The White House Readies a Stealth Stimulus
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White House senior adviser Valerie Jarrett was adamant on Sunday, when asked if President Obama was considering a so-called second stimulus to deal with the rising unemployment rate. “I think it’s too soon. It’s premature to say, ‘Is a second stimulus needed?’ ” she told David Gregory, the host of NBC’s Meet the Press.
But a moment later she said the White House was already looking at tax credits and other measures to further stimulate the economy. “There are a range of suggestions that are being considered right now by his economic team, and we’ll see what we come forward with,” she added.
On its face, the two comments sounded like a contradiction. But at the White House, there is no confusion. More stimulus is coming, but it just won’t be called stimulus. Economic advisers, in concert with senior Democrats in the House and Senate, are planning additional piecemeal benefit extensions, tax breaks and other spending that could eventually add up to as much as $100 billion, say some outside experts. “The fact is that this is a word game. It isn’t a discussion of the ’second stimulus,’ ” says Jennifer Psaki, a White House spokeswoman. “This needs to be an ongoing discussion between the President and his economic team about new ideas and ways to get people back to work.” (Watch a video about the “Unemployment Olympics” in New York City.)
Prominent economists like Mark Zandi at Economy.com, who has counseled the White House and also worked with the presidential campaign of John McCain, say there is little doubt what is going on. “Yes, I think it’s a form of stimulus,” said Zandi, who has always favored a second stimulus. “This is what I always thought would happen, policymakers would take it one step at a time.”
In other words, the new stimulus efforts, which are still under discussion, are unlikely to be packaged into a single bill, which would be politically unpopular. An August Gallup poll, for instance, found that 65% of Americans opposed a “second stimulus” and 51% thought that the Federal Government “should spend less” than it is currently spending on stimulus. And that opposition is likely to grow after the announcement on Oct. 16 that the federal deficit for the fiscal year that just ended hit $1.4 trillion, which, at almost 10% of the total economy, represents the largest share since the end of World War II. (See pictures of hard times in Las Vegas.)
The exact content of this piecemeal, second effort is not yet known. The White House has so far declined to spell out its wishes. On Oct. 14, Obama announced his desire to give seniors onetime checks for $250 in lieu of any cost-of-living increase in Social Security checks this year. The checks, costing about $14 billion, would be paid for with an increase in payroll taxes for people with incomes over $250,000.
House and Senate leaders have also been discussing extending unemployment benefits another month or longer and a program, known as COBRA, that helps the newly unemployed pay to keep their employer-provided health insurance. Other measures on the table include an extension of the first-time-home-buyer tax credit, which is set to expire on Dec. 1 and has helped stabilize the housing market this year. The White House has said Obama supports extending all three programs, though it remains unclear whether they would be offset with other tax increases.
House Speaker Nancy Pelosi said recently that she may support a tax change, called a “loss carryback,” that would allow money-losing companies to more quickly get tax refunds. Another provision under consideration would extend tax breaks that would allow companies to quickly write off the costs of new purchases. Though many of these provisions could be acted upon before the end of the year, another stimulus proposal to send more federal money to cash-strapped states in 2011 is likely to be put off another year. The February stimulus bill provided about two years of additional state funding. (Read “How to Spend a Trillion Dollars.”)
Driving the call for more stimulus efforts is the unemployment rate, which now sits at 9.8%, and is expected to rise into next year, even though the recession may have already officially ended. Republicans, who have long been critical of the $787 billion stimulus that passed in February, are likely to support some, if not most of these new spending programs, in part because they are politically popular. Texas Republican John Cornyn, a vocal opponent of the February stimulus, said recently that he was in favor of some more federal spending efforts. “I think there are things we need to do to help people who need help,” he said Oct. 4 on ABC’s This Week.
Other Republicans, like economist Kevin Hassett, a former adviser to McCain’s presidential campaign, say it might be better to focus on policy fixes that could have long-term impacts, not just short-term impacts. “You can have a stimulus every quarter from now until we go bankrupt,” Hassett said. “But would that be good policy?”
Networks Barely Report ‘Stealth’ Push for ‘Second Stimulus’
Stories mostly ignore failure of Obama’s $787 billion stimulus to halt rising unemployment, continue to give credit for saving or creating jobs.
