'Meet the Press' transcript for Feb. 1, 2009

MR. RUSH LIMBAUGH:  Republicans in the Senate have an obligation to tell the people the truth, what's in this bill, and not support it because it is morally wrong to do otherwise.

The Republicans in the Senate actually have the ability to slow down and even stop major parts of this bill, because of the Senate's rules.

This is a seminal moment.  This vote will determine which senators are statesmen, this vote will determine which senators are reckless hacks.

(End videotape)

MR. GREGORY:  Senator Hutchison, are you prepared to stand up and fight this bill, as he says, and maybe block parts of it, or all of it?

SEN. HUTCHISON:  Oh, I would fight this bill as it is, absolutely, because I think it is the wrong emphasis.  When we talk about bipartisanship, it means that some of the ideas that would be incorporated would be the Republican ideas.  If this bill comes to the Senate floor...

MR. GREGORY:  You'll vote against it.

SEN. HUTCHISON:  Oh, yes, absolutely.

MR. GREGORY:  Well, the--it's interesting, because this is...

SEN. HUTCHISON:  But I think we could fashion a bill...

MR. GREGORY:  Right.

SEN. HUTCHISON:  ...that would take out some of that nice spending, but not necessary right now and not job stimulative.  Put the stimulation in, put the tax cuts in, I think you could have a bipartisan bill.  But just talking a good game and then not having any real input or change is not going to make a difference.

MR. GREGORY:  You say you voted against it.  This is what you said the day after Election Day about President Obama:  "I want to congratulate Barack Obama.  ... We hear the people, and now it's time to come behind our president." And yet you're not prepared to do that on the most important piece of legislation that he's beginning his administration.

SEN. HUTCHISON:  Oh, absolutely.  I cannot step back from the principle that I think is so important for my constituents and for our country, that we would do a stimulus package that has job creation, keeping people in their homes, trying to get the financial institutions to get credit out in the marketplace, which it is not doing now, and having infrastructure spending that would make sure that we are doing something that we were going to do anyway.  I agree on the broadband, the electric grill.  But--grid.  But let me just say that if there is a bipartisan effort, it's not just talking about it; it is really giving and taking, as we have done in the Senate in the past, to make this a bill that we would--at least 60 of us would feel comfortable with, or more.

MR. GREGORY:  So...

SEN. HUTCHISON:  That's what I think the president has indicated he would do, but we haven't seen it yet.  Now, it's early, but we haven't seen it yet.

MR. GREGORY:  All right.  But--so, Senator Kerry, what do you specifically to get Republican votes?  And are you confident you'll get them on the Senate side?

SEN. KERRY:  I hope we can get them, and I think the--I think President Obama has done an exceptional job.  I mean, I can't remember in the eight years President Bush was here that he came to our caucus once.  The fact is President Obama came up to the Hill, spoke to the Democrats in the--to the Republicans in the House.  One hour before he spoke to them, the leader of the House Republicans sent an e-mail out saying, "Urge all of you to vote against the package." That's not give and take, that's politics.  And I think what we need here is to recognize that, that there has to be--you know, if you're going to argue for a concession, you invest in the legislation and then you hopefully support it.  I haven't seen any such offer yet.  Now, maybe that'll happen.

Secondly, I don't think we're duty-bound to accept something that we fundamentally believe is either a waste of money or not going to work.  There are differences here.  And the fact is that some of the nontargeted tax cuts are simply, in most people's judgment, not going to, at this point, do what we need to do to suddenly stimulate the economy and create jobs now.

MR. GREGORY:  Final point on this.  If this measure passes the Senate without Republican votes, would you consider it a failure, or would you say, "So be it"?

SEN. KERRY:  It, it depends on what the voting--if we do what we say we're going to do in the next days, and we will, have an open debate with these amendments, rising and falling on the merits of the argument, and the Senate votes its will and we then pass something, I think, I think that's a success.

MR. GREGORY:  Let me ask a broader question here about the next $2 trillion question, and that is what to do about America's banks.  Senator Hutchison, can we expect that the stimulus package is going to have any impact unless the government does enough to recapitalize America's banks?

