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And hello again from Fox News in Washington.
In the next few days the Senate is expected to approve its version of an economic stimulus package.
Then tough bargaining with the house over it's very different plan before a final bill reaches president Obama.
For more we're joined by the president's top economic adviser Lawrence Summers -- Summers welcome back to Fox News glad to be with you.
The son that has reached a tentative agreement on the stimulus package of 827.
Billion dollars which has more.
Ian tax cuts but less government spending how big a re right do you expect when the two versions thousands and versions get to that conference can.
Chris we got to begin with what's most important.
The economy lost 600000 jobs just in January.
Lost three million jobs last year.
We've got to get this economy some help.
The Senate bill the house bill the overlap it's ninety plus percent.
We've got to work through the differences.
Find the best bill we possibly can.
And getting in place as quickly as possible to contain what is a very damaging and potentially deflationary.
Spiral that's gotta be the priority now so yes let's argue vigorously let's work through.
The differences let's make sure we scrub out any wasteful programs let's make sure we preserve.
Key investments let's make sure we give incentives where those incentives can make a big difference.
But you know what's agreed.
Between that house and senate is at the end of the day.
Much more important for preserving this economy than what's disagreed and so if there was ever a moment to transcend politics.
This is that moment and that's what I'm very much hope will take place as this legislation moves forward.
Before we get into the specifics and there are some not -- minor differences between the two bills.
Is the president standing firm on February 16 deadline -- is it realistic to expect that you can work out some sizable differences.
In less than a week.
President believes we need is legislation absolutely as soon as we can.
He believes it is speaker policy is stated as majority leader Reid has stated.
That that congress has to stay here.
Avoid their traditional recess until.
Has passed there are too many jobs at state.
-- basic economic security ability.
To meet their needs for too many families.
Are on the line with these for this to become a -- for this to become a traditional political football it's.
Gotta happen it's got to happen and it's got to happen.
Very fast and there's no reason why can't.
Happened very fast with Goodwill on all sides by the February 16 deadline it can happen very fast before the congressional -- for the congressional.
Recess it's not a battle this hour or that our it's about getting this done as rapidly as possible.
For the American people are.
I want to explore some of the major differences in the house and senate versions of them up on the screen the Senate bill cuts aid to the states especially for education.
By forty billion dollars of cuts five billion dollars for health coverage for unemployed workers and SA it's two billion by phasing out payroll tax credits.
At lower income levels the biggest difference is that in addition.
To the immediate economic stimulus.
You were pushing and the house passed a lot of what you're calling long term investment what critics are calling is more government spending do you just want to see some about the stored in the final version.
There are strong elements in the Senate bill.
There are some very strong.
Elements in that house bill and what we've got to do is take the best of both.
We believe for example that it is critically important at a time when too many of our kids you know we say education is our most important priority.
But I have visited school afterschool.
Where the paint has fallen off the walls.
A collective believe us when we say that.
So we believe school modernization is.
Absolutely essential investment in the competitiveness in the future of our country want to -- that's an investment banks and investment that can take place quickly.
It's an investment that's labor intensive in restoring schools and install in laboratories based in our kids.
Need to compete that's a place that where we think there's very important investments.
To be -- Is that the capacity to scrub.
This bill other expenditures sit in in the bill that probably -- the highest priority.
I'm not going to tell you that every item is the highest priority of the president really wants this not to be done the traditional Washington way.
That's why he said no earmarks.
That's why he's back out transparency and accountability on every project.
And I'm sure there are improvements that can be made.
By taking resources out of certain investments where.
They've been inserted that's why we have a complex legislative process in this country so that.
Deals do get honed and perfected.
All along along the way but let's not.
Focus and we do that much too often in Washington we focus on the bit of difference we focus on where the political.
Fight is 90% of these bills are essentially overlapping.
There isn't a lot of disagreement the -- create.
Three million and some jobs.
Wants war get out get moving start preserving those jobs.
Last month you've set what you call free principles for what we needed in economic stimulus package you said it had to be timely.
Had to be targeted and it had to be temporary but there are products.
From both sides who say that these plans fail on all three points the Congressional Budget Office.
Says only 64%.
Of the house plan.
Actually gets out on the economy in the next two years to -- that time.
Well if you look.
Two the effects.
Of even if some of the money is spent with the delay.
The hiring begins even before the governments of the position to reimburse somebody.
For the completion.
Of a road project or a bridge project.
And I'll -- Chris looking.
Where the economic forecasts.
Are right now.
I think this economy still needs some support.
Two years from now.
And so I think the idea that not a 100% that spends out in the next.
Two years she's actually a prudent one.
But you know we can equivalent hassle about the the numbers.
A variety of efforts under way to accelerate the process of disbursement for infrastructure investment.
For example and so I can assure you that at the end of the day.
The figure will be.
More than 64%.
Clinton budget director Alice Rivlin says that much of this program both in both bills is social spending that has nothing to do with immediate economic stimulus maybe legitimate social spending the social spending.
So how -- that target.
You know it it its its interest in Alice Rivlin is one of the most respected voices in this town.
She had some concerns about.
The bill but if you read this morning's Washington Post she made clear that what she thinks is important now is that it pass as rapidly as passable.
