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First on CNBC Interview: Bill Griffeth and Sue Herera speak to Senator Hillary Clinton today on "Power Lunch." (Transcript Included)

WHEN: WEDNESDAY, JANUARY 16 AT 12:00PM ET
WHERE: "POWER LUNCH"

Following is the unofficial transcript of a FIRST ON CNBC interview with Senator Hillary Clinton live from Las Vegas with CNBC's Bill Griffeth and Sue Herera on CNBC's "Power Lunch." During the interview, Clinton will discuss the economy and her campaign, among other topics.




BILL: WELCOME BACK.FRESH FROM LAST NIGHT'S DEBATES IN LAS VEGAS, WE'RE PLEASED TO WELCOME SENATOR HILLARY CLINTON. WELCOME BACK TO "POWER LUNCH."

SENATOR CLINTON: THANK YOU SO MUCH, BILL. IT'S GREAT TO TALK TO YOU AND SUE.

BILL: SINCE YOU WERE WITH US LAST, THE ECONOMY HAS TAKEN CENTER STAGE. YOU HAVE AN ECONOMIC STIMULUS PACKAGE. SENATOR OBAMA HAS A SIMILAR PACKAGE IN TERMS OF THE AMOUNT OF DOLLARS. SENATOR EDWARDS HAS TALKED ABOUT STIMULUS AS WELL. ROBERT SAMUELSON IN "NEWSWEEK" MAGAZINE IS NOT IMPRESSED. HE CALLS THIS LOLLIPOP ECONOMICS SAYING THAT IN A $14 TRILLION ECONOMY, $70 BILLION IS, AT MOST, NOTHING MORE THAN POLITICAL SYMBOLISM AND, AT WORST, A SMALL DROP IN THE BUCKET. WHAT DO YOU SAY?

CLINTON: WELL, I THINK THAT WHAT I'M PROPOSING HAS TO BE PART OF A LARGER SET OF BOTH FISCAL AND MONETARY POLICIES.YOU KNOW, PEOPLE ARE HURTING. THEY ARE LOSING THEIR HOMES. THEY ARE LOSING THEIR JOBS. I'VE MET THEM HERE IN LAS VEGAS AND AROUND THE COUNTRY. AND I THINK IT'S IMPORTANT THAT WE MOVE QUICKLY TO TRY TO STEM THE BLEEDING. IT ALSO WILL HELP, I BELIEVE, YOU KNOW, MAYBE BUILD UP A LITTLE MORE CONFIDENCE IN THE ECONOMY AGAIN. WE HAVE BIG PROBLEMS. YOU KNOW THAT. YOU REPORT ON THEM EVERY DAY. BUT I HAVE PROPOSED A WAY TO PUT A MORATORIUM ON HOME FORECLOSURES FOR 90 DAYS TO SEE HOW MANY WE CAN WORK OUT TO PREVENT A CASCADE OF FORECLOSURES WITH ALL THE CONSEQUENCES THAT REPRESENTS. I'D LIKE TO SEE INTEREST RATES AND MORTGAGES FROZEN FOR FIVE YEARS, WHICH I THINK COMPLEMENTS THE MONETARY POLICIES THAT THE FED IS PURSUING. I ALSO WANT TO SEE MORE TRANSPARENCY FROM THE SERVICERS AND BROKERS. AND TO PUT TOGETHER A $30 BILLION FUND THAT WOULD, YOU KNOW, GIVE SUPPORT TO COMMUNITIES TO PREVENT WHAT I THINK WILL BE A MUCH WORSENING HOUSING MARKET WITH ALL OF THE CONSEQUENCES THAT REPRESENTS. I WANT TO PUT $650 IN THE HANDS OF PEOPLE WHO NEED HELP PAYING THEIR ENERGY BILLS. MAKE SURE WE'VE GOT A GOOD ROBUST UNEMPLOYMENT COMPENSATION SYSTEM. YOU KNOW, WITH THESE LAYOFFS GOING ON, YOU KNOW WHAT HAPPENED WITH CITIGROUP THE OTHER DAY. AGAIN, I THINK IT'S CONTAGIOUS. I WANT TO DO SOMETHING ELSE. I WANT, NUMBER ONE TO GET SOME MONEY INTO THE JOBS OF THE FUTURE. THE CLEAN ENERGY JOBS. WE CAN PUT PEOPLE TO WORK HERE IN NEVADA, IN CALIFORNIA, ACROSS THE COUNTRY. ACTUALLY DOING THE WORK THAT IS GOING TO BUILD US A BETTER ENERGY FUTURE AND MOVE US AWAY FROM OUR ADDICTION ON $100 A BARREL OIL. AND I ALSO HAVE IN RESERVE A CONTINGENCY OF $40 BILLION FOR ADDITIONAL TAX REBATES.

