Sen Jon Kyl On "Is Government Taking Over the Economy?"
LARRY KUDLOW: All right, back to our theme of the night, Obama’s first one hundred days almost over. Is the government taking over the economy? Well we’re honored to welcome back Republican Whip, Senator Jon Kyl from Arizona. Hello Mr. Kyl, thank you sir.
SENATOR JON KYL:Hi Larry.
KUDLOW: All right no one does this better than you do. I want to run the table on four or five really important issues. First of all, we’re coming down to the first one hundred days, Obama’s supporters are saying he’s the best president in history. You got a quick thought on that one? It’s an easy one.
KYL:Well, if the test is has he spent more money than any president in history, the answer is yes—in the first one hundred days. How about increasing the debt? Yes. As a matter of fact, the budget that both the House and Senate have passed doubles the debt in five years; triples it in ten years. More debt than every president from George Washington through George W. Bush, just in one Obama budget. I would say that he’s really accomplished a lot on his agenda.
All right, let me go on to expansion of TARP. And by the way, the TARP Inspector General himself says this thing could be a whole totally corrupt program. $3 trillion dollars, it’s a separate budget. But the expansion of TARP, throwing out GM CEO Wagoner , we may see some bank CEOs thrown out—we don’t know that yet but that’s a possibility. What is your take? Is this a state takeover of the economy? Are they riding roughshod over investors and shareholders?
KYL:Yes, and yes. And this is what you get when you have a lot of government involvement in your life. Good lesson: Don’t invite the government in, the government will take over. Now, TARP originally was intended to provide credit to the markets. That’s a good thing. But, it has been expanded beyond its original intent—especially with regard to bailing out, for example, the auto companies. And as quickly as these banks can get out from under it, they need to do so.
KUDLOW: Are you ready to bailout the Boston Globe and The New York Times with more TARP?
KUDLOW: I was shocked to hear you say that. Okay. What about the next step in this, cap-and-trade. The president was out there on earth day yesterday in Iowa. Now to me, cap-and-trade, I’m obviously not a supporter. It would be one of the most incredible restructurings of our economy in the nation’s history…
KYL: It would kill the economy, kill it…
KUDLOW: Will cap-and-trade pass though?
KYL:No. No I don’t think so. It’s flopped in Europe. The president has now gone to a version of it that is simply, or primarily, a revenue raiser. That was not what was intended. And no, I don’t think it will pass. Even my colleague John McCain from Arizona, who supports a version of cap-and-trade, said not this version. All this does is provide the president with a big source of money to perhaps pay for something like healthcare. What’s the sense in that?
KUDLOW: Is anybody talking about an exit strategy from TARP that we were talking about a moment ago?
KYL:Yes indeed. And incidentally, just to go back on the cap-and-trade, when the president talked about reducing taxes on 95 percent of America, remember, this is a tax increase for everybody. Well not everybody, if you turn on a light switch, it’s a big tax increase. If you use any energy, it’s a big tax increase. As the president has said, under his cap-and-trade program, “energy prices will skyrocket”. That’s a quote from the president.
Exit strategy from TARP? Those that are under it right now can’t get out from under it fast enough. I think what we’re going to try to do is promote in the Senate a way for them to get out of it as quickly as they can without any residual obligations. And incidentally, when they repay the money, not to have it go back into a revolving fund, but to go back to the Treasury to reduce the debt.
KUDLOW: What about the rumor that Senator Schumer and Senator Dodd want some kind of emergency freeze or immediate disclosure so that the credit card companies cannot raise rates or increase charge offs. We’ve been talking about it. Mr. Frank, Barney Frank, and the House has a much better version. But have you heard anything about this immediate emergency cap on the credit card companies?
KYL:No I haven’t. But there is a lot of talk about it. They need to be careful about the way that they raise their rates and the kind of disclosure they give to their users and so on. But hopefully we’ll have time to do whatever we do in a sensible way so that it doesn’t kill the very industry that provides us the credit that we need to continue to buy things.
KUDLOW: All right what about universal healthcare insurance—the big expansion, Medicare, Medicaid, the threat of rationing and the threat of allocation of resources?
KYL:The threat of rationing is very, very real. And if you want the government to get in between you and your doctor, if you want the government bureaucrats to delay or to deny you coverage, then I think supporting the kind of thing that we’ve heard is predicted to come out of the administration is what you want to support.
KUDLOW: Can Republicans stop it sir?
KYL:Oh I think we can. I am sure that the American people can stop a program that puts bureaucrats in between patients and their doctor, and that delays and denies care to them. Yes.
KUDLOW: It’s a big issue. When’s this going to heat up? When’s it going to come down to votes?
KYL:This will take a while Larry. I think that you’ll see through the month of May, the legislation being written in the Senate. Not sure when it will come to the Senate floor. It’s actually pretty quick. But there is at least some time to try and stop this kind of “healthcare reform.”
KUDLOW: And Senator Kyl can you stop an overseas tax on business profits which could be decimating to business? Can you stop it?
KYL:I hope so. Because people do not realize that when we ask our companies to go abroad and do business, they have to make money. And when they do they shouldn’t be taxed on all of it. Bottom line is I hope we can.
KUDLOW: Senator Jon Kyl, nobody does it better sir. We really appreciate your time.
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