SEN. HUTCHISON:  Absolutely not.  The 700 billion that we have already put into the system is not working.  The money is not getting out to the businesses of our country, nor to the individuals in our country who need that help.  And if we don't open up the credit markets, nothing is going to work. Just a lot of government spending is not going to do the job.  So I do think that a component of this has to be getting the money out.  Now, I do believe that the Obama administration is saying the right things about the 700 billion.

SEN. KERRY:  Mm-hmm.

SEN. HUTCHISON:  To try to direct it, get the bad assets off, let the good asset banks be required to start getting the money out there, because they do then have enough capital to do it.  And then on the bad assets--and this is so important to me, David.

MR. GREGORY:  These are the toxic assets that are really weighing down the banks, their balance sheets.

SEN. HUTCHISON:  Yes.  Back in the '80s, the RTC had a habit of just going in there and lowering all the collateral value around an area where they were just doing fire sales and good-performing loans were being called.  I would ask--if, if there is anything that we do on bad asset banks, it is to have workouts that try to bring people in, and never call a performing loan.  Even if the collateral goes down, if the loan is performing it should not be called, and that should be a policy in this administration.

MR. GREGORY:  Senator Kerry, I just--I want you quickly on this, because I want to get to a couple of other matters.  What we're talking about here, one idea is for the government to go in and purchase these toxic assets, primarily subprime and other mortgage-backed assets on the banks' balance sheets, that if in fact they're sold at what they're worth right now could make the banks insolvent.  So that's why they would want to buy them, put them in another entity, so the banks could maybe get some more capital and start lending again.  Do you think that's how the government should proceed?

SEN. KERRY:  Well, it's not my preferred way to do it, because I don't think it provides the maximum protection to the American taxpayer.  I was on the Banking Committee when we did the RTC, and we created the good bank, bad bank, and I recognize the problem that Kay has just talked about.  But I think the best way to do it is to basically dilute the shareholders by writing down those assets within the banks themselves, either taking warrants...

MR. GREGORY:  Actually take the loss.  Take the loss, put them on their books...

SEN. KERRY:  Take the loss...

MR. GREGORY:  ...and say, "We lost one."

SEN. KERRY:  Well, there's no reason that the American taxpayer should be required to basically subsidize further the shareholder, which is what happens if you just buy the assets off.  And, and then someone's going to walk away--some government employee is going to wind up selling those assets, and someone's going to make a lot of money in two years.  I want the taxpayer to be protected against their investment in those banks if they're going to recapitalize them, and I think that's an appropriate thing for us to ask.

Now, how you structure it, whether you do it with taking warrants, which allow you to set a price down the road, and you can argue what it's going to be and you get the upside if it comes, or taking common stock or preferred stock. These are technical--you can--they all have impact.  They all have a profound impact on how much money you're talking about and what the impact is on the banks.  But the bottom line is we ought to be thinking about the taxpayer here, and in the long term many of those assets are going to revalue.  So if you did have a warrant, you're going to get the value back to the taxpayer for their investment, and you let the banks work out those properties.

MR. GREGORY:  But bottom line, the taxpayers have to get prepared for the government perhaps borrowing...

SEN. KERRY:  Bottom line is this is...

MR. GREGORY:  ...almost a trillion dollars to help the banks, whether they like the banks or not.

SEN. KERRY:  Whether they like them or not.  This is not about the banks, per se, this is about how you get Main Street America back to work, and how you release the money that lets any small business in any community to be able to borrow so that they can pay their payroll, buy the next set of goods they use to produce their products and go on and grow our economy.

MR. GREGORY:  I just want...

SEN. HUTCHISON:  I'd like to add to that, David.

MR. GREGORY:  I just--I want to cut this off, but I just want to...

SEN. HUTCHISON:  Targeted spending is so important in this $800 billion bill...

MR. GREGORY:  Because of the other...

SEN. HUTCHISON:  ...because you do know that the other is coming, coming behind it.

MR. GREGORY:  Little bit of Cabinet news before I let you go.  Senator Hutchison, is Judd Gregg, senator from New Hampshire, going to be the Commerce secretary?  And if he is, will he be replaced by a Republican so it doesn't affect the balance of power in the Senate?  Has a deal been worked out?

