ROVE SPEAKS IN NH

(From The Raw Story)

Rove spoke to a wingnut group in New Hampshire called VictoryNH. I don't know how long it will be up so I'm copying the entire interview.

Karl Rove — The Victory NH Interview

Every once and a while someone comes on the scene who manages to leave an indelible mark on our politics. We are truly honored to be joined by one of the great political strategists of our time. We hope you enjoy our exclusive interview with Assistant to the President, Deputy Chief of Staff, and Senior Advisor... Karl Rove...

VNH: First off, Ambassador Petrone wanted me to thank you personally both for joining us today and for coming to New Hampshire, as he would say, to rally the troops.

Rove: Here we go. Well, give the Ambassador & Augusta my best. They’re both remarkable people.

VNH: That they are. Let’s start with the economy. The media seems determined to ignore all of this great economic news, especially the impact of the President’s tax cuts. Talk about what he’s done, as well as their impact on job creation and the revenue they’ve brought into the treasury.

Rove: Well, it’s good to have a little bit of an historic perspective on this. Remember the conditions that the administration found when it came into office. The stock market had peaked in 2000. In fact, I think the Dow peaks in March and by the end of the year the NASDAQ is down 50%. Literally, about the time the President takes his hand off the Bible, the slowing economy late in the year of 2000 had turned into a recession. I believe it officially was charted to begin in March, but clearly the economy was slowing dramatically in the 3rd and 4th quarters of 2000. Along comes 9/11, and while the terrorist attacks did not shut down the American financial system and our economy, they did it great damage — the economy shed 1 million jobs in 90 days following 9/11.

VNH: It is remarkable how many folks seem to have forgotten how bleak things looked following 9/11.

Rove: Then we had corporate scandals. And the President’s attitude was, “Look, the best way for us to get this economy growing again is to allow people to keep some of their own money." So, we cut taxes. In fact, we cut taxes with big tax cuts in 2001 and 2003. But in essence, we’ve cut taxes every single year we’ve been here: we cut taxes on income; we cut taxes on families; we cut taxes on marriage and married couples; we cut taxes on children; we cut taxes on small businesses; we cut taxes on dividends; we cut taxes on capital gains; and we put the death tax on the road to extinction. And what has happened as a result of those well-timed tax cuts, is that the recession was one of the shallowest and shortest in modern history. We’ve created 5.3 million new jobs; we’ve got the growth rate that is the highest of any major industrialized country in the world; we’ve got productivity at near record heights; home ownership at record heights; home sales set new records last year; there are more people owning homes – particularly in the Hispanic and African-American communities – than ever before. This is a result of wise policies instituted at just the right time.

There is a deep division between the 2 parties on this. When it came time to pass the 2001 tax cuts, virtually every Republican voted for the tax cuts and three quarter of the Democrats in the Congress voted against them. And when it came time in 2003 to consider tax cuts on small business, capital gains, and dividends, virtually every Republican voted for it and 95% of the Democrats voted against it. So if the American people need to have an understanding of where the 2 parties are coming from, they’ve had no better example in the 6 years than when it comes to the questions of taxes. At a time of economic difficulty for the country, Republicans voted to cut taxes, Democrats did everything they could to obstruct it.

And what has happened over the last 2 years? You match that kind of economic growth with the kind of spending restraint that we’ve seen in the federal budget, and some powerful things happen.


Last year, between the increased revenues and restraints on spending, we had a dramatic decline in the deficit – well below the expectations of all the budget forecasters. And it’s happening again this year where revenues are running 11% above projections. That’s not because taxes have been raised, it’s because the economic growth has been so much higher as a result of lower taxes that we are blowing through the projections for the second year in a row in revenue.

As a result, we are well on the way to reducing the deficit – despite the fact that we are in a war and having to pay for the largest natural disaster in America’s history. We are on the way to cutting the deficit in half by 2009. In fact, by the middle of the summer, with the so-called mid-session review (that’s where the Office of Management and Budget and the Treasury are obligated to report to the Congress on how we’re doing on collecting revenues and restraining spending), my sense is we will see a dramatic decline in the anticipated deficit for this year, as well.

