When: Today, Friday, Oct. 14, 2011 at 2PM ET
Where: CNBC’s “Street Signs”
Following is the unofficial transcript of a CNBC interview with White House Chief of Staff William Daley today. Excerpts of the interview will air during CNBC’s Business Day programming starting on “Street Signs” at 2PM ET. All references must be sourced to CNBC.
JOHN HARWOOD: Former Commerce Secretary, current White House Chief of Staff Bill Daley, thanks for being with us.
WILLIAM DALEY: Good, John.
JOHN HARWOOD: This is a sour time in Washington as you know-- bad economy, low poll ratings for everybody, lot of in fighting. But you got the trade deals done. Tell the average struggling business owner, person looking for a job, how's this going to affect their life?
WILLIAM DALEY: Well, in addition to the three trade deals for Korea, Panama and Columbia we got trade adjustment assistance, which really is going to help people who are negatively affected by trade deals. And there are negatives to 'em, but overall the positive-ness of this is you're creating jobs in the U.S. because of lowering barriers in foreign countries, especially in Korea, which is an important ally, the 15th largest economy in the world and a growing economy…
And a lot of our-- industries specifically auto has had a very hard time cracking that market. Ford-- UA-- GM, Chrysler and the UAW, United Auto Workers, were all strongly in favor of this deal because they believe it'll create jobs here in the U.S.
The ripple effect obviously to stronger U.S. companies, president-- and President Lee of Korea went out to a GM plant today-- that is going to make some compact cars along with-- an-- an agreement with a Korean company-- to bring new technologies into that plant that's going to hold jobs, create jobs, more jobs. And the ripple effect of that obviously is very positive.
And-- the other thing it does, John, is it sends the message to the rest of the world that in these economic times the U.S. continues-- will continue to be aggressive about doing trade deals, opening-- our economy is very open to the world. And we're trying to encourage other economies that have been historically much more closed than ours to open up, lower barriers so we can sell-- U.S. manufacturers can sell goods into the-- these countries and therefore create jobs here, not create jobs there.
JOHN HARWOOD: You mentioned the negatives. As you know-- there's this huge Occupy Wall Street movement that's in New York and elsewhere. A lot of the people there think that trail-- trade deals like this, like NAFTA, which you helped negotiate under President Clinton, are part of the reason why middle income-- families are struggling even if they're good for big corporations and corporate executives. Why are they wrong?
WILLIAM DALEY: That they're good for big corporations or big executives-- you have a tremendous-- reservoir of smaller and medium sized businesses that have done well by having chances to sell their products around the rest of the world. We are most-- the most innovative, creative business-- bus-- we have the most creative businesses in the world. And opening up barriers to them going around the world-- well, some people would like the world to go back to the 1950's.
The U.S. through innovations, through technologies, through business, through-- through-- trade deals has helped open the world, create opportunities around the world for other people and therefore to sell American goods. So it-- it-- it-- I understand the frustration of a lot of people-- with this new world we're in, which is a difficult, competitive, global world. There wasn't 40, 50 years ago competition coming from much of the world.
But that's created also opportunities for other people and parts of the world to rise from poverty. Sixty years ago the Korean national average was $80 a year and they have a vibrant economy now. And that's good for them, it's good for out politics for an ally, it's good for American businesses. And these deals, albeit there are negatives to some of them and we've tried to counter that-- overall I think it helps the world come together and-- and helps the economy of the world.
JOHN HARWOOD: Let me ask you about Wall Street. Before you joined the administration you made a comment in an interview that the Obama administration had miscalculated, gone too far left on health care. Did the administration go too far left on financial regulation, Dodd-Frank?
WILLIAM DALEY: No, I don't-- I don't think so at all. There are disagreements and honest disagreements with many in the-- financial sector as to whether it went too far or not. It was a long process fought out on the hill-- and it passed by v-- narrow margins. So there was a very open public debate. But whatever you try-- as the president tried to bring true reform in an area that had not had any, most of the laws that regulated the financial service sector were enacted at a period that was close to the Civil War than to this period.
And so-- and a very complex world we've come into in the financial sector at least and an enormous growth in the financial sector, so trying to bring the reforms that he did to try to get control of a system that had gotten out of control.
