Transcript of interview with President Bush

CNBC: Let me turn to North Korea and Iran. It seems like the markets have discounted a threat from these countries, certainly the way that the markets are trading. How do you feel about those two countries? Tell me which one worries you most and...

Pres. BUSH: Right.

CNBC: ...the level of concern that you have.

Pres. BUSH: I don't discount the threat. As a matter of fact, I see the--I see the threat in a country like North Korea or Iran possessing, using or selling a nuclear weapon, and therefore, have put together a diplomatic effort to convince them that there's a better way for their governments and their people.

Now, both threats are equally, you know, equally serious. They both present different problems, but they're serious threats. And I--the progress that we've made on North Korea's important. I know you're going to China, and China has now become a very important partner in convincing North Korea to live up to her international obligations and get rid of her weapons in a verifiable fashion. It's much easier for us to achieve a diplomatic solution on this problem if there's more than one voice speaking to China. You now have China, the United States, South Korea, Japan and Russia all saying the same thing. I was briefed by Condi this morning. She came back from the Far East, and she gave me a full briefing on all the conversations she had in these--in Japan and South Korea, Russia and China. She's very pleased by the fact that they're all committed to enforcing the latest UN resolution, and they all know that in order for the North Korean leader to be convinced that we all must speak with one voice, and then effect the consequences inherent in the UN Security Council resolutions.

The same strategy applies to Iran. That we've got to say to Iran that China, Russia, the EU and the United States all are intent upon providing a way forward, but we're also intent upon making sure that they don't develop a weapon.

CNBC: Why won't this administration talk directly to North Korea without any concessions?

Pres. BUSH: Well, the key is to try to put a--put a strategy in place that actually achieves the objective. And the notion of bilateral talks had been tried and it failed in 1994. And the idea is to try something that I think will work. And we--the--North Korea knows our position very clearly. There is a better way forward for the North Korean people. And the leader has that choice to make.

CNBC: Let me ask you, broadly speaking, about the competitiveness of this country. A lot of people worry--Treasury Secretary Hank Paulson among them--that a lot of business is going to international economies. You're seeing an enormous amount of, relatively speaking, IPOs going to Hong  Kong and London relative to the New York Stock Exchange.

Pres. BUSH: Yeah.

CNBC: Are you concerned about that, and how successful has Sarbanes-Oxley really been?

Pres. BUSH: Mm. Secretary Paulson and I have spent a lot of time talking about this issue. And on the one hand, we want to make it clear that our country will not tolerate any malfeasance through corporate executives. On the other hand, we understand that if you over-regulate, it'll drive capital elsewhere. And so Secretary Paulson and--has convened a group of leaders here in Washington--Chris Cox and others--to talk about how to achieve--you know, live within the spirit of Sarbanes-Oxley, but make sure that we don't over-regulate here in America. And--so one way you become less competitive is through over-regulation. Another way is through high taxation. Another way is through lousy education. And we've got plans to address all these issues to make sure that America's still the most competitive nation in the world.

CNBC: So are you expecting it will be rolled back, then? Sarbanes-Oxley?

Pres. BUSH: I think "rolled back" is the wrong way to look at it. I think fine-tuned in a way that achieves both objectives. One objective is good corporate governance so that people have faith in the balance sheets they read and the numbers that are presented. And on the other hand, to make sure that--the other objective is to make sure that capital remains here in the United States, that we don't drive it out because of over-regulation.

The good news is Secretary Hank Paulson knows a lot about the subject.

He's a tough-minded guy, as you know, when it comes to bad corporate governance, but he also understands capital very well. And he and I am concerned about IPOs being issued in overseas as opposed to here in New York and in America.

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