Hillary Clinton on Budget & Economy
Secretary of State; previously Democratic Senator (NY)
A: Well, it is the case that the economy is becoming a greater and greater concern because, obviously, itís not working for the vast majority of Americans. Iíve been out there since March talking about this mortgage crisis and urging much more aggressive action to stem the foreclosures that are beginning to cascade around the country. But at some point youíve got to have government action to really tackle these problems. The stimulus package is a start, but itís not nearly enough. What we have to do is have an economic policy that once again creates jobs with rising incomes. Obviously, I disagree with the Republicans about the tax cuts for people making more than $250,000 a year. I think we should let those expire and use that money on universal health care and other needs that people have that are really directly related to the state of the economy.
After seven years of stagnant wages, declining incomes and increasing inequality, our families are working harder and harder and still falling behind. President Bush had one final chance tonight to acknowledge what the American people have known for years: that the economy is not working for middle class families. Unfortunately, what he offered was more of the same--a frustrating commitment to the same failed policies that helped turn record surpluses into large deficits, and push a thriving 21st century economy to the brink of recession.
We need a President who understands the urgent economic challenges our families face and who will work as hard for middle-class families as they work for America. I intend to be that President for the American people.
OBAMA I did not compliment Republican ideas. That is not true. What I said was is that Reagan was a transformative political figure because he was able to get Democrats to vote against their economic interests to form a majority to push through their agenda, an agenda that I objected to. While I was working on those streets watching those folks see their jobs shift overseas, Clinton was a corporate lawyer sitting on the board at Wal-Mart. What I said had nothing to do with their policies.
A: No. I think it helps to mitigate the agony. What I hear as I go in and out of peopleís homes and talk to so many who have already lost their homes, theyíre in foreclosure, they see these interest rates that are about to go up and they know they canít pay them, is that we take action now. Iíve been calling for action since last March. When I first started calling for it, a lot of the same economists who now say donít do anything about it said, it wonít be that bad. The mortgage crisis is not only destroying home ownership, it is having a ripple effect across the world. So my moratorium for 90 days is a work-out. Itís not a bailout. I want people to be able to see whether they can stay in their homes paying a rate that is affordable for them. The interest rate freeze is merited. If youíre a homeowner who has been at the bottom of this incredible scheme that was established, youíre left holding the bag and you donít have the house anymore.
This administration canít figure out what we should do. I have a plan: a moratorium on foreclosures for 90 days, freezing interest rates for five years, which I think we should do immediately. What we now see is our financial institutions having to go hat in hand to borrow money from foreign government funds. Iím very concerned about it. Iíd like to see us move much more aggressively both to deal with the immediate problem with the mortgages and to deal with these foreign funds.
A: This stimulus shouldnít be paid for. The whole point of stimulus is going to require an injection of federal funding. And I would start with the mortgage crisis. I want to have a moratorium on foreclosures for 90 days so we can try to work them out. I want to freeze interest rates for five years, and I want to have a $30 billion package that will go in and try to stabilize the housing market and stabilize communities that are going to be affected by that.
Q: But many people couldíve had a fixed mortgage at a higher rate, but they opted for a cheaper one. Should they not bear some responsibility?
A: The bankers, the mortgage lenders, the brokers, all bear a lot of the responsibility, because many of the practices that were followed were just downright predatory and fraudulent. There is no doubt about that. A lot of people got into subprime loans who frankly couldíve been in a conventional fixed-rate loan.
A: Well, fiscal responsibility is a very high priority for me. We donít have to go back very far in our history, in fact just to the 1990s, to see what happens when we do have a fiscally responsible budget that does use rules of discipline to make sure that weíre not cutting taxes or spending more than we can afford. I will institute those very same approaches. You canít do it in a year. Itíll take time. But the economy will grow again when we start acting fiscally responsible. And then we can save money in the government by cutting out private contractors, closing loopholes, getting the health care system to be more efficient. Weíll do all of this at the same time, but the results will take awhile for us to actually see.
