Transcript: David Axelrod on 'FNS'

Written by Chris Wallace / Published April 06, 2009 / Fox News Sunday

The following is a rush transcript of the April 5, 2009, edition of "FOX News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: Before the North Korean missile launch, we spoke with the president's senior adviser, David Axelrod, who's also traveling with Mr. Obama.

(BEGIN VIDEOTAPE)

WALLACE: Mr. Axelrod, President Obama wants new limits on nuclear weapons with the long-term goal of eliminating all nukes. But on the other hand, mutual assured destruction, the fact that several nations have arsenals, has kept the peace for the last 60 years.

And if the major powers disarm, then don't you run the risk that a rogue state or a terrorist group that gets a nuke suddenly has all the power?

DAVID AXELROD, PRESIDENT OBAMA'S SENIOR ADVISER: Well, obviously, Chris, that -- we need to involve the entire world in this -- in this regimen, but it's hard to do that if you don't lead by example.

We're not going to disarm and leave America vulnerable, but we want to -- we want to set ourselves on a path so when the president met with President Medvedev last week in London, they agreed to begin talks to reinitiating the START treaty to reduce nuclear warheads.

And he will announce -- he is going to pursue a series of other measures, the -- pursuing ratification of the test ban treaty, which has languished, renewing the nuclear proliferation treaty, getting a treaty that will control fissile materials that can be used to make bombs, and -- so that countries can get the materials to have peaceful nuclear programs but not for weapons programs, and of course, locking up the loose nukes. This is something he's been working on for years.

He wants in the next four years to lock up the loose nuclear weapons that are scattered around Eastern Europe that could fall into the hands of terrorists.

And of course, that is the big threat. That's why we have to step up the pace. This represents an existential threat, and we need to meet it.

WALLACE: But, Mr. Axelrod, if the president wants to cut nuclear weapons, shouldn't he spend more, not less, on missile defense to protect the United States?

AXELROD: Well, I think that missile defense -- the missile -- the president has said that he is -- he is willing to embrace, wants to embrace, missile defense if it's necessary, if it's cost-effective and if it works. And he's never taken that off the table.

Right now, we have the issue of the potential for a missile defense system here in the Czech. Republic to protect Europe from Iran, but the better answer would be for the world to put pressure on Iran to stand down and not pursue their nuclear ambitions.

And that is what he talked with President Medvedev and the other leaders he met with this week about.

WALLACE: So it is fair to say that he has an open mind, and perhaps even some skepticism, about the effectiveness of missile defense.

AXELROD: Well, I think he has an obligation not to deploy systems that don't work, but he's not taking it off the table.

But our goal should be a world in which you don't need those systems because the weapons have been eliminated, and we have to start down that road. That is his -- that is his goal with the initiatives that he's announced.

WALLACE: All of which makes the facts of what's going on right now in North Korea more interesting. As we speak, North Korea is prepared, apparently, to launch a long-range rocket. The U.S. does have the capability. Why not shoot it down?

AXELROD: The real question is for the North Koreans -- why do you want to isolate yourself further from the community of nations?

It would be violating U.N. edicts. It would -- and it would set back the six-party talks that have been going on to try and usher North Korea into the community of nations. This would be a -- this would be a terribly bad mistake.

WALLACE: Having said that, though, Mr. Axelrod, Defense Secretary Gates was here on "FOX News Sunday" last week, and he said that the six- party talks have made no recent headway with the North Koreans.

Is President Obama -- if the North Koreans defy the world's will, is he prepared to push for tough new economic sanctions? And do you have any promise that the Chinese will go along?

AXELROD: Look, I think that there's no doubt that there must be consequences if they take that step. The president will -- has and will confer with our allies, will go to the U.N. Security Council, will pursue a tough response.

WALLACE: During this trip overseas, President Obama has tried to repair relations with Europe, even in one of his speeches in France saying that America has at times been arrogant and dismissive.

But the Europeans, despite all these best efforts, have refused to increase their stimulus programs, government spending. They refuse to send combat troops to fight alongside Americans.

And some critics here in this country say that the president is pandering to the Europeans, running down America on foreign soil and getting nothing for it.

AXELROD: Well, if they're -- if they say that, then they haven't read the speech, and they haven't watched closely, Chris.

What the president said was there have been problems in our relations, some of them emanating from us, some of them emanating from the Europeans. And he made the point that there are those in Europe who think despite all the good that America does, they can only emphasize things to criticize, and he was very blunt with the Europeans about that.

But I disagree with the other parts of your statement. There's been an enormous amount of spending on economic stimulus, and -- you know, in the -- in the trillions of dollars, and there was an agreement to do more in the way of -- of dealing with our financial crisis at the G-20.It was a very productive meeting, and the level of cooperation was very high on -- on expanding the International Monetary Fund and providing funding for countries that need it to get through this crisis, and on regulation, so that...

WALLACE: But, Mr. -- Mr. Axelrod...

AXELROD: ... countries upgrade their -- so that countries upgrade their regulation so we don't have financial crises like this that envelope the world.

WALLACE: But Mr. Axelrod, if Al Qaida and the Taliban are the threat to the west, not just the U.S., that the president says they are, why didn't our NATO allies agree to send more troops -- they're -- they are sending more troops, but not combat troops, to fight alongside the U.S. in southeastern Afghanistan and along the Pakistan border?

