'Meet the Press' transcript for Feb. 15, 2009

MR. AXELROD:  ...we, we, we believe that it, it achieves, it achieves our goals without risking the kind of trade war we can't afford right now.

MR. GREGORY:  How about executive compensation?  In this stimulus bill is a measure from Senate Democrats that goes beyond what the White House laid out, basically saying that cash bonuses would be prohibited, other incentive compensation for executives at companies who will receive or have received bailout money.  Are you concerned about this?

MR. AXELROD:  Well, the president's expressed himself on this.  He shares the outrage that most Americans feel about excessive bonuses at firms who are receiving extraordinary assistance from American taxpayers.  That's why he's laid out some very tough provisions himself, some of which are tougher than what was in the congressional bill, like a hard cap on, on compensation for executives at firms that receive extraordinary experience.

MR. GREGORY:  At $500,000.  But this goes beyond that.

MR. AXELROD:  Well, it does in some ways, but not in that way.  The point is that we're all on the same side of this argument.  We believe that there should be limitations.  And we're going to work with Congress to, to administer them in a way that's, that's practical.

MR. GREGORY:  So are you going to try to fix this?

MR. AXELROD:  We're going to, we're going to have a dialogue with Chairman Dodd and, and Frank and, and talk this through.

MR. GREGORY:  So this may be altered in some way from the final package.

MR. AXELROD:  We want it to, we want it to work, we want to achieve the goals we need to while moving the financial stabilization plan forward.

MR. GREGORY:  But are you for or against the cash bonus prohibition?

MR. AXELROD:  Well, we--they borrowed an idea from us, which is to, to make most of the compensation come in stock that only vests when they repay the federal government.

MR. GREGORY:  OK.  The stimulus plan was the first step, and now you move on to the financial industry.  The president talked about that this week, so did Secretary Geithner.  This was The Washington Post editorial which captured some of the criticism of Secretary Geithner's plan:  "An Unfinished Product: America's banks need a plan.  The Obama administration delivered a concept." Was it a mistake for Secretary Geithner to just issue principles and not specifics?  Some critics have said this was in line with what the Bush administration did.  Too reactive, not bold enough.  Wall Street certainly didn't like it.

MR. AXELROD:  Well, first of all, I understand Wall Street's reaction.  They would have preferred that Secretary Geithner wheel, wheelbarrow down the center of that room with cash and then say we're going to take care of all your problems.  That wasn't a practical, a practical answer.  What he laid out was a very thoughtful strategy for dealing with this problem.  In the coming weeks he's going to lay out the tactics that animate that strategy.  And you know, if, if, if anything, I think there was some anticipation that was not in keeping with what he had planned for that event.  He planned to lay out a strategy.  The strategy is sound.  We believe the strategy will help lead us out of the morass that we're in.  And you know, we're going to, we're going to fill in the details in the next few weeks.  The president's going to speak to the housing component of it this week, and I think that people will be well satisfied with what he comes up.  But let's be, let's be clear; it is a very complex problem, the likes of which we've never seen.  We're going to do it thoughtfully.  One of the complaints about what happened on the first half of the administration of this program by the Bush administration was that it was very, that it was very scattered, that there were starts and stops.  And we want to make sure that when we lay these details out, that they're the details that we believe in and that we--that will work.

MR. GREGORY:  The president was very pointed talking to columnists on Friday, saying, "That he won't let the financial system collapse."

MR. AXELROD:  Yes.

MR. GREGORY:  Will it be a--necessary to nationalize major U.S. banks at some point to keep them healthy?

MR. AXELROD:  Our goal is to have a strong, vibrant private sector of financial system.  And that's, that is our assumption and that's what we're working towards.

MR. GREGORY:  So nationalization is not something you anticipate?

MR. AXELROD:  Well, we will do what we need to do, but our long-term goal is to have a strong private sector banking and financial system.

