Rep. Bob Goodlatte (R-VA06) joined me tonight after the president addressed a joint session of congress to offer his immediate views on the speech and proposals being made by the administration.
Jim: Obama spoke a lot about energy, education and health care spending. Of the address, what do you think was the most significant?
Rep. Goodlatte: Well, I think he sounded a lot of themes that a lot of people could agree with.
Certainly the few polls that I have already seen on some of the networks would say that the public responded very well to it, and I think somebody just sitting and listening to the speech would react that way. But the fact of the matter is it’s in the policy, and not in the overarching themes, that we find the disagreement.
All three things you mentioned – energy, education, and healthcare – are very important to everyone, and everyone recognizes that there are problems with each of those. But the solutions can take very different courses, and we’ve already seen that in a very short time with the massive amount of spending that the president and the leaders of congress view as the course that the country should take.
The president said a few weeks ago that only government can solve these problems, but Governor Jindal and I and most Americans feel that it is the American people that will be the foundation upon which there will be an economic recovery. The president, I think, tried to tap into that theme tonight, but he kept coming back to massive government programs, yet never addressed them with much specificity.
So you can like a lot of what the president had to say, until you get the bill for it.
Jim: Are there going to be areas such as banking reform where Republicans are going to be able to work with the president?
Rep. Goodlatte: Well, we’re certainly going to try. In fact, we have tried ever since the president won the election last year to go forward in a bipartisan fashion.
I thought President Bush was very graceful in the way that he worked with the president-elect to make a very smooth transition. Obviously [the administration] has hit a lot of bumps in the road, but those weren’t caused by a lack of cooperation from Republicans.
The president’s vision for how to stimulate the economy [is when relations with Republicans] started getting very difficult. If you truly had a bipartisan stimulus package, it would have much greater reliance on trusting the American people to grow the economy through targeted tax relief and not massive government spending that really expands the size of government at every level and in an unsustainable way that the president admitted tonight was not sustainable. It’s of concern that two weeks later we have another massive spending bill coming forward.
But when it comes to if the president would open up the process to bipartisanship, sure, everybody recognizes that there are problems with our regulatory system. There will be plenty of disagreements about how best to make sure that some of the things that happened in the banking crisis last year, some of which is continuing today, doesn’t occur again. But I will tell you that most of the people on my side of the aisle believe that it’s a combination of both over-regulation, with things like the Community Re-investment Act, and under-regulation in areas where SCC really didn’t do things that a good watchdog agency should be doing.
So, yes, I think there is a great opportunity to work together, if the party that’s in power doesn’t decide that they want to seek only smothering government regulations as the solution to the problem; that will simply make matters worse. And, if they want to exclude one party from the process,which they’re pretty much capable of doing, particularly in the House, with the majorities they have.
Jim: How much of a challenge is it for Republicans to be credible on fiscal restraint, given how much spending Republicans did while in the majority?
Rep. Goodlatte: Well it’s certainly made easier when decisions that a Republican president made (that I and many others in my party questioned and voted against) are eclipsed by what I think are even more serious broaches.
You know the bailouts that I voted against last year at least had the promise of saying we’re not going to turn this money over; that we’re going to invest in these businesses and we have some prospect of getting the money back. Personally, I thought that was the wrong way to do it; I thought we should have guaranteed things. That we should have guaranteed the warranties on automobiles so that they could go through a chapter 11 reorganization, yet people could still go buy a car with confidence and know that the warranty would still be honored. That might not have cost the American taxpayers a penny. Instead we put tens of billions of dollars into these [automobile] companies and now they’re back for more.
Even worse problem with the financial industry.
We could have guaranteed these complex securities much like we guarantee deposits in banks - that has worked quite well through the FDIC - instead, we set out first to buy these assets, manage them for years, then we thought that someday we’d sell them and get our money back to then saying, “Well, let’s buy the businesses themselves.” Now, the next step that’s coming since that didn’t work is, “Well, since throwing some money at it didn’t work, let’s really go whole hog and nationalize these banks and solve the problem that way.”
The government approach now of spending huge sums of money primarily on government related programs is not going to work.
The only thing that’s really going to work to rebuild the economy is to trust the American people.
The American people understand that when you are in difficult times like this government at every level needs to do the same things that families are doing: that is to tighten the belt and achieve efficiencies. After you’ve done that, then the economy starts to re-grow.
