GEORGE W BUSH: Well, the only-- the only-- I mean, I-- as I understand this, or-- you know, they haven't marked this bill up yet. But they have marked up other bills. And I'll just give you an indication of where my head is. First they've proposed $4 billion to buy-- you know, empty abandoned houses.

Which I strongly oppose. That doesn't help anybody who's trying to stay in their house. That helps lenders. Then they propose changing the bankruptcy law, which would cause interest rates to go up eventually. Which will make it harder for people to buy homes.

So I oppose that. And-- I am concerned about any government intervention with new law that will end up making it harder for the housing market to recover expeditiously. And so our policy is to help people refinance their notes. Is to help people, who are credit worthy, stay in their homes.

And-- are FHA secure and our Hope Now Alliance is beginning to have pretty good progress. As a matter of fact, the rate of foreclosure versus the rate of restructuring has changed. Been more restructurings and the-- the rate is better for restructuring than for foreclosure. And my-- I would advise people, who are worried about staying in their homes, to get a hold of the federal government. And to find out how they can get help to restructure.

LARRY KUDLOW: So with respect to Mr. Frank's idea, which may be picked by-- house-- senate banking chairman-- Dodd, they're gonna offer delinquent borrowers some FHA relief.

GEORGE W BUSH: Yeah.

LARRY KUDLOW: Is that a deal breaker for you?

GEORGE W BUSH: Well, there's a lot of deal breakers-- from what-- how you've described this-- this law. I-- I-- I-- I think a couple of things-- Larry. One, that we ought to make sure that this-- stimulus package we pass has a chance to work before government overreacts.

Listen, I'm open to new ideas, but I'm not open to ideas that'll make it harder for the market to recover. What we need is-- for the market to work its way through. To help people stay in homes who are credit worthy. To get excess homes off the market by having the market function well

But we also gotta give this stimulus package a chance to work. It's-- over $150 billion of-- money is gonna be headed out the door. Be-- either as incentive for businesses to buy equipment, or-- direct rebates to American consumers. And-- and those checks will be hitting the second week of May. So, obviously, we-- the-- the-- the-- the real substantial effects of this stimulus package have not had a chance to take hold.

LARRY KUDLOW: This morning we had some other news. Now the consumer price index was released for February. And it actually came in flat, below expectations. But it has been rising at a four percent annual rate. Faster than worker wages. Some people say the worst in 15 years, on the inflation front. Retail sales down two of the last three months. The question is is this a 1970s repeat of inflationary recession? Sometimes called stagflation?

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