MR. GREGORY:  Let me address housing.  You said the president will take this on on Wednesday.  The plan appears to be an effort to try to modify people's loans by reducing their payments.  And the metric for this is that you would try to reduce it to 31 percent of people's incomes.  Housing experts I've talked to say the problem with that is that people who are having a hard time in this economy making their payments now and who are saddled with additional debt--it might be credit cards, student loans, auto debt--still have a hard time making those payments.  And we see a redefault rate, even with payment modification, of between 50 and 60 percent.  Can you address the housing problem without dealing with either principle protection or some kind of insurance for principle?

MR. AXELROD:  I'm not going to--David, I'm not going to get into the details of the plan here, the president will unveil them.  But we obviously have a major problem; problems with foreclosure, problems with people living on the edge and problems with home values around the country just plummeting, which is affecting family, family finances everywhere.  We want to do something that will address all of those things.

MR. GREGORY:  Are you concerned, though, about the fact that people are just not able to make their payments, even if you reduce them?

MR. AXELROD:  Obviously we're concerned.  You know, the president, one of the things that he's taken to doing is getting letters each day, a sampling of letters that people have sent to the White House.  He showed me a letter the other day that was just heart wrenching from a woman in Arizona whose husband lost his job.  He now has a job that's one-third the pay and they're really struggling to make their payments and meet their responsibilities.  And she was emblematic of people all over this country.

MR. GREGORY:  Hm.

MR. AXELROD:  We want to do what we can to help the American people and to solve this problem, which is at the heart of our financial challenges.

MR. GREGORY:  You've got the economy overall, you've got the banks, you've got housing, you've also got the auto companies.  They have to demonstrate whether they're viable this week coming up, whether they can keep getting government aid.  This was how The Wall Street Journal reported it on Saturday: "GM," General Motors, "to Offer Two Choices" to the government, "Bankruptcy or More Aid." Is the administration prepared to offer more bailout money to at least two of the Big Three?

MR. AXELROD:  Well, of course, we need to see what it is that they come up with this week.  We've got a working group going on this and, and, you know, we're ready to receive what they bring us.  One thing is clear--really, two. We need, we need an auto industry in this country.  There are millions of lives, livelihoods that depend on it.  Not just at the auto companies, but spin-off manufacturers, dealers and so on.  So we have a real interest in seeing the auto industry survive.

MR. GREGORY:  Right.

MR. AXELROD:  But it's going to require a major restructuring of the auto industry.

MR. GREGORY:  But can the auto industry withstand a bankruptcy at GM?

MR. AXELROD:  Well, I'm not going to--as I said, we're going to need a major restructuring of these companies.  How that restructuring comes is something that has to be determined.  But it's going to be something that's going to require sacrifice not just from the autoworkers, but also from creditors, from shareholders and the executives who run the company, and everyone's going to have to get together here to build companies that can compete in the future.

MR. GREGORY:  In our remaining moments, let's talk about some of the political fallout this week in trying to fill the Cabinet.  Judd Gregg, your choice--the president's choice for Commerce secretary, backed out.  And it was--raised a lot of questions about what was really going on here.  Press Secretary Robert Gibbs indicated that Gregg actually approached you guys for the job initially, then Gregg said no, it was the other way around.  What happened here?

MR. AXELROD:  Well, what happened was that Senator Gregg was very interested in serving in the Cabinet, and I think that he had second thoughts.  As he said--you know, as you know, he's quite the maverick in the Senate.  He said that he finally concluded that he didn't belong in anyone's Cabinet.  And so he had, he had second thoughts and he withdrew.  And we're going to move on.

MR. GREGORY:  Was there a bigger issue made about the role that he would play or wouldn't play in the census, a new census coming up?  You wanted to bring that into the White House instead of having the Commerce secretary have jurisdiction over that.  Wasn't that a big issue for him?

MR. AXELROD:  To my knowledge that was not the--a major point of discussion. And let's be clear, we want professionals to run the census, people who are expert in the field.  We want to make sure that every American is counted. It's important to them, it's important to the states in which they live.  And we're going to proceed on that basis.

MR. GREGORY:  You won't politicize the census?