Unemployment stands just short of 10 percent and could be revised higher. No, this isn’t the unemployment rate without a stimulus package, it is the rate even after President Obama pushed through the massive $787 billion stimulus package, which he said was desperately necessary.
“For every day we wait or point fingers or drag our feet, more Americans will lose their jobs,” Obama said on Jan. 8 when unemployment stood at 7.2 percent.
Now there is a quiet move to pass even more stimulus because job losses have been so severe. In the past month, the networks have covered the first stimulus package 6 times as much as the prospect of a second stimulus. At the very same time the media allowed the Obama administration to take credit for saving and creating jobs and touted a recovering economy.
Michelle Gielan of CBS “Morning News, said Oct. 16 “there is new evidence this morning that President Obama’s stimulus program is working. Federal contractors say it helped or create–to create or save 30,000 jobs, mainly in construction.”
CBS also highlighted an Obama stimulus proposal to provide a $250 “emergency payment to seniors and veterans” but without labeling it as a form of a new stimulus, perhaps because the term has become “toxic.”
On “Good Morning America” Oct. 15, Chris Cuomo announced that the “economy appears to be rebounding,” before telling viewers the bad news about the housing market.
NBC celebrated money from the first stimulus being put to good use retrieving fishing nets from the bottom of the Puget Sound on Oct. 2 and 3.
If Associated Press, Time magazine and other print outlets are correct, stimulus 2.0 is coming – but in stealth mode. Time reported Oct. 19 that “at the White House, there is no confusion. More stimulus is coming, but it just won’t be called stimulus. Economic advisers, in concert with senior Democrats in the House and Senate, are planning additional piecemeal benefit extensions, tax breaks and other spending that could eventually add up to as much as $100 billion, say some outside experts.”
Why won’t they be calling it stimulus? Two words: public opinion.
Time answered that question with a Gallup Poll that “found that 65% of Americans opposed a ‘second stimulus’ and 51% thought that the Federal Government ‘should spend less’ than it is currently spending on stimulus.”
MSNBC’s Rachel Maddow was even more frank on NBC’s “Meet the Press” Oct. 4. “When E.J. [Dionne] says they may not call it a second stimulus, I think you’re right, because I think stimulus has been turned into a toxic term,” Maddow said.
Despite plenty of political discussion about more stimulus coming down the pike, in the past month the network news programs (excluding Sunday talk shows) have continued to mention the initial Obama stimulus. That $787 billion package was talked about six times as often as a second stimulus (18 to 3). One additional mention announced a proposed Obama giveaway to seniors, but without calling it a “stimulus.”
Ignoring Failure of Stimulus 1.0
The Obama administration sold its initial stimulus package claiming it would turn the economy around. They even released a report estimating that unemployment wouldn’t rise above 8 percent with a stimulus package.
But they were wrong. The $787 billion of taxpayer money that would be doled out by the government failed to prevent unemployment from rising to nearly 10 percent. In fact, a Bloomberg report out Oct. 2 indicated that even the 9.8 percent unemployment rate may be “optimistic.”
“About 824,000 more jobs may be subtracted from the payroll count for the 12 months through last March when the figures are officially revised early next year,” Bloomberg said citing a Labor Department report. If accurate, that would boost the unemployment rate even higher.
It also expanded the federal deficit. The announcement of a $1.4 trillion deficit for the 2009 budget year prompted Fed chairman Ben Bernanke to warn this week that the U.S. must get its deficit under control.
But mentions of the obvious failure of the stimulus package were few and far between on the networks. In the past month, only three mentions of the stimulus package indicated it was not as successful as the administration claimed it would be.
And the only network reference to Obama’s own claims about the stimulus package and its inability to fulfill them came from New York Times columnist and Weekly Standard senior editor David Brooks on “Meet the Press” Oct. 4.
“You know, when the stimulus package passed, the White House put out a chart of what it – what the country would look like if it passed. And the unemployment rate peaks at around 7– at about 9 and then it comes down to – at this point we should be around 7. We’re not around 7, we’re at 9.8. Now they say, ‘Well, it would have been worse without us.’ A lot of people say this shows it didn’t work.”
