Editor's Note - The following is the unofficial transcript of a CNBC interview with Speaker of the House Nancy Pelosi, today, Wednesday, October 21st. The interview will air during CNBC's "Closing Bell with Maria Bartiromo" at 4pm ET.
MARIA BARTIROMO: You hosted an economic forum today, particularly looking at job creation. We've got almost ten percent of the country unemployed. Worse showing in 26 years. What is it gonna take to get Americans working again?
House Speaker House Speaker NANCY PELOSI: Well, it's going to take a major investment in health care, in energy, in education. We know that on a long term basis. On the short term, we're looking at some remedies in the tax code. We're considering whether a $3,000 tax credit for- for hiring. Net operating loss, carry back, appreciate- accelerate depreciation. A number of initiatives that might be helpful to business.
Extending the- first time homeowner- credit, but maybe expanding that to not just first time home owners. We're talking also about what we're have to do immediately. Expansion of what we did last year in the recovery package, which is extend unemployment benefits and health benefits of COBRA. So that- people who are- who've lost their jobs, have some relief or continue to have relief.
MARIA BARTIROMO: Do we need a second stimulus? I mean, I seems that after $787 billion in stimulus and then the $700 billion from TARP. It's surprising that we haven't seen a bigger impact.
House Speaker NANCY PELOSI: Well, I don't see anybody surprised that we haven't seen any job creation from TARP. All that did was- keep jobs at banks- major banks in our country. So that- that has been disappointing. And it caused a great degree of- anger in the country, frankly. The major investment that was made that has not reached Main Street. But the fact is we had to do it to prevent a collapse of our financial institutions. We understand that.
The- recovery package that we passed later in January, under President Obama, has had positive results. It has created or saved one million jobs. Right now the- economist told us this morning in our session that absent that recovery package, we'd be in much worse shape. And it's no accident that right now- that as the recession is coming to an end, it does so where the recovery package is weighing at its- biggest impact in the third quarter- quarter of '09. So- but more must be done. It's not enough to say we saved jobs. And- we haven't created enough. And that's why we have to look at the tax code. And- other remedies that are there for us in the short term.
MARIA BARTIROMO: Let me ask you about the tax code. You know, business managers come on the program. And they say, "Look, they're not gonna be hiring new people anytime soon, because there'll be uncertainties going into 2010. They're worried about cap and trade. They're worried about higher health care costs. They're worried about higher taxes. Will we see higher taxes in 2010?
House Speaker NANCY PELOSI: Well, I- well, there will be a time when we will hopefully lower taxes because of the comprehensive overview of our tax code. Over the- even the corporate tax. And in- budget that was passed re- and in the recovery package, as well, we lowered taxes for the middle class. But as far as the other initiatives, the cap and- the- climate change and energy investments, as well as health care. They are designed to be job creators. Because they will lower the cost of energy. And lower the cost of health care to businesses.
We consider the health care issue a competitiveness issue for businesses. They can no longer carry the weight of this. And be competitive in- in the international economy. And that's why we're hoping- that with this legislation, we will contain the rising cost of health care. We will make it more affordable for businesses, as well as individuals, and for the government.
MARIA BARTIROMO: But- on the tax issue, allowing the Bush tax cuts to expire would essentially be tax increase.
House Speaker NANCY PELOSI: That wasn't a tax increase. It is- it is- eliminating a tax- decrease that was there. It's- it was controversial to begin with. It is- a boon to those who have had it for now. But I think that you will see that happen. So- and that is- that affects, what? The upper two percent of our population. What we're trying to do is lower co- taxes for the middle class, relieve burdens- on business. So that we can be competitive in job creation. And I think you'll see some interesting things emerge- from the conversations we're having now.
MARIA BARTIROMO: I'm just wondering if now is the appropriate time. I mean- now, given the fact that we are still in this fragile recovery. Would you rethink- allowing those tax cuts to expire, given that we are still pretty vulnerable, in terms of the economic recovery.
House Speaker NANCY PELOSI: I don't think many people here see, nor do the American people see those tax cuts at the high end as being job-creating. They don't- they think that that's part of the reason we're in the fiscal, the budgetary situation that we're in, because those tax cuts cost money. And- they were- a cost to our budget, without any commensurate- impact on the economy for job creation. To return money- to the treasury. So, nobody sees those as a job-creator. And- and- the- the fact is, is we have to be acting in a fiscally sound way. And we can't afford those taxes. We never could. Those tax cuts.
MARIA BARTIROMO: I'd like to ask you more about the deficit. And- and really how to attack such a sizeable number. But you've also brought up the idea of a (UNINTEL) tax. Can you tell us about that?
House Speaker NANCY PELOSI: No, I hadn't brought it up. It was brought up to me. And I said, "When we do our comprehensive fairness and simplification tax package, everything will be on the table- including that." No, I- I didn't bring it up. But what I would say is that as we go forward with our- our health care reform- that- it's important to note why this is urgent. It's not only urgent for individuals and certainly for the competitiveness of our businesses. It's urgent in terms of the deficit.