And I think if you look at-- many parts of the financial sector and many of the leaders in the financial sector would admit right upfront that the controls weren't there. You-- the too big to fail situation-- and we are striving to get to the point where no one is too big to fail-- and to bring relief to consumers-- the Consumer Protection Agency is an important part of that.
And we should get that stood up with a new director-- Rich Cordray who's been nominated by the president and has come out of the committee-- the Senate committee for approval-- is a solid-- person who's held elective office and has also been a business person-- he could bring some real leadership to that and people want that--
JOHN HARWOOD: You mention--
WILLIAM DALEY: --and those are good changes.
JOHN HARWOOD: --you mentioned some of the Wall Street leaders know that we need reform or have said so. You worked for JP Morgan, Jamie Dimon is your friend?
WILLIAM DALEY: Right.
JOHN HARWOOD: He recently met with Mitt Romney, went to a Mitt Romney fundraiser. What does that tell you?
WILLIAM DALEY: He's interested in meeting Mitt Romney. Other than that, I don't know.
JOHN HARWOOD: What does that tell you about your level of Wall Street support and-- you know, you had a lot of Wall Street support--
WILLIAM DALEY: Well, the-- the pro--
JOHN HARWOOD: --in 2008.
WILLIAM DALEY: And I believe the American people-- well, there are many people in the financial sector which isn't just in Wall Street-- on Wall Street-- who are appreciative of the fact that this administration has fought to save this economy and has fought to get a better and more aggressive structure of regulation for that sector which has grown way beyond what anyone expected and in ways that even they were surprised, I think, in the financial sector, the success in which they had.
But the bottom line is, yes, there will be people who will talk to other can-- candidates and maybe-- have a different opinion this cycle or the last time. But the president's been out there fighting for the American people. He's been trying to-- to-- for the average middle class American to try to bring some relief in a very difficult time.
JOHN HARWOOD: Explain the disconnect as someone who knows Wall Street. How is it that at the same time you think and the president thinks he's adopted a reasonable approach to reform, they think you're really coming at 'em on regulations, on taxing the wealthy, why?
WILLIAM DALEY: Well, I think there's a super sensitivity of some people in the financial sector to criticism. And you know what? That-- a lot of people in the financial sector have done quite well, I being one of them. And-- and the influence that the financial sector has on our economy is way beyond what it ever had. And that is good and there's a bad side to that. And--
JOHN HARWOOD: Is it that they--
WILLIAM DALEY: --and--
JOHN HARWOOD: --live in some cocoon where even the lowest paid people, the clerical workers make more than the average American and they just don't understand the--
WILLIAM DALEY: Well, I think there is a dis--
JOHN HARWOOD: --rest of the country?
WILLIAM DALEY: --disconnect in some parts of the-- financial sector with what really is going on out there in America and the pain that's out there on Wall Street. I mean, we have a very different society today where the-- someone who's making $125,000 is in the top five percent of income earners in America. That's a phenomenal change that's happened.
So most of the assistants to the leaders of Wall Street or other major businesses probably are in the top five percent of the earners in America. They probably wouldn't con-- consider themselves the wealthiest of Americans, but that's the change that's happened. And the effect of that is a lot of uncertainty for those who are not that fortunate.
And that's a change that a lot of people in the financial sector whether on Wall Street other parts of the country who have done quite well, and there's no problem with that, they-- the key to this-- system of ours is people should have the opportunity to do well. And there's-- nobody's holding that against them. They feel under siege.
JOHN HARWOOD: I want to ask you about the thinking--
WILLIAM DALEY: Yeah, but they may feel under siege. But go out there and talk to the average American who's struggling mightily just to get by, that 95, 96-- 90 percent of the America people, that's where the real pain is, not in that five percent or ten percent at the top--
JOHN HARWOOD: Understood. I want to ask you about the thinking within the White House. Yesterday at a press conference one of my colleagues asked the president to respond to something Mitt Romney said. The president said, "I didn't realize you were a spokesman for Mitt Romney." Is the White House-- you feeling-- the president feeling under siege from events right now?
WILLIAM DALEY: No, I mean, look at the-- the-- since the day the President came in the-- to this office the-- the economy of the world has been in trouble. The U.S. economy was-- we were losing 750,000 jobs a month the first month he was in office. And the pace picked up based upon the problems that had had-- 4 million Americans had lost their jobs the year before he came into office. So-- he came in and from day one the middle class has been under siege. And the middle class has been under siege for many, many years.
