Larry Kudlow Speaks with Republican Presidential; Candidate Rudy Giuliani Today, November 1st at 7PM ET on "Kudlow & Company" (Transcript Included)

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When: Thursday, November 1 at 7:00 PM ET
Where: "Kudlow & Company"

The following is the unofficial transcript of a CNBC interview with Republican Presidential Candidate, Rudy Giuliani, on CNBC's "Kudlow & Company" today. All references must be sourced to CNBC.

In an interview with CNBC's Larry Kudlow, Republican Presidential Candidate, Rudy Giuliani, discusses "waterboarding" and whether it's legal, Senator Biden's intense criticism in the Democratic debate, his candidacy for the White House and the strength of the U.S. economy.

KUDLOW: I INTERVIEWED RUDY GIULIANI EARLIER ON A VARIETY OF ISSUES BUT I BEGAN BY ASKING ABOUT JOE BIDEN'S PERSONAL ATTACKS. HERE'S SENATOR BIDEN GOING AFTER MAYOR RUDY GIULIANI.

BIDEN: RUDY GIULIANI. I MEAN, THINK ABOUT IT. RUDY GIULIANI, THERE'S ONLY THREE THINGS HE MENTIONED IN A SENTENCE, A NOUN, A VERY SH AND 9/11. THERE'S NOTHING ELSE. THERE'S NOTHING ELSE.

KUDLOW: WELL, THEN MR. GIULIANI ASKED ME WHETHER JOE BIDEN ACTUALLY WROTE THAT HIMSELF. THAT'S A DIRECT SHOT AT PLAGIARISM CHARGES. LET'S LISTEN TO ELSE WHAT HE HAD TO SAY ABOUT BIDEN AND THE DEMOCRATS.

GIULIANI: THE REALITY IS, THE LAST ONE TO RAISE AN ISSUE LIKE THAT BECAUSE HE FITS INTO THE FOLLOWING CATEGORY, THAT BIT FITS HIM, HILLARY AND OBAMA.THEY HAVE NEVER RUN A STATE, A BUSINESS, NEVER HAD THE SAFETY AND SECURITY OF OTHER PEOPLE ON THEIR SHOULDERS, NEVER HAD TO PAY A TAX.THE PRESIDENT OF THE UNITED STATES IS A TOUGH JOB, EVERYBODY KNOWS THAT. IT'S NOT A PLACE FOR ON THE JOB EXPERIENCE AND JOE WAS OVERREACTING TO THAT, BECAUSE HEFITS INTO THAT CATEGORY OF NO EXECUTIVE EXPERIENCE.WE VERY MUCH RESPECT HIS CAREER IN THE SENATE, WHICH I THINK IS 30 OR 40 YEARS, I DON'T REMEMBER.BUT WHEN YOU'RE IN THE SENATE, THERE'S NO ACCOUNTABILITY.YOU CAN PASS A BILL, IF IT BANKRUPTS AN AGENCY, YOU'RE NOT RESPONSIBLE FOR IT. WHEN YOU'RE A MAYOR OF AMERICA'S LARGEST CITY, YOU HAVE TO RUN THE 17th LARGEST ECONOMY IN THE WORLD, YOU HAVE TO DEAL WITH THE SECURITY OF EIGHT MILLION PEOPLE, YOU LEARN HOW TO BE ACCOUNTABLE.

KUDLOW: DO YOU THINK HE MIGHT BE TAKING A SHOT, AND MIGHT THERE BE MORE SHOTS FROM DEMOCRATS, ABOUT 9/11? ARE THEY DEMEANING --

GIULIANI: I DON'T KNOW. I THOUGHT I WON THE DEBATE THE OTHER NIGHT. BECAUSE I WAS MENTIONED MORE OFTEN THAN ANY OF THE DEMOCRATS WERE.

KUDLOW: THE DEMOCRATIC DEBATE?

