Bigger Government Not Permanent Goal: Rahm Emanuel

Acknowledging that government has gotten bigger since the financial crisis began, White House Chief of Staff Rahm Emanuel told CNBC Tuesday that it isn't the desire of President Obama to make that larger role permanent.

Rahm Emmanuel
Rahm Emmanuel

"We've got to get to a position mainly in auto and financials, where they can stand alone," Emanuel said. "That's desired, and the sooner the better."

"The president doesn't want to have more at stake in individual companies [like GM] by the end of his first term. "His goal is to stabilize these industries or companies so they can make this transition to a different place," Emanuel said.

But Emanuel said that the times called for government intervention. "For the stability of the overall economy, the moment requires some key investments by the government," he said.

Referring to the wars in Afghanistan and Iraq, Emanuel said, "If you look back at history, at every stage in which we've had a major war, there's been a major investment in America ... you make those investments so that America's economy can grow for the next stage."

Asked about the role of the financial industry in the economic downturn, Emanuel said there's been a lack of accountability for the risks banks and others took.

"They turned to the public sector, that is the taxpayers, to bail them out," Emanuel said. "Yet they want no change in any of their business models or compensation. They've now had a major impact for the risks they took."

Asked to asses the massive concerns over the Swine flu, Emanuel said the government and the public need to work together to combat spread of the virus.

"I think we've got to take certain steps that are necessary to avoid a crisis," Emanuel told CNBC. "The state and federal governments, families, hospitals all need to work on this. I think that will mitigate the potential for a crisis."

When asked about the flyover in New York City Monday of an Air Force One plane and a jet for picture-taking purposes, Emanuel said he had talked to the person who had authorized the action that caused many New Yorkers to flee office buildings.

"I had a conversation with him [Louis Caldera, head of the White House military office] immediately when I found out," Emmanuel said. "He takes responsibility and he's accountable."