The networks’ unwillingness to attack the stimulus package comes as no surprise, given that the media helped sell it in the first place. The Business & Media Institute found that ABC, CBS and NBC spun the huge growth of government by including pro-stimulus voices in stories more than twice as often as opposing voices. The networks also refused to explain how the package would be paid for in most stories.
Reporters like Scott Cohn of NBC promoted it as essential saying, “Economic stimulus isn’t just a political debate around here. It could be a matter of survival.”
Lawmakers Weigh Measures to Spur Hiring, Short of a Second Stimulus
WASHINGTON–House Speaker Nancy Pelosi said Wednesday there are no plans for lawmakers to push through a second economic-stimulus package, but she said individual job-creation measures could be pursued.
Speaking after a morning-long meeting between House Democratic leaders and a number of economists, the California Democrat said a range of suggestions had been made on how the government could act to spur job creation.
These include extending measures that were in the initial $787 billion stimulus plan, such as federal jobless benefits, food-stamp programs, funding for the COBRA scheme that helps jobless people keep health insurance, and a tax credit for first-time home buyers.
An extension of unemployment benefits are seen by many experts to be among the most effective ways of stimulating the economy, since people who are receive the benefits generally spend the money right away.
Politically, it would be difficult for Congress to pass another large economic-stimulus package. The jury is still out on the first one, with more than half the nearly $800 billion left to be spent.
All the economists who spoke at a press conference after the meeting said that it looked like an economic recovery is under way. But most also said there is a real risk of the recovery being a jobless one that doesn’t benefit most Americans.
Calling the recovery “very fragile,” Mark Zandy, co-founder of Moody’s Economy.com, said he believed the federal government should move aggressively to ensure there is a recovery in employment.
Allen Sinai, president of Decision Economics, a consultancy, said the Obama administration should consider redirecting unused money from last year’s Treasury plan to rescue Wall Street banks to do more to help homeowners facing foreclosure and to boost lending by community and regional banks.
On Wednesday, the administration announced plans to ask Congress for legislation to raise the ceiling on federal loans to small businesses. It also said it would consider using money from the Troubled Asset Relief Program to provide capital injections to small banks that do the bulk of their lending to small businesses.
The meeting was convened in the face of a national unemployment rate at 9.8% and as jobless numbers continue to rise.
WASHINGTON (CNN) – House Speaker Nancy Pelosi said Thursday that Congress is set to consider a measure increasing the amount of money the federal government can loan to small businesses.
The House of Representatives will debate a bill next week increasing the ceiling on Small Business Administration loans from $2 million to $5 million. The bill, backed by President Barack Obama, also would increase the maximum size of SBA-backed microloans from $35,000 to $50,000.
On Wednesday, Obama unveiled a separate measure designed to stimulate small business growth in part by making capital cheaper for community banks.
“Small business is the engine of job creation and capital creation in our country,” Pelosi told reporters Thursday. “The issue of jobs is (always) important to us.”
The moves highlight a growing debate in the White House and on Capitol Hill over whether to push for a second economic stimulus package. The unemployment rate has continued to climb in recent months, and is now near 10 percent.
Most top Democrats refuse to refer to any new measure as a “stimulus,” partly out of concern that it will raise questions about the effectiveness of the $787 billion recovery package enacted in February.
Republicans have slammed February’s package as a failure.
“We do not have plans for an additional stimulus package,” Pelosi said Wednesday. “But we do have plans to stimulate the economy in the … work that we are doing here.”
Yesterday, House Democrats convened a forum of economists to debate the state of the economy, with a specific focus on job creation. Mark Zandi, chief economist of Moody’s Economy.com, warned that the “possibility of the economy slipping back into recession next year (is) uncomfortably high.”
The measure is only one of an array of new measures being floated by White House and congressional leaders.
Among other things, Congress is currently working on legislation to extend unemployment benefits. An estimated 1.3 million jobless workers will have run out of their benefits by the end of the year, according to the National Employment Law Project.
The House has already approved an extension. The Senate has amended the bill, but not yet voted on it. Both parties say they want to extend benefits but disagree over how to pay for it and how to handle amendments to the bill.
