Oklahoma Senator Tom Coburn with all the reasons why not to support the non-stimulus bill
HH: We start with Oklahoma’s great United States Senator, Doc Tom Coburn. Doc Coburn, before we go to the stimulus bill, I know you’re close with Norm Coleman. Norm told me that when I was up there campaigning for him. Great news out of Minnesota today. There’s still life in that old campaign yet.
TC: You bet. 4,800 ballots are going to get counted that should have.
HH: And do you have any idea of whether some of that 225 is going to get disqualified yet? I can’t…
TC: Well, that’s the other point in the trial. There’s 125 votes for sure that were double counted. And so that’s something they haven’t ruled on yet, and we have to wait on that. So if that 125 that were double counted for Al Franken get eliminated, he’s down to 100, and most of these ballots are from Republican precincts.
HH: Are you feeling pretty good about this, Tom Coburn?
TC: Well, I’m praying for him every day.
HH: I didn’t know you two were such pals. He told me that you’ve spent a lot of time in fellowship with him, and that’s a wonderful thing.
TC: I do, I do. Any day without Al Franken in the Senate is a good day.
HH: (laughing) Okay, Doc Coburn, earlier today I talked with Lamar Alexander about the stimulus bill, and he told me you were out there trying to kill Hollywood. Now I’m from Hollywood. We need our stimulus out here as well. Tell me about that bill.
TC: Well, there’s $246 million dollars, which is nothing but a gift to pay back all the Hollywood money that went into the Democratic campaign. And it was specifically for the large producers, one year, one time tax credit to give them money, no matter what. They had the biggest January they’ve ever had. They’ve had one of the best summers they’ve ever had. They’re making money hand over fist. And now is not the time to send money. And by the way, I won the amendment on the floor, and it’s out of the bill.
HH: No kidding? Well…
TC: But they’ll probably put it back in conference.
HH: All right, now give us the overview. I don’t know the specifics on that. I do believe that the industry struggles, and I don’t know the specifics, so I’m going to reserve judgment on that one. I know you’re hell on spending all over the place. Generally speaking, is this bill going to get to a place that Republicans are going to be able to support it?
TC: Absolutely not.
HH: There’s just no way?
TC: No, look. Hugh, when you count interest, this is a $1.3 trillion dollar bill. It supposedly either saves or creates three million jobs. 600,000 of those are federal employees.
HH: Yeah, that’s bad.
TC: All right? If you take the 600,000 federal employees out, it costs almost $600,000 dollars a job to create it. That’s number one. It doesn’t address…look, our problem is this. As a physician, I kind of look at everything with disease and symptoms. We have the symptoms of unemployment, people can’t afford their houses, poor credit. What is the number one disease that’s causing that? And it was the fact that we socialized the risk on housing.
TC: We put every American taxpayer at risk through Fannie Mae and Freddie Mac. We now, the American taxpayer, own Fannie Mae and Freddie Mac. And we’ve got 31 million mortgages of which probably 30% are in the tank.
HH: Or upside down. Not dead, but upside down.
TC: Upside down. They’re underwater.
TC: They’re underwater. Until you fix the mortgage industry and the housing industry, you could spend $10 trillion dollars, and it’s not going to accomplish what you want. Plus, and if you really wanted to do it in a way that would truly stimulate the economy, you’d follow what JFK did, or what Reagan did. That’s the only two times we’ve had stimuli that have actually worked.
TC: And they concentrated most of their intention in letting people have back their money to spend it where they wanted to spend it rather than throw $800 billion dollars at government programs with the inefficiency of the bureaucracy, and hope it might do something.
HH: Let me ask you, Doc Coburn, you’ve got Alexander and the Ensign bill saying we want a 4% mortgage. You’ve got the Isakson bill saying $15,000 dollar tax credit for new home buyers. Are either of those or both of those going to get into the bill, in your opinion?
TC: Well, I think the $15,000 will, which will help.
HH: That will help.
TC: Yeah, and it costs $20 billion dollars to do that. What the Alexander bill does is it’s a potentially good idea. I haven’t decided on it yet. We could take and offer to everybody in the country a mortgage somewhere between 4.2 and 4.5%. Everybody.
HH: Even the jumbos?
TC: Well, up to $750,000.
HH: Okay. That’s a lot of jumbos.
TC: Our cost on that, we can fix our cost at that interest rate at 3.6% by selling 30 year T-bills at 3.6%. We could allow everybody that wants to refinance, that’s not underwater in their mortgage today, that’s not underwater in their mortgage today. What you’d have is on average, $450 dollars a month increased cash in your pocket.
HH: That’s huge.
