Money & Politics -- Mike (fast)
hello, i’m michael mckee. welcome to “money & politics.” our top story, one with reverberations on wall street, k street and pennsylvania avenue. texas representative tom delay, who helped build a massive republican fund-raising and lobbying machine, says he’ll resign the seat he’s held in congress for almost 11 terms and won’t seek re-election. delay already under indictment in texas for campaign law finance violations, announced his decision four days after his former deputy chief of staff pleaded guilty in the case stemming from the corruption probe of lobbyist jack abramoff. lindsey arent joins us from capitol hill with the latest.
>> today’s resignation of tom delay comes at a time when republicans are very concerned about the prospectss for their re-election chances in november’s midterm elections and they’re worried about the scandal surrounding tom delay, perhaps sensing that, delay himself took matters into his own hands. after 22 years in congress and much of the last two spent battling ethics complaints, former house majority leader tom delay surprised washington with his decision to leave public office.
>> today, i am announcing my intention to resign my seat in the house. i plan to begin focusing on the next phase of my life as a private citizen.
>> delay is known for his ability to keep republicans working in lock step and for his fund-raising efforts, which helps his party maintain a majority over the last 10 years. today, president bush wished delay well and suggested republicans would carry on.
>> my own judgment is that our party will continue to succeed because we’re the party of ideas.
>> why did he step down? political analysts say recent scandals involving lobbyist jack abramoff and former delay aides proved too damaging for the 11-term congressman to overcome.
>> a couple of days ago, his very close former aide, tony rudy, pled guilty and is cooperating with prosecutors for running, in effect, a criminal enterprise out of the majority leader’s office. that may make this resignation a little less surprising.
>> delay denied involvement with the scandals but conceded they could jeopardize his re-election bid, risking the house republican majority.
>> i have done nothing unlawful, unethical, or, i might add, unprecedented.
>> but experts wonder whether the fallout from the recent scandals could move beyond washington, into the finance community.
>> if there are significant indictments of members of congress on corruption charges right at the same time that we’ve got enron’s major figures on trial and delphi in bankruptcy, general motors about to go, pension plans and health plans held in abeyance, there may be a significant public backlash here against business.
>> tom delay has said that he will leave congress some time in mid may but it’s not clear what will happen to his seat in the house. some options, here, governor rick perry of texas could hold special elections to find someone to fill delay’s seat for the rest of his term. alternatively, that seat could remain open until november’s midterm elections.
>> lindsey arent on capitol hill. another republican lawmaker getting set to retire from congress this year under different circumstances is house ways and means committee chairman bill thomas. he’s the house point man on taxes and trade. inoit speech on monday, he urged the administration to give up on efforts to reach a global trade agreement this year and instead devote more attention to deals with individual countries. in a bloomberg exclusive, peter cook is in washington with chairman thomas.
>> thanks very much. chairman bill thomas of the house ways and means committee, the chairman, thank you very much for your time today. before i have the opportunity to ask you about trade and taxes and other issues, i want to get your take on tom delay and specifically, how do you think the history books will treat delay’s years in congress?
>> obviously, you’re getting a number of reactions from a number of places. first of all, let me say that i think it’s somewhat analogous to that separate but very heroic act in the military where you ask artillery to come down on your own location, which would be the best choice in terms of trying to solve the immediate problem. so i think it’s desperate, but i think it’s very heroic. tom’s place is very simple. he was part of the original team that made the republicans a majority. whenever someone leaves at a time not of their own choosing, people tend to look at the immediate surroundings and place far more emphasis on the immediate surroundings because of the way in which they leave. i think what you have to do is put tom in, first oful, a decade frame of what he accomplished and what he was able to do and then two or three decade frame as the place has changed.
>> is this a blow to republicans?
>> no, i think we hold that seat.
>> let me ask you about other issues, if i could. starting first of all with trade and some of the comments you made, even in a speech yesterday about the global trade situation.
>> and today.
>> and today, as well. you talked about irreconcilable differences between the u.s. and e.u. as the global trade talks continue, as we continue the doha round. what, exactly, has led to these irreconcilable differences? who’s responsible?
>> you don’t have to place blame if you come to a conclusion. i base it on my personal direct involvement over 30 years with the european union, both the parliamentarians and the commissions and the structure. they have a welfare state with a high subsidy in their agriculture, which they use as their welfare policy. and they still operate very much in a mercantile way with colonies in which they give preferential treatment to those colonies and they’re not going to change, unless it’s more painful for them to change than retain the current system. what i mean by an enabler is we have not made it so painful that they have decided to change. and at some point, if they aren’t going to change, and that’s one of the primary reasons we aren’t moving forward in trade, the lesser developed countries, which have probably only agricultural products or simple handcrafts to move into market , they should have a duty-free, quota-free structure. we should ask for very little in return other than scientific tests for sanitation on agricultural products, protection of intellectual property rights. europeans simply refuse to do this. they will not give up their preferential position. that’s where we have irreconcilable differences and i believe staying with them is holding back the continued gantion for everyone, especially the lesser developed countries. and separating from them will actually be a boon, letting them know they can’t control the structure.
>> so the bush administration should walk away from the current doha talks?