In the Senate proposal, unemployment benefits would be extended by up to 14 weeks in every state and then another six weeks on top of that in states where the unemployment rate tops 8.5 percent. Senate Democrats say the measure, projected to cost $2.4 billion, would be paid for by extending an add-on tax for employers under the Federal Unemployment Tax Act.
The administration is also backing an extension of the federal subsidy now offered to unemployed workers who opt to continue their health insurance coverage from their former employers under what is known as COBRA.
Under the original provision passed in February’s economic recovery act, the government agreed to pick up 65 percent of the cost of COBRA premiums for up to nine months for workers laid off between September 1, 2008, and December 31, 2009.
Obama has also proposed sending a $250 economic relief payment to seniors, veterans and the disabled to compensate for the fact that there will be no cost-of-living adjustment made to Social Security benefits in 2010 due to a lack of inflation.
The $13 billion measure would be identical to a $250 emergency payment sent out earlier this year.
Democrats also are looking at a possible extension of the $8,000 tax credit for first-time home buyers. The credit – aimed primarily at individuals making under $75,000 or couples earning less than $150,000 – is set to expire November 30.
49 Out of 50 States Have Fewer Jobs Now
Posted by Lorie Byrd
Published: October 21, 2009 – 11:05 PM
Seven months after passage of the “stimulus” plan, 49 out of 50 states have lost jobs.
According to the data, 49 States and the District of Columbia have lost jobs since stimulus was enacted. Only North Dakota has seen net job creation following the February 2009 stimulus. While President Obama claimed the result of his stimulus bill would be the creation of 3.5 million jobs, the Nation has already lost a total of 2.7 million – a difference of 6.2 million jobs.
Follow the link to see how your state has fared as a result of Obama’s stimulus.No wonder President Obama’s poll numbers have dropped so significantly. Gallup attributes the drop to Obama’s push for health care reform, but the employment situation has to be part of it. As I wrote last week, the public is likely having a problem seeing the President put a higher priority on health care than on jobs. Mark Tapscott writes:
President Obama’s push for health care reform during the third quarter of 2009 has seriously damaged his public standing, according to new data from the Gallup Daily tracking poll. His job approval rating dropped nine points from the second to the third quarter, from 62 percent to 53 percent.The nine-point second-to-third quarter drop is the highest Gallup has ever measured for an incumbent president during his first year in office, and among the highest quarter-to-quarter drops measured for any president at any point.
Q+A: What is Congress doing to boost the economy?
WASHINGTON, Oct 21 (Reuters) – With many provisions in the $787 billion economic stimulus package due to expire, U.S. Democratic lawmakers are considering a variety of measures to further goose the sluggish economy before next year’s mid-term elections.
Q: IS CONGRESS CRAFTING A SECOND STIMULUS PACKAGE?
A: No. Economists say the $787 billion stimulus package has helped lift the U.S. economy out of recession, but few Republicans supported the package when it passed in February. Democrats are under pressure to bring down the country’s 9.8 percent unemployment rate before the November 2010 congressional elections, but they are leery of advancing another massive stimulus package, which could spur a backlash among voters concerned about record budget deficits.
Instead, Democrats aim to use a piecemeal approach to extend many of the existing stimulus package’s components.
WHAT COULD BE RENEWED?
* The House of Representatives has voted to extend unemployment insurance benefits through the end of the year, but the measure has stalled in the Senate as Republicans try to attach unrelated legislation. Congress has twice extended the usual 26-week limit, but more than a third of those unemployed have been out of work for six months or more and many are running up against the extended deadline of 79 weeks.
* Many lawmakers also hope to extend an $8,000 tax credit for first-time homebuyers set to expire at the end of November. Democrat Chris Dodd, who heads the influential Senate banking committee, backs a measure that would broaden the tax credit to include all homebuyers. The measure’s sponsor, Republican Senator Johnny Isakson, hopes to attach it to the stalled unemployment insurance bill. The Obama administration has not yet decided whether to back the extension, depending on its cost
* President Barack Obama has asked Congress to approve $13 billion for a second round of $250 checks for retirees next year, matching a payment in this year’s stimulus package. Politically powerful seniors’ groups pushed for the increase after the government announced that they would not get a cost-of-living increase in their Social Security payments because inflation has been so low.