SEN. HUTCHISON:  I do think it would be important that--and I, I'm sure Senator Gregg would not leave his seat if he thought a Democrat would take his seat.  I just know he would not do that.

MR. GREGORY:  Do you know, is he going to be Commerce secretary?

SEN. HUTCHISON:  I, I can't say that I know anything.  It certainly, I think, is a good possibility.  I think he's a very good person for it.  He's very, very strong.  But he would never walk away and leave the balance in the Senate for the Democrats.

MR. GREGORY:  And, Senator Kerry, questions now about Senator Tom Daschle, the designate, of course, to be secretary of Health and Human Services.  He, too, like Tim Geithner, has a back tax issue.  He had to amend his tax returns; questions about whether he informed the Obama team in time, or not before he was actually nominated.  You're on the Finance Committee.  Will this impair or imperil, I should say, his nomination?

SEN. KERRY:  Well, not for me, and I hope not for fair-minded and thoughtful people.  I think that--you know, I voted for Tim Geithner.  I thought he made an innocent mistake, he corrected it.  And in the case of Tom Daschle, I mean, I've known Tom for 25 years.  There is--he's a, he's a person of enormous integrity.  If you look at all of the positions he's taken on health care, many of them have been opposed to, you know, the sort of special interests, as they're called.  And I think Tom is the man to, to fix the system and he can do the job.  I also believe he notified--you know, he voluntarily informed his accountant.  His accountant went to work to pull the pieces together.  He, he informed the, the vetting process.  And, and I just think, you know, this is, you know, it's obviously a mistake, but I think it's an innocent mistake.  I don't think it affects one iota his ability to do the job.

MR. GREGORY:  Senator Hutchison, Senator Kyl says he's troubled by this.  Are you still for Senator Daschle in this post?

SEN. HUTCHISON:  I like Tom Daschle personally, and I think that on the merits of the job he is, is very qualified.  However, I certainly want to see more of the background about what wasn't, what wasn't in the tax that he is now paying, what wasn't paid before, when it came forward.  I do need to know more information.

MR. GREGORY:  So this is--this troubles you.

SEN. HUTCHISON:  Yes, it does.  I, I, I like him as a person, I do, and I would have leaned for him without question but for this.  I just want to know more.

MR. GREGORY:  All right, Senators, we'll leave it there.  Thank you very much for being here.

SEN. KERRY:  Thanks for...(unintelligible).

MR. GREGORY:  Coming next:  the stimulus package, the bank bailout, the crumbling housing market.  What does it all mean for the American taxpayer? Our conversation continues when our roundtable weighs in.  Mark Zandi, Erin Burnett and Steve Forbes all here, only on MEET THE PRESS.

(Announcements)

MR. GREGORY:  Our economic roundtable weighs in on the stimulus package and the financial bailout after this brief station break.

(Announcements)

More from NBC News broadcasts Struggling species gets helping hand Astronaut over the moon for daughter’s birth   Panel examines cancer screening confusion Report: Vet aid program riddled with fraud Knox speaks out, calls victim a ‘friend’ McCain says he enjoyed Palin’s book   Polluters, watch out for 'eco-cops'   Follow on Twitter: Making a Difference

MORE FROM MEET THE PRESS

Meet the Press Section Front

Nov. 22: Senate roundtable, Brinker, Snyderman Nov. 15: Clinton, Duncan, Gingrich, Sharpton Nov. 8: Casey, Barbour, Rendell, roundtable, Brokaw Nov. 1: Tim Geithner, David Plouffe, roundtable Oct. 25: Cornyn, Schumer, Burnett, Sorkin, roundtable Oct. 18: Jarrett, Dodd, Kyl, Shriver, Podesta Oct. 11: Levin, Graham, McCaffrey, Myers, roundtable Oct. 4: Ambassador Susan Rice, roundtable Sept. 27: Bill Clinton, Paterson, Kyl, Webb Sept. 20: President Obama, Sen. Graham, Rep. Boehner, roundtable Meet the Press Section Front   Add Meet the Press headlines to your news reader: