Transcript: Sen. Christopher Dodd On The Fight For The Democratic Nomination
© National Journal Group Inc.
Thursday, March 27, 2008
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National Journal's Linda Douglass sat down with Sen. Christopher Dodd for the March 28 edition of "National Journal On Air." This is a transcript of their conversation.
Audio of the full show is also available.
Q: I want to welcome Senator Chris Dodd. He is the chairman of the Senate Banking Committee. He was a presidential candidate this year -- very well liked by many -- and was in the '90s the general chairman of the Democratic National Committee. Welcome, Senator Dodd.
Dodd: Thanks for having me on.Q: So you have proposed, through the Banking Committee, an economic plan -- a plan to deal with the housing crisis that is getting a lot of attention. It has been embraced by Barack Obama and Hillary [Rodham] Clinton and is getting a lot of editorial review. Can you explain how it would work?
Dodd: Yeah. First of all, it's not a terribly new idea. There are very few new ideas; this is one that was tried decades ago when we faced a similar housing crisis. So I'd love to tell you this was a novel approach. And the idea is very simple, and that is, when you have very distressed mortgages -- in the past, the federal government actually purchased them. We're not suggesting anything quite as dramatic as that, but taking the same idea, we're talking about financing these mortgages or insuring these mortgages.Q: You are having hearings in the Senate Banking Committee next week. One of the questions that certainly has been raised often in discussing your solution and others is the question of at what point might the taxpayers have to step in and bail out, say, financial institutions?The old idea is to do five different things: one, get long-term affordability for owner-occupied residences. This is a voluntary program. You have to be living in your home. You have to be willing to pay the insurance on this, which is the key. In exchange for that, you get a lower principal that you owe. But you're going to have a fixed-rate mortgage to allow you to stay in that home, and addressing that underlying issue of providing a floor and a bottom for this foreclosure market, this housing market, is critical if you're going to get capital and credit to flow again. It requires the lender to take what we call a haircut. They're going to end up getting less than they would have under the adjustable-rate mortgage, but they're going to get a lot more than they would if the property were foreclosed. So everybody pays a price here, but you get that stability. You establish that floor. It's good for the homeowner, occupied homeowner, but more importantly in many ways, it's good to get credit flowing again, get capital flowing again, which is what's really been missing in all of this issue.
Dodd: Well, I'm hoping that won't occur. And let me just say I'm generally supportive of what occurred a week and a half ago now, and that was the decision to allow J.P. Morgan to acquire, in effect, Bear Stearns, avoiding a bankruptcy of Bear Stearns, which I think could have created a global meltdown if something had not happened. So I want to begin by saying I'm generally supportive of that decision. But candidly, Linda, I don't know, nor does anyone else know, all the details of this. I do know this much -- that the Federal Reserve basically has opened the discount window, and a lot of people are going through that window and getting federal backing here, without any kind of regulation on those that are having access to that window. That's got to change, No. 1 --Q: So, more regulation?
Dodd: Well, yeah. I mean, banks, of course, they submit themselves, and they get the guarantee of the federal government. The price they pay is federal regulation to make sure they are doing things properly. When you end up having brokered dealers owned by investment banks, they are not subjected to the same kind of regulation that the banks are, and yet they're getting the full faith and credit of the United States behind them. So you've got to do something here or you run the risk of having people engaging in deceptive or fraudulent practices or unscrupulous practices and exposing the American taxpayer to a huge price tag.Q: OK, let's talk a little bit about the candidate you've endorsed, Barack Obama, and Senator Clinton. Why do you think Obama would be better at handling the economy than Senator Clinton, or do you?
Dodd: You know, my mother raised me to believe that comparisons are odious. That line you've heard over the years. So I've made a decision to support Barack Obama, but not because I'm opposed to Hillary Clinton. Quite the contrary. In fact, I know people assume you are going to say these things, but they've been good friends and I've worked with them over the years. I just think we are at a moment here, in terms of electability, when history and an individual can come together.Q: As I mentioned earlier, you were the general chairman of the Democratic National Committee. Now, you know that a lot of Democrats feel that this increasingly bitter race between Obama and Clinton is hurting the party. First of all, do you think that is true? And secondly, if you were in charge, what would you do?I spent a year and a half on the campaign trail, obviously, at debates and forums with all these candidates. Got to know them fairly well. And I believe that Barack Obama has the ability to reach across party lines -- independents, Republicans. For many years I've listened to people talk about Reagan Democrats, and clearly there were many. For the first time we are hearing someone talk about Obama Republicans. Independents who would never even consider voting for a Democrat are attracted to this candidacy, and I believe that helps us win the election in November. But more importantly, I think it helps build that kind of consensus we're looking for, and we're looking for leadership that truly will try and speak for all Americans, and I think Barack Obama offers that opportunity. It's been his appeal as a Democratic candidate and that is, I think, what is necessary to win. But more importantly, far more importantly than winning, although you've got to do that to create change, is the ability to reach across those lines and to start acting like a nation again instead of a two-party nation.
Dodd: Well, I think it is hurting. Look, we've got five more months to go before the Democratic convention at the end of August and, candidly, we cannot go five more months with the kind of daily sniping that's going on and have a candidate emerge in that convention. My hope is that it will be Barack Obama, but if it's Hillary Clinton, she too will suffer, in my view, from this kind of a campaign that I think is undermining the credibility and the quality of the two candidates that we have. We have two very strong candidates. So I'm worried about this going on endlessly and to a large extent, Linda, the media, a lot of these cable networks, are enjoying this. It's what is keeping them alive financially. The fact that this thing is going on forever, back and forth every day, all night -- I don't think it's really helping the candidates or the political institutions.Q: What's the solution?
Dodd: Well, the solution is -- look, we've got a contest coming up in Pennsylvania and one in North Carolina and Indiana very quickly afterwards. In my view, the outcome of those three races will determine -- I think the race has been determined, anyway, at this point. I think it's very difficult to imagine how anyone can believe that Barack Obama can't be the nominee of the party. I think that's a foregone conclusion, in my view, at this juncture given where things are.Q: So you're talking about putting together, what, a committee of elders? What do you mean, exactly?But certainly over the next couple of weeks, as we get into April, it seems to me then, that the national leadership of this party has to stand up and reach a conclusion. And in the absence of doing that -- and that's not easy, and I realize it's painful. But the alternatives, allowing this sort of to fester over the months of June, and July and August, I think, are irresponsible. I think you have to make a decision, and hopefully the candidates will respect it and people will rally behind a nominee that, I think, emerges from these contests over the next month. That's my suggestion. That's what I would do.
Dodd: Well, again, I think you are looking at people who are already in positions of leadership in the Congress, governors, senators, and others, the leadership of the DNC, whatever it is. It seems to me you've got to have an issue here that transcends your favorite candidate and decide whether or not the best candidate we have to win this election, to bring our country together and to get behind that choice, instead of having this sort of drip on for the next five months. That is devastating in my view. I think it hurts our candidate at a time when the country is looking for an alternative choice. I think we have an opportunity to do that. So I would advocate that we try and let this run out for the next few weeks, but then consolidate behind that candidate that's clearly the choice and will win the nomination.Q: So you go to the person who seems to be the winner after these most recent contests and you tell the other person to drop out? Is that essentially what you are saying?
Dodd: Well, it's more deciding who the winner of this is. I mean, if a person wants to stay in the race, stay in the race. But if you have enough people rallying behind what appears to be the likely choice, and I believe the choice is Barack Obama, and I believe that will be the choice over the next several weeks, then I think you have to step up to the plate and say enough is enough. We want this to be over with. We want to get behind this candidate, and we want people to pull together to win that election in November, to build those majorities in the House and the Senate if we can, and then start doing the work on health care and Iraq and all these other issues that demand our attention.Q: Well, that was fascinating, Senator Dodd. It is always great to talk to you, and I hope you'll come back and join us again.
Dodd: Anytime, Linda. Always a joy. Thanks.