Transcript: Sens. Kyl, Durbin on 'FOX News Sunday'

Written by Chris Wallace / Published February 01, 2009 / Fox News Sunday

The following is a partial transcript of the Feb. 1, 2009, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: And hello again from Fox News in Washington. With the news about the economy bad and getting worse, all eyes will be on the Senate this week as it debates that $800 billion-plus economic stimulus plan.

Will Democrats change the package and will any Republicans vote for it? For answers, we bring in two Senate leaders — Democrat Dick Durbin, who comes to us from Chicago, and Republican Jon Kyl, who joins us from Phoenix.

Gentlemen, you are the whips, the chief vote counters for your parties in the Senate, so let's start there.

Senator Kyl, as the Senate begins debate on the economic stimulus plan Monday, how many Republican votes at this point do you count for the Democratic package as it stands right now?

SEN. JON KYL, R-ARIZ.: Chris, we haven't begun our counting yet, but I can tell you that I see support for this legislation eroding. I think the more people around the country see of it, the angrier they get, because it's very wasteful. It spends way too much money.

By the way, if you throw in the interest, it's over a trillion. It's about $1.3 trillion. And it's ineffective. I think the theory of it is if you throw enough money, somehow or other it'll trickle down to people and that will help stimulate the economy.

But the economists that we've talked to said that's not going to work. I think the people understand that. And so I see support in the Senate actually eroding.

WALLACE: Senator Durbin, I don't know how much of a count you've done, but how many Republican votes at this point do you see for the package? And picking up on what Senator Kyl just said, do you see any Democrat defections?

SEN. DICK DURBIN, D-ILL.: Well, of course, we're working to make sure the Democrats are supporting it, and some of them have concerns, will offer amendments. And I believe some of those amendments will be adopted.

I've talked to some Republicans on the other side of the aisle. We've said to them, "We're open about this. Come to us with your ideas, if you want to make changes and offer amendments. Let's move forward."

Now, four Republicans in the Appropriations Committee supported the bill initially, and I'll stress initially because they said they wanted to see the final product, and one Republican in the Finance Committee. But we still have work to do.

But let me just — and commenting in general terms, I want to put this in perspective. This is not another bill. This is not another political debate. This isn't something that we can just dismiss at the end of the week and say, "Well, let's move on and do something else if this doesn't work."

We are facing one of the most serious economic crises in our nation's history. The numbers that come in every day are absolutely devastating. To think that our gross domestic product is shrinking more than it has in 25 years, that the unemployment rate is now higher than it's been in 16 years and getting worse — we all sense this is a crisis.

We cannot delay this. We can't engage in the old political rhetoric of saying, "Well, maybe it could be a little bit better here and a little bit better there." We've got to pull together.

I think the American people are really counting on us. And President Obama has reached out in an unprecedented way to the other side of the aisle to try to engage them and ask them — get beyond any specific small issues and let's look at the bigger picture here. America's counting on us.

WALLACE: Well, I'm sure that Senator Kyl would say they're looking at the big picture, too.

Since you guys both agree that you need to make some changes, let's see if we can work out a deal right here on "FOX News Sunday."

Senator Kyl, recognizing, as you must, that your side lost the election and the Democrats won, what is the minimum that you would need to see in changes in this package to get significant Republican support? And is there a possibility that if you don't get that that Republicans will try to filibuster to block this bill?

KYL: Well, first of all, of course, Dick Durbin is right, there is a crisis in this country. Republicans fully appreciate that. People are hurting. And that's why we don't want to see this opportunity wasted.

We're not talking about little things at the margins. We're talking about over a trillion dollars here, and it would be a shame to waste that money. In the first place, we don't have it. So there would be major structural changes that would have to occur.

The centerpiece of this is a $500 rebate to folks, about 27 percent of whom don't even pay federal income tax. That didn't work last year. It's not going to work this year. And so that's not a good place to start.

It creates 34 new government programs. It sends $84 billion to the states when about $10 billion would satisfy the so-called FMAP needs that they have. It wastes a ton of money.

I mean, there are so many different things that you can make fun of in this bill. Let me just mention one — millions of dollars to World War II Filipino veterans in the Philippines. Now, that may be a good thing to spend money on, but not in a stimulus bill. It doesn't stimulate anything.

So I think you have to start from scratch and reconstruct this to — start with the problem that created the entire cascade of events that have occurred here, the housing collapse.

And Republicans, I think, will come forward with ideas to start with housing first, let people keep more of their own money, and in that way really provide some stimulus and better hope for the future.

WALLACE: Briefly, Senator Kyl, I want to pick up on one thing you just said and re-press my question. Start from scratch? I mean, you're really talking about rewriting this whole bill?

And secondly, if you don't get those major changes you're talking about, will Republicans filibuster to try to block this bill?

KYL: I think that we would all agree there will be a 60-vote requirement for the bill. That's the end result of a filibuster.

