Clinton Looks to Ohio, Texas for Rebound in Tough Race

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• JIM LEHRER:

  Now, our interview with Senator Clinton. Judy Woodruff talked to the New York Democrat this afternoon in Zanesville, Ohio.

• JUDY WOODRUFF:

  Sen. Clinton, thank you very much for talking with us.

  SEN. HILLARY CLINTON (D), New York: I'm happy to talk to you.

• JUDY WOODRUFF:

  We're here in Ohio where you had the 20th debate among the Democratic presidential candidates last night. What effect do you think this one is going to have on the campaign?

• SEN. HILLARY CLINTON:

  Well, one never knows, but I feel very good about it and have had a tremendously positive reaction from people where I've been today, in Cleveland, here in Zanesville.

  I just feel that people are focusing on what the really big issues are, kind of getting through all the clutter and trying to decide who they want to be their president, and who they hope would be the person to turn the economy around and be the next commander-in-chief, and get our country back on the right track.

• JUDY WOODRUFF:

  Well, speaking of the economy, this is a state with one of the most difficult economic experiences of the last few years. They've lost hundreds of thousands of jobs. What exactly would you do as president about the people who are hurting in Ohio that Senator Obama wouldn't do?

• SEN. HILLARY CLINTON:

  Well, several things. This is also a state that it's in the top 10 with home foreclosures. The number of people who were foreclosed on last year, 150,000 households, an additional 13,000 in January alone, and I have been to Parma and to Dayton and to Cincinnati listening to the stories of people who have been in this terrible situation.

  So I've said we need a moratorium on home foreclosures for 90 days, just like what we would do if a corporation couldn't pay its bills. You would bring the creditors together. You would work out some kind of payment schedule. That's what we need to do for all these homeowners.

  I also would like to freeze interest rates for five years on these adjustable-rate mortgages, the subprime mortgages. And I have a fund that would help communities deal with the consequences of foreclosure.

  So in the very near term we need to be trying to control the cascading home foreclosure crisis, because we can't get the economy back on track if we can't get the housing market picked up. And people who have paid off their homes, if they're in this housing market, are seeing their home values drop.

• JUDY WOODRUFF:

  Well, on the point about freezing those adjustable rates, I think Senator Obama has argued that if you do that, though, then what you're going to do is raise the rates on the non-subprime loans.

• SEN. HILLARY CLINTON:

  Well, there's no basis for that. You know, we are in a difficult economic position. The Federal Reserve is desperately cutting interest rates, trying to drive those interest rates down.

  What are the big costs that people have in their lives? Their home, their energy costs, their health care costs, their education costs. They have just kept escalating.

  And beneath a lot of these subprime mortgage rates are abusive lending practices that we can't turn the clock back and say, "Don't do that. Don't inflate the appraisal. You know, don't be marking people's payments as late so that you can raise their interest rates."

  I mean, people are suffering. And if we freeze the adjustable-rate mortgages, which a number of economists have agreed with me, is a very sound way of trying to stabilize the housing market. The conventional market, which is being affected by the impact of the rising interest rates in the subprime market will actually be stabilized.

  So it's funny to me that Senator Obama would be to the right of George Bush on this, because after sort of dragging his feet President Bush has now come out talking about doing something on moratorium, looking at the interest rates.

  And this, remember, would be voluntary. This is what I would do right now, and I would certainly do it if I were president, to try to get everybody to understand, if we don't take these steps, we're going to have an even more serious economic recession on our hands.

• JUDY WOODRUFF:

  Well, as you know, a lot of the blame for losing these jobs has been focused on NAFTA, the North American Free Trade Agreement. You talked about it at length in the debate last night.

  You've said that you've long opposed it. Your critics say, well, it really hasn't been that long. Help us understand, when did you decide that NAFTA was not a good thing?

• SEN. HILLARY CLINTON:

  Well, I had my doubts about it way back at the beginning of Bill's term, but I was working on health care. But David Gergen and others have apparently remembered a lot of the meetings we were in where I raised a lot of questions.

  But it's hard to argue with the economic success overall of the Clinton years: 22.7 million new jobs, family income up $7,000 on average, more people lifted out of poverty than at any time.

  So the impact of NAFTA and other trade agreements was not so obvious in the economy at large until the Bush administration, because they stopped enforcing trade agreements. They really stopped going to bat to try to keep jobs in this country. They gave more and more tax breaks to, you know, people who were not committed to growing the economy and jobs here.

  So since I've been in the Senate, I have raised a lot of serious questions. And I've said, look, I have a plan to fix it. We've got to get core labor and environmental standards in the agreement. We've got to get better enforcement mechanisms. And we have to end the ability of foreign companies to sue over laws we passed to protect our workers.