AXELROD: First of all, our NATO allies do have troops in Afghanistan.

WALLACE: I said more troops.

AXELROD: And there was a tremendous -- there was -- there was a -- well, we're getting more -- more assistance. There was a tremendous response to the president's new strategy in Afghanistan.

One of the problems we've had in Afghanistan is we haven't had a focused strategy, and therefore it was hard to sell that strategy. The president a week ago unveiled his strategy. We had a very productive meeting at The Hague this last week with Secretary Clinton and the foreign ministers.

And then at NATO, the -- his plan was unanimously embraced, and nations stepped forward with expressions and offers, tangible offers, of support -- thousands of military personnel to help secure the election on August 20th, which is the next big hurdle we have to clear in Afghanistan, thousands more personnel to train police and the Iraqi -- and the -- I'm sorry, the Afghan army.

And so there's a -- and cash, as well, to help pay for the development of the Afghan army, and half a billion -- half a trillion dollars in commitments to help rebuild -- half a million, I should say, to help rebuild the Afghan economy.

So there was enormously positive reaction to the president's plan there, and now we have a unified front. Every NATO nation acknowledged the fact that we have a joint concern and a joint interest in repelling Al Qaeda and in making -- making this mission work.

WALLACE: I want to switch to the domestic economy, Mr. Axelrod. There was more bad economic news this week, as you well know -- 663,000 more Americans lost their jobs in March. The unemployment rate is 8.5 percent. It was just two months ago that the President's Council of Economic Advisers projected that the unemployment rate for all of 2009 would average 8.1 percent.

Aren't we, in fact, headed -- isn't there a real chance we're headed for 10 percent, double-digit, unemployment? And given that your forecast was so wrong, don't you need to do more?

AXELROD: Chris, I'm not prepared to say that's where it's going to go. But the president was very clear -- and the reason that we pushed for an economic recovery act -- that we were going to have a very difficult year this year.

And unemployment -- employment is the last thing that follows growth. So it's going to be a while for us to do -- to turn upwards on these jobs numbers. But that's why we needed an economic recovery package.

That's why we were in Europe this week talking to the allies about joint measures to stimulate the world economy, so there are markets for our companies to sell products. All of this is part of a coordinated strategy to get our economy moving again.

We inherited a terribly difficult situation, and we have to work our way out of it. It took years to get into it. It's going to take more than months to get out of it.

WALLACE: Mr. Axelrod, we're running out of time, so I'm going to try to invoke the lightning round rules, with quick questions and quick answers.

First of all, there's a report that the Obama administration is structuring its new bailout initiatives to allow companies that participate to get around congressional limits on executive compensation.

When taxpayers are putting up most of the money and taking more of the risk, why would the Obama administration allow some of these executives to get even richer?

AXELROD: Chris, understand that we are -- we are very committed -- the president has a tough set of standards that we are refining to deal with this question of executive compensation. It's an issue he's talked about long before this crisis.

But here's the point. On some of these programs, we're asking financial companies to come in and help solve this problem by providing more lending, by buying up toxic assets and so on. We don't want to create disincentives and undermine the program.

So we have to look very closely at this, making sure that we're not rewarding people for irresponsibility, that people -- that firms that get extraordinary help aren't getting -- aren't giving out huge bonuses.

But we do need these financial companies to help -- who aren't in great distress to help lead us out of this and partner with taxpayers to get lending going again.

WALLACE: And finally, Mr. Axelrod, the administration got into the car business this week. You fired Rick Wagoner as the head of G.M. The president announced that you're going to have government guarantees of car warranties.

Does the president think that General Motors could survive a bankruptcy? And if so, why not just go there right now?

AXELROD: Look, Chris, first of all, we didn't get into the car business. Understand the car companies came to us. Chrysler and General Motors actually came to the last administration and said in order to continue they needed help from the American taxpayer, and they were given a certain amount of time to come up with a plan to restructure.

Those plans were found wanting. They don't -- they did not project viability for these firms. And what we're saying is we want these -- this to work, but you're going to have to do better, and it's going to involve significant restructuring to build firms that can compete in the 21st century.

And we want these to be going concerns, not wards of the state. So whether it comes through some sort of structured bankruptcy or another process, there is no doubt that for General Motors to survive and prosper, as we all want them to, they're going to have to do serious restructuring.

And the same is true with Chrysler and Fiat. We -- Chrysler cannot stand on its own now, but they have partnership negotiations, merger negotiations, going on with Fiat. That, too, will involve a rationalization of that company.

WALLACE: And real quickly, sir, when you talk about restructuring, are you talking about even your friends in the union movement, at the United Auto Workers -- that they're going to have to take a severe haircut, too?

AXELROD: Well, Chris, first of all, they've already taken a haircut. They've been sitting at the negotiating table making huge concessions. They have -- every stakeholder, whether it's creditors, company executives or workers on the line, are going to have to make sacrifices.

What we shouldn't do is ask the sacrifices of the workers to be disproportionate. But there's no doubt that everyone who has a stake in the future of this company is going to have to make sacrifice.

WALLACE: Mr. Axelrod, we want to thank you so much for talking with us, taking the time on this busy trip, and safe travels on the rest of your trip and back home here to Washington.

AXELROD: Thanks, Chris. I appreciate it.

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