GIULIANI: I WAS MENTIONED MORE OFTEN THAN ANY OTHER DEMOCRAT AND THERE WAS NO OPPORTUNITY TO MAKE A MISTAKE OR FOR ME TO SAY I SAW UNIDENTIFIED FLYING OBJECTS. I DIDN'T HAVE TO CHANGE MY POSITION FOUR OR FIVE TIMES LIKE CLINTON DID IN FRONT OF THE AUDIENCE. I THINK THEY'RE CONCERNED WITH ME BECAUSE THEY UNDERSTAND SOMETHING, I CAN BEAT THEM. YOU LOOK AT THE POLLS. TWO POINTS AHEAD OF HILLARY. BUT IT'S MORE THAN A NATIONAL POLL, IT'S I CAN RUN COMPETITIVELY IN STATES THAT ARE - OUR PARTY HAS NOT BEEN COMPETITIVE IN FOR 16 TO 20 YEARS AND THEY'RE AFRAID OF THAT. SO I THINK YOU'RE GOING TO SEE THEM STEP UP THE PRESSURE ON ME BECAUSE I'M THE LAST ONE THEY WANT TO SEE AS THE REPUBLICAN NOMINEE. AND HEY, I ACTUALLY -- I'M PROUD OF THAT BECAUSE I THINK I'M GETTING THROUGH TO THEM.

KUDLOW: LET ME GET TO ANOTHER IMPORTANT ISSUE THAT CAME UP IN THAT DEBATE AND IS A FRONT PAGE ISSUE, THIS BUSINESS OF GOVERNOR ELIOT SPITZER WANTING TO GIVE ILLEGAL IMMIGRANTS A DRIVER ICE LICENSE. WHAT IS YOUR VIEW ABOUT THAT?

GIULIANI: CAN'T DO IT.

KUDLOW: WHY IS THAT?

GIULIANI: BECAUSE THE ABILITY TO USE IT AS A FRAUDULENT DOCUMENT. IT WOULD BE A REAL DOCUMENT. IT WOULD CONFUSE THE HECK OUT OF TSA. ALL OF A SUDDEN, WE'RE GOING TO HAVE ILLEGALS APPEARING TO BE LEGAL. IT WILL BE CONFUSING FOR EMPLOYERS. NOW ALL OF A SUDDEN THEY'RE GOING TO HAVE A VALID DOCUMENT. I'M TRYING TO FIND A NICE WAY TO DESCRIBE HOW WRONG IT IS. IT IS A TERRIBLE MISTAKE AND I THINK HILLARY DID ONE OF THE MORE ASTOUNDING THINGS I'VE EVER SEEN IN A PRESIDENTIAL DEBATE ON BOTH SIDES OF IT.

KUDLOW: BUT YOU YOURSELF AS MAYOR OF NEW YORK WERE ALWAYS A STRONG ADVOCATE OF THE CONTRIBUTION OF IMMIGRANTS.

GIULIANI: ABSOLUTELY.

KUDLOW: TO THE CITY OF NEW YORK, TO THE STATE AND COUNTRY. I'VE SEEN POLLS THAT SUGGEST IF REPUBLICANS RUN HARD AGAINST IMMIGRANTS, IF THEY HAVE AN ENFORCEMENT ONLY MESSAGE OR A CRIMINALIZATION MESSAGE, THAT THE REPUBLICANS WILL LOSE KEY STATES LIKE FLORIDA, LIKE IOWA, LIKE ARIZONA, NEW MEXICO. IN OTHER WORDS, THIS IS A BIG ISSUE FOR THE ELECTION.

GIULIANI: IT IS, BUT I DON'T HAVE AN ENFORCEMENT ONLY MESSAGE. I WANT TO END ILLEGAL AND EXPAND LEGAL. I THINK A LOT OF PEOPLE NOW THAT HAVE THE BEHAVIOR OF COMING IN HER ILLEGALLY, WE CAN TEACH THEM TO COME IN LEGALLY. I'M THE ONLY ONE RUNNING FOR PRESIDENT WITH ANY AREA IN CHANGING PEOPLE'S BEHAVIOR. WHO THOUGHT WE COULD REDUCE CRIME IN NEW YORK?NOBODY. DID WE CHANGE? YES. WHO THOUGHT WE COULD CHANGE WELFARE? WELL, WE CHANGED IT DRAMATICALLY. MORE THAN ANY OTHER CITY IN THE COUNTRY. WE CAN CHANGE THIS IF WE HAVE SENSIBLE ENFORCEMENT POLICIES AND WE EXPAND LEGAL IMMIGRATION. I BELIEVE I HAVE A PRO IMMIGRATION POLICY.

