JIM LEHRER: And to our Newsmaker interview with Speaker of the House Nancy Pelosi, Democrat of California. Gwen Ifill spoke with her this afternoon at the Capitol.
GWEN IFILL: Madam Speaker, welcome.
REP. NANCY PELOSI (D-CA), Speaker of the House: My pleasure to be with you.
GWEN IFILL: As we speak this afternoon, you’ve just come from a leadership meeting with Democrats in the House and the Senate, trying to come up with some sort compromise, I presume, on this big budget bill. Any luck?
REP. NANCY PELOSI: Well, we’ve had a number of items on our agenda as we come to the end of this session, but I’m pleased in the direction we’re going in. I’m especially pleased that we’re going to be bringing the energy bill back to the floor for its final passage. That’s really landmark legislation that will change, takes us in a new direction, and it’s pretty exciting.
GWEN IFILL: I want to point out to you — I’m sure you’ve seen them — page one of today’s Capitol Hill newspapers, “Dems Cave,” another ones says, “Democrats set to cave on Iraq, on the budget.” What do you say to people who call this a cave-in Democratic Congress?
REP. NANCY PELOSI: Well, I guess they’re trying to sell papers, but the fact is, is that I will never confine the hopes, aspirations of the American people, as reflected in the legislation of the House of Representatives, to what the president of the United States, George W. Bush, will sign.
We set a high watermark. We negotiate. We compete. We debate for our position to be held. And I’m pleased that, when we come out of this process, our priorities will be largely intact. It won’t be funded to the levels that we want, but I’ll never start at the president’s bottom line. We’ll always start at a high watermark.
Budget, war standoffs
GWEN IFILL: It seems like there are a series of standoffs going on right now, not only within Congress, but also with the president. I want to run through a few of them. The budget compromise, is the government going to keep on running? Is there a real compromise in sight?
REP. NANCY PELOSI: Well, I don't know if there will be a compromise, but there will be legislation that will go to the president's desk. And we're working through the details of that now. And the government will -- let me assure everyone -- the government will be running, and people will be getting their IRS check refunds in a timely fashion. There's some fear-mongering going on, but actually things will be done on time.
GWEN IFILL: What do you mean by fear-mongering?
REP. NANCY PELOSI: Well, there are those who are saying people will be fired if this doesn't happen and that, especially in the Department of Defense, because of our talk about war funding.
But the fact is we've given the president what he asked for, with conditions that he didn't ask for, when it comes to Iraq. The fact is, is that our domestic agenda that we will bring to the floor -- hopefully Monday or Tuesday -- will meet the needs of the American people.
I think it's important, though, when you see these articles and you ask this question, to know that we want to do more. We know what to do to further meet the needs of the American people with this president and the obstructionism in the United States Senate. We can only do so much.
But when we have the election, it will make all the difference in the world.
GWEN IFILL: You had started this time as speaker saying that one of the things you wanted to do was hold the president accountable for the war. One of the things you wanted to do was not fund Iraq. Is that what this bill is going to end up doing, between what you call the obstructionism in the Senate and what it is that you can actually accomplish?
REP. NANCY PELOSI: Well, we will not have any funding for the war in our bill. As we have said, we have sent the president our proposal to use the funds to begin the redeployment of the troops out of Iraq. That's our marker; we'll see what the Senate sends back.
But there's no question, ending the war was a -- is a high priority for us and a big disappointment to many people that we weren't able to do it. I assumed incorrectly that the Republicans would respond to the wishes of the American people, showing a new direction in Iraq.
But they have stuck with the president with his 10-year war, war without end, trillions of dollars. Of course, the most important part is the loss of life and the serious injury to our troops, cost in reputation to our nation, and the undermining of our military to meet any threats to our security wherever they may occur.
GWEN IFILL: You said this morning at your news conference that Republicans like this war, that this is the Republicans' war.
REP. NANCY PELOSI: Well, when I said "like," I used a poor choice of words. The fact is: They support this war. They support the president's execution of it, even though any objective observer of it would say that a war that we've been in much longer -- more than a year longer -- than we were in World War II, going in on a false pretense without a strategy for success, without a reason to stay, against the wishes of the American people does not deserve the support of the Congress of the United States.
