This is a rush transcript from "Your World With Neil Cavuto," January 13, 2009. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: Meanwhile, in the middle of all of this, the president-elect is calling for $350 billion in bailout bucks. And now it's looking like he will get a lot more than that, Senate Majority Leader Harry Reid just saying he is very confident he has the votes.
One of them coming from New Hampshire Senator Judd Gregg, and he's a Republican.
Senator, always good to have you.
I do want to get to this $350 billion, Senator, but your thoughts, very quickly, on this Geithner housekeeper issue. What do you make of that?
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SEN. JUDD GREGG, R-N.H.: Gee, I — I just find it to be really — really unfortunate, because I — here is — here is an extraordinarily qualified guy, who we really do want to have in leadership here in Washington.
He has got immense talent. He's the type of person you want as your treasury secretary. And I just think this is a lot to do about nothing. I mean, the IMF issue is probably a little bigger, because it is a tax liability. But you can understand how something like that might happen, because you don't pay taxes if you work for the IMF. And if he got an accountant letter that said he didn't owe them, you could understand why he did not pay them. And if a second look at it said he should pay them, and he paid them, so be it. He did it. But, you know, we have got to stop looking at the ridiculous, and look at the serious. We are facing one of the most significant financial crises in the history of this country. Talented people like Tim Geithner are needed right now. And let's not get tied up over these nanny-gates, which really don't go to the essence of what the problem is, which is that Americans are going — are losing their jobs.
And our country is at serious risk, unless something is done. And we need a leader to do it.
CAVUTO: It's a valid point, Senator, but also very competent, well- regarded folks like Zoe Baird, and Kimba Wood, and Linda Chavez lost out on appointments because of issues very similar. Double standard?
GREGG: Well, yes, I think you take them one at a time.
In this instance, unless there is something more to this than — than has been reported, I think it would be a serious loss to this country not to have this talented individual as our treasury secretary.
CAVUTO: While I have got you, then, on to this second $350 billion. You are Mr. Watch Every Government Penny. And you're saying goodbye to $350 billion worth. Why?
GREGG: Well, we're not saying goodbye, Neil. As you — well, first off, we're not saying goodbye.
As you know, unlike a stimulus package, where you are spending money and potentially saying goodbye, are probably saying goodbye, the TARP money has been investments. We have basically bought assets. In the first $350 billion, we purchased preferred stock in the banking institutions across this country.
Interestingly enough, we borrowed money to buy that preferred stock. We borrowed it between zero percent and 2.5 percent. We are getting paid back between 5 percent and 5 percent. And we will get the preferred stock back when the — when the economy recovers and these institutions become strong enough to pay us back, which will happen.
CAVUTO: What if they don't?
GREGG: And, so, we're going to get money back.
CAVUTO: Well, what if they don't, Senator, right? Is that not the fear, that you're — obviously, you are trying to deal with a financial crisis. You're doing the best you know how, but you could be pouring good money after bad, right?
GREGG: No, no, Neil. That's just — I just don't agree with that at all.
The simple fact is that, if you don't have confidence in the American economy recovering, then you could take that position. But the American economy will recover. And the only way it's going to recover, however, is if we have a sound financial system, which requires that you have adequately capitalized banks system in this country.
And what we're doing is putting the liquidity into those banks to capitalize them. It's an investment by the taxpayers. The vast majority of it, if not all of it, will be paid back with interest. And I expect the taxpayer is going to make a little money here.
In fact, this does not even score against the deficit, if it is done pursuant to traditional scoring rules.
CAVUTO: Yes, well, you have got a lot of hope there, Senator, because the $350 billion already...
GREGG: It's not hope. It's not hope, Neil.
CAVUTO: Yes, it is, Senator. It is a lot of hope, because...
GREGG: Are you saying that all these banks are going to go under?
CAVUTO: Senator, are you guaranteeing to me that that money is going to make its way back to taxpayers, like it is a foolproof loan?
GREGG: What I'm saying to you is that, if this economy recovers, we will get that money back. And I presume this economy will recover, because I have great confidence in the American resilience.
CAVUTO: All right. Let's hope you're right.
Senator, thank you very much.
GREGG: Well, so do I.
GREGG: And I think I am.
CAVUTO: All right. Thank you, sir. All right.
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