• This is a partial transcript from "Your World with Neil Cavuto," March 16, 2005, that was edited for clarity.

    NEIL CAVUTO, HOST: First things first, the Wolfowitz news, to head the World Bank. Why him?

    KARL ROVE, DEPUTY CHIEF OF STAFF: Because he has a keen understanding of international economics and development issues. He was an ambassador to Indonesia. He's got — former Johns Hopkins academic, has studied this, understands this, understands it particular from a free market perspective, understands that we need reform of this institution to make it durable and viable in the 21st Century.

    Was Colin Powell ever given serious consideration for this job?

    ROVE: I think Colin Powell — I can't speak for — about that, but my sense is that Colin Powell had a desire after, you know, four years as secretary of state to return to retirement and had some goals in mind and not include — didn't include World Bank.

    CAVUTO: How about Bono? Was he ever...

    ROVE: No. I don't think so, unfortunately for U2, whose albums are doing great despite that. So...

    CAVUTO: He needs to stay with U2 and not the World Bank.

    ROVE: Well, he also, as you know, has a keen interest in debt issues and water issues for Africa and has got a magnificent heart and has really mobilized a lot of the international community to confront both of these issues in a very positive way.

    CAVUTO: Does it bother you, Mr. Rove, that this president has earmarked more money for helping the African continent, for helping those who have been ravaged by disaster there, for AIDS, for everything else, than all prior presidents combined and he doesn't get a lick of credit for that?

    ROVE: Well, look, the more important thing is the right policy. And as you say, he's pursuing the right policies. He was deeply moved by his visit to Africa. He feels keenly about the necessity of confronting AIDS. He feels that we really need to reform our foreign assistance programs and drive them towards meeting the real needs of people across the globe. And he's done a magnificent job of it. These new...

    CAVUTO: That's not reporting in the media.

    ROVE: Well, that's OK. That's OK. History will record it as being the right thing, and America will be in the...

    CAVUTO: So it doesn't bother you when you see in the media this is a stingy president, he doesn't do much for global aid, whenever there are these protest marches out there? And people don't — obviously, they don't look back (ph).

    ROVE: Let me get this straight. The mainstream media and the left don't get this president? What's new? So, you know, that's fine. And — and some do. I mean, look, Bono is not a man of center right, and he understands and applauds what this president is doing. He's worked with us on AIDS and debt relief and the — the Millennium Challenge to come up with a new way that we're delivering foreign aid to countries that are deserving and which have demonstrated that they'll spend it in appropriate and good ways.

    So there's begrudging respect on the other side for him.

    CAVUTO: Let's talk about your side, the Republican side. I've spoken to a number of prominent Republicans who sort of said Social Security reform, at least where the president wants to see it, is now dead.

    ROVE: Absolutely wrong. I mean, every time we go through a major initiative, whether it's tax cuts or the education bill or Iraq, somebody says everything's all bollixed up. And then it happens, and it comes through, I think we're in very good shape.

    The polls are now showing — yesterday, for example, "The Washington Post" ran a poll, and they put one thing in the headline but what they buried in the story was that support for personal retirement accounts was at a six-year high. Since they began asking the question about personal retirement accounts...

    CAVUTO: Yes, younger people like it. But the 50-, 51-, 52-, 53-, 54-year-olds, they're not altogether keen.

    ROVE: Not necessarily. A new poll out — and I hate to rely on so many polls, but there's a new poll out today showing that those age 55 or older, if told that the accounts are voluntary and will not affect their benefits, that they support it by, I think, a margin of, like, 57 to 39. And that AARP members are more likely to support personal retirement accounts than non-AARP members.

    Look, this is a powerful idea. People understand the power of markets. Our country has gone in a very short period of time from a nation which a — those that are invested in the markets represented a small minority of all households to the day where over half of American households are invested in the market and nearly two-thirds of all voters are invested in the market.

    CAVUTO: But do you think the timing is what hurts you, though, now? That the markets have sort of — they haven't been doing miserably, but they've been kind of stumbling along, as this debate...

    ROVE: Well, a lot of people, people have a mature — they've got a mature view about it. They know that markets go up and markets go down, but over the long haul, markets go up. And they understand, too, that some of the best time to buy is when things are sort of stuck there, after having come down from the highs in 2000. And now is a good time to get in.

    They know over the long haul — look, Social Security, if you retire today, you're reaping a two percent return on your Social Security. Even a conservative mix of bonds and stocks would have gotten you two or three times that over the course of your lifetime. And that's a powerful, a powerful message.

    I just read a letter to the editor where a fellow had started working at 19 and paid into Social Security. At 23 — he was a good saver, obviously — he started saving as much money as he could. Roughly the same amount of money that he put into Social Security, he put into a personal investment account.

    Today, he's retired. He's got two checks, his paycheck from the government and his paycheck from his personal retirement account. The check from his personal retirement account is four and a half times the size of his Social Security check. Put the same amount of money into it, and yet over time, because of the growth of the market and the power of compound interest, he's now getting a much more generous check from his private, personal investment than he is from...

    CAVUTO: I think most people would readily agree with you that the stock market over time does very, very well. But it appears to be falling on deaf ears, at least among the power brokers in Congress. And I'm wondering whether it's because they feel you have to give a pound of flesh here.

    One of the ideas that's been raised is raising the income threshold above and beyond $90,000. Are you for that?

    ROVE: Look, as the president said, everything is on the table...

    CAVUTO: Including raising the threshold.

    ROVE: ... except — except raising the payroll tax rate.

    CAVUTO: OK.

    ROVE: We're not...

    CAVUTO: I want to be clear on this. Does that mean that you would be open to raising that $90,000?

    ROVE: Everything is on the table, but we're not going to negotiate with ourselves. If people want to come to the table and say, "We want to work with you on a solution, and here's what we want to have in there." And we're willing to listen to all ideas." What we...

    CAVUTO: Well, one of those ideas, the conservative columnist who I know you know very well, George Will, has been open to the idea espoused even by some conservatives on Capitol Hill to raise that threshold figure to get that monkey off the Republicans' back and to say, "All right. We're for this. If that's what it takes to get you on board."

    ROVE: Yes. I repeat. We're not going to negotiate with ourselves. Everything is on the table. We're early in the process. I love how people are, you know, saying now, "Oh, it's stuck. It's not going to go anywhere." Well, they said the same thing about the tax cuts in '01. I went back and read some of the articles from April of '01, where they said this is stuck and going nowhere. And of course, we got it.

    And we're going to get this, too, because it is so important that we do it right. I mean, we are facing a Social Security system that is going to go bankrupt by the time our kids and grandkids retire. And we'd better do something about it.

    Senator Joe Lieberman, a Democrat of Connecticut, said something very important the other day. He said every year we fail to act adds $600 billion to the cost of strengthening and saving Social Security. That's why we need to act and to act now.