The President has said, rightly so, health care reform is entitlement reform. We're not going to address the rising cost of the- of the deficit unless we address the- rising cost of medical costs to Medicare and Medicaid, which is the fastest increase in the deficit. We have to turn that around. That's what we're doing with this bill. And that will do more than almost anything you can name.
MARIA BARTIROMO: Tell me about that. What is it going to take to really feel like you were successful in terms of really cutting into the deficit? What would be the goal? How do you cut down such a sizeable number? More than a trillion dollars in- in- in deficit this year?
House Speaker NANCY PELOSI: Well, what we're talking about in our health care bill is to go forward in a manner that is- fiscally sound. That is paid for over ten years. And that is also- reduces the deficit in the next ten years after that. So- the idea of- of- improving quality. Lowering cost to individual and to business. Expanding coverage to many more people. And retaining choice for people who like what they have. You have to do it in a way that looks at the- medical C.P.I. You cannot have the C.P.I. be what it is now. At least two percent over the regular C.P.I. So, we have to take those costs down.
And nothing, as I say, will do more- to take us on the path of- the Congressional budget office doesn't like us using the term, but of bending the curve. So that we're going- lowering the deficit. Because we're lowering health care cost, not only in the next ten years, the next 20 years, the next 30 years after that.
MARIA BARTIROMO: Now, the public plan was not in the Bacchus Bill. Will you bring it back? How do you pass legislation without a public plan and get everybody together on this?
House Speaker NANCY PELOSI: We don't. Not in the House of Representatives, who will have a public plan in the legislation that is here. And in the Senate, they had two bills. One bill has a public plan- the other- the public option, the other bill does not. The three bills in the House all have a public option. So, four of the five committees have the public option. I just saw most recent survey just released, I think, today that the-(UNINTEL) that the public option support is- continues to grow from the 50s now into the 60 percent in the public.
When you- when you talk to the American people and you say you want- you're mandated to have health insurance. And if they don't have health insurance now, they lose their health insurance, and we say you're mandated to have it, because you are a cost to everyone else. We're all paying for you. You must have health- insurance. And then we- we say to them, "But you have to go to the same insurers that have either rejected you in the past or- rescinded your pol- your- your- your coverage or something."
The public reacts to that. And one way they react is to say, "Give me another choice." So, with the public option what we're saying to people is, "As you are mandated to have insurance, you're free to choose the insurance- provider- that you wish. It may be who- who you had before. It may- but it may be the public option. You're free to choose." It's a consumer choice. And that is very popular with the people.
MARIA BARTIROMO: So, you do think that- at the end of the day, this reform will include a public plan.
House Speaker NANCY PELOSI: I would- I'm speaking now from the standpoint of the House of Representatives. Our plan will definitely have a public plan. The public supports such a plan. If we don't have one of the plans, the President says, this is the best way to keep the insurance companies honest and to increase competition. If you have a better idea, put it on the table. You always are open- to another idea. We haven't seen it yet.
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MARIA BARTIROMO: Well, what is the final cost of the House bill?
House Speaker NANCY PELOSI: Oh, that- that's- we're waiting right now for the figures from the- Congressional Budget Office. Right now, they've given us preliminary figures, which takes us well under the President's $900 billion. And so- we're very pleased with that.
MARIA BARTIROMO: Yeah, some people look at it and say, you have 300 millions Americans. You have maybe 30 million people without health insurance. Why not just focus on those people? Why spend nearly a trillion dollars on this?
House Speaker NANCY PELOSI: Well, first of all, we're not gonna be spending a trillion, but- but again, plus- several hundred billion dollars, fair enough. And we're not spending it. What we're doing- over half of it- over $500 billion of it will be in- we- trimming waste, fraud, abuse- duplications, obsolescence, and the rest. Which is essential to preserving and making- and strengthening social- Medicare. It's essential to strengthening Medicare that we do that.
So, the remaining $400 billion is what the- (UNINTEL) the ... are. If everybody in America, not just the 40- more like 50 million Americans who don't have health care. If everyone had health care, and they were very pleased with it, we could not sustain the current system, because it's too costly. It's too costly to business. It's too costly to families. It's too costly- to the government.
So, we have to reduce the medical cost. And that's what this legislation does by increasing competition and by introducing innovation- for value not volume of service. Quality, not quantity. Reducing- utilization in a way that pr- produces a better science-based result. While reducing cost.
MARIA BARTIROMO: Madam Speaker, let me ask you about broad ideologies and- and- and really class warfare that has developed. People are angry about the bonuses. People are angry about- about compensation on Wall Street. You, of course, have criticized- wrongdoing in this area. You've pushed for higher taxes on the wealthiest earners. And you've pushed for the public option and bigger government. Do you worry that this country is moving toward too big government? And in fact, it is going to hurt economic growth and prosperity over the long term?
House Speaker NANCY PELOSI: No, I- I don't. I mean, I think about it a great deal. And- and being Speaker of the House, you have to be agnostic about every proposal that comes before you. As to say what does it do to- competition? What does it do to the markets? What does it do to the job- job creation? What does it do to the deficit? What does it do to our competitiveness internationally?