TC: Yeah, for 31 million mortgages.
HH: Why do Democrats oppose that?
TC: Well, I’m not sure they are. We haven’t finished working it out. And the risk for us, first of all, since we own all these mortgages anyhow, we’re liable for them anyway, the taxpayer is.
TC: This is a way to make sure more don’t get in the tank, okay?
TC: And the difference is, we will have about a 60 basis point spread on that interest cost to pay for some of the mortgages that are going to go bad. Right now, we don’t have anything to pay for it.
HH: Good idea.
TC: So there’s a potential for us to do something like that. It’s not finalized. I’m not sure I’m going to back it. What it does is it would permanently say we’re going to have Freddie Mac and Fannie Mae for thirty more years, which is the problem that got us into this mess in the first place.
HH: Well, it’s a good idea, but getting us out matters. I’m also getting almost every day, Senator Coburn, emails that say I’ve got savings in the ROTH, I’ve got savings in an IRA. I can’t get them because they’re going to charge me 10% plus the tax. I could save my house, I could invest in my business. Why won’t the government let me use my money to save my most precious asset?
TC: It’s a good idea to give them 20, let them take 25% out of it tax free. And that’s one of the amendments that’s being thought about.
HH: Do you think that’s going to work?
TC: It’ll never pass.
HH: Now you are said to be, by the President himself, his big buddy on the conservative side. Have you talked to him about what a bad bill this is, Senator?
TC: No, I haven’t had an opportunity. I haven’t talked to him since this bill came. Look, he’s got lots of things. Our problem really isn’t with him, because I think he truly wants a bipartisan bill. I know he wants a bipartisan bill politically, because if the thing doesn’t work, he doesn’t want it to be just the Democrats’ ideas. And this bill won’t work. You mark my words.
HH: I agree with you on that.
TC: We’re going to add a trillion dollars to our kids’ debt, and we’re going to be right where we are.
HH: So you’ve got friends on the other side of the aisle. Do they not understand this?
TC: Look, they have far overreached in what they’re trying to do. There’s $450 billion worth of social engineering in there, and government-run programs, including $170 billion in health care. You know, they’re giddy with their win, and they’re not thinking long term.
HH: How about this provision that is going to give billions to ACORN and community organizers? It’s an assault on democracy.
TC: That’s right.
HH: Is that going to stay…
TC: I’ve got an amendment I’ll offer. I will lose that one hands down. But it’s filed, I think to get rid of that. It doesn’t create any jobs.
HH: No, it doesn’t. So what’s the glide path on the timing here, Senator Coburn? When do you think that the amendments will all be through, and we will know what the package is that you’re going to have to overall consider?
TC: Probably Saturday or Sunday.
HH: And at the end of that, if the bill is 100% bad now, what percent bad will it be on Sunday?
HH: (laughing) Is it going to continue to grow like the blob?
TC: Yeah, they’re adding things like crazy. I actually voted for an amendment today to stimulate auto sales.
HH: And what did that provide for?
TC: It gives you $1,500 dollars deduction, additional deduction, if you’ll buy a car.
TC: From November of last year forward.
HH: Okay, so people can go out and buy a car right now and not get…
TC: Yeah, and if you bought one in November of last year, you get the $1,500 dollar credit.
HH: Well, that makes sense. That’s a good…
TC: That actually will put somebody to work. If people are buying cars, it’ll given an auto worker a job.
HH: Last two questions. I have written on two other things. One, we’re not building any ships with this, and the Navy’s down to 280, and they produce real ships and they produce real jobs.
TC: Oh, yeah. We’re spending $88 million dollars to do a study on an icebreaker that’s going to cost a billion dollars which we know we need, and we can refurbish an old one for a third of that.
HH: Are we going to do that?
TC: No, we’re going to put the $88 million, I’ll never win that, and we’ll spend the billion dollars.
HH: Is there any money for serious acquisition of private property that’s completely sequestered due to Endangered Species? That way, at least if you get money back in the private sector to get out there and let those developers and landowners get using their money again?
TC: Not that I’m aware of.
TC: And I’ve love to have your people send me an e-mail on that to my staff.
HH: I will do that. Let me close by asking…you study this stuff like no one I know. How much of this bill do you know? I mean, does anyone know what’s in this bill?
TC: Oh, I can give you 500 egregious things with the bill if you’ve got time to listen.
HH: I think I’ve got the picture. Doc Coburn, thank you, we’ll check back in with you towards the end of the week if we can get you, because I really appreciate the expertise and the time you’re putting in on this. And God speed on the floor of the Senate. We need you there.
TC: All right. Thanks, Hugh.
End of interview.