NOW I THINK ALL OF US ARE COMING FORWARD ON THIS. I'VE BEEN TALKING ABOUT THE ECONOMY. I'VE TALKED ABOUT IT WITH YOU SOME WEEKS AGO. BECAUSE I COULD FEEL THAT WE WERE GOING TO END UP WHERE WE ARE TODAY, SLIDING INTO A RECESSION. THE PRESIDENT GOING HAT AND HAND TO THE SAUDIS, BASICALLY SAYING, PLEASE HELP US OUT AGAIN. WE'VE GOT TO GET FOCUSED ON WHAT WE NEED TO DO. SHORT, MEDIUM AND LONG TERM. AND THAT'S GOING TO REQUIRE NEW LEADERSHIP.

BILL: LET'S BE CLEAR, THOUGH. ARE YOU SAYING YOU CAN AVOID A RECESSION WITH A PLAN LIKE THIS, OR DO WE JUST LET THE BUSINESS CYCLE TAKE ITS COURSE AT THIS POINT?

CLINTON: NO, I DON'T KNOW THAT WE CAN. SOME ECONOMISTS, AS YOU KNOW, SAY WE ALREADY ARE.IN FACT, THE GOVERNOR OF NEVADA SAYS HIS STATE IS ALREADY IN ONE. BUT WE CAN CERTAINLY DO WHAT IS NECESSARY TO TRY TO MAKE IT SHALLOWER AND LESS LONG LASTING. AND I THINK WE'VE GOT TO DO THAT BECAUSE WE'RE REALLY IN A DIFFERENT ENVIRONMENT GLOBALLY RIGHT NOW. WE KNOW THAT WE'VE GOT THE HUGE SPIKE IN OIL PRICES OVER THE LAST SEVERAL YEARS. I MEAN, LOOK AT THE SPIKE IN OIL PRICES SINCE GEORGE BUSH BECAME PRESIDENT. WE KNOW THAT WE ARE INCREASINGLY INDEBTED TO OTHER COUNTRIES, AND WE NOW ARE NOT ONLY INDEBTED TO THEM, BUT OUR PRIVATE INSTITUTIONS, ARE BORROWING FROM SOVEREIGN WEALTH FUNDS SO THAT WE'VE GOT IT KIND OF COMING AND GOING. WE DON'T HAVE A SENSIBLE ENERGY POLICY. AND I THINK THAT'S ONE OF THE BIGGEST PROBLEMS IN THE ECONOMY. THE FISCAL STIMULUS THAT BUSH PUSHED SO HARD IN '01 AND BEYOND HAS GONE PRIMARILY TO PEOPLE WHO ARE, YOU KNOW, GOING TO WEATHER THIS CRISIS BECAUSE THEY ARE SO WEALTHY AND THEY ARE SO MUCH BETTER OFF THAN THE REST OF US. SO I THINK WE NEED TO SAY, LOOK, WE'VE GOT TO TAKE SOME SHORT TERM ACTION HERE. THAT'S WHAT A STIMULUS IS FOR. THEN WE'VE GOT TO DO A MUCH BETTER JOB IN GETTING BACK TO FISCAL RESPONSIBILITY. LET'S MAKE INVESTMENTS THAT WILL MAKE US RICHER AND SAFER AND SMARTER, LIKE IN CLEAN ENERGY, FOR EXAMPLE. THEN WE'VE GOT TO TAKE STOCK OF, YOU KNOW, THE INDEBTEDNESS, THE $9 TRILLION DEBT AND THE REST OF WHAT IS HAPPENING IN THE GLOBAL ECONOMY THAT I BELIEVE CAN UNDERMINE OUR FISCAL SOVEREIGNTY. AND I TAKE THAT VERY SERIOUSLY.

SUE: SENATOR, YOU BROUGHT UP THE SOVEREIGN WEALTH FUNDS. IT'S SOMETHING THAT OBVIOUSLY IS SAY HOT BUTTON ISSUE IN WASHINGTON.AND IN A RECENT NBC NEWS POLL WAS ONE OF THE MAJOR CONCERNS OFVOTERS.YOU HAVE SAID IN THE PAST THAT YOU WOULD LIKE TO SEE MORE TRANSPARENCY. HOW, THOUGH, IF YOU WERE PRESIDENT, WOULD YOU ACHIEVE THAT BECAUSE IN F THE SHOE WAS AN THE OTHER FOOT, A LOT OF PEOPLE THINK THAT THE UNITED STATES WOULD BE VERY RELUCTANT TO OPEN ITSELF UP TO THE TYPE OF SCRUTINY THAT'S BEING SUGGESTS ON THESE SOVEREIGN WEALTH FUNDS. HOW WOULD YOU DO IT?