And we believe that the- two issues, the cost of energy and the cost of health care, have been too competitiveness issues that we have to lower, because they are becoming unsustainable, especially as we dwell now on the health care issue. So, the public option is- it's interesting to me, because people say, "I don't want to- a public option, but don't touch my Medicare." Well, the public option is less of- a public plan than Medicare is, because it is just an alternative that has to be- administratively self-sustaining. And has to be actuarially sound.
It's not any- it has to be a real competitor, not something that is subsidized by the government. So, it is a- it is increasing- the market forces, which we always want to move toward. But we have to have competition. Right now, we don't. And as you know, the insurance companies are not even- subjected to McCarron Ferguson (PH)- anti-trust laws. So- the- the- consumer has gotten the short end of- of this. And (UNINTEL) for consumer.
And again- all of our initiatives, whether it's energy, education, health care, and the rest have been about market-oriented- solution. Public/private partnership. Public/public partnerships, private/private partnerships. Anything that takes (UNINTEL). Which is the tradition of America. From- from the start. The entrepreneurial spirit of public/private partnership has been the approach that we have taken.
MARIA BARTIROMO: And- and, of course, financial reform also on the table.
House Speaker NANCY PELOSI: Yes.
MARIA BARTIROMO: Is this getting sidelined-
House Speaker NANCY PELOSI: No. No.
MARIA BARTIROMO: -because health care reform is really what- what most of us are talking about these days? People are worried about- the lack of legislat- lack of regulation over derivatives. This is how we got here, right? As well as- as the idea that- we need to see change, in terms of the financial system.
House Speaker NANCY PELOSI: Well, as we sit here, the Financial Services Committee is finishing work on their- regulatory reform legislation. We've already finished- the- what they are doing on derivatives. It will now go to the Agriculture Committee. They are doing regulatory reform. They are doing the consumer protection agency part of it. The bill- (UNINTEL PHRASE) maybe by next week. I would hope. But certainly soon.
It's under leadership of Chairman Barney Frank, the Financial Services Committee is doing it's part. As I say, the derivative piece will go to- the Agriculture Committee. But this is a high priority for us. And a high priority for the Obama Administration. And it will be done in a matter of weeks.
MARIA BARTIROMO: Speaker Pelosi, the poll numbers for Congress look troubling. And they do suggest you're pursuing policies that are unpopular. I'm sure you've seen their (UNINTEL) reports and the field poll, showing the lowest approval ratings for you in a year and a half. Do you look at these numbers? What do you think when you see-
House Speaker NANCY PELOSI: Well, I'm not here (UNINTEL). I'm here now to get the job done. And- to- on the other hand, all of the public polls show overwhelming support for the initiatives that the Democrats are taking. And- only 20 percent of the American people identify as Republicans in the latest yesterday poll on- who would you vote for, for Congress in the next election? It's something like 51 favor the Democrats, 39 Republicans.
My own personal person- popularity is not what I spend time being concerned about. My (UNINTEL) for the Democratic agenda. Hopefully, in a bipartisan way. And most of the bills that- many of the bills that we have had, have had strong bipartisan support. And-
MARIA BARTIROMO: Well, not about you, but the Congress in general.
House Speaker NANCY PELOSI: Well, Congress in general has never been very popular. It is an institution that has been- held up for joking and all the rest. But individually Members of Congress do very well. And I'm very confident about the- support that is there for a strong Democratic majority, which I know we will sustain in the next election.
MARIA BARTIROMO: When would you expect to see job growth once again?
House Speaker NANCY PELOSI: We are- as I say, with the initiatives that we are taking now, we want to move these as quickly as possible. But we do think that some of the initiatives from the recovery package will weigh in more heavily now. As- as we've seen, the third quarter was the biggest weigh in. And that impact. It's just if it- it's about what the bill does. It's also been inspiring confidence. A good deal of the- measures that we will do will in- be- the money will be spent or inject demand into the economy and create jobs right away. But issues like unemployment insurance, et cetera. We'd rather have job creation come another way. But that is a way that stimulates the economy and all the economists tell us that's the fastest way.
MARIA BARTIROMO: Madam Speaker, we know how busy you are. We appreciate your time. Would you like to add anything else that I may have missed?
House Speaker NANCY PELOSI: Well, no, but- just- it's a pleasure to see you. Let's talk more frequently. Because I think it's important- for- your audiences to know- that- in Congress, we are putting forth in all of our initiatives, we're looking to market solutions. To market-oriented solutions. We think if that's not- if that doesn't happen, it's no use going down the path. So, one of the questions we always ask is, "What does this policy mean to the private sector? How would they pick up on it?" Because we want to be partners in that regard.
MARIA BARTIROMO: So, do you think we need more incentives for the private sector to create jobs then?
House Speaker NANCY PELOSI: We may. We may. And that's what- a number of the initiatives we're working on that we can do in the short term.
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