A: Iím glad they did what they did. But it canít be just left to a bail-out for the banks. Weíve got to figure out how weíre going to figure out people facing foreclosures. And I have recommendations on that, that do not lend themselves to an easy yes or no.
And we know that for those who worry about passing on this huge debt that has been blown up in the last six years--because remember, six years ago we had a balanced budget and a surplus--well, if youíre a grandparent worried about passing that debt on to your grandchildren, youíre invisible.
CLINTON: Six years ago, we didnít yet have a recession. We didnít have the 9/11 attack. We didnít have high deficits. We didnít have the Bush policies. Thankfully we escaped a plague of locusts, but weíve had some challenges in the last 6 years. So Iím not discouraged Iím just changing direction, trying to work in different ways to help people right here at home create these opportunities for themselves.
SPENCER: Well, if we did have a plague of locusts, you know whoís fault it would be, right? George Bush. Heís responsible for everything. When are you responsible, Sen. Clinton? When are you responsible, after 6 years? You pledged 200,000 jobs. If youíre not responsible, then youíre ineffective. Youíre ineffective as a United States Senator from New York.
In 2003 and 2004 Clinton grew even more generous with the taxpayersí dollars. She sponsored or co-sponsored 211 bills to increase spending and just three bills to reduce it, yielding a total net cost of $378 billion. This made Clinton the second most ďexpensiveĒ senator during that time.
CLINTON: I donít think thatís a good use of that space or of taxpayer dollars. There is work we need to do to upgrade the infrastructure. Thatís why I support the Second Avenue subway. Thatís why I support the East Side connector, a rail link to La Guardia and to JFK. I will go to the Senate to continue the work on Penn Station and others that Senator Moynihan has started.
LAZIO: I think itís important to get the Jets and Giants back. This is not just a plan for a stadium; itís also a plan for expansion of convention space. I donít think this should be funded with public money entirely. But I believe that this is an important initiative to build jobs for New York.
A: We have a surplus after 7 years of good economic leadership in our country. We should pay down the national debt, secure Social Security, add a prescription drug benefit to Medicare, and provide affordable tax cuts. I have been very careful to cost out my plan because I believe in a balanced budget. Thatís why I reject the large tax cut that independent experts have said is more than a trillion dollars that my opponent has proposed.
CLINTON: Iím a very strong supporter of these changes that are needed to stimulate the upstate economy. And many of those changes can only take place at the state and local level. Because what I have laid forth in my economic plan for upstate is a way to use tax credits to stimulate business, to expand the high tech industry that is coming to Buffalo.
LAZIO: I do believe that the upstate economy has turned the corner. It also needs new partnerships, alliances, something Iíve been doing down in Long Island. Creating technology incubators, building on our assets in the upstate economy. Making sure that we build good partnerships and a first-class educational system. One of the things you can do is to begin to address the issue of taxation. We need to make sure that people donít pay taxes on top of income that theyíve already paid taxes on.
LAZIO: I donít believe that itís a good idea for us to be building casinos. I would allow the state of New York to make these decisions. But in the end, Iím not a big fan of gambling. Economic development in the area is an important issue, but I would not focus on the quick hit, the cheap hit in gambling. Iíd focus on the kind of jobs where our children can afford to stay here, raise a family, buy their own home.
CLINTON: I know how hard the people in Niagara are working to try to turn their economy around, and if they believe that a casino would help attract more tourists back, I would support that. I leave that to their judgment. But there has to be more of a strategy about the upstate economy --tax credits to help jobs be created, creating the regional skills, alliances, commitment to work force development, etc.
Obama did vote against--and Clinton voted for--an amendment that would have placed a 30% cap on the interest rate that could be charged on any extension of credit. The amendment failed by a vote of 74 to 24 in 2005. When the amendment came up for a vote, Obama was standing next to Sen. Paul Sarbanes, D-MD, the senior Democrat on the banking committee and the leader of those opposing the landmark bill, which would make it harder for Americans to get rid of debt. As for whether the 30% cap was too high, thatís certainly a matter of opinion.
