When: Thursday, October 11th at 4:00pm
Where: "Closing Bell with Maria Bartiromo"
The follwing is an unofficial transcript, of an exclusive interview with President Bush. All references must credit CNBC's "Closing Bell with Maria Bartiromo."
In the exclusive with CNBC's Maria Bartiromo, President Bush discusses a broad range of topics including the economy, the Presidential election, housing, the subprime market, Greenspan, interest rates and Bernanke's job as Fed Chairman, energy independence, among other topics.
MARIA BARTIROMO, host: Mr. President, thank you for joining us today. More positive news on the economy. You have a budget deficit that is getting smaller, the trade deficit is shrinking, and yet even with a record stock market, virtually full employment, Americans are nervous. In a recent Wall Street Journal/NBC News poll, two-thirds of the American people say that we're either in a recession or headed toward a recession. Why the angst and why can't your administration take--get any of the credit for this good news?
President GEORGE W. BUSH: Well, we certainly try to explain to the American people that there are some--that there is good news. There's been 49 consecutive months of job growth, which is the longest stretch in the history of the country. The budget deficit's down to 1.2 percent of GDP, which is extremely low. Americans are working.
A couple of factors, I think, trouble Americans. One is that there's a lot of churning in the job market. In other words, if you're under 30, you're likely to have had seven jobs by the time you're 30. And older people like me take a look at that kind of volatility or some would call it excitement in the job market, and they wonder whether or not this job turnover is going to affect them. Secondly, there's been concerns about health care. People want to know whether or not, one, the government's going to stay out of their business, and two, whether or not this is going to be good policy that'll enable them to have affordable and available health care.
People are concerned about their pensions to a certain extent. There's still--you know, we've transitioned from defined contribution--or defined benefit to a defined contribution plan. And yet there are still some who are involved with defined, you know, benefits. And they wonder whether or not their promises will be made. So there's a variety of reasons why people are uncertain. But people, when they take a hard look at the statistics and the reality, they ought to, you know, I hope it brings them some comfort to know this economy is strong and it's setting all kinds of records.
BARTIROMO: Speaking of the benefits, what did you think of the UAW's deal with GM, Chrysler also working on a deal? Should this be a blueprint for other industries?
Pres. BUSH: Well, from my perspective, I'm glad they were able to settle the deal in an expeditious way. I appreciate the fact that GM and the UAW are able to come together quickly and come up with an agreement that satisfied both sides.
BARTIROMO: Let me ask you about the record number of US exports. Even with that number, you've got an increasing voice in Congress saying, `Look, we don't think free trade is working.' Even in your own party. It seems you can't even control the Republicans in Congress. And what do you say to those people who are trying to put trade barriers in place?
Pres. BUSH: Well, I've long worried about protectionism and isolationism here in America. We've had periods of protectionism in our past and I'm concerned about protectionist sentiment, because I believe that a world that welcomes US products and goods and services is beneficial for American farmers and manufacturers. In other words, if there's more customers for what we produce here in America, the better off the producers will be. It's also good for consumers that we have open markets. In other words, the more options the consumer has, the less inflationary our society can be. And I think it's good when consumers are able to have a variety of choices.
And so I--it's going to be very important for me to continue to explain the positive side of trade. In other words, people are getting work. There's a lot of people whose jobs depend upon exportation of goods and services. There are people whose jobs benefitted as a result of foreign capital coming into the country. I think about some of the automobile manufacturers in the South.
But I understand why people are anxious about trade. People are saying, `I may lose my job, or somebody else is going to get my job because of free trade.' And what's very important for people like me who believe in markets is one, to explain the economic benefits, but also to assure people that there's trade adjustment programs to help people retrain for better jobs that have got stability.
BARTIROMO: Let me switch to housing. We've had a meltdown in housing. Things are expected to get worse because you've got new rates resetting this fall. Who's to blame, lenders, borrowers or regulators?