* Lawmakers could also extend a program that allows laid-off workers to continue to buy health insurance through their old employers.
* Businesses hope Congress will renew the 20 percent tax credit for research and development, which is due to expire at the end of the year. Obama supports making the credit permanent, which would cost about $68 billion in lost tax revenue over a decade.
WHAT ARE OTHER POSSIBILITIES?
Economists who met with Speaker Nancy Pelosi and other House Democratic leaders for several hours on Wednesday suggested a variety of measures, including:
* Modifying the Treasury’s bank-bailout program to cover community banks, with the aim of increasing credit to small businesses, a measure backed by Obama.
* Using the bank-bailout program to help those struggling to pay their mortgages.
* A second bailout for state governments, which are being forced to slash budgets and lay off workers as their tax revenue plunges.
* Expand the Medicaid health-insurance program to cover the unemployed.
CNBC TRANSCRIPT: CNBC’S MARIA BARTIROMO SITS DOWN WITH SPEAKER OF THE HOUSE NANCY PELOSI, TODAY, WEDNESDAY, OCTOBER 21ST ON CNBC
22 hours ago
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Susan Walsh / AP
Speaker of the House Nancy Pelosi.
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WHEN: TODAY, WEDNESDAY, OCTOBER 21ST AT 4PM ET
WHERE: CNBC’S “CLOSING BELL WITH MARIA BARTIROMO”
Following is the unofficial transcript of a CNBC interview with Speaker of the House Nancy Pelosi, today, Wednesday, October 21st. The interview will air during CNBC’s “Closing Bell with Maria Bartiromo” at 4pm ET.
All references must be sourced to CNBC’s “Closing Bell with Maria Bartiromo.”
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MARIA BARTIROMO: You hosted an economic forum today, particularly looking at job creation. We’ve got almost ten percent of the country unemployed. Worse showing in 26 years. What is it gonna take to get Americans working again?
NANCY PELOSI: Well, it’s going to take a major investment in health care, in energy, in education. We know that on a long term basis. On the short term, we’re looking at some remedies in the tax code. We’re considering whether a $3,000 tax credit for– for hiring. Net operating loss, carry back, appreciate– accelerate depreciation. A number of initiatives that might be helpful to business.
Extending the– first time homeowner– credit, but maybe expanding that to not just first time home owners. We’re talking also about what we’re have to do immediately. Expansion of what we did last year in the recovery package, which is extend unemployment benefits and health benefits of COBRA. So that– people who are– who’ve lost their jobs, have some relief or continue to have relief.
MARIA BARTIROMO: Do we need a second stimulus? I mean, I seems that after $787 billion in stimulus and then the $700 billion from TARP. It’s surprising that we haven’t seen a bigger impact.
NANCY PELOSI: Well, I don’t see anybody surprised that we haven’t seen any job creation from TARP. All that did was– keep jobs at banks– major banks in our country. So that– that has been disappointing. And it caused a great degree of– anger in the country, frankly. The major investment that was made that has not reached Main Street. But the fact is we had to do it to prevent a collapse of our financial institutions. We understand that.
The– recovery package that we passed later in January, under President Obama, has had positive results. It has created or saved one million jobs. Right now the– economist told us this morning in our session that absent that recovery package, we’d be in much worse shape. And it’s no accident that right now– that as the recession is coming to an end, it does so where the recovery package is weighing at its– biggest impact in the third quarter– quarter of ‘09. So– but more must be done. It’s not enough to say we saved jobs. And– we haven’t created enough. And that’s why we have to look at the tax code. And– other remedies that are there for us in the short term.
MARIA BARTIROMO: Let me ask you about the tax code. You know, business managers come on the program. And they say, “Look, they’re not gonna be hiring new people anytime soon, because there’ll be uncertainties going into 2010. They’re worried about cap and trade. They’re worried about higher health care costs. They’re worried about higher taxes. Will we see higher taxes in 2010?