KUDLOW: WOULD YOU HAVE VOTED FOR THE BILL PRESIDENT BUSH'S BILL THAT JOHN McCAIN CO-SPONSORED?

GIULIANI: I MADE CLEAR AT THE TIME I THOUGHT COMPROMISES, COME PRO-MILZED AWAY THE WHOLE PURPOSE OF THE BILL. THEY CREATED SO MANY CORRECTIONS -- CONTRADICTIONS. THEY COMPROMISED SO MUCH, THEY WOULD HAVE MADE THE SITUATION WORSE RATHER THAN BETTER.

KUDLOW: SO SENATOR CLINTON --

GIULIANI: I DON'T THINK SHE VOTED FOR IT.

KUDLOW: I THINK SHE DID.

GIULIANI: SHE VOTED AGAINST IT AND FOR IT.

KUDLOW: WHAT IS HER POSITION RELATIVE TO THESE DRIVER'S LICENSE SNLS

GIULIANI: I THINK YOU'RE GOING TO HAVE TO ASK HER. DURING THE COURSE OF THE DEBATE, SHE WAS FOR IT AND AGAINST IT IN THE SPACE OF ONE QUESTION. HILLARY HAS A REPUTATION OF SAYING DIFFERENT THINGS TO DIFFERENT AUDIENCES. SHE'LL USE A SOUTHERN ACCENT IN THE SOUTH OR TAKE ONE POSITION ON IRAN ONE PLACE, A DIFFERENT POSITION SOMEPLACE ELSE. I'VE NEVER SEEN HER TAKE TWO DIFFERENT POSITIONS IN FRONT OF THE SAME AUDIENCE. IN THE SPACE OF ONE QUESTION. I THINK IT MAY BE THAT EDWARDS AND OBAMA AND DODD PUT SO MUCH PRESSURE ON HER, MAY BELIEVE SHE WASN'T THINKING CLEARLY. I'M NOT SURE.

KUDLOW: YOUR FRIEND, JUDGE MUKASEY, IS UP TO BE THE ATTORNEY GENERAL. HE'S GOING THROUGH SOME DIFFICULT HEARINGS IN THE SENATE. ONE OF THE ISSUES COMING UP IS THE ISSUE OF WATER BOARDING, WHETHER THAT IS ILLEGAL OR TORTURE. I KNOW YOU OAR VERY COMPLETE CALL OF SENATOR CLINTON NOT BEING DECISIVE. BUT ON WEDNESDAY YOU SAID YOU WEREN'T SURE WHETHER WATER BOARDING IS ACTUALLY TORTURE. IS THAT SOME INDECISION ON YOUR PART?

GIULIANI: I THINK IT REFLECTS WHAT A LOT OF PEOPLE THINK, WHICH IS ITDEPENDS ON THE CIRCUMSTANCES. AND CONGRESS HASN'T MADE IT ILLEGAL. CONGRESS, ON TWO OCCASIONS, HAD THE OPPORTUNITY TO MAKE IT ILLEGAL AND THEY FAILED TO DO IT. IF CONGRESS WANTS TO MAKE WATER BOARDING ILLEGAL, THEY SHOULD DO IT. IF THEY WANT US TO START INTERPRETING WHAT IS OR ISN'T ILLEGAL, YOU HAVE TO LOOK AT THE CIRCUMSTANCES. WHO IS IT BEING DONE TO, UNDER WHAT CIRCUMSTANCES, IS THIS BEING DONE AS A ROUTINE PRACTICE, IN WHICH CASE IT SHOULDN'T BE DONE, OR IS THIS ANUNUSUAL SITUATION WHICH YOU HAVE A TERRORIST, THERE'S GOING TO BE A BOMBING AND YOU NEED THE INFORMATION.YOU NEED TO LEAVE SOME DISCRETION THERE. IF YOU TRY TO LOCK THIS DOWNTOO TIGHTLY, YOU'RE GOING TO LEAVE THE UNITED STATES IN A PRECARIOUS SITUATION.