Pres. BUSH: Oh, first of all, there's a lot of people who can afford the houses that they live in and they're going to be fine. There's no question there are particularly some people on the margin that are going to have to--that are defaulted on their loans, and that troubles me. It troubles me because I want people to be able to stay in their homes. And the solution, it seems like to me, is not more government or more regulation, but to help people refinance their homes, is to--I have some transparent policies as well as counseling polices that find people, identified people and encouraged them to go to refinance their homes, and to encourage the lenders to be, you know, refinancers.
What happened, it seems like to me in the housing, again, I'm not an expert, but there was a lot of incentive for people to, you know, buy homes. And so we had a huge supply of homes. And until the supply and demand gets back in balance, you're going to see some softness. But so far, the softness is regional. There's not a nationwide phenomenon, there are parts of our country that are doing just fine in their real estate markets. And you know, we're paying close attention to it and we're going to make sure that government policy is not counterproductive but consumers can be helped to stay in their homes, for example, through FHA reform.
BARTIROMO: So were the rate cuts enough or would you think to encourage more?
Pres. BUSH: Well, I knew you would try to suck me into the dialogue of monetary policy but you know full well that the Federal Reserve is independent from the president. I never send Ben Bernanke instructions, he doesn't expect me to send him instructions, nor do I publicly comment on what I would like to see done or monetary policy. I can talk about fiscal policy all day long and that is we will keep taxes low and make sure Congress doesn't overspend the people's money.
BARTIROMO: Let's talk about that in particular, the health care coverage. You vetoed a plan last week to expand health care coverage for millions of low income children. Why?
Pres. BUSH: First of all, the Democrats are misleading people when they say this is a plan to expand health care to millions of low income children. The plan that I vetoed would have expanded health care coverage to families making up to 80 something thousand dollars, in some cases. And--which would have meant people would have been moving from private insurance to public care. And I don't think that's good. I do support a program that helps poor children. But the program that I vetoed expanded health care, government health care.
By the way, just so you know some of the facts I think will interest you. About a half million poor children under the program as it exists today don't get coverage. And so my first call to Congress is let's make sure they get coverage. Secondly, in some states, like six or seven states, the states use the money aimed for poor children, they spend more money on adults than they do on children. So my call to Congress was it you're truly for poor children, like I am, let's make sure the program answers that need, and let's not expand the federal role in health care.
See, I believe that for some members, this was an important step toward the federalization of health care. Really fine people believe that the best health care policy is when the federal government runs it. I believe the best health care policy is to take care of those who can't help themselves, like poor children, and encouraged those...(unintelligible)...in the private sector. I'm for private medicine. I want decisions to be--being made between doctor and patient, not between people here in Washington, DC. And so the--I'm vetoing the bill, working hard to see that it's not overridden, the veto's sustained, and then I'll be willing to work with the Democrats to focus the program on poor children.
BARTIROMO: One Democrat and I do admit this was a Democrat, say look, all of a sudden you found fiscal discipline now and you veto this, but how come you signed the Farm Bill, you signed the Highway Bill and others, passed by Republican Congresses that substantially exceeded your initial target?
Pres. BUSH: Well, I would remind that person that over the course of my presidency, we have been able to reduce the federal deficit substantially. As I told you, it's down to 1.2 percent of GDP, which is historically low, very low. And I was able to do so working with the Congress, and at the same time, fight a war and make sure our kids had the support and troops--equipment they needed. And kept taxes low. In other words, the fiscal policy of low taxes and setting fiscal priorities here in Washington has worked. And we're on our way to balancing this budget and it's going to be very important for Congress not to overspend nor raise taxes.
BARTIROMO: What do you think of Senator Clinton's idea, the kid bond idea? It sounds similar, actually, to your idea of private accounts with Social Security.
Pres. BUSH: Well, my idea in Social Security was is that rather than putting your money into a trust that was not generating a rate of return that was fair, that you ought to be allowed to take some of your money and set it aside in a personal account. But that's your money already contributed. In other words, it's setting aside a part of the portion of your contribution in the Social Security system, which I think is vastly different from what she proposed.
BARTIROMO: Do you think that her plan is a good one?