CLINTON: WELL, SUE, WE DON'T HAVE THE EQUIVALENT OF SOVEREIGN WEALTH FUNDS IN THE WAY THAT WE'RE SEEING THEM DEVELOP AROUND THE WORLD. WE HAVE A PRIVATE MARKET. OBVIOUSLY, THE GOVERNMENT PLAYS A ROLE. BUT WE HAVE PRIVATE PLAYERS WHO MAKE INVESTMENT DECISIONS BASED ON PROFIT RETURNS, BASED ON WHAT THEY THINK ARE IN THE BEST INTEREST OF THEIR INVESTORS.

WHEN YOU MIX POLITICS AND GOVERNMENT WITH THESE INVESTMENT FUNDS, THAT'S WHERE WE RUN INTO THE QUESTIONS THAT ARE BEING RAISED.

SUE: WHICH YOU SUGGEST -- WOULD YOU BE IN FAVOR OF STRONGER CAPS ON THE AMOUNT OF MONEY THAT THESE SOVEREIGN WEALTH FUNDS ARE ALLOWED TO PUT IN OR THE STAKES THAT THEY ARE ALLOWED TO TAKE IN THE LIKES OF A CITIGROUP OR PERHAPS A MERRILL LYNCH?

CLINTON: WELL, HERE'S WHAT I WANT TO START WITH.I WANT THIS TO BE AN INTERNATIONAL SOLUTION. I WANT TO SEE THE IMF AND THE WORLD BANK GET INTO THIS, ALONG WITH GOVERNMENTS LIKE OUR OWN. BECAUSE IT'S NOT ONLY THE UNITED STATES. I MEAN, YOU KNOW, THE INVESTMENTS FROM THE SOVEREIGN WEALTH FUND AT THIS POINT IN THE UNITED STATES ARE NOT GOING TO DISRUPT OUR ECONOMY.

THAT ISN'T THE CASE IN A LOT OF OTHER COUNTRIES WHERE THEY COULD BE MUCH BIGGER PLAYERS. BUT WE NEED TO GET AHOLD OF THIS NOW. WE NEED TO MOVE TOWARD TRANSPARENCY. IF THERE ARE RULES ON INVESTMENT CAPS OR STOCK OWNERSHIP OR THE RIGHTS AND PRIVILEGES THAT GO WITH CERTAIN CLASSES OF STOCK, WE NEED TO START LOOKING AT THAT BECAUSE I DO BELIEVE THAT WHEN YOU MIX GOVERNMENTS AND HUGE CAPITAL FLOWS, YOU CAN RUN INTO TROUBLE. I MEAN, ONE OF THE REASONS THAT I HAVE RAISED THIS IS, YOU KNOW, WE DO HAVE A LOT OF OTHER BUSINESS GOING ON WITH OTHER COUNTRIES. AND SOMETIMES WE ARE ALIGNED AND SOMETIMES WE ARE NOT. SOMETIMES OUR STRATEGIC NATIONAL INTERESTS ARE NOT THE SAME. SO IF GOVERNMENT OFFICIALS ARE BASICALLY CALLING THE SHOTS ON INVESTMENT AND DISINVESTMENT THAT PUTS A WHOLE NEW FACTOR INTO HOW THE GLOBAL ECONOMY NEEDS TO WORK.

BILL: SENATOR CLINTON, WE'VE TALKED ABOUT POSSIBLE FISCAL STIMULUS FOR THE ECONOMY. WHAT ABOUT MONETARY STIMULUS?THE FED HAS CUT RATES. THERE ARE THOSE THAT FEEL THAT BEN BERNANKE AND COMPANY ARE BEHIND THE CURVE ON TRYING TO DEAL WITH THE CREDIT CRUNCH AND THE SLOWING ECONOMY. WHAT IS YOUR VIEW? YOU'VE HAD CLOSE DEALINGS WITH THE FED SINCE YOU BECAME A SENATOR THERE IN NEW YORK. WHAT IS YOUR VIEW OF THE JOB BEN BERNANKE IS DOING RIGHT NOW AND AS PRESIDENT, WOULD YOU REAPPOINT HIM AS FED CHAIRMAN?

