Republicans Take the Brunt on Economic Crisis; Interview With Senator Hillary Clinton
ROBERTS: Well, right now, Congress is haggling over a historic Wall Street bailout. What form will the final deal take and will it be enough to both calm the markets and prevent a future crisis? Joining us now to talk more about this for the first time since the primary season ended is New York Senator Hillary Clinton. Senator, it's great to see you. Thanks for being with us this morning.</s>SEN. HILLARY CLINTON (D), NEW YORK: Thanks, John. It's great to talk to you.</s>ROBERTS: So President Bush is urging swift action on this measure. He says, "The whole world is watching to see if we can act quickly to shore up our markets." Do you trust him to do the right thing here because some members of Congress are likening this to the run up to the Iraq war? The administration is saying trust us here.</s>CLINTON: Well, John, I think we could have done better had we started acting nearly two years ago when I and others said that this crisis was looming on the horizon and we had to do something to help people stay in their homes and begin to deal with these mortgages that, unfortunately, were, you know, not in the best interest of either homeowners or our economy. Well, we are where we are now and we do have to take action. But I think it's important that Congress is driving a hard bargain with the administration and not just saying OK, we'll do whatever you want because we want to make sure that taxpayers have some control over the purse strings and they're not just left holding the bag of this huge bailout. So, I think we are going to have to come to agreement and there's a consensus to that, but we also want to inject some reality-based checks and balances and not just give the administration a blank check.</s>ROBERTS: Many of your fellow Democrats are insisting that this bailout include more oversight on the Treasury Department, as well as on the financial services market, limits on executive compensation. You agree with those ideas. But do they need to be in this immediate bailout?</s>CLINTON: Well, I do agree with those ideas. And I'm putting forth proposals again like I did during the campaign about what I think should be done with these challenges. And the reason I agree with that is that we can't just go back to business as usual and hand over $700 billion of the money that people send into their government.</s>ROBERTS: Right. But do they need to be in this immediate rescue?</s>CLINTON: Well --</s>ROBERTS: Or could they be left for the future?</s>CLINTON: Well, what I have said is I'd like to make sure we have oversight and accountability in this immediate package. I do think we have to have conflicts of interest provisions because a lot of the people who are going to be working with the treasury come out of the very same banks that are going to be asking for money for the bailout. We also have got to give authority to rewrite these mortgages so that we go to the root of the problem. Now some of the big issues like new regulations, which we have to have a new framework for the 21st century, the creation of a special entity that I've recommended, the Home Owners' Loan Corporation, similar to what we did during the Great Depression, we can't get that done in the next week or two. But we need a commitment from treasury and the administration that we will get back together as soon as this election is over and try to put in place the building blocks for what I think is a more comprehensive solution.</s>ROBERTS: Let me ask you about that Home Owners' Loan Corporation, as you said, similar to something that happened during the Depression which helped a lot of people out. You also would like a moratorium on foreclosures. You want to see a freeze on interest rates as well. Critics have said, though, that might encourage some people to default on their current mortgages, people who might not have (ph). And it also raises the issue, how do you decide who gets bailed out and who doesn't?</s>CLINTON: Well, the fact is, we're going to have to do that. That's what the treasury is going to have to begin to unravel. We have another government agency called the FDIC. They're doing that right now with the defaulting mortgage assets from a failed bank called IndyMac. There's no getting away from the fact we have to go after the root cause here and try to rewrite these mortgages. And I find it fascinating that when I was calling for freezing interest rates and stopping home foreclosures so that we could get a breather a year ago and try to figure out how to manage this impending crisis, I was told no, that would be bailing out irresponsible homeowners. So we turn around, we're going to bail out irresponsible lenders. Well, we've got to do both...</s>ROBERTS: Right.</s>CLINTON: ... because we've got this market crisis and we got to restore confidence.</s>ROBERTS: On that point, if your plan had been followed and the Treasury Department had gone in and bailed out these individual homeowners a year and a half, two years ago, could we have avoided this whole crisis? Would it have been cheaper?