Pres. BUSH: I'm not going to interject myself into the presidential campaign yet.
BARTIROMO: You have more than a year left in your second term. What are your goals for the economy for the rest of your service here?
Pres. BUSH: Well, first is to keep taxes down and keep, you know, and to have good, wise fiscal policy. To work with Congress and say, `Look, let's set priorities and meet those priorities,' and be willing to use the veto if they want to overspend, which the initial blush looks like they're going to try to do. Secondly, is to keep opening up markets for US goods and services. One of the reasons why our third quarter growth was good was because of exports. In other words, when we export it means growth in our economy. When we export, it means people are going to work. And so try to get these free trade agreements passed. Continue to work on energy policy that makes us less dependent on foreign sources of energy. And so I've got an important agenda that--and win the war on terror and protect the homeland.
By the way, one of the best economic measures we can do is make sure we don't get attacked again. As you know, the attacks of September the 11th crippled our economy for a short period of time. I wouldn't say--cripple's not the right word--damaged our economy for a short period of time. And you know, and we'll keep working night and day to make sure we protect the American people.
BARTIROMO: So is Social Security off the table at this point or will you try to fix it in the remaining time?
Pres. BUSH: You know, I'd like to, but remember, I'm the person that has laid this issue out in my State of the Union address and talked specifically about how to address Social Security. Whether or not Congress has got the will to step up and try to get something done, I don't know. We'll continue to try. My door's open. I'd like very much for people of both parties to come in and say, `You know, you gave us a good starting point, you gave us a good idea. Let's get together and get something done.' Because Social Security and Medicare, the unfunded liabilities inherent in those programs, are two of the most significant fiscal challenges this country faces. I mean, this is a real problem for us that we've got to get done.
BARTIROMO: Did you see the Republican candidate debate? What did you think? Who came out a winner?
Pres. BUSH: Were you there?
BARTIROMO: Yes, I was. I was the co-host.
Pres. BUSH: So you're trying to hoax me into saying--yet brilliant question.
BARTIROMO: No, that's not what I'm looking for, Mr. President.
Pres. BUSH: I didn't watch, I didn't watch. I was...
BARTIROMO: What did you think of Fred Thompson joining this...
Pres. BUSH: Didn't watch, and you know, people are going to try to get me to comment on the primaries and I'm not going to do it. I will tell you I believe that whomever we nominate will win the general election. Our candidates are going to be talking about being tough on these terrorists and keeping taxes low, and that's a winning message.
BARTIROMO: Any advice for them?
Pres. BUSH: I just tell people what's in their heart, you know.
BARTIROMO: Let me ask you about oil, Mr. President. Clearly, a worry about $80 a barrel. Why is it that we really have not seen a substantial energy plan? We all know that we have to be reliant on foreign oil, but should there me more incentives for hybrids, perhaps a gasoline tax, something?
Pres. BUSH: I think we have had a significant energy bill pass that is comprehensive in nature, that couples good conservation policy with diversification away from oil. One of the things that has taken place in our country that doesn't get much notice is the advent of ethanol. Right now, ethanol is mainly created through the use of corn. And we've...(unintelligible)...a billion gallons of ethanol to eight billion gallons of ethanol on an annual basis, and we're spending a fair amount of taxpayers' money on research and development on cellulosic ethanol, which is a fancy word for using like wood chips to make ethanol or corn--or stalks or switchgrass. The whole purpose is to incent people to develop the technologies that will enable us to get off of oil. You can't get off oil overnight but you can diversify away from oil over time, and that's precisely what we're doing now in the most substantial ways of any administration in history.
Secondly, we've got to figure out new ways to produce electricity. And I actually use old ways in a safe way to produce electricity where I'm for clean--you know, new nuke, new nuclear power plants, because I believe the engineering is safe, and I know that, you know, nuclear power is good for the environment.
BARTIROMO: What can you tell us about the war? How is the war in Iraq going?
