House Republican Leader John Boehner told me last night that the GOP will come up with an alternative economic plan.
Will it be a choice, not an echo?
Here is the transcript of my CNBC interview with him regarding the Democrats’ mammoth stimulus spending proposal.
LARRY KUDLOW: A short time ago, I spoke with House Republican Leader John Boehner. I asked him for his response to the Democrats’ massive $825 billion stimulus proposal. Here's what the Republican leader said.
REP. BOEHNER:Larry, I was looking at this over lunch. And just the outline of the bill, here is over a half of a trillion dollars worth of spending on liberal Democrat ideas that have been stuck in the back of a file cabinet for the last 14 years. You know, it's just more money for government, whether it's Community Development Block Grants and Community Services Block Grants and $6 billion for community action programs. This is not going to stimulate the economy, or create jobs, or preserve jobs. And I thought that was the goal of this plan.
And secondly, I think the tax cuts that the President-elect promised, they don’t seem to measuring up to the 40 percent of the package that he called for. And so I’m hopeful that when we see more details from the President-elect, that we’ll have a plan that really will create jobs in America and help preserve jobs in America. And the only way to do that is to allow American families and small businesses to keep more of what they earn.
KUDLOW: Well the chances are Mr. Obama’s formal plans are going to probably look a lot like this Democratic plan. But let me ask you, you’re the leader of the House Republicans, and this is a difficult moment for them. Do you and the GOP caucus in the House expect to offer up an alternative package that some are calling a “choice, not an echo”?
BOEHNER: We are going to have a package. I’ve asked Eric Cantor, who’s our Whip, our number two leader, to head up a working group. And they’ve been working for the last several weeks, including today -- we had a hearing with Mitt Romney, we had Meg Whitman in, we had other economists in, to help us develop our ideas. We’re sharing those ideas with the President-elect. He’s reached out, and we’re going to comply. But we’re also probably going to have an alternative that really will re-invest in our economy, and give people reasons to re-invest in our economy, incentives to invest. Because at the end of the day, the only real jobs that are going to be there short-term and long-term are jobs that are created in the private sector.
KUDLOW: There are business provisions in this plan and Team Obama has had some business provisions. But I want to ask you, do you intend in your program to lower tax rates on large and small businesses? An awful lot of people are looking for that as a true stimulant to the economy.
BOEHNER:I think you’ll see our plan will lower taxes for virtually all Americans, and make it clear that depreciation schedules ought to be sped up. We’ve got to make it easier for small businesses to expense items, the net operating loss carryback for probably five years. Some of these are in the tax package we saw today, but I believe that we will expand upon that.
KUDLOW: Also moving through is the so-called second TARP, or son of TARP, $350 billion. From what I hear today, $50 to $100 billion of that might be set aside for mortgage foreclosures. Will your caucus vote for son of TARP?
BOEHNER: Well I don’t believe so. You know, the first $350 billion tranche, we really don’t know where it all went. We don’t know what conditions it was there to prevent. And the kind of transparency and accountability that we would expect, we haven’t seen. And so I’m not about to vote for a second $350 billion for a plan that I haven’t seen, a need that I haven’t seen, and a lack of transparency and accountability. And I don’t believe that you’ll see very many members of the House – both sides of the aisle – that are going to vote for this.
KUDLOW: Do you think that there are Blue Dog Democrats, fiscally conservative Blue Dog Democrats, who might join Republicans to slow down the big spending stimulus package and TARP?
BOEHNER:I do believe that on TARP, there is no question that there are going to be an awful lot of Democrats join Republicans in voting no. But you know, because this is a motion of disapproval, and the Senate has rejected the motion of disapproval, there will be a vote in the House, but frankly, it’s largely symbolic.
On the stimulus package, I think we’re going to have to wait and see. We’re just starting to see the details of this package. I know that I’m a bit alarmed by what I see so far. That’s why when I looked at it, I said, “Oh, my God.” This is $825 billion. And the chairman of the House Appropriations committee, Dave Obey, said, “we’re probably going to have to spend more.” I think that it’s clear we can’t borrow and spend our way to prosperity. We’re putting mountains of debt on the backs of our kids and their kids. We need to act, but we need to act responsibly. And we need to take actions that will stimulate the economy, not stimulate government spending.
KUDLOW: Now Mr. Leader, President-elect Obama has been reaching out across the aisle. I know you have talked with him and met with him. A bunch of us conservatives even had dinner with him the other night. He’s very popular. His polls are very, very high. How do you deal with that as the so-called loyal opposition?
BOEHNER: Well the President has made it clear that he wants to go down a middle path. He’s asked for our ideas on the stimulus package. We are going to comply with his request. We’re going to work with him. And when it’s in the best interest of the American people, I’m going to be for it. That’s kind of my test. If I think that what he’s calling for really does solve problems in America, I’ll be there. When he offers things that I disagree with, I’m going to try to offer up a better idea.
But you know, listen, everybody wants the President to succeed. Frankly, the country needs the President to succeed. But as we get into these issues, we’re going to deal with them one by one, just like he will. And you have to remember that governing and being President of the United States is a lot different than running for election. And so as we get into these, we’re going to have real decisions that are going to have real consequences. And we’re going to have a real debate over them.
KUDLOW: House Republican Leader John Boehner, we thank you ever so much for your time.
BOEHNER: Larry, thank you.
Watch my interview here