Sen. Conrad: Stimulus is mixed bag
Sen. Kent Conrad (D-N.D.)
TEXT OF INTERVIEW
BOB MOON: President Obama is getting anxious. You could hear it in his voice today as he warned that the nation is sinking deeper into a crisis that he says threatens to become irreversible:
PRESIDENT OBAMA: The time for talk is over. The time for action is now.
Democratic leaders are hoping to pass the Senate's version of a stimulus package by tomorrow. In the meantime, moderates from both parties have been pushing to trim away spending they see as unnecessary.
Let's check in on their progress with the chairman of the Senate Budget Committee. North Dakota Democrat Kent Conrad on the line with us from Capitol Hill. Thanks for joining us.
KENT CONRAD: Good to be with you.
MOON: As the Senate version of this stimulus bill has taken shape this week, are you satisfied that there are things in there that will actually stimulate what needs stimulating? You've expressed some concern about that.
CONRAD: As in so much of life, it's a mixed bag. There are many elements that clearly are stimulative of the economy. Tens of billions of dollars for roads, bridges, waterways, things to rebuild the electrical grid. But there are other things that frankly are of less stimulative value that appear to have kind of been stuck in because this is a train that's leaving the station and people had a chance to get their favorite projects added on.
MOON: President Obama said today that every day that ticks away, more damage is done.
CONRAD: Oh, I think he's exactly right. I think we are very much in uncharted water. I think we are seeing a potential beginning of a deflationary spiral, which would be extraordinarily damaging to this country. And so it's critically important to have an economic recovery package. But, you know, it's also critically important that we get it right.
MOON: Is there anything in particular that you have in mind that you think would bring fast relief as opposed to something that would take a little bit more time.
CONRAD: What we know from the modeling, the econometric modeling done by outside experts, is the thing that works fastest is the government speeding up its purchases of goods and services. The second thing that has most-immediate effect is transfers of funds to the states who are otherwise going to cut their own purchases to meet their balanced budget requirements. So, the modeling shows those two things go out the fastest and have the greatest immediate impact.
MOON: You and members of the opposition party have both been talking about foreclosure reduction plans. What's in the bill that would accomplish that?
CONRAD: Well, there's precious little in the bill now. That's why Lindsay Graham, Republican of South Carolina, and I have teamed up on an amendment to provide more than $20 billion to the FDIC headed by Sheila Bair. On her foreclosure reduction plan, that's probably been the most heralded plan that anybody has come up with, it would provide for renegotiation of mortgages that are in trouble. Because we know one in five houses in America the owners are upside down. They owe more on the house than the house is worth. That means we're going to have more foreclosures, we're going to have more delinquencies, we're going to have an even deader weight on the economy unless we find a way to effectively address it.
MOON: So, are you hopeful, optimistic, certain that this is going to be on the president's desk by mid-February?
CONRAD: I'm optimistic. I'm very hopeful that we're going to make changes to improve this package. We're trying very hard to do that. At the end of the day, we've got to remember what's at stake.
MOON: Senator, thank you very much for taking time out from your work, and we wish you the best of luck in your task.
CONRAD: Thank you, sir.