Jim: Do you feel that this one-time infusion in cash will be enough for the commonwealth or will you be encouraging some state legislators to watch spending and cut taxes?
Rep. Goodlatte: Yea. I think a lot of state legislators would like to do that. Quite a few states are actually contemplating not taking some of the money, which is an interesting alternative – but most states are going to wind up taking the money because they see that as an attractive solution to some very deep-seeded problems that they have with their budgets. The problem is it’s not sustainable.
If you take the money, and it solves your problem today, where are you going to get the money to solve it tomorrow – where the problem is even bigger and you don’t have the ability, and the federal government doesn’t have the ability, to put more good money after bad?
Jim: Where do we go from here if we are in an energy crisis, credit crisis, etc.? How do we solve these problems, at least from a Republican perspective?
Rep: Goodlatte: Well, Republicans, as I indicated, would take a very different approach than the government has chosen to take here and that would include providing real safety nets: making sure unemployment insurance is working (people who are really hurting because they are out of work they obviously need to have help under these circumstances). But in every other place the government should be looking to achieve efficiencies in the government.
Just like what state government is doing, although some of that is deferred because of what the federal government has provided them. Local governments are having to do it, but some that is also deferred because of what is being provided for them.. And then of course the people who are completely forgotten in this process: families, small business, and large businesses – unless you’re on the short-list of favored industries that are receiving bailout money – you’re pretty much on your own on this. But, quite frankly, they will do just fine because they will find the efficiencies that they need to make it through this process. Then when this economy starts to grow again those will be the business and families that enjoy the greatest success.
Every government that puts off the obligation to dig deep – to call for sacrifice by government workers and those who participate in government programs – I think is making a mistake that could prolong the problem - that’s just in the near term.
In the intermediate term, you’re looking at the fact that the government is going to have to go into the market place to borrow trillions of dollars - the estimates are that it is in excess of two trillion dollars in the next year or so – and when we do that there are fewer and fewer places in the world where you can go and borrow money and more and more people who are seeking to borrow it. This has to mean that interest rates will rise – could rise significantly - and that in turn will bring about inflation in a time with low economic growth (which in the late ’70s under Jimmy Carter we called stagflation – we’re at risk of that happening again).
We’re also at risk that projects that otherwise would have happened (where business, families, and local governments could have gotten money at five percent interest, but may not be able to as interest rates creep higher because the federal government is in there soaking up so much of the available capital), will be postponed. All of that will mean that there will be a backlash to whatever benefit was derived from this initial surge of spending (which, by the way, isn’t really much of a surge; a majority of this money won’t even be spent this year)
Finally, the long term picture is the one that’s the most bleak of all: We’ve just added another two trillion dollars for young people to look after for the rest of their lives, and this runs a great risk as to whether they will enjoy the same type of prosperity Americans enjoy today.
Government must turn around, take responsibility and start to really downscale the size of government - and make the kind of long-term budgetary commitments that are necessary to bring this problem under control.
The state of Virginia has these kinds of problems every year – they’ve got a particularly bad one this year – but that’s nothing compared to the federal government. The reason [the problem is not as great] is the state of Virginia is required by its constitution to balance the budget each year. So, they have big fights in Richmond about cutting spending, raising taxes , and we see the governor forced to make some tough decisions about state government spending –and that’s a good thing. If the federal government had [a balanced budget amendment] year-in and year-out, we wouldn’t be in as deep a hole as we are; we’d be more able to handle this problem and I don’t think this problem would be as severe.
I don’t think trying to solve a problem originally created by massive government spending and debt by adding more massive government spending and debt makes sense to most people.
Jim: Do you think we might see the balanced budget amendment from the “Contract with America” dusted off again?
Rep. Goodlatte: Yea…we’ve dusted it off, but we’ve got to get it passed.
You know, back when we took up the “Contract with America” we came within an eyelash of passing [the balanced budget amendment]. It passed the House easily – very strong bipartisan support – it came within two votes of getting the two-thirds majority needed in the Senate.
Can you imagine just two more votes?
It then would have gone to the state legislatures – where I believe that three-quarters of the states would have ratified it.
We would have had [the amendment] in play not only today but probably for much, if not all, of the Bush administration, where that same discipline would have been equally well-applied to Republican majorities in the Congress and a Republican president, as they should be applied to the Democrats who are making the same mistakes today.
http://bearingdrift.com/2009/02/25/exclusive-interview-rep-bob-goodlatte-part-one/