</s>CLINTON: It would have -- well, look, you know, hindsight is 20/20. I think we could have avoided the worse of it. We would have begun reining in the lenders Even Secretary Paulson recommended about a year ago some toughening of regulations. So the administration was recognizing that Wall Street and all of the lending institutions, you know, were on slippery ground and were frankly out of control in many ways. So, yes, I think we could have managed this in a more sensible way that would have not cost as much and certainly would not have thrown our entire global marketplace into such a panic where people won't lend to each other, where trust has been destroyed, where nobody knows how much value any of these assets have in their portfolios or anybody else's.</s>ROBERTS: Senator, everybody is pointing fingers in a number of different directions. I talked with Speaker Pelosi the other day. She said the Democrats bear absolutely no responsibility in this. But if you go back to 1999, the Gramm,-Leach-Bliley Act, that a lot of people say started this whole ball rolling. In the House, 138 Democrats voted for that. One Democrat voted for it in the Senator. Your husband signed it. I mean, do Democrats, do they get off scott free here with all this?</s>CLINTON: Well, I think that everybody has to take responsibility, but the great bulk of the responsibility rests with this administration, and with the ideology that the Republicans have been promoting since they took over the Congress in 1995. You know, they never met a regulation that they thought was worth implementing. They really believed in almost faith-based way in the power of the marketplace. And we have learned our lesson repeatedly in our country. It's human nature. If you take the rules away or if you have weak rules, then people are going to take advantage...</s>ROBERTS: Right.</s>CLINTON: ... and that's what happens in markets.</s>ROBERTS: But again -- again, many Democrats voted to take those rules away. Your husband could have vetoed the bill even though it might have been overridden. You could have done it symbolically. Instead, he chose to sign it.</s>CLINTON: Well, but there were reasons. There were positive reasons. What I believe the failure in '99 was, is that once you remove some of those barriers between banks and investment banks and the kind of business that could be done by banks, that there needed to be a new regulatory framework. But there was no appetite in the Republican Congress or with a Republican president to take the second step.</s>ROBERTS: Right.</s>CLINTON: That's why I am advocating right now that if we put money into the market, that's only the beginning. And it needs to be done the right way and we have to hold everybody accountable...</s>ROBERTS: Right.</s>CLINTON: ... unlike what's been done for the last eight years.</s>ROBERTS: Senator --</s>CLINTON: And then we have to continue to do the building blocks that are necessary so this doesn't happen again.</s>ROBERTS: Time is growing short here and a lot of people want me to ask you a little bit of a political question here -- an absolutely political question. Many people are looking at the closeness of this race. They are wondering what would have happened, where would this race be if Barack Obama had chosen you as his running mate. Your husband yesterday on "The View" said, "She would have been the best politically, in terms of choice, at least in the short term because of her enormous support of the country. Would Senator Obama be further ahead if he had chosen you as his running mate? And did you really want the job?</s>CLINTON: Well, I have always said that it was Senator Obama's choice, and I think his choice was a good one. Joe Biden is a friend of mine. He is a champion of working people. He is a great strategist about what's going on around the world. And our team is just such better, so much better prepared to take on the challenges that we face now than the McCain/Palin team.</s>ROBERTS: Did you want the job?</s>CLINTON: Well, it's not something you want or don't want. It's up to the presidential candidates to make a choice. And I've always said that I was going to support this ticket and I was certainly going to support the choice that Senator Obama made.</s>ROBERTS: So you would have taken --</s>CLINTON: And I think it was a good choice.</s>ROBERTS: So you would have taken it if offered?</s>CLINTON: You know, I'm not going to hypothesize about something that didn't happen, John. What I want to do is make sure that voters understand the stark differences between our candidates and the Republican candidates. And if you like what's gone on in the last eight years and if you're happy about this Wall Street meltdown, and having to put $700 billion into trying to rescue these banks so that we can keep lending and keep the economy afloat, then I think you have a ticket on the Republican side. But I don't believe most Americans want to buy into that.</s>ROBERTS: Senator, we have to go. Other people are waiting to talk with you. But thanks very much. It's great to catch up with you. It's been a long time.</s>CLINTON: Thanks, John. Good to talk to you.</s>ROBERTS: Appreciate it. Twenty-seven minutes now after the hour. World leaders, heads of state and rock stars.</s>ZAIN VERJEE, STATE DEPARTMENT CORRESPONDENT: Whether it's a superpower or a tiny nation, everyone comes to the United Nations with an agenda and to get their 15 minutes in the spotlight.</s>ROBERTS: President Bush and Iran's leader in the same town sharing the same stage. Zain Verjee joins us live on the big showdown at the United Nations. You're watching the "Most News in the Morning."