CLINTON: WELL, I'M NOT GOING TO ENGAGE IN SPECULATION. I THINK HE'S BEEN DEALT A VERY HARD HAND AND HE'S TRYING TO, YOU KNOW, PLAY IT. AND WE ALL KNOW WHAT THE CONCERNS ARE. WE'VE GOT TO FIGURE OUT HOW TO STIMULATE THE ECONOMY AND NOT TRIGGER INFLATION THAT WOULD TAKE AWAY A LOT OF THE BENEFITS FROM THE STIMULUS. SO HE'S TRYING TO, YOU KNOW, MATCH WHAT ARE OFTEN COMPETING CONSIDERATIONS. I AGREE WITH WHAT HE'S DONE SO FAR IN TRYING TO CUT INTEREST RATES. WE MAY NEED TO DO IT AGAIN.

THAT'S WHY I HAVE BEEN PUSHING FOR A FREEZE ON INTEREST RATES WITH HOME MORTGAGES BECAUSE IF YOU LOOK AT WHAT'S HAPPENING IN THE ECONOMY, REAL WAGES ARE NOT GOING UP. WE HAVEN'T HAD PRIVATE SECTOR JOB GROWTH. HOW IS THE AMERICAN CONSUMER STAYING AFLOAT BY GOING FURTHER AND FURTHER INTO DEBT. REFINANCING HOMES. MORE AND MORE CREDIT CARD DEBT. WE'VE GOT STUDENT LOAN DEBT. WE'VE GOT CAR PAYMENT DEBT. WE HAVE SO MUCH DEBT IN THIS COUNTRY. WE NEED TO SAY, LOOK, WE'VE GOT TO GET A HANDLE ON THIS DEBT BECAUSE YOU CAN LOWER INTEREST RATES, YOU KNOW, THROUGH THE FED ON A MONETARY SIDE. BUT THE INTEREST RATES THAT ARE GOING UP THAT -- THE CLEAREST EXAMPLE ARE THE ADJUSTABLE RATE MORTGAGES AND ALL OF THE OTHER VERY EXOTIC VEHICLES THAT WERE SOLD TO PEOPLE. SO YOU'VE GOT INTEREST RATES GOING UP IN A MAJOR PART OF THE ECONOMY WHILE THE FED IS TRYING TO GET INTEREST RATES DOWN. THAT JUST DOESN'T ADD UP. SO I THINK WE'VE GOT TO HAVE A MORE EFFECTIVE COMBINATION OF MONETARY AND FISCAL ACTION TODAY. IT'S NOT ONLY STIMULUS. IT'S CHANGING SOME PRIORITIES. I WOULD LOOK HARD AT THE BANKRUPTCY CODE TO GIVE PEOPLE MORE RELIEF WHO ARE ON THE BRINK OF LOSING HOMES WHO FRANKLY HAVE BEEN THE VICTIMS OF A LOT OF PREDATORY AND FRAUDULENT PRACTICES. WE'VE GOT TO LOOK AT THIS ECONOMY MORE BROADLY THAN JUST, OKAY, WHAT CAN THE FED DO NEXT MONTH TO TRY TO BOOST A LITTLE BIT MORE CONFIDENCE AND GET BACK INTO BORROWING.

SUE: THERE'S SO MUCH TO TALK TO YOU ABOUT. I WISH WE HAD A FULL HALF HOUR WITH YOU.AND WE'D LIFE TO HAVE YOU COME BACK AND SPEND THAT TIME WITH US. BUT WHEN YOU TALK ABOUT FREEZING INTEREST RATES, THERE ARE THOSE WHO SAY THAT THAT BASICALLY IS ACTING AS A PRICE CONTROL.AND THERE ARE OTHERS WHO SAY, HEY, LOOK. I'M AN INVESTOR IN CITIGROUP. I'M AN INVESTOR IN JP MORGAN. THOSE BANKS HAVE COUNTED ON THE APPRECIATION OF INTEREST RATES FOR THEIR BOTTOM LINE. AND AS A SHAREHOLDER, YOU ARE HINDERING THE BANK'S ABILITY TO MAKE MONEY ON THOSE LOANS. THEY LENT TO HOMEOWNERS. SO WHERE DO YOU COME DOWN ON THE ISSUE OF PRICE CONTROLS AND THOSE WHO ARE HOLDING THE STOCK OF A CITIGROUP AND A JP MORGAN AND THE LIKE?

