Transcript: David Axelrod on State of the Union

October 17, 2010

From CNN’s State of the Union with Candy Crowley

CROWLEY: No matter how much money is spent this election season, next January President Obama will, in all likelihood, have to work in a very different political reality that includes fewer Democrats and more Republicans on Capitol Hill. In a wide-ranging interview in today’s New York Times magazine, Peter Baker offers a glimpse into what an aide called Obama 2.0.

“I keep a checklist of what we have committed to doing,” the president says, “and we’ve probably accomplished 70 percent of the things that we talked about during the campaign, and I hope as long as I’m president, I’ve got a chance to work on the other 30 percent.”

And that 30 percent includes immigration and energy reform and reining in government spending in times of great need. Joining me to discuss this and more is David Axelrod, a senior adviser to the president, up in Boston today. Thanks so much, David, for joining us.

AXELROD: Happy to be here, Candy, thanks.

CROWLEY: Let me start first, before we get to campaign spending, with the president’s last two years agenda in his first term. What is the single most important priority come the end of January?

AXELROD: Well, look, we have two continuing priorities. One is to generate more growth and jobs. That’s fundamental. We’re still digging out from the worst recession since the Great Depression, and there’s been a lot of devastation from that, that we have to heal, and that means accelerating our recovery. We’ve had nine straight months of private sector job growth, but we need more of it, so that’s certainly going to continue to be a focus.

But in the mid and long-term, we do also have to focus on our fiscal situation. We didn’t just inherit a financial crisis and an economic crisis, but also a fiscal crisis, and we have to — and we have to deal with that, and lay the foundation for future growth. Fiscal reform is part of that. Energy is a part of that. Managing the health reform…

CROWLEY: What about immigration?

AXELROD: …is part of that. Education reform is part of that, and certainly immigration is an issue that we want to tackle. You know, a couple of years ago, there were 11 Republicans in the United States Senate who worked with Democrats to try and pass immigration reform. There were none in this last couple of years, but it’s an issue we have to solve. We have to impose some responsibility and accountability on this system and on people who are here illegally, on the borders, on employers who are skirting the law.

We also have to address the issue of people who are coming here to study. They’re being educated in American universities, and then they go back to their countries because our immigration laws don’t allow them to stay. They go back to their countries, and so we create assets for foreign competitors, and that’s another issue we have to address. So immigration certainly is part of the agenda we want to address going forward.

CROWLEY: One of the things in this interview that I found interesting, the interview with Peter Baker, is the president said, look, if the Republicans win in this election, they’re going to have to prove they can lead if they take over a majority. If they lose, they’re going to be more contrite and they are going to have to work with me. What does the president have to do in what is very likely to be that changing political environment? Does he have to change a thing?

AXELROD: Candy, from the moment we arrived here, our goal and our aspiration was to get past this very destructive hyperpartisan environment in Washington because we had big challenges to solve. One of our great disappointments was that the Republican Party made a political decision essentially not to cooperate.

CROWLEY: But did the — I’m asking about the president.


CROWLEY: What does the president need to do?

AXELROD: I understand, but Candy, it takes two to tango. The president…


AXELROD: … I’ll never forget — I’ll never forget the president going up to the House to talk to them about the Recovery Act, and the entire Republican House caucus issuing a statement before he arrived to meet with him saying they were going to vote en masse against his plan. We have to get past that…

CROWLEY: So you think it’s all the atmosphere (ph) is all the Republicans?

AXELROD: … and recognize we both have — we both have responsibilities for the future of the country.

So what I’m saying is we’re going to continue to reach out, Candy, and we’re going to look for common ground, and a way forward to solve the problems facing this country, and we’re hoping that — the Republicans will have more seats in Congress regardless of whether they have control or not. We’re hoping with that comes a greater sense of responsibility. The last two years weren’t encouraging…

CROWLEY: So you think it’s up to them, really.

AXELROD: … but perhaps the future will be. Well, I think that it’s up to us to extend our hand, as we have before. It’s up to them to decide whether they’re going to take it or whether they’re going to do what they’ve done for the last two years.

