Carly Fiorina discusses economic issues and the McCain campaign

CBS News Transcripts

August 3, 2008 Sunday

Show: Face the Nation 10:30 AM EST CBS


Bob Schieffer, host: Back now with Carly Fiorina, who is joining us from San Francisco. She, of course, is the former head of Hewlett-Packard, a major economic adviser for Senator McCain. Well, you heard what Mr. Rubin just said, Ms. Fiorina, and that is that this economic situation could actually get worse. What is your take on where things are right now and where we go from here?


Ms. Carly Fiorina (McCain Advisor): Well, I certainly agree with him that the situation could get worse, and there are a couple things that will make it worse. One is to raise taxes, which is what Senator Obama proposes to do. Another is to massively increase government spending, which is what Senator Obama would propose to do, over a trillion and a half in increased government spending. And the third is to become isolationist and protectionist, which Senator Obama would also propose to do. Conversely, Senator McCain has proposed a series of tax cuts, including but not limited to giving every family with a dependent a doubling of the exemption for dependents, from $3500 to $7,000. He's proposed to leave the capital gains tax right where it is as opposed to doubling it, which is what Barack Obama would do. That impacts 100 million Americans. He has proposed a comprehensive energy plan to wean us from our dependence on foreign oil. And as well, he has proposed a plan to help keep Americans in their homes as we see the credit crisis continuing to get worse. And finally, he is focused on accelerating job creation in this country, and that means helping small businesses form and grow, because small business is the engine of growth in this economy.


Schieffer: Let me just--that all sounds great and there are some good programs in there but, you know, last week the government announced that we have a $480 billion deficit.


Ms. Fiorina: That's right.


Schieffer: How do you do all of that? I mean, surely, this has to stop somewhere.


Ms. Fiorina: Well, first of all, the deficit is a huge problem and Senator McCain has consistently said that he will make sure that we balance the budget by 2013. How is that possible? Well, a couple things. First, you have to get the economy growing again. That's why small business is so important, that's why job creation is so important. That's why, by the way, a comprehensive proposal for weaning ourselves off of foreign oil is so important. And by the way, Senator Obama has consistently opposed offshore drilling and yet it's clear that offshore drilling is an important part of a comprehensive energy proposal. It's not the only part. And as we are building independence from foreign oil, we're also creating jobs, probably 700,000 jobs in the pursuit of nuclear power alone. Secondly, we have to get government spending under control. John McCain has never asked for an earmark. He has promised he would veto every bill. Barack Obama has voted for bills that are laden with pork, whether it's the 2005 Bush-Cheney energy bill, the 2008 agriculture subsidy bill; both of those John McCain voted against because they were laden with pork, both of those Barack Obama voted for.


Schieffer: All right.


Ms. Fiorina: We have to get government spending under control.


Schieffer: Let me just ask you about that because John McCain, the whole core of his campaign is, `The other guy's going to raise your taxes and I won't.' And yet last week on ABC, John McCain seemed to back off a bit of that and said, `Well, when it comes to payroll taxes, saving Social Security, that's just basically a negotiating point. Everything will be on the table.' Let's listen to how he put it here.


(Beginning of excerpt from "ABC This Week" from July 27th, 2008)


Senator John McCain: I will say that everything has to be on the table if we're going to reach a bipartisan agreement. I've been in bipartisan negotiations before, I know how you reach a conclusion. We all have to sit down together with everything on the table.


Mr. George Stephanopolous: So that means payroll tax increases are on the table as well?


Sen. McCAIN: There is nothing that's off the table. I have my positions and I'll articulate them, but nothing's off the table.


(End of excerpt)


Schieffer: So how do you say, `I'm not going to raise your taxes,' but then say, `But nothing is off the table'?


Ms. Fiorina: Yeah. Well, first of all, Senator McCain, with his vast experience in bipartisan discussions, understands that you don't begin a negotiation with an ultimatum. On the other hand, his record is crystal clear. Barack Obama has proposed solving our Social Security problem with an increase in payroll taxes. John McCain has been very explicit in saying he does not support an increase in payroll taxes, particularly because they impact small businesses and sole proprietorships more greatly than any other part of our economy. His record is very clear on that. And he has a number of economists who support his assertion that we can solve the Social Security and Medicare crisis, but particularly Social Security, without raising payroll taxes. As I think he also said in that interview, he'll make his positions very clear, he'll make the positions of economists very clear. He doesn't think it's necessary. But again, you don't start a negotiation with an ultimatum, you start a negotiation with an open mind.


Schieffer: But if that's what you're going to do, then how can you say, `I promise you I won't raise your taxes'? I mean, it just seems like two totally different things.


Ms. Fiorina: I think he's making his--well, I think he's making his position very clear, which is payroll tax increases are not the solution. He has been consistent in that position for the last many, many months, even as his opponent has proposed increases in payroll taxes. And in this regard he is supported by a number of noted economists, whether those are Marty Feldstein at Harvard or John Taylor at Stanford. There are a whole lot of experts who agree with him that raising payroll taxes may be an easy answer, but it's the wrong answer.


Schieffer: All right. What programs would he cut, specifically?


Ms. Fiorina: Well, one of the things that John McCain has said for many months now is that he would immediately institute a freeze in increases in discretionary spending for one year, and during that year he would subject every single government program to a top to bottom review. That includes, for example, defense procurement spending, it includes civilian programs. And during that top to bottom review he would post the results of those reviews on the Internet for all American citizens to see. Now, I'm a businesswoman and I know that when you create that kind of transparency and accountability you can make a difference. I also know that when federal spending has increased 60 percent in the last seven years, there is a lot of fat and a lot of opportunity to cut spending without cutting effective programs that make a difference to the American taxpayer.


Schieffer: Carly Fiorina, we want to thank you for coming by this morning.


Ms. Fiorina: My pleasure, Bob.


Schieffer: And hope to see you again.


More