WHEN: FRIDAY, NOVEMBER 16 AT 7:00 PM ET
WHERE: "KUDLOW & COMPANY"
The following is the unofficial transcript of a CNBC interview with former Massachusetts Governor and Presidential hopeful Mitt Romney on CNBC's "Kudlow & Company" today at 7:00 PM ET. All references must be sourced to CNBC.
In the interview with CNBC's Larry Kudlow, Romney discusses the economy and whether he thinks there will be a recession, corporate taxes, the dollar, the AMT mess, fuel standards, Senator Clinton and the McCain push-poll controversy, among other topics.
LARRY KUDLOW, host: Governor Mitt Romney, welcome back to KUDLOW & COMPANY, sir. Thanks for coming back on.
Governor MITT ROMNEY: Thanks, Larry. Good to be with you.
KUDLOW: You know, once again we're going through one of these periods, there's doom and gloom in the media, Wall Street is turning pessimistic, so I want to ask you at the beginning here, are we going into a recession? Do you see a recession out there?
Gov. ROMNEY: I don't think we have to go into a recession. We obviously have a credit crunch, we have high prices in gasoline, very high prices in home heating oil. A lot of people are feeling the pinch in a very severe way. But I don't think America has to go into recession as long as the Fed continues to ease the credit necessary to keep the economy going, and as long as we have the confidence in the White House and in Washington that we'll deal with the problems that America faces.
KUDLOW: If we are wrong and there is a recession, what kind of anti-recession program might you recommend?
Gov. ROMNEY: Well, you know, the worst thing you could do in a recession is to raise taxes. And if you watched the Democratic debate last night, virtually every candidate up there is talking about raising taxes. That's the wrong way to go. The right thing to do is to reduce the burden on the American people, to invest in the future of our country by investing in technology and innovation, to open up markets to our goods, not closing them off. The Democratic agenda would, frankly, put a burden on our economy. We have to open our economy up, fight around the world so that we can get our products and services a fair shake on a level playing field. But that's the way to get us going again.
KUDLOW: Is it time for a corporate tax cut? There's a lot of talk that the president and the treasury, Mr. Paulson, are going to recommend one. Is it time to cut corporate taxes, in your view?
Gov. ROMNEY: Yeah, it sure is. We have the highest corporate tax rate in the world. Japan and we vie for that distinct dishonor from time to time. But we're up there at the top with Japan. Japan has had a huge drag on their economy by virtue of that. Our high tax rate today means that some corporations are going to say, `Let's go somewhere else instead of America.' That's the wrong thing. We ought to get our tax rate down to a more competitive level. Look what low tax rates have done for Ireland.
KUDLOW: Loews CEO Jim***(as spoken)***Tisch was on the program last night talking about the need to cut the corporate capital gains tax, which he says would be a revenue generator as well as a stimulant. Would you sign on to a corporate capital gains tax cut?
Gov. ROMNEY: Well, the place that I've been focused is with regards to the corporate income tax, where it's at a rate which, as I say, is the highest in the world. That encourages companies to go other places. I'd like to see us look at our whole corporate tax structure, to tell you the truth. It is so complex, it is so unwieldy that many corporations spend millions and millions of dollars just trying to file their tax forms. Particularly small business gets overwhelmed with the complication of our tax system. So any places to simplify, to reduce taxes and to make us more competitive with other nations I think is a--is a good place to look. And one of the real concerns I have is embedded taxes, the fact that our goods and services have within them the income taxes and other taxes which various suppliers have paid along the way, and so our goods are noncompetitive in certain markets because of those embedded taxes. I'm looking for ways to get that feature out of our tax system.
KUDLOW: You know, earlier this morning on CNBC I interviewed Charlie Rangel, the head of the House Ways and Means Committee. They can't get an AMT fixed; they can't get an AMT patch through. Mr. Rangel wants to offset AMT revenues with increased taxes on partnerships and private equity. Over on the Senate side, they don't want that. November 16th was supposed to be a deadline. What do you make of this AMT mess in Washington?
Gov. ROMNEY: Well, it's another example of the fact that Washington is broken and can't get the job done. We certainly need to have an AMT patch at least, which keeps the AMT from affecting more and more families in this country. You know, it's not that Washington is taxing too little, they're spending too much. And there's going to have to be this patch. It's something that Charlie Rangel ought to be able to bring through his body, and it's something the Democrats are going to have to deal with. Because having more and more Americans, middle income Americans getting hit by the AMT is simply not fair.
KUDLOW: One other issue that's out there is the dollar, the weak dollar, the cheap dollar. Some economists are now saying that it's actually damaging consumers, it's raised the price of imports, especially energy-related imports. Should we be doing something aggressively about the dollar?
