This is a rush transcript from "Your World With Neil Cavuto," July 15, 2010. This copy may not be in its final form and may be updated.
NEIL CAVUTO, ANCHOR: This is also just coming in to our news room via our good buddy Charlie Gasparino over at Fox Business Network, saying that Goldman Sachs will be settling with the U.S. government, the Securities and Exchange Commission, expected to announce later this hour that it has entered into an agreement to settle differences with Goldman Sachs, no indication on how much money the company will have to put forward, whose job might be sacrificed.
Reaction now, as well as to what’s happening on the tax front, with Democratic Senator Evan Bayh of Indiana. Senator, I don’t mean to hit you broadside with this latest news development, but reports that Goldman Sachs is settling with the government, do you know anything about it and what we might be seeing?
SEN. EVAN BAYH, D-IND.: Neil, I don’t know anything about it.
But I would assume that Goldman, from a business standpoint, concluded that it was important to get behind them. And we will have and see what the terms are to know what the government was insisting upon in return.
CAVUTO: What do you think of Goldman and whether they should settle with anyone now or before?
BAYH: Well, Neil, I think that’s up to them. I can’t offer an opinion about that until I know what the terms of the settlement were.
CAVUTO: But I guess I’m looking at it, Senator, in the context of a lot of the big banks and financial leaders, obviously what passed in the Senate, big financial reform that will going to the president’s desk, many argue, including those at Goldman, that what was odd about that reform is that Fannie Mae and Freddie Mac were left out of it, and yet it’s Goldman the one that is going to be sort of slapped around today and pay something or do something, the details of which we don’t know.
BAYH: Well, again, I assume — well, first, Neil, I was one of only two Democrats to actually vote to include Fannie and Freddie. I think that was a big omission in this bill and is an issue that has to be addressed going forward, because that whole sub-prime issue had some relationship to them, and it needs to be addressed. So, that’s number one.
Number two, there’s still a lot of uncertainty out there with regard to what the regulators will ultimately decide about how to implement this bill.
I assume what the folks at Goldman Sachs were thinking — and, again, I haven’t talked with them, so I’m just speculating here — is...
BAYH: ...they were saying, look, we have got a lot of uncertainty. This is a threat to our reputation, the integrity of our franchise. Let’s try and limit the amount of uncertainty by at least getting this SEC enforcement action off the table.
I assume the terms were acceptable to them, or they wouldn’t have – wouldn’t have done it.
CAVUTO: All right.
And I do want to continue with you, Senator. I just want to update people just tuning in. Again, besides the BP cap thing, and besides trying to put — Goldman putting a cap on the problems it’s been having with the government, just keeping you posted that, later this hour, we should be getting the details on the latter from Goldman Sachs that it has indeed settled with the government.
Whether that means Lloyd Blankfein, the top cheese at Goldman, is a goner, it is anyone’s guess. That is probably a good guess, but we will have to say.
Now back to Senator Evan Bayh.
And, Senator, on this growing talk from the debt commission that it’s entertaining anything and everything, including more taxes, now, you were among those who said you were against raising taxes on anyone. You drew the line even for the rich, because you said, look, maybe when things improve, but they’re not at that point yet.
Is that still where you stand?
BAYH: Yes, that’s absolutely my stand, Neil. I think we need to focus upon — the deficit needs to come down. We need to focus upon spending restraint. In fairness to Erskine Bowles, he recommended 75 percent spending cuts, 25 percent revenues, so at least he’s focused on spending cuts. But, right now...
CAVUTO: By the way, you — well, you know this inside and outside. I just want to remind people, when you say 75 percent spending, that he would cut spending and the other would come by raising taxes.
BAYH: That’s what he said. It remains to be seen what they will actually propose.
But my broader point, Neil, is, the economy is very fragile right now. Raising taxes on anyone at this time runs the risk of undercutting a demand which we need to buttress to keep this economy going. And it’s way too premature to talk about raising taxes right now, whether it’s on individuals or businesses, because we need to increase business confidence, so that they will invest some of that $2 trillion they currently have sitting on the sidelines.
And we want consumers to be a little more confident as well and step back into the marketplace. So, now is not the time to be raising taxes.
CAVUTO: I want to switch gears. I know I have been all over the map with you, Senator. You’ve been very kind.
But this BP potential cap that’s working, if it does succeed — it has to succeed for a while, permanently — but then there’s the issue of drilling in that area and if it can continue. How do you feel about the moratorium and whether this might speed the process along toward lifting it?
BAYH: Well, a couple of things.
First, if they have been successful in capping that well, that may be one of the few things that Democrats and Republicans can agree in Washington, Neil, that that is a good thing.
BAYH: So, number one, let’s hope — let’s hope that’s the case.
Number two, you know, clearly, we get — until we find a way to become more energy-independent, we get a — the Gulf is one of our major sources of domestic oil. If we just cut that off, we are only going to be more dependent on Saudi Arabia, Venezuela. That’s not a healthy situation.
So, I would say two things. Number one, let’s focus like a laser on what went wrong with the BP rig. Let’s insist that all of the companies have better contingency plans in place and take the steps necessary to just totally minimize the chances of anything like this reoccurring.
Once they have done that, however, Neil, we need to continue exploration there, because it’s a lot better to have a domestic source than it is to continue to rely upon foreign oil.
CAVUTO: All right, Senator Bayh, thank you very, very much.
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