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Interview Transcript: Hillary Clinton

Below is the unofficial transcript of an interview with Senator Hillary Clinton on CNBC's "Street Signs" today.

Senator Clinton discussed a broad range of topics including her economic plan and her reaction to the GOP debate with CNBC's John Harwood and Erin Burnett.

Erin: it's a great point and one we hope our next guest will address and Mr. Donahue, I believe, will be able to listen to what senator Clinton has to say and john Harwood is with the senator this afternoon, john?

Harwood: thanks, Erin, I’m with senator Hillary Clinton in Plymouth, New Hampshire, thank you for joining us, Senator.

Clinton: Thank you, John.

Harwood: We're going to kick it off by asking, as you know republicans have been criticizing your campaign broadly saying you'd raise taxes and raising spending for programs you've outlined and increase regulation with healthcare with your mandate. At our debate of republicans Rudy Giuliani said by interfering in the free market this way that you would place a lid on the success of the nation as a whole. Can you respond to that?

Clinton: well, obviously, I disagree profoundly. What I have proposed would be fiscally responsible. I have put forth the way that I would pay for everything, that I believe we need to do in our country. I am concerned that our great economic engine, this incredible middle class that has been the heart and soul of America and the American dream, is under stress and even under attack. You know, the average family has lost a thousand dollars in income in the last six years, but the costs of what make up a middle class life style, education, energy, housing, healthcare, all of that has gone up. So a lot of American families feel like they're actually standing on a trap door, they're one pink slip, one mortgage payment, one diagnosis of falling through. I see a history of our government being a good partner with business, with families, to make sure that we make investments in people and that's what i proposed so that we can get back to having a strong and prosperous middle class.

Harwood: Could your tax increases stall that economic engine that you referred to?

Clinton: I don't believe that's the case. We hear a lot from the other side about taxes, but as I recall in the 1990's when my husband did raise taxes on the upper income Americans who are the most well off, we got 22 million new jobs. President bush has tried to slash taxes as much as he could over the last six and a half years, we haven't seen jobs increases the way that we should have. If cutting taxes is supposed to be a job generator. I think you have to be balanced about this. No one wants to overburden our economy with regulation and taxation. On the other hand though, we've always had a pretty good sense of how to make it work for everybody. How do we move towards shared prosperity, how do we have an increasing pie that more people get their slice of? That is not happening today. So, I think we have a stark choice. We can continue with the supply side trickle down economics which have been really elevated by the current administration and those running for president on the republican side or we can get back to what previous presidents did that was more in balance and that's what I intend to do.

Harwood: Erin?

Erin: Senator Clinton, I wanted to ask you a few questions if I might about healthcare. I'm at the CEO summit. As you know some of the the biggest companies in the nation, the CEO's are all here, usually they talk about three or four issues, today they're talking about just one, seven straight hours talking about healthcare. It's an amazing thing, they think it's the biggest issue facing their companies, about half of them or slightly more, say that they are willing to consider getting rid of employer-based healthcare. Is that something you would consider?

Clinton: Well, Erin, my health-- American health choices plan builds on what works in our country's healthcare system, and tries to fix what doesn't. I start from the fact that we do have an employer-based system, but I give employers and individuals much more choice than we have in the current market. By opening up the congressional health plan, the federal employees health benefit plan, so that businesses could go in and shop there, to get a better deal because they now would have a much greater bargaining power than they do on their own. Companies, particularly small businesses, that don't now provide healthcare, might decide they could afford it under those circumstances, and I would help them with a healthcare tax credit. And individuals would also be able to have a healthcare tax credit. Because my goal is to move towards shared responsibility and choice, because in our system many businesses, no matter how large they are, cannot effectively bargain at the level that they need to try to get costs under control and they have tried really hard, so, under my plan, if they want to stay in what they're doing, if they're satisfied with it totally approved, that's fine. If they want to try something different, but still stay in the business of providing healthcare to their employers, employees, then that will be open to them. But if they want to get out of the business, they're going to have to pay into a fund. If they're large enough and if they're small enough, they will get a healthcare tax credit to help them if they decide to offer healthcare, this is not government run insurance, I’m not creating a single new bureaucracy, but I think we can get the costs down and that's what business leaders tell me they're desperately looking for.

