CNBC Press Releases

HARWOOD: A broader economic question. We now, for the first time in a long time, are facing the risk of both slow growth and renewed inflation at the same time. Which of those strikes you as the greater risk at this moment, and how would you balance those risks in applying policy?

Sen. OBAMA: Well, you know, I think that the big problem that we've got right now is that because of the housing crisis, because of the contraction of the financial markets, the economy is slowing down rapidly. At the same as we've got some shocks primarily having to do with oil and other commodities. If we can get the financial markets stabilized, if we can implement the kind of housing plan that I've called for where borrowers and lenders are both having to make some sacrifices, but we're keeping people in their homes and there's a bottom where the credit markets save, we know what we're investing, that, I think, can help businesses that have good business plans and are making good products and providing good services. That can get them back on their feet. If the credit markets are flowing, that puts less pressure on the Fed to constantly lower interest rates. And that in turn will allow us to not only see the dollar strengthened, but it can also make certain that over time, these inflationary pressures are ones that the Fed can deal with, and that's obviously been their primary job over the last several years.

HARWOOD: Taxes are clearly going to be a big issue in the campaign. McCain's attacked you on that front. You do have tax cuts that you've talked about for seniors.

Sen. OBAMA: Right.

HARWOOD: For homeowners and others.

Sen. OBAMA: Right.

HARWOOD: But you would, on net, raise taxes to improve the level of fiscal responsibilities you've talked about.

Sen. OBAMA: Right.

HARWOOD: Higher taxes for capital gains, for dividends, for carried interest, for high-income Americans. You embraced a lot of those policies when the economy was stronger than it is now.

Sen. OBAMA: Yeah, yeah.

HARWOOD: Even if you think those are a good idea substantively, is there reason, because of the situation we're in, to delay the implementation of any of those to avoid having a negative effect on job creation?

Sen. OBAMA: Well, there's no doubt that any policies I implement are going to be based on the economic situation that I inherit from George Bush. You know, one of the things I believe in is a manager of the economy, is you should base your decisions on facts and not ideology. And so even if I'm predisposed to a certain set of policies, I'm going to want and see what's going on at the moment and ask a wide range of viewpoints from situations...

HARWOOD: So you can see the possibility of deferring some of those?

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