Gov. ROMNEY: Well, I don't think we want to manipulate--I don't think we want to try and interfere in some way on a temporary basis to try and give ourselves a little breathing room. But I think instead we have to deal with the fundamental reasons why the dollar is weak long-term. And so I'm not just talking about short-term interest rates, I'm talking about the long-term reality that our obligations in our entitlement programs as well as our national debt are enormous, and we don't seem to be willing to deal with things like Social Security and Medicare and Medicaid, and these are--these are issues we're going to have to deal with. We're going to have to stop spending more money than we take in every single year. These kinds of changes, plus a recognition that our investment in productivity will pay off down the--down the road is something which I think will signal to the world that we're serious about having a stronger future and a stronger dollar. And finally becoming energy independent and not needing to send a billion dollars a day outside our country for oil is something which will strengthen our long-term economic prospects.
KUDLOW: Do we need fuel standards for light trucks and SUVs and so forth? There's a California court that says we should go ahead with that, that the US government is wrong. Where do you come out on the fuel standards?
Gov. ROMNEY: Well, you know, I don't like the way the CAFE system has worked so far. Basically, CAFE has put a huge burden on domestic manufacturers, and it has not increased the fuel economy of the fleet. I'd like to find a way to significantly improve the fuel efficiency of the American fleet, the automotive and truck fleet. But that's something we've got to do in conjunction with the automotive leadership, both management and labor. We want to support and strengthen the domestic automobile manufacturing sector, not give it a chop at the knees. So this is something we're going to work on together. We're going to hit much higher mileage standards. But CAFE has been an uneven and distortive type of mechanism for doing that.
KUDLOW: I mean, everybody--nobody likes $100 oil, nobody likes 3 or $3.50 gasoline. The problem, Governor, is what are we going to do about it?
Gov. ROMNEY: Well, the only long-term answer we have for the very high price of energy is to start developing our own sources of energy from sources that are renewable and sustainable. And I'm talking about nuclear power, biodiesel, biofuel, ethanol, cellulosic ethanol, as well as liquified coal, clean-burning coal, coal where you can sequester the CO2. We're going to have to develop those sources and become more efficient in our use of energy. And that means in our cars, our homes, our businesses. We can do those things. It's going to take what I think Tom Friedman coined as a Manhattan-style project, an Apollo-style project, where we as a nation become serious about investing in technologies that allow us to become energy secure and energy independent. And that will dramatically change the world equation when it comes to the strength of our economy, our national security and of course the emissions of greenhouse gases.
KUDLOW: I mean, President Bush has said similar things on the issue. He can't seem to get another bill through the Congress. The Democratic House and Senate will not cooperate with him, they don't want to play ball. And I guess I want to ask you, if there's a President Romney and you have a Democratic Senate and House, how would your management style on this or other issues, perhaps, differ from Mr. Bush's?
Gov. ROMNEY: Well, everybody has their own management style, and different types of bills, of course, require different types of strategies to make them successful. In some cases, you go directly to the American people, and you inform the American people about the choices that we have. You get enough support behind the position you think is right to be able to drive that through the legislative process. In other cases, you can work behind the scenes, if you will, with people of good faith on both sides of the aisle, and see if you can find common ground. That's what we did in my state when we went to work to see if we couldn't find a way to get everybody health insurance that was affordable, portable, that was not government insurance, did not require new taxes. It was something Republicans and Democrats worked on together. That's what's going to have to happen in Washington on issues like, well, our entitlement issues. But on other issues, such as what we're going to do for energy, I think it's just something where the American people are going to have to be so well-informed that their voice is heard loud and clear.
KUDLOW: What do you make of--you're in Las Vegas now. The Democrats had their big debate last night. You referred to it a moment ago, lots of tax increase proposals. Senator Hillary Clinton, the leader over there, she's arguing that the Bush tax cuts for the rich have not helped the economy, that the middle class has suffered, their wages are stagnant, income inequality is growing. You have heard the litany of complaints. What's your response to Mrs. Clinton, and what's your response to the issue the Democrats are raising about a middle class discontent, a middle class revolt against Republicans?
Gov. ROMNEY: Well, you know, I'm somebody who grew up in the world of business and the private sector, and I've learned that you can--you can say a lot of things, but show me the data. I need to see the data. And frankly, some of her conclusions and assertions are just not backed up by the data. And there's no question, however, that people in the middle class in this country deserve a break, and that the burden on the middle class is high in this country. I think it's fundamentally unfair that we tax people when they earn their money, and then again when they save their money, and then when they die. And I propose that anybody making $200,000 a year or less should be able to have a new tax rate on their interest, dividends and capital gains, their savings. And that new tax rate should be zero. We should allow the American middle class to save their money without getting taxed. That reduces the tax burden, it allows them to be able to invest in their future, their retirement, their home, their kids' tuition. And that, I think, is the right course to pursue.
KUDLOW: You were mentioning a moment ago, Senator Clinton, some of her assertions and conclusions are incorrect. Is there anything particular, specifically you want to raise?