VNH: So, taxes are cut and more revenue comes into the Treasury.

Rove: Right.

VNH: And people are missing it because of the necessary spending for the War and Katrina?

Rove: Well, no, we have the necessary spending for the war and Katrina. But even then, the budget deficit is in pretty rapid decline to where we will cut the deficit in half by 2009 because of the economic growth and fiscal restraint. I don’t think too many people understand that the non-security, discretionary spending part of the budget (in the fiscal year we are in, FY06) was actually cut from the previous year’s levels. It’s 1% less than we spent in FY05. So, it’s not even adjusted for inflation or population growth — it’s an absolute cut. We proposed that again for FY07, that we will, in essence, cut again from the FY06 levels, which means that we would have 2 years in a row in which the non-security, discretionary spending in the budget actually went down.

VNH: OK, one more on spending. When Ed Feulner was here, we talked about the 6 questions (from his new book, Getting America Right) he believes should be asked of every new piece of legislation, one of which is: “Is it Responsible?” He argues strongly for the Line Item Veto being key to reintroducing responsibility at the Federal level. Tell us why it is so important, as well as how the President approaches the budget process.

Rove: Well look, the Line Item Veto is absolutely essential. Most states in the Union have it. We had an interesting meeting yesterday with 7 governors – 2 Democrats and 5 Republicans – to talk about the Line Item Veto. And one of the things they said was, “Look, just simply having it on the books allows us to do a much better job of controlling spending.” Because what happens is, members of the State Legislatures come in and say, “If I put this in the budget, will you line item it?” And if a governor says, “I don’t like that,” they say (more often than not) that the item tends to disappear. So, all of them said, “We use it aggressively. But even more important than using it is the ability to use it, which keeps spending in check.” The President of the United States ought to have that ability because the budget is so big and the process is too complicated.

In reality, there are 3 parties in Congress: Republicans, Democrats, and Appropriators. And guess what? The Republicans and Democrats are in a minority. So you need to have this important and executive tool that allows a President to shine a bright light on some unnecessary spending and then to have Congress vote up or down as to whether or not to override his veto. This would be healthy for the system and it would bring some needed restraint into the system.

It’s interesting that there is a bipartisan move for this.

Senator Kerry supports the Line Item Veto. As you may recall, a Republican Congress gave President Clinton that power in the mid-‘90’s; it was then taken away by the courts. But we’ve written what we think is a Constitutionally acceptable method of Line Item Veto that would do a lot to help restrain spending.

Now here’s the way the President has approached the budget with each of his Directors of the Office of Management of Budget (Mitch Daniels, Josh Bolten and now with Rob Portman). He’s instructed them to start each year by basically wiping the slate clean: “What is it the government does? Is this program necessary? Is it duplicative of things that are done elsewhere in the government?” And most interesting of all, the President insists upon a focus on results. Government tends to measure itself by inputs: “How much money are we spending?” And the measure of success is, “Are we spending more?” This President said, “I want every program to be evaluated by results. “What are we achieving with the program? And if we’re not achieving what the program was proposed to achieve; or we’re not doing it as efficiently as other parts of government are doing it; or we’re not doing it as efficiently as the private sector would do it if we got out of the way — then let’s get rid of it.”

So in each one of our budgets, we’ve proposed the termination of dozens of programs. In fact, I think this year was like a hundred and forty some-odd programs we’ve recommended the termination of. Now we don’t win every battle every year, but we’re making steady progress on this. And this is having an effect on the budget because once you take a spending program and wipe it out it has a huge impact on the baseline of future spending because that spending is now gone.

VNH: When you spoke at The American Enterprise Institute, one of questions that came up is a question we get a lot: “Why doesn’t the President exercise his veto power more?” You made an interesting point about veto threats. Can you take us through that?

