"Economic Choices 2008"-Gene Sperling, Top Economic Advisor to Hillary Clinton
Thursday, January 10, 2008SUSIE GHARIB: In our "Economic Choices '08" coverage, we're looking at the economic views of the major presidential candidates. We have invited the candidates themselves and their economic advisers to join us here. Tonight, we talk with Gene Sperling, top economic advisor to Hillary Clinton. Washington bureau chief Darren Gersh began his discussion with Sperling by asking if the economy is headed into recession and if so, what kind of stimulus package the senator would support.
GENE SPERLING, CHIEF ECONOMIC ADVISOR, HILLARY CLINTON CAMPAIGN: Senator Clinton does feel that for the typical American family right now, a lot -- for a lot of them that recession is already happening. In other words, she understands the more technical definition of what the National Bureau of Economic Research says, but what she says in just a speech over the last week or two is that, you know, the economists and the wonks are still trying to figure it out, but a lot of working Americans have already made that determination. And I think she is really looking at the combination of the higher oil prices starting to hit consumers. She is looking at the fact that we're expecting the largest amount of sub-prime adjustable rate mortgages to reset in the first few months and I think what really affected her a lot was this week or last week's seeing manufacturing contracting and in the unemployment report, while it was up slightly, once you took out the government jobs, you actually had had 13,000 negative job loss in the private sector economy. I think she looks at all of those things and thinks that we are certainly on the brink of recession.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Is she thinking about we need a plan to create new jobs, but we need something to address the mortgage concerns that people have, things like that and would it be a short-term let's do something right away?
SPERLING: Well, what she did is on December 5, she gave a speech in Wall Street. It was on the housing crisis. And at the end of that speech, she said we're at a position now where stimulus might be needed. What she did is to say that she thought people should be putting those plans together and that we should be watching how the economic news is turning. She also laid out what she thought the principles should be, that it should be fast-acting. In other words, if you are going to put money out in the economy, if you put it -- it should hit in 2008 and hopefully the first half of 2008, you know, get the highest bang for your buck.
Secondly, that it truly be temporary. This is very much a criticism of the Bush administration for using stimulus as a pretext to not pay for initiatives, to let the deficit go up, which is the right thing to do in that short window of time when you are trying to inject some stimulus in the economy, but it shouldn't be a pretext for driving up the debt for years and then the last thing is that it be progressive and not just because that's fair but because lower and moderate income families are more likely to spend the money and put it out quickly into the economy.
GERSH: The big criticism that Republicans make of Democrats and Senator Clinton in particular is this is the wrong time to be talking about raising taxes if the economy is slowing down. It's the wrong time to be talking about taking back the Bush tax cuts. That's not going to restore confidence. It's going to take money out of the economy. What's your response?
SPERLING: I'm glad that you asked, because I think that when they say that, they're confusing the time situation. Right now in 2008 what she is saying we should at least be ready for or consider would be the possibility of injecting some more resources into the economy. When she is talking about what to do with the tax cut, she is talking about what is the -- what is our long-term policies and there she is saying that we should be extending the middle class tax cuts. She is actually adding two very substantial ones, obviously, a health care tax cut to allow everybody to be covered.
GERSH: But (INAUDIBLE) she's talked a lot about the need for fiscal discipline. But all of those things that you mentioned, a large health care tax cut, a large savings incentive plan sounds like she is going to take back the Bush tax cuts and spend it all. I don't see how you get to balance.
SPERLING: Well, what she has done in her campaign is she said when she's putting out her health care plan, which is a bold initiative and will cost over $1 billion a year, she has to put out how we're going to pay for that. That's why she has been willing to say that one of the ways to pay for it is to not extend some of the tax cuts that just hit people over $250,000.
GERSH: Gene Sperling, thanks for your time.
SPERLING: Thank you.