MR. AXELROD:  Absolutely not.  Absolutely not.  We are interested in the best census ever, and a census that reflects as accurately as possible the true population of this country.

MR. GREGORY:  Is the president prepared to name a new Commerce secretary? Does he have somebody in mind?

MR. AXELROD:  We'll be having an announcement shortly.  Yeah, you know..

MR. GREGORY:  This week?

MR. AXELROD:  Well, I'm not going to put a day on it.  It's going to be a busy week.  As you know, he's going to Canada.

MR. GREGORY:  Mm-hmm.

MR. AXELROD:  We're, we're announcing the housing plan.  We're signing this bill.  But shortly.

MR. GREGORY:  What about somebody to replace Tom Daschle as secretary of HHS? Another announcement coming there?

MR. AXELROD:  Yes.  We're obviously going through the process of evaluating candidates.

MR. GREGORY:  Mm-hmm.

MR. AXELROD:  Now, it's an extraordinarily important job, health care is a major issue in this country, and HHS has a lot of other responsibilities.  So we want to make sure that we make a great choice.  Tom Daschle was, was an extraordinary guy, great expertise in health care.  We want to make sure the next choice is, is up to this role.

MR. GREGORY:  Let me have you address some criticism from the prior administration, specifically the vice president, who offered some pretty strong things to say about the administration's approach to the war on terror now in, in the new administration.  He said this to Politico:  "`When we get people who are more concerned about reading the rights to an al-Qaeda terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry,' Cheney said.  ...  He said he worried that `instead of sitting down and carefully evaluating the policies,' Obama officials are unwisely following `campaign rhetoric' and preparing to release terrorism suspects or afford them legal protections granted to more conventional defendants in crime cases.  The choice, he alleged, reflects a naive mind-set among the new team in Washington.  `The United States needs to be not so much loved as it needs to be respected.  Sometimes, that requires us to take actions that generate controversy.  I'm not at all sure that's what the Obama administration believes.'"

MR. AXELROD:  Well, first of all, let me say that if respect in the world is what we're after, I'm not sure that that cause was advanced by some of the things that the vice president has said and done over the last eight years. And what he said here is really irresponsible.  The fact is that the president has announced a very, a very methodical system for evaluating how we close down Guantanamo, how we're going to deal with those detainees, and, and, and he's proceeding in a thoughtful way.  He believes, and I think most Americans do, that we can protect the American people and be consistent with the values that have animated this country for over two centuries.  The vice president seems to think it's a zero sum game.  I think that's one of the things that was on the ballot last November.  It was decided.  Apparently the vice president is having a hard time dealing with those--with the verdict of the American people.

I will say this.  President Bush could not have been more generous in, in the transition in, in every conceivable way.  And when he left, he said, "I, I'm rooting for you guys.  I hope you do well." I believe that.  Apparently the memo didn't go down the line.

MR. GREGORY:  The first few weeks in Washington, any surprises for you?

MR. AXELROD:  You know, I relearned, David, a lesson that I've, that I, that I've always known but that came back in stark relief, which is that there's a different conversation in this town often than what's going on in the country. On cable television for the last few weeks you've heard the president's plan is in trouble, you know, this big discussion about Republicans and Democrats and so on and so forth.  Out in the country people were saying, "I'm losing my job.  I'm worried about my health care.  I'm worried about staying in my home. I'm looking for someone to act." And they were supportive of what the president was trying to do.  And it's always important to remember that the chatter in this town is not the chatter around kitchen tables in this country. And as long as we listen to kitchen table chatter, I think we're going to stay on a truer course.

MR. GREGORY:  We'll leave it there.  David Axelrod, good luck with your work.

MR. AXELROD:  Good to be here.  Thanks, David.

MR. GREGORY:  Appreciate it.

Coming next, looking back at the first three weeks of the Obama administration and what's next on the agenda.  Insights and analysis from our roundtable: Ron Brownstein, Eugene Robinson, Roger Simon and Kimberly Strassel all here, only on MEET THE PRESS.

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MR. GREGORY:  Insights and analysis from our political roundtable, after this brief station break.

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