Tax reforms for middle class
GWEN IFILL: One of your priorities this year was to fix the expansion of the alternative minimum tax, which you say affects 23 million -- could affect 23 million middle-class taxpayers. Yet I wonder if you're on the verge of breaking a promise, that is, coming up with a fix that's not paid for.
REP. NANCY PELOSI: No, what we passed on the floor last night -- for the second time -- was an alternative minimum tax relief for middle-income families. Twenty-three million families will benefit from this.
The difference between the Democrats and the Republicans is that they would rather give tax breaks to 5,000 people in our country. Imagine this: 5,000 people, the wealthiest people in America, who are sheltering their income offshore to the tune of billions of dollars, they would rather keep that intact for them than to pay for tax relief for 23 million families, 5,000, 23 million.
And what they're suggesting is that, instead, we should have our children pay the tab so that these 5,000 people don't, so passing $50 billion debt increase onto our children, plus interest, 5,000, 23 million, $50 billion paid for by these offshore folks, or by our children and our grandchildren.
GWEN IFILL: What is your plan for paying the tab if, indeed, you were able to get this passed?
REP. NANCY PELOSI: The plan for paying the tab is to increase the taxes -- the evasion of taxes of those CEOs of certain hedge funds and other private equity firms who are sheltering their income offshore. That brings us a huge amount of money, that and other related revenue raisers, to make this -- to pay for tax relief for 23 million Americans.
GWEN IFILL: Has it been frustrating to you at all that these kinds of solutions, like you suggest for this, and on energy, and on the budget, and any number of issues, health insurance for poor children, that the president and Democrats in the Senate are not on board with your desire to get these things done?
REP. NANCY PELOSI: The senators voted -- every Democratic senator voted to pay for the alternative minimum tax relief. They voted for it the last time now. It didn't get the 60 votes in order to be heard and sent to the president. We'll send them another.
GWEN IFILL: What about the energy bill?
REP. NANCY PELOSI: On the other energy bill, well, I'm very pleased with the energy bill. As I say, we set a high watermark here, combining initiatives that the Senate initiated -- to their credit -- the CAFE standard and the renewable fuel standard.
These are very important advances. And it's been 32 years since we've had an emissions standard set here. So we're pleased with how it's coming out.
You don't get everything you want in just one bill. But we signaled change, we've taken big steps, and we're going forward to do more. And we can do the most if we had a new president.
GWEN IFILL: The president has said that the House is wasting, Congress is wasting its time by sending him bills which he has said upfront he's going to veto.
REP. NANCY PELOSI: Well, I don't know whether he thought he was King George, that we would just be here to enact the will of the president of the United States. This is called the legislative process. We have to show the way of a new direction.
We may succeed on the first bill or we may not, but we will be faithful to taking the country in a new direction, where we're protecting our country, growing our economy, strengthening our families, preserving our planet in a way that is fiscally sound, no new deficit spending, living up to the highest ethical standard, with an eye to the future. It's all about the children.
New intelligence information
GWEN IFILL: Different subject. The CIA tapes, which were destroyed in 2005, which no one knew existed, were you briefed on those?
REP. NANCY PELOSI: No.
GWEN IFILL: So you didn't know that they existed or that they were destroyed?
REP. NANCY PELOSI: No, I did not know either. They have claimed that they had briefed Congress, but I don't believe that that is consistent with the facts.
GWEN IFILL: Are you satisfied that this administration is preserving all the records it should on these and other issues?
REP. NANCY PELOSI: Well, I think this incident raises the question as to whether they are. And I think that we should have a thorough look into this by the committees in the Congress. And I know that the Intelligence Committees in both houses are looking into this now.
But it's very important, because this is about who we are as a country and the integrity with which we protect the American people.
GWEN IFILL: I want to ask you about Iran. We heard the National Intelligence Estimate last week, in which it was suggested that Iran was no longer producing nuclear weapons and hadn't been since 2003. Should U.S. policy toward Iran change?
REP. NANCY PELOSI: What's significant about the intelligence estimate coming out with that information is I was briefed on this in the fall, the president earlier than that. And even though he had that information, President Bush still used the reference to World War III and Iran, knowing full well that the intelligence community had strong consensus that this program had been stopped.
That doesn't mean that Iran is not still a country to be watched. They threaten the safety and existence of Israel. But I do think there's an opportunity, with engagement and dialogue, for us to improve the security situation in the region, which is important to us.