Erin: and I think it's interesting you're talking about the small businesses, too, since Mr. Donahue's in the chamber of commerce was just talking about the 20 million small businesses out there. Let me ask you one other question, senator Clinton.

I was talking to Franklin Raines the former chief at Fannie Mae, he said one of the biggest if he is questions for you, was all right, we understand we need to provide healthcare, but we're concerned about who decides what is an acceptable healthcare plan, what is a fair price for drugs. Is there someone who is going to be making that decision and if so, is that someone in the government?

Clinton: Well, if you look at the way the congressional plan operates now, there are more than 250 choices available to members of congress and other federal employees. It's a lot cheaper than if you're working for a company that doesn't have a lot of bargaining power or if you go into the individual market. We're going to open that up to everybody, anything businesses if they so choose. So, the competition that will be available through insurance companies now competing on costs and quality, I think, will give a much better deal than we can currently get. Now, I’m going to change the way insurance companies operate because we can't afford it anymore. You know, we're letting one business, namely, health insurance, drive every other business to incredible lengths, trying to figure out how to afford healthcare for their employees, or just giving up entirely. What I am offering the health insurance industry is a different business model. We're going to ask you to guarantee coverage to everyone, including preexisting conditions and we're going to ask you to compete on costs and quality. And let me just give you one fact, last year, the American health insurance industry spent 50 billion dollars trying to avoid covering people. That meant that they didn't give people insurance if they had a preexisting condition. That meant that they drove excessive costs in the healthcare system and businesses hospitals, doctor's offices by arguing about whether or not they would pay for something that someone thought was covered by their insurance. If they took that 50 billion dollars and instead of trying to play games to eliminate people's coverage and instead put it to work to cover prevention, to do better chronic care management, we would begin to get costs down. So, I think we're going to have a choice to make and the chamber of commerce and the business round table and all of the business executives are going to have to ask themselves, do we want to change the model of one business that can still stay in business, still be competitive, still make a profit, but they're going to have to compete on costs and quality, or do we want them to continue to drive up the costs of doing business in America, leading to more uninsured and underinsured and the loss of jobs? I think the answer to that, from what I hear business executives saying, you know, we need to try something different and af he come forward with a model that is based on competition and choice and I think it answers the need that's out there.

Harwood: Senator, let me ask you about fiscal responsibility which you've said we have to return to. Part of that is, obviously, the entitlement, in fact, the biggest part is entitlement. Part is health and part social security. Fred Thompson the other night was the rare candidate to offer a specific proposal. He said let's change the way that social security benefits are calculated so that it's tied to the rate of inflation not to the growth of wages. That would save an awful lot of money. Economists, democratic economists I talked to say depending how many people you applied that to it could solve the entire problem. Is that a good idea?

Clinton: Here is what I think about social security, a lot of republicans have been sounding the alarm about social security for a long time. We have long-term challenges when it comes to social security. We have a crisis when it comes to Medicare and health costs. When I look at social security, I look at the missed opportunity. When my husband was able to achieve a balanced budget and a surplus, there was a plan that would have extended the life of the social security trust fund until 2055. Under president bush we're back into the deficit and increasing debt so we're seeing that the social security trust fund's life is now aimed at about 2041. We do have to get back to fiscal responsibility to replenish the social security trust fund. I want people commit today that first before we start talking about what will or will not be done. And then I think we should have a bipartisan commission so that everybody agrees on what steps have to be taken, but I am stressing fiscal responsibility because we could have been so much further down the road toward insuring the solvency for the 21st century, if we hadn't detoured off that path.

Harwood: Don’t you owe it, as someone with a pretty good chance of becoming president, don't you owe it to the American people what you think about some of these ideas specifically while you're running.

Clinton: I think what I owe the American people and tell them I will not spook them and sound the alarm over social security because that's not merited, we have time to deal with the problems. I will deal with it in a responsible fashion and the first thing I’ll do is move back towards fiscal responsibility. Unless we're committed to fiscal responsibility, you can tinker around the edges and you're still going to have presidents like president bush, who will continue to raise the social security trust fund and for the wealthy Americans and the war in Iraq neither of which he's paid for. My principal objective is to get back to fiscal responsibility and I want America know I’ll do that and I’m talking in great length about healthcare and Medicare because those are crisis we have to deal with now.

Harwood: we have to leave it there. Thank you for joining us.

Clinton: Thank you.

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