Gov. ROMNEY: Well, there are a number of issues that Senator Clinton raises that I think are incorrect, but her general proposition that somehow the Bush tax cuts and the 2001 and 2003 tax cuts were aimed at the rich is just not accurate. The tax cuts were aimed throughout our economy. There was a doubling in the child tax credit. There was an increase in the credit that was given for people who are adopting children. The calculations were made across the board, Americans saw their taxes go down. And the proportion of taxes paid by higher income Americans has actually gone up during the Bush years, not gone down. So some things that she says are simply not accurate. But really what you want to do is determine what's the best course for us to grow our economy and to help middle income and lower income Americans? I don't sit up at night worrying about how our highest income Americans are going to make more money. That is--that is not something that gives me a lot of concern. I do want to make sure that middle income Americans, that all Americans are able to pay for college for their kids, plan for retirement and have a bright and prosperous future. And that's something you expect of a president.
KUDLOW: All right, switching gears a minute, religion is now re-entering this race or maybe growing larger, and I want to ask your response. There's a story on the politico.com Web site, there's an anti-Romney, anti-Mormon call being made in Iowa, apparently it's a push poll, a kind of negative poll. Somebody who received a call told this politico.com reporter about it. It said there are lots of negatives on Romney, talking about flip-flop, hiring illegal immigrants as landscapers and extensive discussion of Mormonism. The guys says I think they have twice that being a Mormon would be an issue. This is pretty negative, dirty pool type stuff. Do you have a response to this? Have you heard the same thing in Iowa about negative commentary, negative phone calls about your religion?
Gov. ROMNEY: Yeah, I sure have, and frankly, it's un-American, Larry. And I say un-American because well, this is the week of Thanksgiving. This is a time when we're going to be sitting down with our families and celebrating the founding of a country, which was established in part recognizing our tolerance for religions. People came here to seek religious freedom. And on this week of all weeks for a campaign or supporters of a campaign to be launching attacks on another candidate because of his religion, it's as un-American as I can imagine. And I think it's very, very disappointing.
KUDLOW: According to this story, the guy in Iowa who told the reporter at the Politico said that this push poll emphasized a lot of positives about Senator John McCain. And I want to ask you that because, of course, this crazy incident on MSNBC where McCain's 95-year-old mother starts blaming Mormons for difficulties around the Salt Lake City Olympics, which you wound up fixing yourself. Is there anything to this? Is this a McCain assault?
Gov. ROMNEY: Well, I don't think we know where the assault has come from, and I think it's going to be hard to find out. But I can tell you this, which is that Senator McCain was the author of the McCain-Feingold bill, and if you will, he's the Dr. Frankenstein for a bill I considered a monster. And that bill and the creation of these entities, these 527s and 501C4s, where people are able to contribute massive amounts of money, no limits on how much they contribute, hide who they are, no disclosure about the person or their connections to organizations, that's the problem here. And it's something which, in this case, is threatening the kind of appropriate campaign process that you'd expect in a campaign like this. And I think it's very unfortunate. I think the real fault here is McCain-Feingold, the bill McCain-Feingold, and the monster that it is. Now, as to who's behind this particular round of attacks, you know, we may never know. Time is going to tell. There'll be an effort to try and find out, but, you know, this isn't the first, it won't be the last. There are various pieces of literature and e-mails and so forth of the same nature that have been sent around. It's just--it's wrong, it's un-American, and it's one reason McCain-Feingold ought to be repealed. It's a bad piece of law.
KUDLOW: Do you or your staff have any evidence at all that Mr. McCain is behind these push polls?
Gov. ROMNEY: No, we don't. That's why I say we don't know who's behind the push polls. We don't know who's behind the literature and the e-mails. It could be any one of the campaigns or it could be someone associated with other groups. It's hard to know because. under McCain-Feingold, there's no requirement that these groups identify who they are or that we know what kind of financing is being provided and what kind of organizations they might be affiliated with. It's really--it's really a very unfortunate piece of legislation.
KUDLOW: The other day in the campaign trail, I guess someone asked you whether you intended to give a speech on your religious beliefs, on your faith as John F. Kennedy did back in 1960. And I think you responded by saying that you would be open to it, your political advisers don't want you to do it. Have you made a decision on this yet? Where are you going to come out on this speech?
Gov. ROMNEY: Well, actually, I--maybe I'm too simple in that response because, you know, I get advice of a lot of different kinds from advisers on all sides of that issues--that issue, rather, but I don't really have a conclusion at this point. Nothing new to add on that. We'll see what happens down the road.
KUDLOW: Do you think that the religious issue is holding back, holding your campaign back, holding your numbers back? Is there any evidence of that?
Gov. ROMNEY: You know, I don't think so. In the states where I'm well-known and where I spent my time, like Iowa and New Hampshire, Michigan, South Carolina, Wyoming, Nevada and Florida, I'm doing real well. I'm either in first place or tied for first place in six of those seven; in Florida I'm in second place. So there's no real indication that people are going to choose their nominee of their party based on which church he goes to.
KUDLOW: Governor Mitt Romney, I appreciate it very much. We'll leave it there. Thank you for spending time with us again, sir.
Gov. ROMNEY: Thanks, Larry, good to be with you.
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