CLINTON: THIS IS A VERY BROAD-BASED PROBLEM. THERE'S ENOUGH RESPONSIBILITY TOGO AROUND. AND A LOT OF THE BANKS, A LOT OF THE INSTITUTIONS THAT CREATED THESE STRUCTURED INVESTMENT VEHICLES THAT BUNDLED THESE BIG PRIME -- SUBPRIME MORTGAGE PACKAGES, YOU KNOW, THEY BET THE SAME WE THESE HOMEOWNERS BET THAT HOUSING PRICES WOULD ALWAYS GO UP AND IT WAS A BAD BET.

THEY ARE TAKING A LOT OF WRITE-DOWNS AS WE KNOW. WE'VE GOT TO STOP THE BLEEDING. I THINK THAT EVERYBODY IS GOING TO HAVETO SHARE IN WHAT NEEDS TO BE DONE. YOU KNOW, A LOT OF THESE SIVs THAT ARE NOW FLOATING AROUND IN ASIA AND EUROPE AND ELSEWHERE, THE ULTIMATE HOLDERS OF THOSE PAPERS, OBVIOUSLY, THEY FEEL LIKE, WAIT A MINUTE. I INVESTED IN THIS KNOWING THAT -- OR THINKING THAT RATES WOULD GO UP A COUPLE OF PERCENTAGE POINTS OVER THE COURSE OF THIS MORTGAGE. OUR ECONOMY CAN'T AFFORD THIS RIGHT NOW. SO WE'VE GOT TO MAKE SOME TOUGH DECISIONS. I THINK THAT FREEZING INTEREST RATES ON THESE HOME MORTGAGES WILL GIVE US AN OPPORTUNITY TO LOOK HARD AT HOW WE'RE GOING TO WORK OUR WAY OUT OF THIS. AND FOR THOSE WHO HOLD THE PAPER, THEY ARE ALREADY TAKING THE WRITEDOWNS. THEY WILL GET A RETURN. THEY WON'T GET A RETURN PERHAPS AS HIGH AS THEY ANTICIPATED. IF THEY FORECLOSE ON ALL OF THESE HOMES, MILLIONS OF AMERICANS OUT OF THEIR HOMES. A HOUSING MARKET THAT WILL GO EVEN SOFTER THAN IT IS NOW. WHAT ARE THE RESULTS OF THAT? AND HOW WILL THEY EVER GET ANY KIND OF WORK OUT, PAYOUT ON WHAT THEY'VE INVESTED. I THINK WE HAVE TO LOOK AT THIS. THAT'S WHY I WENT TO WALL STREET ON DECEMBER 5th AND SAID, GUYS, YOU GOT TO BE PART OF THE SOLUTION BECAUSE YOU WERE PART OF THE PROBLEM IN WHAT WE HAVE INHERITED HERE.

SUE: DO YOU THINK CEOs OF SOME OF THESE LARGE COMPANIES SHOULD WALK AWAY WITH COMPENSATION PACKAGES?

CLINTON: NO, I DON'T. I'LL TELL YOU WHAT. FOR COUNTRYWIDE TO GIVE THEIR CEO, WHO WAS ONE OF THE PRINCIPAL ARCHITECTS OF THIS WHOLE HOUSE OF CARDS WITH THESE EXOTIC SUBPRIME MORTGAGE VEHICLES, I THINK IS OUTRAGEOUS. $110 MILLION FOR ENTICING PEOPLE? I HAD A WOMAN IN RENO LAST WEEK WHO TOLD ME SHE TOOK HER MORTGAGE FROM COUNTRYWIDE. THEY TOLD HER THAT, YOU KNOW, SHE'D ALWAYS BE ABLE TO PAY BECAUSE HER HOUSE WOULD APPRECIATE. SHE'S NOW A VICTIM OF THE DOWNTURN IN THE ECONOMY. SHE CALLS COUNTRYWIDE. THEY SAY, LET'S GIVE YOU ANOTHER LOAN. WELL, THIS IS TOTALLY, YOU KNOW, ABSURD. WHERE ARE WE HEADED IN THIS DIRECTION. SO I THINK THAT, YOU KNOW, EXECUTIVES OF A LOT OF THESE COMPANIES THAT PARTICIPATED IN CREATING THIS VERY DIFFICULT SET OF PROBLEMS WE'RE TRYING TO WORK OUR WAY OUT OF SHOULD NOT BE REWARDED WITH $110 MILLION AS THEY WALK AWAY.

BILL: SENATOR CLINTON, WE KNOW YOU HAVE A BUSY DAY TO GET TO. THANK YOU FOR YOUR TIME. GOOD TO SEE YOU AGAIN.

CLINTON: GOOD TO TALK TO YOU.THANK YOU.




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