Leading a Democratic Congress
GWEN IFILL: You mentioned engagement and dialogue, and I want to talk about engagement and dialogue right here in Washington, not only on Capitol Hill, but also both ends of Pennsylvania Avenue. One of the relationships is with Vice President Cheney.
He gave an interview in Politico last week in which he criticized some senior leaders, who he said "marched to the tune of Nancy Pelosi to an extent I had not seen, frankly, with any previous speaker." He went on to say, I'm sure you know, "They are not carrying the big sticks I would have expected."
REP. NANCY PELOSI: Well, as I said then, the statements of the vice president -- more than you've just said -- are beneath the dignity of the office of vice president and certainly beneath the dignity of the office of the speaker of the House.
GWEN IFILL: Did you find it to be a sexist statement?
REP. NANCY PELOSI: I didn't pay that much attention to it, because the fact is that I, as speaker, have led my caucus by consensus. And where we go is where the caucus has joined together with the boldest, most positive initiatives, and working with our distinguished chairman. I guess that democratic process is one that may be unknown to the vice president and he doesn't recognize it.
GWEN IFILL: When John Murtha says he believes the surge in Iraq is working, is that part of the consensus thought, as well?
REP. NANCY PELOSI: Mr. Murtha said that the surge was working militarily. And God bless our troops. Any time they're engaged in military activity, we want them to succeed.
He also said that the purpose of the surge was to create a secure environment in which the political change could occur, and it has not. As a matter of fact -- the generals there in Iraq, our own generals, not former generals -- have said the biggest threat to security in Iraq is not the al-Qaida terrorists, the Iranian militias, or the Sunni insurgents. The biggest threat to peace there is the Iraqi government, the intransigence of the Iraqi government.
GWEN IFILL: Another one of the members of your leadership, Barney Frank, was quoted in one of the papers today as saying he felt that the Senate and the House are out of phase with one another. Is that what's happening up here on Capitol Hill now among the Democrats?
REP. NANCY PELOSI: No, no. No, no. What he was talking about -- he was talking about elections. When we won the election last year, 100 percent of the House was up, and we won a Democratic majority. In the Senate, only one-third of the Senate was up, so we only won -- when we won, it was among people who represented one-third of the Senate. So now, when we have the next third, then we'll be in-sync.
I work very closely with Harry Reid. There are very few people in politics that I can think of that I respect more for his leadership, his commitment to the values of our country. And we have one of the best working relationships.
The rules of the Senate are different from the House, in that you need 60 votes in order to have a bill be heard. That's frustrating. There's no question about it. And the Republicans use it to obstruct.
The American people don't want to hear about that. They want the job to get done for them and to help them address the concerns they have about the economy. And I'm more into spending time talking to economists, academics, labor leaders, workers about how we can meet the economic needs of America's families than the process here.
GWEN IFILL: If that's true, if all is happiness and light with you and the Senate, and agreement to disagree with the White House, why is it that 68 percent of Americans in the last NBC-Wall Street Journal poll said they disapprove of the job that Congress is doing?
REP. NANCY PELOSI: Well, I think largely that's because of the war. The biggest hope and expectation for this new Congress was that we would be able to end the war, and we haven't. And for that, I'm disappointed in the Congress, as well.
We thought we would be able to persuade our Republican colleagues to support a responsible, honorable redeployment of the troops out, but they have stuck with the president.
And I'm pleased, though, with the numbers that the Democrats receive overwhelmingly on almost every issue that you can name: health, housing, education, public safety, even fighting terrorism, so many issues dealing with the economy. The Democrats are overwhelmingly favored by the American people.
We have to work to improve the image of Congress. But I go into this next year very confident about the fact that we have done what we promised. We had our six for '06 to make us safer and more secure in every way. And but for one, they have all been signed into law by the president and with strong bipartisan majorities.
So, again, the legislative process is not all sweetness and light. It's not for the faint of heart, because it's a struggle. It's a debate about ideas and priorities. And so I'm confident that we'll be able to lift Congress's ratings, but I'm very interested in the fact that Democratic ratings are very high.
GWEN IFILL: Nancy Pelosi, thank you very much for joining us.
REP. NANCY PELOSI: Thank you. My pleasure. Thank you.