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Senate Republican Whip Jon Kyl on the status of the bailout bill

Friday, September 26, 2008
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HH: Joining me to discuss what is going on with the bailout bill and everything else, the number two Republican in the United States Senate, Jon Kyl, our favorite Senator, from Arizona. Welcome, Senator Kyl, it’s good to have you here, and…

JK: Thank you, Hugh, great to be with you and your listeners.

HH: I want to start by asking you, I couldn’t get the rundown of who was in the Cabinet Room yesterday. Did the invitation extend to the Whip? Were you there? Or was it just Senator McConnell?

JK: Thankfully, it did not.

HH: (laughing) Okay.

JK: It was the Speaker, Majority Leader, Minority Leader in the two Houses, and I believe the chairmen of the Banking committees and then McCain and Obama…and of course, the President, his Cabinet people and so on.

HH: Now I’ll ask Joel Kaplan this after the break, but there are lots of stories out there including some put out by Democrats that John McCain blew up this deal yesterday. What’s your assessment of those stories?

JK: No, no. That is absolutely false. First of all, there was not a deal. Six Senators were talking yesterday to see how things were going, and they were going so well in their little meeting that they decided to keep talking, and see if they could work through a bunch of this. And several of them were well-placed. I mean, they were members of the Banking Committee, for example, and they actually came out at Noon and said look, we’ve talked this thing through, and we think that there is the essence of a deal here if we can keep talking and get the right people in the room and so on. But A) they didn’t speak for anybody, nobody had said go off and negotiate this thing on our behalf, B) they did not have a deal, and I think they’ll be the first to tell you there was no deal, they had simply worked through several of the issues. And so no, there was no deal. And in any event, John McCain didn’t blow anything up. He actually said very little at the meeting at the White House, and what he did say was constructive. He’s actually been a pretty positive force here in one key respect. Nobody seemed to be listening to House Republicans. His concerns and theirs were pretty close. When that became known, it elevated the knowledge of the fact that the House Republicans had pretty well been shut out of this. He played a constructive role in both, I think, persuading them that they had to get in the game, be reasonable about what they were requesting, and that he would help to amplify their concerns, which he did. And by the same token, he got other people to recognize that they needed to include the House Republicans, as a result of which the negotiations today go forward with a representative of the House Republicans, Roy Blunt, as well as a representative of each of the other House Democrats, Senate Republicans and Democrats, and the administration.

HH: Well, I share the dismay that the House Republicans are not or were not in the game, and had been urging them in print that they’ve got to be in the game…

JK: Right.

HH: …and they cannot simply sit on the sidelines and say no, no, no, no, no, because this is a real crisis, Senator Kyl. Are you persuaded of that?

JK: Yeah, I am persuaded of it. I saw your note earlier in the day. The more you talk to people both in and outside the government, the more concerned you get. And I am not usually like this, but I am really, really concerned, to the point that I’m willing to take some of my key free market principles and say this is one of those occasions where we have got to allow some government involvement as well, or we’re not going to have a free market to take care of. So I’m willing to lay that aside so long as we have the absolute maximum in taxpayer protections here, and we have a plan that we think will actually get the free market working again.

HH: Senator Kyl, I’m dismayed because I thought Senator McCain did the right thing to say put politics aside and go to D.C. and work on this thing. And I have seen nothing but an attempt to manipulate this by Senator Red, by Senator Obama, especially by Senator Schumer, Barney Frank. It’s just dismaying that they will do this, and I also see it amplified on the networks. What’s your response?

JK: Yeah. No, I’ve seen the same thing. Harry Reid three days ago was on the Senate floor saying John McCain has got to come back here and get involved in this, because Democrats are not going to do this all by ourselves. He’s going to have to take some ownership of this, too, just like Obama has. Okay, McCain says I’ll come back, this is serious, and I mean, there’s probably nothing more serious right now that we’re doing as a country, we are both Senators, let’s get back and see if we can help, too. Now Reid says today this is outrageous that John McCain is back here standing in front of the cameras and…first of all, John McCain hasn’t stood in front of any cameras. I know, because I’ve been with him. He’s tried to avoid as much of the press as possible. He has said very little. In fact, the other thing Reid says, and McCain won’t even tell us exactly what his plan is. Well, I mean, you want it both ways, Harry. Do you want him here or not? Do you want him to be in front of the cameras or not? The reality is that he did something very constructive behind the scenes, and now he’s going to the debate. I think it was a real sign of leadership. And I’m not being critical of Obama, either. You know, some people said Obama said well, call me when you’re ready. I’m not saying that he should have come in, because people could consider that to be grandstanding. But don’t criticize McCain when you want him here, and then you criticize him for coming. And when he does actually do a, I think, a pretty constructive job of helping to get people talking again.