NANCY PELOSI: Well, I– well, there will be a time when we will hopefully lower taxes because of the comprehensive overview of our tax code. Over the– even the corporate tax. And in– budget that was passed re– and in the recovery package, as well, we lowered taxes for the middle class. But as far as the other initiatives, the cap and– the– climate change and energy investments, as well as health care. They are designed to be job creators. Because they will lower the cost of energy. And lower the cost of health care to businesses.
We consider the health care issue a competitiveness issue for businesses. They can no longer carry the weight of this. And be competitive in– in the international economy. And that’s why we’re hoping– that with this legislation, we will contain the rising cost of health care. We will make it more affordable for businesses, as well as individuals, and for the government.
MARIA BARTIROMO: But– on the tax issue, allowing the Bush tax cuts to expire would essentially be tax increase.
NANCY PELOSI: That wasn’t a tax increase. It is– it is– eliminating a tax– decrease that was there. It’s– it was controversial to begin with. It is– a boon to those who have had it for now. But I think that you will see that happen. So– and that is– that affects, what? The upper two percent of our population. What we’re trying to do is lower co– taxes for the middle class, relieve burdens– on business. So that we can be competitive in job creation. And I think you’ll see some interesting things emerge– from the conversations we’re having now.
MARIA BARTIROMO: I’m just wondering if now is the appropriate time. I mean– now, given the fact that we are still in this fragile recovery. Would you rethink– allowing those tax cuts to expire, given that we are still pretty vulnerable, in terms of the economic recovery.
NANCY PELOSI: I don’t think many people here see, nor do the American people see those tax cuts at the high end as being job-creating. They don’t– they think that that’s part of the reason we’re in the fiscal, the budgetary situation that we’re in, because those tax cuts cost money. And– they were– a cost to our budget, without any commensurate– impact on the economy for job creation. To return money– to the treasury. So, nobody sees those as a job-creator. And– and– the– the fact is, is we have to be acting in a fiscally sound way. And we can’t afford those taxes. We never could. Those tax cuts.
MARIA BARTIROMO: I’d like to ask you more about the deficit. And– and really how to attack such a sizeable number. But you’ve also brought up the idea of a (UNINTEL) tax. Can you tell us about that?
NANCY PELOSI: No, I hadn’t brought it up. It was brought up to me. And I said, “When we do our comprehensive fairness and simplification tax package, everything will be on the table– including that.” No, I– I didn’t bring it up. But what I would say is that as we go forward with our– our health care reform– that– it’s important to note why this is urgent. It’s not only urgent for individuals and certainly for the competitiveness of our businesses. It’s urgent in terms of the deficit.
The President has said, rightly so, health care reform is entitlement reform. We’re not going to address the rising cost of the– of the deficit unless we address the– rising cost of medical costs to Medicare and Medicaid, which is the fastest increase in the deficit. We have to turn that around. That’s what we’re doing with this bill. And that will do more than almost anything you can name.
MARIA BARTIROMO: Tell me about that. What is it going to take to really feel like you were successful in terms of really cutting into the deficit? What would be the goal? How do you cut down such a sizeable number? More than a trillion dollars in– in– in deficit this year?
NANCY PELOSI: Well, what we’re talking about in our health care bill is to go forward in a manner that is– fiscally sound. That is paid for over ten years. And that is also– reduces the deficit in the next ten years after that. So– the idea of– of– improving quality. Lowering cost to individual and to business. Expanding coverage to many more people. And retaining choice for people who like what they have. You have to do it in a way that looks at the– medical C.P.I. You cannot have the C.P.I. be what it is now. At least two percent over the regular C.P.I. So, we have to take those costs down.
And nothing, as I say, will do more– to take us on the path of– the Congressional budget office doesn’t like us using the term, but of bending the curve. So that we’re going– lowering the deficit. Because we’re lowering health care cost, not only in the next ten years, the next 20 years, the next 30 years after that.
MARIA BARTIROMO: Now, the public plan was not in the Bacchus Bill. Will you bring it back? How do you pass legislation without a public plan and get everybody together on this?
NANCY PELOSI: We don’t. Not in the House of Representatives, who will have a public plan in the legislation that is here. And in the Senate, they had two bills. One bill has a public plan– the other– the public option, the other bill does not. The three bills in the House all have a public option. So, four of the five committees have the public option. I just saw most recent survey just released, I think, (UNINTEL) today that the– that the public option support is– continues to grow from the 50s now into the 60 percent in the public.