KUDLOW: SO YOU DISAGREE WITH SENATOR McCAIN?

GIULIANI: I DID IT IN THE DEBATE. I SAID IF YOU GET TOO PRECISE ABOUT THESE DEFINITIONS, ALL OF A SUDDEN YOU'RE GOING TO NEED SOMETHING LIKE THIS IN A VERY, VERY DIFFICULT SITUATION AND YOU DON'T WANT TO BE DEPRIVED OF IT. IF YOU WANT ME TO SAY THIS SHOULDN'T BE ROUTINE OR NOT SOMETHING WE SHOULD USE IN EVERY CIRCUMSTANCE, OF COURSE NOT. BUT THE REALITY IS, I'M VERY RELUCTANT TO TAKE AWAY PRESIDENTIAL PREROGATIVES AND DECISION MAKING, MAYBE BECAUSE I'VE FACED CRISIS MORE THAN THE OTHER ONES HAVE.

KUDLOW: MITT ROMNEY ATTACKED RUDY GIULIANI IN CHICAGO AGAIN YESTERDAY FOR OPPOSING THE LINE ITEM VETO AS A WAY TO HOLD BACK FEDERAL SPENDING.IN THE SECOND PART OF MY INTERVIEW, I ASKED MR. GIULIANI TO RESPOND TO ROMNEY.

GIULIANI: I DID A MUCH BETTER JOB THAN HOLDING BACK SPENDING THAN MITT.MY SPENDING IN NEW YORK WENT DOWN 17% OVERALL BASED ON THE POPULATION. SPENDING UNDER MITT WENT UP 19% IN MASSACHUSETTS.I REDUCED TAXES 23 TIMES IN NEW YORK. MITT NEVER REDUCED THE TAX. HE COULDN'T GET IT THROUGH A DEMOCRATIC LEGISLATURE. I WAS ABLE TO. SO WE HAVE A DIFFERENT RECORD ON FISCAL RESPONSIBILITY. OF COURSE, I RAN FOR RE-ELECTION IN A DEMOCRATIC CITY, GOT RE-ELECTED, HE DIDN'T. ON THIS ISSUE OF LINE ITEM VETO, IT'S FOOLING PEOPLE. I DON'T OPPOSE IT. I'M IN FAVOR OF THE LINE ITEM VETO. IT HAPPENS TO BE UNCONSTITUTIONAL.

KUDLOW: CAN YOU WRITE ONE THAT CAN BE CONSTITUTIONAL?

GIULIANI: YOU CALL IT A CONSTITUTIONAL AMENDMENT.

KUDLOW: CAN THE CONGRESS WRITE A LAW AND HAVE THE PRESIDENT SIGN IT?

GIULIANI: BUT STRICT CONSTRUCTISTS AND YOU CAN'T BE FOR WHAT YOU LIKE AND DON'T LIKE. THE CONSTITUTION OF THE UNITED STATES DEFINES THE WAY A BILL IS PASSED AND CONGRESSIONAL POWER, PRESIDENTIAL POWER. IF YOU WANT TO GIVE THE PRESIDENT MORE POWER, THE SUPREME COURT THINKING IS YOU HAVE TO DO THAT WITH A CONSTITUTIONAL AMENDMENT. UNLESS YOU WANT TO WASTE TIME AND PASS A LAW AND THREE YEARS LATER HAVE THE COURT DECLARE IT UNCONSTITUTIONAL, YOU MIGHT AS WELL TRY TO AMEND THE CONSTITUTION. IT WOULD BE A MORE SENSIBLE WAY TO DO IT. I THINK THIS IS AN AREA WHICH SOME OF OUR POLITICIANS ARE TRYING TO FOOL OFF OF THE PEOPLE ALL THE TIME. THE COURT ADDRESSED THIS ISSUE. IT'S UNCONSTITUTIONAL. YOU HAVE TO GET AN AMENDMENT. IF YOU READ THE FEDERALIST PAPERS, PROBABLY THE RIGHT DECISION.

KUDLOW: MR. ROMNEY SAYS YOU'RE NOT TOUGH ENOUGH ON SPENDING. YOU SAY HE'S NOT. IF YOU WERE PRESIDENT, WHAT WOULD YOU CUT?