Mr. BUSH: Well, I think it's going--there's been a change in Iraq because people are now beginning to feel more secure. And when people feel more secure, they take a--more of a risk toward, you know, following their instincts, which is to have a peaceful society under a constitution that they voted for. And so I'm pleased with the security progress. There's more work to be done, but the surge that David Petraeus recommended to me is working. More and more Iraqis are becoming more and more capable of handling their own security.
We're moving troops out. As David Petraeus said, we'll be able to reduce, you know, from 20 battalions to five--or 15 over--till next July. And that's on schedule, it looks like.
The political progress is, you know, is spotty in that they're doing some good things and they need to do others. And I talked to Prime Minister Maliki today and encouraged him to work hard to see if he can't get law out of his--out of his parliament that will send a signal to the Iraqis that--whether they be Shia, Sunni or Kurd--this government is for everybody.
And--in the meantime, however, there's reconciliation taking place at the grassroots level, at which people are--people are coming together at the local government and providing services and taking federal monies being distributed throughout the country and using it for the embetterment of their people. So you're seeing a democracy emerge and it's exciting. It's in their interest that we succeed.
BARTIROMO: You once said that Putin has a good heart. Do you still feel that way?
Pres. BUSH: I said I looked in his eyes and saw his soul, that was my quote. I think President Putin is--first of all, I'm friendly with him. You can be friendly with people you don't agree with necessarily. One of my concerns about the Russian political scene is that there's got to be checks and balances and, to the extent that those are being reduced, I've expressed concerns. We--we're working collaboratively on some issues, such as proliferation of materials, weapon--nuclear materials. And we're working together to see if we can't get Russia into the WTO. People are trading with Russia. It's in our interest that there be certain rules and the ability to, you know, have arbitration serve as a dispute resolution mechanism. And we have our differences with Russia as well.
BARTIROMO: And finally, on Iran, shouldn't we be opening up a dialogue? I mean, this conversation about the possibility of going into Iran, a lot of people say first we need to open up a dialogue with them and try to use diplomacy.
Pres. BUSH: I know the first thing that has to happen is the Iranians--we are using diplomacy, but it's the--it's diplomacy of nations coming together saying to Iran with one voice, `Give up your weapons ambitions, and then you have a dialogue with the United States.' They know exactly what our position is, and they know what it takes to have a dialogue. My dialogue has been with the Iranian people, and I'm going to try it again right here. The Iranian people have got to know that the--that their government is isolating them, that their government's making decisions that aren't in the interest of their country, and that this great country doesn't need to be standing alone in the world relative to the rest of the free world. This country is missing great opportunities through trade for people to embetter their life and the government--if the government would change its polices toward development or gaining the know how on how to make a nuclear weapon it would be--benefit the Iranian people.
The United States respects Iran and respects the traditions and history of Iran and we respect the Iranian people. The government of the people is letting the Iranian people down, and they can change and should.
BARTIROMO: Finally, Mr. President, congratulations on your daughter's upcoming marriage.
Pres. BUSH: Well, thank you. It's--I'm excited about it. She's marrying a good man.
BARTIROMO: Are all the plans in place?
Pres. BUSH: Well, just so you know, my role is to say, `Yes, ma'am.' And...
BARTIROMO: Will you cry?
Pres. BUSH: Oh, I'm sure I will. I love her dearly, and I'm pleased--I'm pleased she's getting married. I like the fella, and I'm looking forward to welcoming him to the family.
BARTIROMO: What's the first thing you're going to do when you step down?
Pres. BUSH: When I step down? You know, I can't--I can't think that far in advance. I got--you got to understand, I've got a lot on my--on my agenda and I really hadn't--I hadn't got there yet. And I'm--I've told my friends I'm going to sprint to the finish line, I'm that kind of person. You know, I got a lot to do. We can--a lot can happen between now and when I leave, and I'm going to put my whole heart and soul into the effort. And I suspect, you know, head back to the ranch and take a deep breath and decompress. But my heart and head is right here in Washington right now.
BARTIROMO: Mr. President, thank you for fitting us in your schedule. We appreciate it.
Pres. BUSH: Great to see you.
BARTIROMO: Thank you.
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