When you– when you talk to the American people and you say you want– you’re mandated to have health insurance. And if they don’t have health insurance now, they lose their health insurance, and we say you’re mandated to have it, because you are a cost to everyone else. We’re all paying for you. You must have health– insurance. And then we– we say to them, “But you have to go to the same insurers that have either rejected you in the past or– rescinded your pol– your– your– your coverage or something.”
The public reacts to that. And one way they react is to say, “Give me another choice.” So, with the public option what we’re saying to people is, “As you are mandated to have insurance, you’re free to choose the insurance– provider– that you wish. It may be who– who you had before. It may– but it may be the public option. You’re free to choose.” It’s a consumer choice. And that is very popular with the people.
MARIA BARTIROMO: So, you do think that– at the end of the day, this reform will include a public plan.
NANCY PELOSI: I would– I’m speaking now from the standpoint of the House of Representatives. Our plan will definitely have a public plan. The public supports such a plan. If we don’t have one of the plans, the President says, this is the best way to keep the insurance companies honest and to increase competition. If you have a better idea, put it on the table. You always are open– to another idea. We haven’t seen it yet.
MARIA BARTIROMO: Well, what is the final cost of the House bill?
NANCY PELOSI: Oh, that– that’s– we’re waiting right now for the figures from the– Congressional Budget Office. Right now, they’ve given us preliminary figures, which takes us well under the President’s $900 billion. And so– we’re very pleased with that.
MARIA BARTIROMO: Yeah, some people look at it and say, you have 300 millions Americans. You have maybe 30 million people without health insurance. Why not just focus on those people? Why spend nearly a trillion dollars on this?
NANCY PELOSI: Well, first of all, we’re not gonna be spending a trillion, but– but again, plus– several hundred billion dollars, fair enough. And we’re not spending it. What we’re doing– over half of it– over $500 billion of it will be in– we– trimming waste, fraud, abuse– duplications, obsolescence, and the rest. Which is essential to preserving and making– and strengthening social– Medicare. It’s essential to strengthening Medicare that we do that.
So, the remaining $400 billion is what the– the (UNINTEL) are. If everybody in America, not just the 40– more like 50 million Americans who don’t have health care. If everyone had health care, and they were very pleased with it, we could not sustain the current system, because it’s too costly. It’s too costly to business. It’s too costly to families. It’s too costly– to the government.
So, we have to reduce the medical cost. And that’s what this legislation does by increasing competition and by introducing innovation– for value not volume of service. Quality, not quantity. Reducing– utilization in a way that pr– produces a better science-based result. While reducing cost.
MARIA BARTIROMO: Madam Speaker, let me ask you about broad ideologies and– and– and really class warfare that has developed. People are angry about the bonuses. People are angry about– about compensation on Wall Street. You, of course, have criticized– wrongdoing in this area. You’ve pushed for higher taxes on the wealthiest earners. And you’ve pushed for the public option and bigger government. Do you worry that this country is moving toward too big government? And in fact, it is going to hurt economic growth and prosperity over the long term?
NANCY PELOSI: No, I– I don’t. I mean, I think about it a great deal. And– and being Speaker of the House, you have to be agnostic about every proposal that comes before you. As to say what does it do to– competition? What does it do to the markets? What does it do to the job– job creation? What does it do to the deficit? What does it do to our competitiveness internationally?
And we believe that the– two issues, the cost of energy and the cost of health care, have been too competitiveness issues that we have to lower, because they are becoming unsustainable, especially as we dwell now on the health care issue. So, the public option is– it’s interesting to me, because people say, “I don’t want to– a public option, but don’t touch my Medicare.” Well, the public option is less of– a public plan than Medicare is, because it is just an alternative that has to be– administratively self-sustaining. And has to be actuarially sound.
It’s not any– it has to be a real competitor, not something that is subsidized by the government. So, it is a– it is increasing– the market forces, which we always want to move toward. But we have to have competition. Right now, we don’t. And as you know, the insurance companies are not even– subjected to McCarron Ferguson (PH)– anti-trust laws. So– the– the– consumer has gotten the short end of– of this. And (UNINTEL) for consumer.