Our effort is not to delay the bill at all. We understand the urgency of the situation. And when I say "start from scratch," what I mean is that the basic approach of this bill, we believe, is wrong.

It may be that there could be some huge amendments that would redirect it, that would be adopted by our friends on the Democratic side. But every amendment in the Finance Committee was defeated. Every amendment we put forth in the Appropriations Committee was defeated.

I don't think there's a real effort here. As Speaker Pelosi said, we won the election, we wrote the bill. And I suspect that's pretty much the way it's going to end up.

WALLACE: Senator Durbin, let's take a look at the bill and where the money goes — on the spending side, $15 billion for college scholarships; $1 billion for problems with the census, which doesn't take place until next year, 2010; $400 million to prevent the spread of sexually transmitted disease.

And on the tax side, the nonpartisan Congressional Budget Office says that only 22 percent of the House plan is tax breaks, not the 40 percent that Mr. Obama promised.

Now, even Democratic experts like Alice Rivlin said as it now stands, a lot of this money is going to be wasted. So does Jon Kyl have a point that you need major changes in this bill to actually do what it's supposed to do, an emergency economic stimulus?

DURBIN: Let me correct a few things. Jon may not have been aware, but the biggest amendment in terms of dollar volume that was added in the Senate Finance Committee was sponsored by Senator Grassley and Senator Menendez.

It added about $80 billion for the Alternative Minimum Tax fix. So that amendment was bipartisan, and it was adopted in the committee, and it's the largest single addition to tax cuts. With that AMT, 36 percent of this bill goes for tax cuts.

Jon's first criticism was about tax cuts. That used to be the credo of the Republican Party — cut taxes for working people and others. But now it appears that he has a different point of view.

I would tell you I think that we should be helping working families. We should reduce their tax burden so that they can meet some of the expenses they're facing in this terrible economic situation.

And let me say about the overall cost of it, it is around 800 to 900 billion since we've added in this new bipartisan amendment, and that represents about 6.5 percent of the gross domestic product of America.

We have to put enough water on this fire to put it out. Throwing a tea cup of water at it means it will return tomorrow to face it again.

WALLACE: Senator Durbin...

DURBIN: Just last year — one last year — one thing I want to add. Just last year, when President Bush came to us and asked for $150 billion in tax cuts from a Democratic Congress, and said this is the way to turn the economy around, we gave him the 150 billion.

Sadly, it didn't create the turnaround. It might have helped some families a little bit.

WALLACE: So very briefly, Senator Durbin — then I want to move on to another subject — how far are Democrats willing to go to try to get some Republican buy-in as we go forward over the next week?

DURBIN: We're very open, very open to this. For instance, some of the Republicans have been saying to us, "Put more money in infrastructure. Invest in the roads and highways and bridges. Make sure that we create good-paying jobs here in America that we can see, whether we're dealing with mass transit or local infrastructure or wastewater treatment."

You're going to see an amendment that does exactly that. And I think some of the Republicans who feel strongly about that aspect may be drawn to us, and we are open.

Some of the things — you went through your litany there, Chris, and I added it up. It is a trifle compared to the overall cost of this bill. But each of those things deserve to be looked at carefully.

Keep in mind the bottom line. This stimulus package ultimately is going to have an oversight board to watch carefully that we don't make the same mistakes we did with the TARP program, where $350 billion was expended and there wasn't the oversight to protect taxpayers' dollars.

WALLACE: OK. Let's move on.

And in fact, you took me where I wanted to go, Senator Durbin, and that is the TARP program, the financial bailout for Wall Street.

The administration is working on how to spend the $350 billion that's left in the program. And this last week, the president blasted Wall Street for giving out huge bonuses at the same time that the government — or, rather, that the banks are asking for government bailouts. Let's watch.

(BEGIN VIDEO CLIP)

OBAMA: That is the height of irresponsibility. It is shameful.

(END VIDEO CLIP)

WALLACE: But, Senator Kyl, there are reports now that the administration may not impose tough new restrictions because of concerns that if they do, some of the banks that most need the money won't end up accepting them. Is that a mistake?

KYL: Well, you do have to be careful about the kind of restrictions you put on there. They need to make sense. Nobody supports this — the kind of bonuses that were given and so on. But I do think we have to be careful that we don't try to create some kind of a devil out of the business community here.

We're not going to create new jobs unless we have businesses. And so let's be careful about suggesting that all business folks are bad and they shouldn't make very much money.

The president seemed to suggest that it's wrong for them to make a profit in these days. Well, businesses won't stay in business. They won't create jobs. They won't hire people unless they think they can make a profit.

Only 2.3 percent of the Senate bill actually provides tax relief to businesses in the hope that they can create jobs. That's anemic. That doesn't do any good.

And the tax relief that Dick Durbin talked about last year that President Bush asked for — well, it was a combination of Democrats and Republicans. It didn't do any good. He's right. And the same thing is not going to do any good in this legislation.