Obama mischaracterized Clintonís comments on her vote for an earlier, 2001 bankruptcy bill. Obama said, ďSen. Clinton said she voted for [the 2001 bill] but hoped that it wouldnít pass. Now, I donít understand that approach to legislation.ď
Thatís not exactly what Clinton said. When asked if she regretted voting for the 2001 bill, Clinton answered, ĒSure I do. It never became law, as you know. It got tied up. It was a bill that had some things I agreed with and other things I didnít agree with. I was happy it never became law. I opposed the 2005 bill as well.
CLINTON: I regretted voting for the bankruptcy bill and I was happy that it didnít get into law. By 2005, there was another run at a bankruptcy reform, motivated by the credit card companies and the other big lenders. I opposed that bill. There was a particular amendment that is very telling. It was an amendment to prohibit credit card companies from charging more than 30% interest. It was one of the biggest lobbyist victories on that very bad bill that the bankruptcy bill represented.
Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): Congress has tried to do a number of things that would alleviate the squeeze on the middle class. Meanwhile, this economy is sagging. Jobs, income, sales, and industrial production have all gone down. We have lost 600,000 jobs. We are trying to provide a major increase in investments to modernize our infrastructure and to provide well-paying construction jobs at the same time.
Opponent's argument to vote No:Rep. JERRY LEWIS (R, CA-41): Just 2 days ago we were debating an $800 billion continuing resolution. Now in addition to being asked to pay for a bailout for Wall Street, taxpayers are being asked to swallow an additional $60 billion on a laundry list of items I saw for the first time just a few hours ago. The Democratic majority is describing this legislation as a "stimulus package" to help our national economy. But let's not fool ourselves. This is a political document pure and simple. If these priorities are so important, why hasn't this bill gone through the normal legislative process? We should have debated each of the items included in this package.
It doesn't take an economist to tell you that the economy needs our help. But what does this Congress do? It proposes to spend billions more without any offsets in spending. The failure to adhere to PAYGO means that this new spending will be financed through additional borrowing, which will prove a further drag on our struggling economy.
Proponents recommend voting YES because:
My amendment says we are going to take about $18 billion as a strong signal from the Congress that we want to support effective programs and we want the taxpayer dollars spent in a responsible way. My amendment doesn't take all of the $88 billion for the programs found by PART, realizing there may be points in time when another program is not meeting its goals and needs more money. So that flexibility is allowed in this particular amendment. It doesn't target any specific program. Almost worse than being rated ineffective, we have programs out there that have made absolutely no effort at all to measure their results. I believe these are the worst offenders. In the following years, I hope Congress will look at those programs to create accountability.
Opponents recommend voting NO because:
The effect of this amendment will simply be to cut domestic discretionary spending $18 billion. Understand the programs that have been identified in the PART program are results not proven. Here are programs affected: Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, child abuse prevention, and treatment. If there is a problem in those programs, they ought to be fixed. We ought not to be cutting Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, and the rest. I urge a "no" vote.
Sen. DODD: Today we are facing a crisis in the mortgage markets on a scale that has not been seen since the Great Depression: over 2 million homeowners face foreclosure at a loss of over $160 billion in hard-earned home equity; over one out of every 5 subprime loans is currently delinquent. These high default rates have frozen the subprime and jumbo mortgage markets and infected the capital markets to the point where central banks around the world have had to inject liquidity into the system to avoid the crisis from spreading to other segments of the market.
One of the fundamental causes of this serious crisis is abusive and predatory subprime mortgage lending. The Homeownership Preservation and Protection Act of 2007 is designed to protect American homeowners from these practices, and prevent this disaster from happening again. The legislation will:
In the coming months, the housing crisis is going to get worse. We will need to continue to press lenders and servicers to provide real relief for homeowners threatened with foreclosure.
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