CROWLEY: Let me turn you to the economy here, because the Fed chief, Ben Bernanke, said this past week that the economy is more sluggish than he thought, that he believes given this current conditions of the economy, that unemployment is going to remain high for perhaps the next couple of years was the indication. He was talking about the Fed having to do more to kind of get more money into the marketplace.

Given that environment, is it still wise for you all to stick with the idea that you ought to take money out of the marketplace by allowing tax rates to go up on the wealthy?

AXELROD: Well, look, Candy, if you look at the Congressional Budget Office and all the other studies that have been done, the least stimulative tax cut we could give would be a tax cut to millionaires and billionaires who already have…

CROWLEY: But it’s still stimulative in a bad economy.

AXELROD: … money (inaudible) — and nobody wants to borrow $700 billion more to pay for tax cuts that aren’t going to stimulate the economy and aren’t going to benefit the 98 percent of the American people.

We want a tax cut for the middle class, up to $250,000. Everyone would get a tax cut up to $250,000 of income. That would be stimulative, because people who need money in their pocket to spend and pay for the things that they need to live would have more money in their pocket. That makes sense. We proposed other tax cuts. We want to accelerate expensing so that businesses can buy equipment next year and not pay taxes on those purchases next year. We want …

CROWLEY: How about capital gains?

AXELROD: … a permanent research and development tax credit. Well, we believe that there should be action on capital gains, but not to go back to where it was, perhaps to 20 percent. That would be a responsible level and would still encourage growth in investment.

CROWLEY: So you are sort of willing at some point — people think this might be a risk — you need to have money stay in the marketplace, so that people will buy things, and even if you can make the case that the rich don’t spend as much as a percentage of their income, they still spend something, and that is money that businesses say they need in the marketplace so people will buy their stuff. So that they can make more stuff.

AXELROD: Businesses — listen, what we need to do is get a tax cut to the middle class, Candy.

But the other thing that’s weighing down on our economy and you hinted at it and certainly Mr. Bernanke has, is our fiscal — is our fiscal situation. And the notion that we borrow $700 billion for the next ten years from China or some other country in order to pay for tax cuts for millionaires and billionaires doesn’t make sense. This is part of how we got in trouble in the first place.

CROWLEY: But it’s going to cost you to do it for the middle class.

AXELROD: So we ought to do the things that make sense for our economy. Let’s talk about the tax cuts that I just mentioned, that actually have — that everyone agrees would stimulate the economy, and focus on putting the emphasis where it belongs.

CROWLEY: We’ve got to take a quick break, so maybe if I could get a yes or no. Do you think that there is any wiggle room in that position? Are you adamantly against anything that would even temporarily extend those tax cuts for those making $250,000 and up?

AXELROD: We don’t think tax cuts for the middle class should be held hostage for tax cuts for the wealthy.


AXELROD: … that would cost…

CROWLEY: Wiggle room?

AXELROD: … 700 billion we would have to borrow.

CROWLEY: So no wiggle room?

AXELROD: You heard my position, Candy.

CROWLEY: All right. Thanks. Stick with me, David. Up next, is the president off the mark with those claims about shadowy campaign cash? David Axelrod stays with us.


CROWLEY: In our next segment we’ll turn our conversation with David Axelrod to campaign spending, now a staple of the president’s campaign rhetoric. The White House argument is twofold. This DNC ad covers the first.


UNIDENTIFIED MALE: The U.S. Chamber of Commerce, they’re shills for big business and they’re stealing our democracy. It appears they’ve even taken secret foreign money to influence our elections.


CROWLEY: No outside fact checker has found any evidence that latter charge is true. Three million businesses, mostly domestic, and some foreign are dues-paying members of the U.S. Chamber of Commerce, an estimated $100,000, or less than 1 percent of the chamber’s total budget come from the dues of foreign businesses.

The Chamber adamantly denies the charge and there is no evidence that money from foreign dues is funding the Chamber’s political ads.

Moving on to the second objection, this time directly from Mr. Axelrod.


AXELROD: Tens of millions of dollars from undisclosed donors under benign names like the American Crossroads Fund, and they’re spending heavily in all of these elections.