Rove: First of all, the President is very clear about the bright lines in his budget. The last budget of the Clinton Administration had non-security, discretionary spending rising at 15% a year. We’ve ratcheted that down every single year we’ve been in office to where last year it was minus 1%. The year before that, it was basically less than inflation and just slightly above inflation the previous year. And in the budget we’ve proposed for the fiscal year coming up, we’re recommending again a reduction below last year’s levels. Now, we’ve been able to achieve the total amount of spending reductions that we’re looking for by simply saying, “If you cross that line, I’m going to veto it.” And both the House and Senate Republican leadership have said, “Mr. President, we stand with you. We don’t want to send you a bill that busts your budget proposals.” But even though that’s the intent of the leadership, they’re not in charge of the process at each and every step of the way. So, for example, last year on the 6 biggest spending bills, we had to issue 39 separate veto threats, where we said during the process of consideration of those bills, “If you spend this money that way, then it will draw Presidential veto.” And what happened in each and every one of those 39 instances was that Congress gave way to the President on it and reduced the spending or removed the item. The President sometimes says he’s eager to veto something, but he doesn’t want to veto something if they agree to what he wants them to do. So saying to Congress, “This amount of money is what we agreed to spend, no more.” If you win that battle, then there’s no need for a veto. And we’ve been doing it.

Now, we do object to the Congressional practice of Earmarking. We understand that there are occasions where Congress legitimately ought to, or can, or should earmark funds for specific projects. But generally, we are opposed to those mainly because most earmarks do not serve a good budgetary purpose. For example, the Department of Defense complains about the number of earmark projects which require vital defense monies to be spent on programs or projects that do not, in the opinion of the military, add to our national security.

We had an interesting meeting last year with the people of the Department of Energy about the Advanced Energy Initiative. These are people working on basic research and cellulosic, plug-in batteries, hybrid batteries, and wind and solar technologies. When we met with them, we said, “You’ve got goals that you’re attempting to achieve here from research, in essence, create viable technologies that can be adopted by the private sector. You’ve set a time table for each one of these. Can you do it quicker? And if so, will it cost any more money?” And all of those groups said, “We can do it quicker.” For example, the cellulosic, ethanol people said, “This technology will allow us to make ethanol from, like, say, wood chips in New Hampshire or from saw-grass in Texas or from any kind of cellulosic material that’s available in any part of the country.” They said, “Yes, we can do it earlier. We can get this so that this technology can be adopted by the private sector in 2012. And no, we don’t need any more money. Just give us what you were expecting to give us in the budget, but get rid of the earmarks because (for example, in this instance) 40% of the money that we spend each year is earmarked by Congress.

None of these projects are peer-reviewed. They do not, in our opinion, add to our ability to get this job done by the time frame that we’re now living under. And if you want us to get it done earlier, get rid of these earmarks so that we have scientists and engineers making determinations about where these monies need to be spent and how they need to be spent, rather than a Congressman stuffing an earmark into a bill.” We’re sensitive to that. We recognize Congress has prerogatives, control over the purse strings. But we think that wise expenditure of the people’s money means that we out to be looking at, “What are the purposes intended for the use of that money and are we achieving it?”

Interestingly enough, a lot of members of Congress are sensitive to that. One of the most interesting approaches is, Congressman Ralph Regula of Ohio (who isn’t a Chairman, he’s one of the Appropriator Cardinals) has a very interesting approach to this. He says, “OK, if you want to put an earmark into a bill, fill out a 2-page questionnaire that spells out what the money is supposed to be used for, why it’s going to be used, and what local and/or national purpose it serves. You sign it, and that document is made publicly available. Also, it has to be done all at the beginning of the process; it can’t be snuck in at the end. So if we’re going to have earmarks, then somebody is going to have to accept responsibility for them and be willing to publicly defend them. There’s a transparency to the system. That seems to us to be appropriate.