HH: The only two people I have seen who’ve been in front of cameras act consistently presidential have been the President and Senator McCain in that they have not thrown bricks, they’ve attempted to keep…if it is as serious as I am led to believe, and I actually do believe, then a lot of what has happened has been reprehensible. But some of it has been very responsible, primarily President Bush and Senator McCain.

JK: Well, and I’ve seen others act…I mean, I saw Democrat Representative Paul Kanjorski on television. He was very straightforward. He was simply reporting the facts, who was doing what, what were the issues, declined to get involved in the politics of it. He’s a partisan Democrat, and I’ve had my run-ins with him, but he handled himself exactly…I told my wife, that’s great. And I hope, I’ve generally tried to do the same thing, just try to get information out there. This is so complicated, and it’s so easy for the average guy on the street whose trying to make a living and take care of his family, and can’t be expected to be an expert on all of this trading mumbo-jumbo, all he hears is that he’s going to be on the line for $700 billion dollars, and the Secretary of Treasury’s going to have a whole lot of authority, and it has to do with Wall Street. Well, I don’t blame him for saying wait a minute, what’s going on here?

HH: Right.

JK: And I think it’s up to us to explain what’s going on, that hopefully we get all the money back, number one. We’ve got a lot of taxpayer protection built into it, and number two, it’s for his benefit. This doesn’t, we did bail out some Wall Street folks two weeks ago. This is not a bailout of Wall Street firms. There’s no specific Wall Street firm involved here. This is a matter of injecting capital into the system so that companies can make their payrolls next week, so that somebody can get a car loan if they want to next week. Credit has dried up. I mean, unless you’re willing to pay a huge interest rate on it. And that whole system of credit in our country has got to be lubricated, and it’s this money which provides that lubrication so that it can get going again.

HH: Senator Kyl, I’m describing it not as a bailout of Wall Street but as a breakwater for Main Street.

JK: Yeah.

HH: And I really do believe that’s the case. But let me ask you about one specific issue that’s now exploded on the internet. My e-mail box is full, that an alleged $100 million dollars has been set aside for ACORN, this radical voter registration group often involved in the past with scandal and sometimes fraud. Is that true?

JK: No, that’s not true, but the issue is still out there. The way that this group of Senators that met yesterday, that walked through a bunch of the issues, one of the things that they said that they would encourage their colleagues to agree on is that the first, that the $700 billion dollars that’s committed to this, when it is repaid, if it is, all of that will go to debt reduction. In other words, it doesn’t go to the general treasury, can’t be spent for anything else. It buys back debt. And then what they said was, well what about if there are any profits above that. And one of the ideas tossed around was that 20% of any of the profits for the government above and beyond that would go into a so-called housing trust fund, which is the entity that then funds groups like ACORN. Well, I immediately blew the whistle, as did a bunch of other people on that, and I would be very surprised that any of those profits are designated in that way. That issue has got to be resolved in such a way that that doesn’t happen.

HH: Okay, Senator Kyl, with about a minute left, what are the prospects for this bill? What do you see happening over this weekend? What do you think’s going to happen tonight at the debate?

JK: I think it’ll take…well, I don’t know about the debate, but with regard to this, it’s going to take all weekend. It’s really hard slogging. I guess I thought a week ago that we had a slightly better than 50/50 chance to get this done by Monday or so, and I guess that’s about where I am right now. It’s slower than it should be, something has got to be done, and with the right protections, I hope that we will do it and that we’ll have it done by, it would be nice to have it done by Sunday night so the markets can open on Monday with some sense that we’re going to get about doing this.

HH: Senator Jon Kyl, good luck and good luck to Senator McConnell and the rest of the people who are working in the best interest of the country. I really do believe this is necessary, and I’ll be talking about it throughout.

End of interview.

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