MSNBC "Morning Joe" - Transcript

Interview

MSNBC "Morning Joe" - Transcript

MSNBC "MORNING JOE" INTERVIEW WITH SENATOR JACK REED (D-RI)

SUBJECTS: ECONOMIC STIMULUS PACKAGE, AFGHANISTAN

INTERVIEWERS: JOE SCARBOROUGH, MIKA BRZEZINSKI, MIKE BARNICLE, CARLOS WATSON

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MR. SCARBOROUGH: Democratic Senator from Rhode Island, an announcement in support of the stimulus bill, Senator Jack Reed. Senator --

MS. BRZEZINSKI: Hi, senator.

MR. SCARBOROUGH: Great to see you this morning.

SEN. REED: Nice to be here, Joe.

MR. SCARBOROUGH: Okay, first of all, Mike Barnicle wants you to know that his wife works for Bank of America and he doesn't like you screwing around with her salary. Why do we want to limit the pay of executives at Bank of America, specifically, to $500,000?

SEN. REED: Well, this is in response to the outrage to the American people. We've been supporting these institutions because they need support because they're important parts of our economy. They can't be allowed to fail, but then they turn around after posting great losses and give huge bonuses to their executives, but more importantly, we've got to change the short-term focus of compensation of the financial system. People have to have a longer stake. They have to have a longer view. Many of the problems we've seen are a result of people just really taking the money and running and not doing the best they can for their companies and for the long run, for their shareholders.

So all of this makes a great deal of sense to me.

MR. SCARBOROUGH: Well, senator, you said we have to change the pay structure of these economies. With all due respect, that's not really the Senate's job is it in the long run to tell companies in the free market how much money they can pay their employees?

SEN. REED: Well, at this juncture after the investments that the taxpayers have made in some of these companies, they are the largest equity owners in terms of preferred stock I think not just in terms of short run, but the longer run.

One of the reasons that we got into this whole situation is that people were looking at the quarterly bottom line, taking as much as they could as fast as they could and then discovering later on that these investments, these securities were worthless, illiquid and the companies were facing insolvency. That forced us to step in, we did, but having support of these companies, I think, the public has a right to demand that there be responsible compensation schemes.

MR. SCARBOROUGH: Well, that's fine, but after we move past this period though, shouldn't it be up to companies when taxpayers are no longer on the hook? Should it be up to companies to make up their own mind how much they want to pay their employees?

SEN. REED: I hope that we can move through this whole period, that we can redeem those preferred shares that the government owns and that companies are back doing their own thing, but they're doing it, I think, better regulated environment, but also they begin to recognize that long-term results have to be the measure of compensation as much as short-term quarterly results.

MS. BRZEZINSKI: I want to ask about the stimulus bill and President Obama has a piece in The Washington Post this morning talking about why this is a good bill and that it will create or save more than three million jobs in the next two years. I want to understand more about how this is actually a stimulus bill that creates jobs.

SEN. REED: Well, it's a stimulus bill because, first, there's a significant investment in infrastructure, investment in roads and bridges, that puts people to work immediately. Second, it provides immediate relief for working families, extensive unemployment benefits. For every dollar of unemployment compensation that goes out, the economy receives about $1.73, $1.73 because people use their own resources to support themselves.

So it does have a stimulative effect. It increases demand. It increases economic activity.

We have lost in the last two months 500,000 jobs a month. Last year, overall, we lost 2.6 million jobs. This is the worst economy any president has inherited since Franklin Roosevelt, and if we don't move aggressively, these job losses will accelerate.

This proposal the president is making will actually increase jobs by about three million. It will provide growth rather than contraction in the economy. It will provide also great hope and confidence to people who are struggling.

MS. BRZEZINSKI: Okay.

MR. SCARBOROUGH: All right. Senator, let me ask you though about a lot of people, including us who are criticizing this plan because it doesn't follow the guidelines of traditional stimulus plans, and, in fact, if you read Barack Obama's op-ed today in The Washington Post, he talks about this is a long-term bill. Larry Summers, his chief economist in the White House had said earlier this year that if you don't handle stimulus bills carefully, they can actually cause more problems than you had with the underlying disease. He said stimulus bills need to be targeted, timely and temporary --

MS. BRZEZINSKI: Right.

MR. SCARBOROUGH: And only short-term deficits lasting a couple of years. This doesn't meet any of those standards whatsoever, does it?

SEN. REED: It absolutely meets those standards, Joe. It's a two year bill. It's appropriations for two years and tax benefits for two years. It's targeted. The taxes are targeted to working families with the tax credit. There's going to be immediate relief. It's targeted in terms of unemployment compensation benefits, that goes out immediately. The infrastructure projects or those projects that will build out within two years --

MR. SCARBOROUGH: Well, excuse me, senator, with all due respect, the CBO says that maybe only a quarter of that $900 billion goes out the first year.

SEN. REED: Seventy-eight percent of these projects will be built out in 18 months, that's the revised CBO estimates. The first part of the bill, the stimulus part of the bill are essentially those tax benefits for working families, which will go out very quickly, and second, it's relief to states, support for state Medicare programs, support for state education programs. That money will go out very quickly and be spent very quickly because the states are under huge pressure.

If you take the combination of the tax cuts immediately and then the quick phase in of infrastructure projects over 18 months, about 75 percent of these funds will be spent. That's timely. It's temporary. And it's targeted.

MR. SCARBOROUGH: Mike?

MR. BARNICLE: Senator, what seems to be the biggest obstacles for the people on the other side of the aisle, the Republicans? What are the hurdles that they can't seem to get over to join you behind this bill?

SEN. REED: Well, I think a lot of it is just their predilection to the policies that got us to this position, tax cuts and tax cuts and tax cuts. Those policies, the Bush policies over the last eight years have created this economic crisis and can be attributed to it significantly. I don't think they want to abandon that. I think they should. I think they should work together, in fact, Mike, I'm confident that we're going to get a bill out of the Senate and we're going to get a bill because despite their objections, there's been a great deal of cooperation, in fact, I think below the rhetorical debate, there's a consensus that we have to move and we have to go to conference and we will.

MR. BARNICLE: What do you think the timetable is going to be?

SEN. REED: I hope we can get the bill passed this evening. We're going to stay here until we do get it passed, if it's tomorrow, if it's Saturday or if it's Sunday, because we have to get to conference and then we have to move quickly in conference. The goal is to get this legislation to the president before the middle of February, to get it signed and get the money flowing out.

MS. BRZEZINSKI: Okay. Carlos Watson?

MR. WATSON: Hey, senator, quickly I want to move you to foreign policy, you're a long-time member of the Armed Services Committee and a West Point graduate. There's a lot of talk about increasing the number of troops in Afghanistan. I know you visited the area a dozen times over the last couple of years.

Do you think that makes sense? And if so, how quickly do you expect that the Obama administration will increase troops in Afghanistan?

SEN. REED: I think it makes a great deal of sense. I believe that within the next several weeks, there will be an increase of at least two brigade combat teams. This is a big country, difficult terrain, to have a suitable footprint, we do have to increase troops, but the answer is not simply more troops, it is a more comprehensive strategy, it's addressing the drug problems there, it's addressing the problem of governmental capacity.

This is a crisis situation and it also is a situation that involves attention to Pakistan, as well as Afghanistan, because that border region is where al Qaeda is lurking, where the Taliban is reconstituting itself.

MR. SCARBOROUGH: All right. Thank you so much.

SEN. REED: Thanks, Joe. Thanks, Mika.

END.

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