What's social spending some people think that giving support to enable a -- lower middle income families and -- had a college.
Is -- kind of social support.
I think it's a her valuable function that lays the groundwork could get laid the ground for Patrick Harris -- that this it's not if you preventive family from selling its house.
To send their kid to college and keep that houseful of the market and from depressed in the community I think that's economic stimulus.
If you enable.
That family to avoid cutting back on expenditures that's economic stimulus and I have kids myself and college and I can tell you that if you put money in their pockets it's very unlikely to be saved it's very likely to be spent.
And that's stimulus as well.
Anyone getting unemployment benefits would be eligible for Medicaid.
The house plan doubles the budget for the Department of Education over two years.
Aren't you creating a permanent expansion of government.
That will be anything but temper.
Have to look overall.
The whole program and the vast majority of the news investments.
Setting the groundwork for a future prosperity or their responses to account -- -- situation.
Look there is a lot more money.
For health insurance for people who were laid off.
And you know why that is it's because there are a lot more people who were being laid off.
And so we need to spend a lot more money on health insurance that the question is how you can -- make it -- the question is are you creating a new government -- -- -- spending.
And we're going to be at that level from now on that they get to these two years we're not going to go back down we're going to -- government programs that -- model.
But I think I was just -- Responding to responding Chris when I said that the reason there's a big increase in spending.
For health insurance.
Is because we've got many many more people who are being laid off.
And so you know will not be permanently in the budget because at some point among or we will work we will work through this recession -- and it is spending will come down.
President's been very clear.
In support war.
Education is temporary support to prevent teachers from being laid off.
Pressure on budgets of communities laying off cops hand off teachers giving them help so that those things don't have to happen.
We're not going to be in this situation.
Permanently and so these programs are going to be necessary.
Permanently so these are directly responsive to.
What is crucial problem for our country in terms of the recession the administration has come up with a plan for.
What's called park to the second half of the financial rescue plan instead of starting.
A government -- bank for toxic assets -- and offer incentives for private investors.
To to buy out these securities.
Do you really believe regardless of these insanity give that the private market will pick up these assets.
You know it and.
Very interest and we've received a whole variety of proposals.
Private investment firm -- from provide private two.
For how private capital can be part.
Of the solution to this problem.
He can't all be private capital would get to say private sector please invest not given the size of the financial mess that we inherited.
But with the right kinds.
With the right kinds of financing.
Mom and other type of thing you've already seen is the actions -- the Federal Reserve.
Started taking some months ago to purchase mortgage backed securities that have brought mortgages.
What mortgage rates.
Considerably with the right strategic approaches secretary Geiger believes that.
We can bring in substantial.
Private capital and that's -- that we all -- to be able to agree on that where we can had a -- private capital.
That's a better route to solving.
This problem -- government resources but I don't want to mislead people.
We are inheriting.
The worst financial system.
We're inheriting a situation -- when people go back and study major banking crises a quarter century from now the one that America.
Developed in 2007.
He's going to be one of those crises so we're not going to solve it in a day or week we're not going to solve it without.
But we are going to solve it.
By being as effective and strategic as we possibly can in the use of public money so -- to cattle lies and spur private investment.
Let's talk about Larry Summers you are the president's top economic adviser at the White House Timothy Geithner as treasury Paul poker.
It's had at the economic advisory board has been some partisan there too many shots.
Who is the president's top man on the economy.
President's top man on the economy.
Is the president.
He listens to advice from all of us.
He thinks about both narrow economic issues and frankly the much broader interest of with a country.
Needs to be four years from now where it needs to be.
Forty years from now and he gives us all.
The direction that we using whatever technical skills we possess try to implement and I read a number of stories preparing for this interview.
And forgive me kept coming up overbearing.
Abrasive not always politics and what you say.
How do you play.
Well I just lead.
Then on someone who's trying to help this president's two shares my opinions but also worked very hard.
To make sure if he gets access to.
The best opinions that there are.
There and I think here.
High degree of intensity.
Is needed on all of our parts if we're going to address.
What is a very serious financial crisis site you're trying to be a kinder gentler Larry Summers -- is isn't about my personalities is about anybody's personalities is about.
Three and a half million people.
Who have lost their jobs with -- little over.
A year this is about a serious economic crisis that we just all need to focus.
Not on each other we all need to focus on a problem.
Daddy's a man's hand.
Immediate energy and demand.
All of our efforts and that's what the president has -- we do but let me just ask you about it and one aspect -- may affect policies there is some concern among some observers that you are so sure you are right.
That you're going to push your ideas and not be be honest broker so that everybody's eyes and made very clear he's got.
Tolerance he values everybody's advice.
But he doesn't value anybody's advice to a school and other fights and that's the rules the world play that's why the president didn't want to have.
His advice just come.
From all of us who are working on his economic team and OMB and treasury the National Economic Council.
But is established a group.
Business and labor economists and practitioners people who voted for him people who probably didn't.
Vote for him to make sure that he's got all.
The best advice.
Chaired by Paul Volcker who has.
Immense experience and work through.
The worst previous economic crisis that the country's head mr.
Summers in thank you.
Thank you for coming in today and please come back to give us an update as you try to work through this mess thanks very much for having.
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