JOHN HARWOOD: Why would the president respond that way to a reporter though?
WILLIAM DALEY: Well, I don't think it was a colleague from your network, I think--
JOHN HARWOOD: No.
WILLIAM DALEY: --but a colleague from another network. And-- sometimes as you-- I know it may surprise people, some people that there are certain people in the media who do seem at times to carry the water for certain-- piece of the political spectrum.
JOHN HARWOOD: Let me ask you about-- you came here thinking that you were going to repair-- build bridges with business, make deals with Republicans. Is it now clear in this environment that that simply can't happen until after the--
WILLIAM DALEY: Oh, we just passed the--
JOHN HARWOOD: --2012 election?
WILLIAM DALEY: --three-- trade deals and a trade adjustment--
JOHN HARWOOD: But on the big things: tax reform--
WILLIAM DALEY: Well--
JOHN HARWOOD: --grant bargain--
WILLIAM DALEY: --let me just say, trade deals, trade adjustment systems, patent reform, these are big deals. Are they-- or can-- we tried mightily, the president tried mightily to get a long term economic fiscal-- plan-- agreed to with the speaker and with the House leadership-- and it didn't work. As a result of that though $1 trillion in spending was cut-- and we're on the path to-- hopefully with the super committee-- a possible $1.5 trillion of more reforms with revenue at-- involved. The super committee is-- is made up of 12 really experienced, seasoned-- people who are trying mightily--
JOHN HARWOOD: You don't have high hopes for a breakthrough though, do you?
WILLIAM DALEY: Well, I think it-- having been through this I know how difficult it is. And most people who talk about either entitlement cuts or revenue-- when you have to put pen to paper it is much more difficult as I think these 12 people are finding out. And then to build a consensus around that after those 12 have come to agreement, we had a situation with the speaker where it was basically two people trying to come to a deal-- before we even took it-- broader and we found out how difficult that can be.
But I'm eternally an optimist. The president has put forward a $4 trillion package. It's the only one really out there-- put it out a month ago that will solve the long term-- at last-- level off the-- growth of-- the debt to GDP. He's the only one with that out there, he's put it out there. He believes that we've got to get our long term fiscal house in order. At the same time we've got to take steps right now to create jobs, to get some economic growth going, and that's why he put forward the American Jobs Act.
JOHN HARWOOD: Very quickly before I let you go-- a lot of Americans were inconvenienced by the BlackBerry-- troubles-- over the last few days. Did that affect you, the president--
WILLIAM DALEY: Yeah, all--
JOHN HARWOOD: --the White House?
WILLIAM DALEY: --all of our BlackBerrys were down just like everybody else, so.
JOHN HARWOOD: How'd you cope?
WILLIAM DALEY: You know-- it's not that long ago we all coped without any of this stuff. But we've become so hooked to this. I remember the first time-- I did-- I chaired Al Gore's campaign ten years ago and he said to me, "Do you have a BlackBerry?" And I looked at him and I said, "What? You know, what's a BlackBerry?"
JOHN HARWOOD: Al Gore's by the way endorsed the Occupy Wall Street protests. That surprise you?
WILLIAM DALEY: No, not really, not really.
JOHN HARWOOD: You still--
WILLIAM DALEY: saw him the other night, happened to run into him in a restaurant in town, so. He looked good.
JOHN HARWOOD: The-- Republicans on the Hill have asked for all communications related to Solyndra including the president's BlackBerry messages if there are any relevant ones. Will the White House turn those over?
WILLIAM DALEY: The White House counsel's reviewing that request. One of the things you're seeing in the last number of years in this town is an enormous amount of-- requests for things, seems to take up-- a lot of people's times. I think it's a lot of politically motivated-- requests. But there's been a long history of White House communications being-- protected by virtual-- from a lot of the-- legislative requests. But-- the White House counsel will deal with that shortly.
JOHN HARWOOD: And finally lot-- speculation about when you're going to leave the job. What are your plans?
WILLIAM DALEY: I couldn't…when the president asked me to do this I said I'd love to do it for two years to the reelect that's always been my plan. So I don't know what the big deal is.
JOHN HARWOOD: Back to Chicago after the election?
WILLIAM DALEY: Yep, back home.
JOHN HARWOOD: Thanks, Bill Daley.
WILLIAM DALEY: Thank you, John.
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