareness that some foreign crisis could come along that would be -- threaten the national security and be overwhelming, this administration taking office on Tuesday will be defined by how well it can take us out of this economic crisis unless there's some new unforeseen issue, this is where you will mark that you can do what you want to do because of the crisis and the opportunity, therein lies the future of the administration.

Rahm Emanuel:
Well, I think that -- well, he has said the test for us is will the economy be better for the American people, and will web a more secure country side? Then I don't think there's only one test. You have multiple tests. I mean, we have two hot wars. You have a number of issues. You mentioned the Middle East which, as you noted, I wouldn't answer. And you have challenges as it relates around the world.

Charlie Rose:
And you have this Russia testing Europe and the Ukraine in the terms of the flow of natural gas.

Rahm Emanuel:
But what we do know at this point is that the world does want America's leadership on a host of these fronts that have been stalled to date. And the president elect has been very clear. America is going to re-engage with the world and lead that world so we can deal with our collective security and our need to protect this country and part of that protecting this country is leading the world.

Charlie Rose:
It is clear that when you look at all this range of issues, that he reaches out to hear people who are opposed to him. He went to have dinner with George Will and Charles Cladheimer [spelled phonetically] and Bill Crystal. And I'm not sure who was there. Because he wanted what? To know what people who, in print have been opposed to him thought of what he was doing or to see what ideas they had about -- or how their view of the world was different from his or --

Rahm Emanuel:
Well, you heard him mention at the press conference the other day, I mean, he said, I welcome ideas from -- there's not only one way to solve this problem. Now, what's not negotiable is 3.6 million jobs. You have a good idea if it's -- he says there's no pride of officeship [spelled phonetically] that's exactly his words. So he sat down with, as you said, conservative columnists. What are their ideas? We had a -- there was a dinner the other night over at the Wilson Center, organized by Lee Hamilton.

Charlie Rose:
Right.

Rahm Emanuel:
A group of foreign policy people outside of his national security apparatus because he wanted to intellectually engage a set of ideas. And again, I gave you this example. We had a decision made on the financial legislation. I don't want to keep coming back to it, but it was one other person's idea, the speaker, that get it out of the way, deal with it now, and that's it. And it made him rethink. So he likes to be challenged intellectually. He likes to get out and challenge the assumptions of conventional thinking. It is ease in the White House to get a group think going. He wants the best of his advisors to give him, knowing that it's not going to just be a mind meld, but he's willing to reach out and be challenged on a set of assumptions. He may decide to then say, here's where we are. Not me. Will. But he is not intimidated by an intellectual challenge for those who have a different view. And I think that's welcome.

Charlie Rose:
I also hear you saying, and what's happened in the Senate is an example of that, and what -- that he wants to be bold, not only because he thinks the time is demanded but because it's the nature of the person.

Rahm Emanuel:
Well, there's no -- there is no doubt I think he views -- this is a moment of peril, but that peril is also is the nugget of possibility. And you can't get to that possibility without a boldness of action. And you've seen it to date. You've seen it in his willingness on the policy level offer different ideas to get there and welcome a slew of different ideas. I think one of -- I'm projecting, I've had enough conversations, I think with members of the other party. That I think they welcome the openness of the approach, knowing full well -- may not always agree, but that at least we're going to listen and take sincerely, set of ideas.

Charlie Rose:
And he is prepared to go over their heads, if necessary, as Ronald Reagan did, because he knows he has rhetorical gift that served him in the campaign, probably wouldn't have been elected without it, either the primary nomination, a Democratic nomination or the general election. And therefore, he has a tool --

Rahm Emanuel:
It's not like do what I want. He's not saying to the senate you do what I want or I'm going to over -- part of -- I'm going to go over your head.

Charlie Rose:
He is saying to them and to America, you know, I'm going to use my connection with the American people and whatever understanding I have of technology and my own skills to build --

Rahm Emanuel:
You're -- we're dealing with the two sides of Pennsylvania Avenue. I think the president's basic approach is a two-way street. That's number one. I think people on the other side of Pennsylvania Avenue appreciate that. The president has a different role than a member of Congress or senate. Not only are they responsible for keeping the flow of the two sides of Pennsylvania Avenue moving, they also have a job to speak to the country. And so that the role between the Oval Office and Main Street is also an open two-way street. And so you are in a town of politicians. I'm sure they also take note he's doing quite well with the American people, and that they are hoping he succeeds. And so, you know, as you know, Charlie, I love politics. I think it's a good thing.

Charlie Rose:
So do it.

Rahm Emanuel:
Okay. You're in a town of politicians. They have taken note of where the American people are as it relates to President-Elect Obama.

Charlie Rose:
And the polls show it, and his residence shows it.

Rahm Emanuel:
And that's a good thing. The challenge isn't that we're going to go over your head. He has a job to communicate to the American people. That's part of his job. They have a job to communicate to their constituents. He has a job to do it to all 50 states and let them know what his vision is. And he's very clear he wants to continue to do that. It would be essential to the job of the presidency in today's time.

Charlie Rose:
You have been generous with your time, and I thank you very much.

Rahm Emanuel:
The water is really good.

Charlie Rose:
Thank you for the conversation. [laughter]

Rahm Emanuel:
I thank you. I've enjoyed.

Charlie Rose:
This is an exciting time for everybody, whatever side they're on, and, however, they are united by the sense of concern and care for the country. Thank you.

Rahm Emanuel:
I do think -- I spent a lot of time on the hill this week. I will say this. Regardless of how anybody voted on a particular issue, there is a sense of common purpose by the legislative branch that this is a unique time, and I think people can walk away sensing that their elected officials know that this is an extraordinary time that requires extraordinary answers.

Charlie Rose:
Thank you again.

Rahm Emanuel:
Thank you.

Charlie Rose:
Rahm Emanuel, chief of staff for President-Elect Obama. On January 20 he will be in one of the most important places with a huge responsibility of serving the president and serving the country. Thank you for joining us. See you next time.

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