AND IN PARTICULAR, THERE IS A BIG PORK BARREL, OVERSIZED, LOG-ROLLING EARMARKED BILL COMING UP CALLED THE FARM BILL, ABOUT $285 BILLION OVER FIVE YEARS. WOULD YOU VETO THE FARM BILL?

GIULIANI: I WOULD HAVE TO LOOK AT IT. VETOING A BILL, ALWAYS REQUIRES YOU GOT TO TAKE WHAT YOU DON'T LIKE TO GET WHAT YOU DO LIKE. I VETOED A LOT OF BILLS AS MAYOR, I ALSO PASSED AND SIGN A LOT OF BILLS WHERE I DIDN'T AGREE WITH ANYTHING AND HAD TO HOLD MY NOSE TO GET WHAT I WANTED. AGAIN, IT'S SIMPLISTIC.

KUDLOW: WHERE WOULD YOU GO? THE PUBLIC WANTS TO --

GIULIANI: I CAN'T MAKE THIS POINT MORE STRONGLY, I'M THE ONLY ONE WHO'S DONE IT.I CUT THE GROWTH OF NEW YORK CITY, I CUT THE WORK FORCE IN NEW YORK CITY BY 20% E CLUDING POLICE OFFICERS AND SCHOOL TEACHERS, AND RAN THE MOST CONSERVATIVE GOVERNMENT IN THE COUNTRY IN THE LAST 50 YEARS.COMPARED TO MITT ROMNEY OR ANYBODY ELSE. WHAT I WOULD DO IS I WOULDN'T REHIRE HALF OF THE FEDERAL EMPLOYEES, CIVILIAN EMPLOYEES WHO COME UP FOR RETIREMENT IN THE NEXT EIGHT TO TEN YEARS, 42% TO 50% OF THE FEDERAL WORK FORCE, SAVING US $25 BILLION. I WOULD PUT SPENDING TARGETS, REDUCTION TARGETS ON EVERY AGENCY WITH THE EXCLUSION PROBABLY OF THE MILITARY AND PROBABLY HOMELAND SECURITY, HOMELAND DEFENSE.5%, 10%, 15% TARGETS. EVERY YEAR THEY WOULD BE DIFFERENT. IT'S THE WAY I BUDGETED IN NEW YORK CITY. IT WORKED FOR ME IN NEW YORK CITY TO CHANGE A DEFICIT INTO A SURPLUS. AND TO HAVE A TOTAL CHANGE IN THE WHOLE ECONOMY OF THE CITY. SO I WOULD BE VERY COMFORTABLE WITH THAT.

I CAME OUT OF THE REAGAN ADMINISTRATION, I LIVED UNDER THOSE REDUCTIONS ALL THE TIME. AND SURE, SOMETIMES IT DOESN'T END UP STOPPING GROWTH. BUT IT HOLDS IT DOWN AND KEEPS IT DOWN TO THE RATE OF INFLATION. MAYBE BELOW THE RATE OF INFLATION. IF THE EXECUTIVE DOESN'T DO THIS, IT CAN'T HAPPEN. AND IF YOU WANT TO STRENGTHEN THE DOLLAR RIGHT NOW --

KUDLOW: I DO.

GIULIANI: TWO OF THE BEST THINGS YOU CAN DO IS HAVE A VERY AGGRESSIVEPROGRAM TO REDUCE FEDERAL SPENDING. ZARCOZY SAID NOT TO HIRE HALF OF THE CIVILIAN EMPLOYEES. YOU CAN REDUCE INDIVIDUAL TAX RATE, CORPORATE TAX RATE, KEEP THE CAPITAL GAINS TAX LOW. IT'S DOING TREMENDOUS DAMAGE TO THE DOLLAR TO SEE THIS UNCERTAINTY AND THE CHARLIE RANGLE, ANYWHERE FROM 1.5 TO $3 TRILLION TAX INCREASE, THE HIGHEST IN HISTORY.

KUDLOW: HE DOES WANT TO CUT THE CORPORATE TAX AND MR. RANGLE WAS ON OUR PROGRAM LAST WEEK. IT'S THE FIRST TAX CUT I'VE SEEN --

GIULIANI: LARRY!