WALLACE: Senator Durbin, very briefly, because I want to move on to another subject, how do you feel about the idea of putting as part of the TARP financial bailout tough restrictions on executive compensation?

DURBIN: I agree with that. And I think that should be the bottom line. It is sickening when families across America are making sacrifices and facing economic uncertainty that it's business as usual on Wall Street, even at firms that are losing money, that without a taxpayer subsidy wouldn't be in business.

And here they turn around and issue billions of dollars of bonuses to their people. Where is the spirit of sacrifice and unity? We're in this together. And you have to ask those captains of industry at the highest level to really pull with the rest of America to get us out of this crisis.

WALLACE: A couple of political issues I want to get to with both of you.

And, Senator Kyl, let me start with you. It now turns out that former Senator Majority Leader Tom Daschle failed to pay about $128,000 in taxes over three years until he was nominated for secretary of health and human services.

Senator Kyl, how much trouble is his nomination in?

KYL: Well, we'll have to see. I just got the report. I'm on the Finance Committee, and I just got the report late Friday afternoon. So we'll have to question former senator Daschle and understand his explanation, and then have a conversation about it and see where it goes. I think it's too early to tell.

WALLACE: Are you troubled by it?

KYL: Well, sure, you have to be troubled by it. I just have to note, you know, with the problems that now Secretary Geithner had with his taxes, with these problems, with former senator Daschle, with the problems of Bill Richardson, the number two person brought into the defense department, I know that — that President Obama wanted to have a very ethical administration starting out and so on, but I think he's seeing how hard it is to avoid these kind of problems.

And I just wonder if President Bush had nominated these people what folks would be saying about that.

WALLACE: Senator Durbin, one of the top Republicans in the House said, "Listen, no wonder that Democrats don't mind raising people's taxes, because they don't end up paying them themselves."

DURBIN: Well, that was a little joke, and I read it in the papers myself. But let me say this. If all you knew about Tom Daschle was that he used to be a senator, and he made a mistake and had to pay over $100,000 in back taxes, you have a right to be skeptical, even cynical.

But if you know Tom Daschle, you know better. This is a man who gave 20 years of his life to public service. He's — even more — 20 years in Congress.

And when he ended up losing an election, he didn't cash in and leave. He lost an election ending his public career. His net worth was less than a million dollars at that point. And here he went out in the private sector, and now he's found himself having made a mistake and admitted to it.

He took the steps necessary to start paying the taxes, make sure they're paid. Now, that's the right thing to do. I believe Tom Daschle's one of the most honest people I've ever known or worked with in public life.

And I really want to commend Senator Kyl for showing some reserve here when asked the question. I think he knows Senator Daschle and he wants to be fair, as I do.

WALLACE: OK. We've got...

DURBIN: The bottom line — this administration has made more progress in appointments, in filling these positions to the cabinet, than most other previous presidents.

WALLACE: Gentlemen, we've got less than a minute left, and I want to ask you about one last issue.

Senator Kyl, your colleague, your trusted colleague, Senator Judd Gregg of New Hampshire, apparently is Barack Obama's top choice for commerce secretary.

But if he takes that job, then Republicans would lose their ability to mount a party line filibuster. They wouldn't have 41 votes. First question: Is Judd Gregg leaving?

KYL: I don't know. But I expect there may be an announcement on Monday. I will say this, that it shows a great deal of perspicacity on the part of President Obama to select a guy like Judd Gregg, who is just a phenomenal senator, very bright.

He's our ranking member on the Budget Committee, gives sage advice to us. And if he did go to Commerce, I would miss him greatly. On the other hand, he could make a significant contribution to the Obama administration.

WALLACE: And briefly, Senator Kyl, how troubled are you with the idea that you would lose your 41st vote? And are you putting any pressure on him to stay in the Senate?

KYL: I'm not sure that we would. I think that's been thought through. I suspect that Senator Gregg has thought that through very carefully and would not leave his Republican colleagues in a lurch.

WALLACE: You're suggesting that there might be a deal in which the Democratic governor...

KYL: No deal.

WALLACE: ... of New Hampshire would appoint a Republican?

KYL: No, I'm not suggesting a deal at all. I'm just suggesting that Senator Gregg clearly has thought this through. And if it does turn out that he's the commerce secretary, that events may unfold in a way that don't cause us the problem that you suggested.

WALLACE: All right. We'll have to read between the lines there.

Senator Kyl, Senator Durbin, I want to thank you both so much. Thank you for coming in.

DURBIN: Thank you.

KYL: Thank you, Chris.

WALLACE: And please come back, gentlemen, both of you.

KYL: And go Cardinals!

WALLACE: I knew you were going to get that in.

DURBIN: And go Steelers!

WALLACE: Anything you want to say, Senator Durbin?

DURBIN: Go Steelers!

WALLACE: OK. There you go.

Well, the Bears aren't in it, so I guess that the Steelers are close by.

Gentlemen, thank you both.

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