And again– all of our initiatives, whether it’s energy, education, health care, and the rest have been about market-oriented– solution. Public/private partnership. Public/public partnerships, private/private partnerships. Anything that takes (UNINTEL). Which is the tradition of America. From– from the start. The entrepreneurial spirit of public/private partnership has been the approach that we have taken.
MARIA BARTIROMO: And– and, of course, financial reform also on the table.
NANCY PELOSI: Yes.
MARIA BARTIROMO: Is this getting sidelined–
NANCY PELOSI: No. No.
MARIA BARTIROMO: –because health care reform is really what– what most of us are talking about these days? People are worried about– the lack of legislat– lack of regulation over derivatives. This is how we got here, right? As well as– as the idea that– we need to see change, in terms of the financial system.
NANCY PELOSI: Well, as we sit here, the Financial Services Committee is finishing work on their– regulatory reform legislation. We’ve already finished– the– what they are doing on derivatives. It will now go to the Agriculture Committee. They are doing regulatory reform. They are doing the consumer protection agency part of it. The bill– (UNINTEL PHRASE) maybe by next week. I would hope. But certainly soon.
It’s under leadership of Chairman Barney Frank, the Financial Services Committee is doing it’s part. As I say, the derivative piece will go to– the Agriculture Committee. But this is a high priority for us. And a high priority for the Obama Administration. And it will be done in a matter of weeks.
MARIA BARTIROMO: Speaker Pelosi, the poll numbers for Congress look troubling. And they do suggest you’re pursuing policies that are unpopular. I’m sure you’ve seen their (UNINTEL) reports and the field poll, showing the lowest approval ratings for you in a year and a half. Do you look at these numbers? What do you think when you see–
NANCY PELOSI: Well, I’m not here (UNINTEL). I’m here now to get the job done. And– to– on the other hand, all of the public polls show overwhelming support for the initiatives that the Democrats are taking. And– only 20 percent of the American people identify as Republicans in the latest yesterday poll on– who would you vote for, for Congress in the next election? It’s something like 51 favor the Democrats, 39 Republicans.
My own personal person– popularity is not what I spend time being concerned about. My (UNINTEL) for the Democratic agenda. Hopefully, in a bipartisan way. And most of the bills that– many of the bills that we have had, have had strong bipartisan support. And–
MARIA BARTIROMO: Well, not about you, but the Congress in general.
NANCY PELOSI: Well, Congress in general has never been very popular. It is an institution that has been– held up for joking and all the rest. But individually Members of Congress do very well. And I’m very confident about the– support that is there for a strong Democratic majority, which I know we will sustain in the next election.
MARIA BARTIROMO: When would you expect to see job growth once again?
NANCY PELOSI: We are– as I say, with the initiatives that we are taking now, we want to move these as quickly as possible. But we do think that some of the initiatives from the recovery package will weigh in more heavily now. As– as we’ve seen, the third quarter was the biggest weigh in. And that impact. It’s just if it– it’s about what the bill does. It’s also been inspiring confidence. A good deal of the– measures that we will do will in– be– the money will be spent or inject demand into the economy and create jobs right away. But issues like unemployment insurance, et cetera. We’d rather have job creation come another way. But that is a way that stimulates the economy and all the economists tell us that’s the fastest way.
MARIA BARTIROMO: Madam Speaker, we know how busy you are. We appreciate your time. Would you like to add anything else that I may have missed?
NANCY PELOSI: Well, no, but– just– it’s a pleasure to see you. Let’s talk more frequently. Because I think it’s important– for– your audiences to know– that– in Congress, we are putting forth in all of our initiatives, we’re looking to market solutions. To market-oriented solutions. We think if that’s not– if that doesn’t happen, it’s no use going down the path. So, one of the questions we always ask is, “What does this policy mean to the private sector? How would they pick up on it?” Because we want to be partners in that regard.
MARIA BARTIROMO: So, do you think we need more incentives for the private sector to create jobs then?
NANCY PELOSI: We may. We may. And that’s what– a number of the initiatives we’re working on that we can do in the short term.
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