KUDLOW: IT'S THE FIRST PRO GROWTH TAX CUT I'VE SEEN FROM ANY DEMOCRAT. WOULD YOU CUT THE CORPORATE TAX?

GIULIANI: YES, BUT THEN I WOULDN'T RAISE TAXES BY $3 TRILLION EVERY PLACE ELSE.

KUDLOW: WOULD YOU REFORM THE TAX CODE?

GIULIANI: YES, BY GETTING IT DOWN TO THREE OR FOUR MAJOR DEDUCTIONS, A ONE-PAGE DOCUMENT THAT YOU COULD PAY, CALL IT THE FAST TAX. I WOULD BRING DOWN ALL OF THE TAX RATES. I WOULD TAKE DOWN THE COMP -- CORPORATE TAX, BUT NOT GET THE INDIVIDUAL TAX RATE OVER 50%. THAT WOULD BE CATASTROPHIC. YOU'RE GIVING BACK A LITTLE AND DESTROYING OUR ECONOMY. YOU KNOW WHAT HE WANTS TO DO WITH THE DIVIDEND TAX? HE WANTS TO TRIPLE IT. I CAN'T BELIEVE YOU FELL FOR THAT. PLUS, IF YOU LOOK CLOSELY WHAT CHARLIE IS DOING, HE WANTS TO REMOVE SO MANY PRESENT DEDUCTIONS AND TAX TREATMENTS FOR PRIVATE EQUITY FUNDS, PHARMACEUTICAL AND ENERGY COMPANIES THAT ALL OF THEM WOULD BE PAYING MORE TAX. SO IT'S A GIMMICK. IT'S A TRAP. HE DOES THAT BECAUSE SOMEBODY IS GOING TO SAY, GEE, HE LOWERED THE CORPORATE TAX RATE. INDIVIDUAL INCOME TAX IS GOING TO GO OVER 50% AGAIN. WE SHOULDN'T BE HEADED IN THAT DIRECTION. FRANCE, THE PRESIDENT OF FRANCE WANTS TO LOWER THE CORPORATE TAX BUT WANTS TO LOWER THE INDIVIDUAL INCOME TAX AND LOWER THEIR TAX ON INVESTMENTS AND CAPITAL GAINS. THAT'S THE WAY TO DO IT.

KUDLOW: LET'S COME BACK TO THE DOLLAR. A LOT OF PEOPLE ARE WORRIED ABOUT THE DOLLAR. THIS MORNING, GOT 96 DOLLAR OIL, ALMOST $ 00 GOLD LT -- $800 GOLD, AND ALMOST EVERY DAY THE DOLLAR FALLS AGAINST THE EURO. IF THERE'S A PRESIDENT GIULIANI, AND YOUR TREASURY SECRETARY WOULD SAY DAILY THAT WE BELIEVE THAT A STRONG DOLLAR IS IN THE NATION'S INTEREST BUT THE DOLLAR KEEPS FALLING EVERY DAY, WOULD YOU TOLERATE THAT? WOULD YOU BE SATISFIED WITH THAT?BECAUSE THAT'S THE POSITION WE'RE IN RIGHT NOW. MR. PAULSON SAYS THIS DAILY AND ON THE SAME-DAY BASIS, THE DOLLAR KEEPS GOING DOWN.

DOESN'T THAT DAMAGE AMERICAN CREDIBILITY? RONALD REAGAN SAID A GREAT COUNTRY SHOULD HAVE A STRONG AND RELIABLE CURRENCY.