CROWLEY: He is talking about groups classified by the IRS as 501(c)s. These are non-profit organizations that list their primary mission as something other than political so they don’t have to tell who gives them money. Crossroads GPS and the U.S. Chamber of Commerce fall in this category.

What do voters make of all of this? In a recent poll 47 percent said a candidate promoted by groups with anonymous donors is less likely to get their vote, 41 percent said it doesn’t matter. Campaign cash with David Axelrod, next.


CROWLEY: We are back with Senior White House Adviser David Axelrod.

Let’s get right to it. You and the president, a lot of other Democrats have been complaining particularly about the Chamber of Commerce, which doesn’t release its — who is supporting some of these ads that it’s out there, and it’s out there with millions of dollars worth of ads in some key states.

And every single fact-check has said there is just no proof of this. Why do you sort of continue to push this idea that the Chamber is doing something illegal, because it would be illegal to use foreign money in campaigns?

AXELROD: First of all, I think that is not the main question. I would ask you, because I know you’re a great reporter, of the $75 million they’re spending on campaigns, how much comes from companies with foreign investments? How much comes from the insurance industry? How much comes from the — Wall Street? How much comes from the oil industry? I’d ask you that.

CROWLEY: Sure, I mean, all of which would be…

AXELROD: No, no, I’m honestly asking — I’m asking you a question, Candy. How much comes from each of those places? You don’t know, because they don’t disclose.

CROWLEY: Right, sure.

AXELROD: They say, trust us, trust us, we’re — everything is cool, everything is kosher, don’t worry about it, but we’re not going to disclose. Let me tell you something, people don’t disclose, there’s a reason.

We tried to pass a law through the United States Congress that would force all these organizations, whether they support Democrats or Republicans, to disclose where their money is coming from. Fifty-nine Democrats in the Senate voted for it, every Democrat, 41 Republicans in the Senate used a procedural technique, a filibuster, to block a vote on this, because they wanted to keep it secret. Why?

CROWLEY: Well, let me back this up then and say you’re perfectly right and it is perfectly legal for these groups that are classified as not having their primary mission be political to keep their donors a secret. Totally legal.

AXELROD: If, by the way — it’s perfectly legal if they spend a majority of their money on something else, it will be interesting to see if that’s the case.


AXELROD: Because all of these funds, all of the sudden Karl Rove creates a fund, it now has, you know, upwards of $50 million that they’re spending, probably over $100 million by the end of this in campaigns across the country. And there are dozens of these sprung up, all run by Republican political operatives, called “social welfare organizations.”

There’s one called The Committee for Truth in Politics, ironically named because they won’t reveal their contributors, that is based in North Carolina. And their mission, their stated mission, is to promote the social welfare of North Carolina. And they’re running negative ads against Democratic candidates in Washington, in California, and in Ohio.

You tell me if this is on the up-and-up.

CROWLEY: OK. Let’s — OK, we’ve established that it’s legal and it’s an even playing field. Democrat-leaning groups could do this, in fact, Democratic-leaning groups are doing it with much less success than Republican groups are doing this. So you can understand why at this point Republicans are going, you know, they are losing this perfectly legal battle to go on the air and this is sour grapes. That you all are using this as a way to stoke your base, and say, oh my goodness, the big insurance companies are coming, the big businesses are coming. And it’s because you don’t want to talk about the economy, you don’t want to talk about TARP. You don’t want to talk about…

AXELROD: This is about…

CROWLEY: … the stimulus bill.

AXELROD: Candy, let me tell you something, this is about the economy because if an interest group can give millions of dollars to Karl Rove secretly and he can run ads — negative ads against Democratic candidates across the country under the American Crossroads Fund rubric or The Committee for Truth in Politics or these others, they’re going to have tremendous influence over the future.

The chairman of the Senate Republican Committee, Senator Cornyn, says their first missions will be repeal health reform and repeal financial reform. And that means, for example, on financial reform, that we’re going to go back to the time of hidden fees and hidden penalties, of the mortgage chicanery, and no one will know who is paying for these ads.