>> i didn’t say that. your reporter at both of these events has gotten it wrong twice. i did not say we should walk away. i said we should let the doha round come to whatever conclusion it does. the point is, it won’t come to much, because of what has transpired. we have limited resources and we have to renew the ability of the president to negotiate agreements in the middle of next year. what we do between now and then will determine a lot of people’s votes. if you simply say we’re going to try to ride out the doha round and hope it produces sufficient quality of change that people will be excited about extending this power, you’re making, i think, a very serious mistake. that’s why i said, turn to those areas we have th ability to totally influence the outcome, the free trade agreements, the bilaterals, if you will, and make those as successful as possible. korea the one you’re most interested in because we have $80 billion worth of two-way trade. it’s not a lesser developed country. it is a major country in a key location in asia. and if we could accomplish that, we could say, that’s why we want the trade promotion authority. using and hoping the doha round gives us enough to extend the trade promotion authority is, i think, not the best strategy.
>> do you think trade promotion authority right now, if it were to come up for a vote at this point in time, would it be dead?
>> i can’t make that kind of a flat-out statement. i think the chances are probably worse than we’ve seen in recent years because we have been riding this doha horse, camel, and it isn’t getting us where we need to go. people are not required to give you a yes vote. you earn a yes vote. and i don’t think what has been accomplished in the doha round will earn enough yes votes. we have to do other things.
>> you’ve talked, in your speech yesterday and perhaps again today, you’ve talked about an anti-trade, anti-globalization sentiment perhaps in the congress, even in the country. why do you think that is right now? why is this anti-trade sentiment if that is prevailing in the congress?
>> it tends to be cyclical, to a certain extent, when you look at if historically. i also believe that the kind of language, the rhetoric used surrounding, especially following 9/11, the questions of security, both societal protection and individual protection, will dominate the language about immigration reform and certainly dominates, for example, with the dubai world port issue. there were very few members who looked at the facts before they used very strong rhetoric. and, for example, most of the debate around trade has been, “i hear a giant sucking sound south of the border.” there may be lost jobs, actually, the statistics show that we gained, but there are localized problems. you can handle those kinds of debates. but when the debate is, if we let a company owned by a country control our ports, our way of life is in danger and your life is in danger. that kind of rhetoric isn’t very reasonable.
>> i’m going to hold you right there and keep you here through the break, if we could. we’ll be right back.
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Listen Interview: Chairman of the House Ways and Means Committee
>> welcome back to “money & politics.” i’m peter cook reporting from here in washington. with me, still, the chairman of the house ways and means committee, bill thomas of california. thanks, again, for your time. i want to talk about taxes. a lot of people give you credit for helping push through the president’s tax cuts in his first term. what is it you’d like to see done with regard to taxes going forward? is extending the capital gains and dividend tax cuts something you feel should be a priority?
>> i think it’s important because certainty and short of certainty, at least enough lead time to think you can make decisions is critical in the field of investment. we provided a five-year window. remember, all of the tax changes, because of the rules of the senate, can only be for a maximum of 10 years. so nothing is permanent. and it seems to me that it’s not difficult to connect the increased revenue and the return to equity being the primary consideration rather than debt. i can’t help but think if we had equity instead of debt, a few years ago, some of the decisions that were made, criminals will be criminals and crooks are crooks, but having equity rather than debt would have made, i think, a significant difference in the way the country went and i think it needs to be renewed and i believe it will be. we will extend the dividends and cap gains. the other tax cuts will have to be determined in the course of when they expire. some of them don’t expire until 2010, obviously.
>> is that frustrating for you in that you weren’t able to do more in the way of taxes before leaving congress?
>> you have to deal with reality. it takes 60 votes in the senate. no matter has had a 60-vote majority for a long time. we currently have 55. you have to deal with the numbers you have. that’s just the way it is. we could have offered blank sheets of paper for all those reductions for individuals, blank sheets of paper for the dividends and cap gains, blank sheets of paper for the corporate tax changes we would have made because that is what the alternative would have been if we wanted permanent change so you do what you can do and you hope you’ve earned the ability not only to extend them but to get 60 votes because of the impact they’ve had on the economy. if we don’t do more fundamental changing of the tax code, we are ill equipped to deal with the principal battleground in the 21st century, international trade.
>> the president got the tax penal together―panel together and made the decision not to go forward this year. is that a mistake?
>> i don’t judge people in terms of mistake but don’t’t think you put parameters on people. my argument is, if you don’t like the work product they turned out, let’s see yours. that’s probably what’s most frustrating, because the people who have the ability to change the law, the members of the house and senate and especially the members of the party who criticized the president, do a pretty good job of criticizing but they don’t do the other part of that responsibility, to offer an alternative. so you’re going to find that most of the criticism is totally driven by politics and about what we need is less politics, more pragmatism and getting the united states ready not only in terms of our aging seniors in terms of social security change, continued change in medicare, but change in the tax code so that the benefits we’ve accrued from being the strongest nation on earth, the largest trader, largest importer, largest exporter, can continue. it won’t if we don’t make more fundamental changes in the tax code.
>> a couple of seconds left, sir. i want to ask you about your future. there have been talk about changes within the administration. would you consider taking a job within the administration?
>> i’m not able to tak a job in the administration because i have a job right now. i have a job that’s open-ended, not totally ended because a session of congress can only last one year and i have to finish this and it will be an enjoyable finish, i have to tell you. so you’ll have to ask me that question when i’m no longer employed in my current position.
>> chairman bill thomas of the house ways and means committee, we appreciate your time. >> coming next, climate change and congress. the senate energy committee gets industry input on global warming. our lizzy o’leary looks at what companies had to say. and a vote of confidence testify treasury secretary when “money & politics” continues.