GIULIANI: IF YOU MAKE THE FUNDAMENTALS STRONGER AND THE ECONOMY STRONGER, THE DOLLAR GETS STRONGER. HOW? YOU MODERATE REGULATIONS, A BIG PROGRAM TO MODERATE REGULATIONS WOULD STRENGTHEN THE DOLLAR.A PROGRAM TO LOOK AT CZAR BANE ZOXLY THAT IS THREATENING NEW YORK AS THE FINANCIAL CAPITAL AND IT WOULD BE BRILLIANT TO DO RIGHT NOW.THAT WOULD STRENGTHEN THE DOLLAR. GETTING CONTROL OVER THE WAY WE SUE IN THIS COUNTRY WOULD STRENGTHEN THE DOLLAR.LAWSUITS ARE TWO TO FIVE TIMES GDP IN THE UNITED STATES COMPARED TO ENGLAND, COMPARED TO JAPAN. ALL THESE THINGS ARE COUNTERINVESTMENT IN THIS COUNTRY, CONFIDENCE IN THIS COUNTRY. ISN'T -- THE DOLLAR IS ALL ABOUT CONFIDENCE IN THE AMERICAN DOLLAR, WHICH MEANS NOT JUST THE DOLLAR ITSELF, THE AMERICAN ECONOMY.THAT'S WHAT A PRESIDENT HAS TO FOCUS ON. I THINK THAT MAYBE WE'RE PAYING THE PRICE THERE EVEN OF NOT HAVING RESTRAINED SPENDING.YOU HAVE TO DO THAT. A PRESIDENT HAS TO DO THAT.

KUDLOW: SENATOR CLINTON IS CRITICAL OF THE ECONOMY UNDER PRESIDENT BUSH, ALTHOUGH THE ECONOMY POSTED GREAT NUMBERS YESTERDAY.SHE SAYS THE FOLLOWING, SHE SAID WAGES OF THE MOST INEQUALITY SINCE 1929. SHE ALSO SAYS THAT THE MIDDLE CLASS IS DROPPING THROUGH A TRAP DOOR UNDER PRESIDENT BUSH'S TAX CUTS IN PARTICULAR AND HIS POLICIES IN GENERAL. I WOULD LIKE TO GET YOUR RESPONSE TO THAT, AND I WANT TO ASK YOU, ARE YOU REACHING OUT TO THE MIDDLE CLASS? ARE YOU DEALING WITH THEIR ANXIETIES ABOUT GLOBALIZATION AND TRADE AND A CHANGING WORLD?

GIULIANI: YES, I BELIEVE WE ARE AND WHAT THE DEMOCRATS ARE DOING IS TRYING TO CREATE A WELFARE PROGRAM FOR THE MIDDLE CLASS. SO BASICALLY, THEY CAN DO FOR THE MIDDLE CLASS WHAT AT VARIOUS POINTS IN HISTORY THEY HAVE DONE FOR THE POOR, WHICH IS LOCK THEM INTO THE LEVEL THEY'RE AT RIGHT NOW SO THEY'RE DEPENDENT ON THE DEMOCRATIC PROGRAM. SOME OF THE PROGRAMS THEY'RE SUGGESTING ARE ENTITLEMENT AND GIVEAWAY PROGRAMS FOR THE MIDDLE CLASS. THE BEST PROGRAM FOR THE MIDDLE CLASS AND POOR, AND I AM ONE OF THE MOST SUCCESSFUL PEOPLE IN THIS COUNTRY MOVING PEOPLE OUT OF POVERTY. NO ONE HAS EVER FOUND 120,000 JOBS FOR PEOPLE ON WELFARE, BUT I DID IT WITH UPWARD MOBILITY. I TOOK THE CAP OFF AND HAD THEM LOOKING UP TO THE SKY. I DID IT BY GETTING THEM WORK AND JOBS, LOWERING TAXES, LOWERING GOVERNMENT SPENDING, CREATING A COMPETITIVE ECONOMY.

AND ALL OF THESE THINGS ARE GOING TO LOCK PEOPLE INTO THE LEVEL THEY'RE AT IN SOCIETY. LOWER TAXING, LOWERING SPENDING, REDUCING REGULATION, REDUCING THE OUTRAGEOUS AMOUNT OF LAWSUITS WE HAVE IN THIS COUNTRY, WHICH COST EVERY AMERICAN FAMILY $10,000, THIS WILL MOVE PEOPLE OUT OF POVERTY AND THE MIDDLE CLASS.

KUDLOW: AMERICA'S MAYOR, RUDY GIULIANI. WE THANK YOU FOR COMING BACK. RIGHT AFTER THE INTERVIEW, HE SAID TO ME IF HE WERE GEORGE BUSH, HE WOULD CUT THE CORPORATE TAX RIGHT NOW.




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