Ask these folks why they feel it’s necessary to keep these funds secret. We tried to make them public, even the Democratic funds — Democratic-leaning funds. We don’t think anybody should keep these things secret.

CROWLEY: Well, can’t we ask…

AXELROD: If you can walk into…

CROWLEY: … then what are the Democratic…

AXELROD: If you can walk into…

CROWLEY: Can’t we ask then, I mean, you have like Americans United for Change and other Democratic groups who also aren’t revealing their donors. What are they hiding? Isn’t that a legit question?

AXELROD: If we passed — yes. Candy, look, I think that we believe deeply in disclosure, no matter who is running the ads. Now you said in your opening, you’re right, it’s 6 to 1 this spending in favor of Republican candidates. And in Colorado Michael Bennet, a fine senator, has six different funds running ads against him. He is being out-spent 3 to 1.

These funds, Karl Rove’s group said they’re going to plunk down $50 million in the last three weeks of the House races. That’s more than the Democratic Congressional Campaign Committee will spend in the entire cycle. So these secret special interest funds will have a louder voice in the last three weeks of this cycle than the Democratic Party did throughout the cycle.

There’s something fundamentally wrong with that. And if they don’t want to disclose who their money is coming from, there’s a reason for that. And the reason is, they don’t want to say, this ad was brought to you by Wall Street, this ad was — who wants to repeal financial reform, this ad was brought to you by the health insurance industry who wants to repeal health insurance reform, this ad was brought to you by the oil industry that doesn’t want to have to be responsible when they leak oil in the Gulf of Mexico.

CROWLEY: If these Democratic groups who say they simply are unable to raise this kind of money in this particular environment, that Democrats particularly on the liberal side who are prone to give big money into some of these independent Democratic-leaning groups are just not doing it this year, if you had that kind of money that could go into independent groups, wouldn’t you be happy they were using that money? It is totally legal.

AXELROD: Well, look, obviously this gives a huge advantage to Republicans, but this isn’t just a threat to the Democratic Party, Candy. If someone can walk into a congressional office and say, if you don’t vote my way, the insurance industry or Wall Street, if you don’t vote our way, we’re going to give Karl Rove $10 million and we’re going to blow you away in the next election, what kind of impact is that going to have on our country?

That’s why we support a law to disclose all of it, Republicans or Democrats. And, you know, speaking of Mr. Rove, back in 2004, when Democratic groups were spending heavily that election, he complained about that. But all of those groups disclosed where the money was coming from.

We didn’t hide where the money was coming from. And yet he said it was a threat to democracy. Well, what about secret funds, funded by special interests? That is a threat to our democracy. And, you know, he may have switched 180 on this when it’s to his advantage. I’m going to maintain that it’s bad whether it’s done on behalf of Democrats or Republicans.

CROWLEY: One quick point and then a question. The quick point being that when we looked at the House races, all of the spending, parties, candidates, outside groups, Democrats are still outspending Republicans on this.

But let me move you on to just the final question, and that is the Republicans have said all along when it came to finance reform, listen, we’re for full disclosure. Everybody would say how much they put in, let’s take off the contribution limits and just disclose everything. What’s wrong with that? You could have had a deal but you didn’t deal with them?

AXELROD: Well, look, if we — we have taken off the contribution limits. We’ve just taken them off for big corporations and special interests who can give money to these secret funds. If you and I give a contribution, it’s limited to $2,300 and we have to divulge that we’re participating.

Through these funds, they can give unlimited amounts of money. They can give $100 million and never have to disclose, and that’s wrong.

Listen, Mitch McConnell, the leader of the Senate Republicans, has been an avowed enemy of any kind of finance — campaign finance reform, whether it was McCain-Feingold or any of the others. He wants unfettered ability to tap these special interests to support his candidates.

And that’s why we don’t have — that’s why we don’t know who is contributing this money today. So you should direct your questions to Senator McConnell.

CROWLEY: Thank you so much. We’ll do that the next time we have him. David Axelrod…


CROWLEY: … senior adviser to the president, thanks for your time. Appreciate it.

AXELROD: Happy to be here, thank you.

– END –

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