VNH: The hot issue these days is immigration. Recently, Congressman Mike Pence proposed an approach at The Heritage Foundation called the Border Integrity and Immigration Reform Act that he believes is tough on both border security and employers, but recognizes the need for a guest worker program. Given the clear divide between the Senate and the House on this issue, do you think he’s on to something here?

Rove: Yes, it’s an interesting approach. Six months ago, people were dismissing the chance of getting a comprehensive bill. Today, we’re talking about wide agreement on issues like temporary worker programs, border enforcement, and interior enforcement. I think there is a growing consensus that this is a problem that we need to deal with in a comprehensive fashion and that there are reasonable, practical ways to do so; upholding the rule of law and keeping America’s reputation as a welcoming country. Congressman Pence has an interesting approach which envisions private enterprise on both sides of the border that he calls “Ellis Island Centers.” In the United States, they would serve as places that would help link up willing workers with willing employers. In countries where immigrants might come from, these “Ellis Island Centers” would prescreen workers that might have particular skills and might have a desire to come here in a temporary worker program. We think it’s an interesting approach.

VNH: OK, let’s switch over to elections here. Clearly with growth of talk radio and the Internet the last 2 cycles (2000 & 2004) marked the beginning of the new age in political campaigns. Having led and won campaigns in both cycles, talk about the impact that, for example, Rush Limbaugh has had for the Right and, in a different way, groups like MoveOn.org have had for the Left.

Rove: Rush Limbaugh and Sean Hannity and other talk radio people (but really pioneered obviously by Rush) have really changed the nature of the way that people get information and the way that the political dialogue is carried on in the country. It used to be that we had 3 national television networks, the Associated Press, and then the elite newspapers (particularly the New York Times and the Washington Post). The vast amount of information that people got and the dialogue about politics largely took place in venues that those institutions dominated. The growth of talk radio and the Internet means that a lot of our public discourse and our political dialogue takes place outside of the venues controlled by those big institutions. In fact, those big institutions can now be held to account by a Rush Limbaugh radio broadcast or a blogger pointing out difficulties in, say, CBS’s approaches on documents, for example, or in commenting on the editorials found in the pages of the Washington Post or the New York Times. I think that’s healthy. I don’t think we’re close to where we fully understand all the ramifications of that and where all that is going but I think it’s enormously healthy for the system.

I do also think that the Internet has proven to be a more powerful tool on our side than it has been for the other side. It has proven to be a tool on our side to sort of unite Conservatives and have a healthy intra-movement dialogue. But it’s essentially been something that has helped us gain in influence and broaden our appeal. Among Democrats, my sense is that the blog world has tended to strengthen the far Left of the Democratic Party at the expense of liberal, but somewhat less liberal, members of their party. It has tended to sort of drive their party even further to the Left rather than focusing on good ideas that would help unite people around common goals and common purposes. Instead, the Internet for the Left of the Democratic Party has served as a way to mobilize hate and anger — hate and anger, first and foremost, at this President and Conservatives, but then also at people within their own party whom they consider to be less than completely loyal to this very narrow, very out-of-the-mainstream, very far Left-wing ideology that they tend to represent.

VNH: How do you see this affecting the next couple of cycles?

Rove: You know, I don’t know! Again, we’re sort of feeling our way along. I do think the Internet is going to continue to be an enormously powerful tool for organization, which we’re now only beginning to understand and apply. I think it’s going to have a huge impact upon providing alternative means by which people collect political information on which they make decisions — particularly talk radio on our side and the Internet on both sides. But again, and maybe I’m just too optimistic about it, I think it’s going to tend to strengthen the Conservative movement because our focus is so much on ideas; and where, by nature, our movement is optimistic and forward-looking and, if you will, progressive: How can we help expand freedom and democracy? How can we expand markets? What are the game-changing reforms that we can build into public policy that will strengthen the power of the individual over their own lives and destiny? I think that’s where our focus is. I think the Democrat focus, or at least the Internet blog world focus, if you will, is, “How can we punish our enemies and express our anger?”

VNH: Naturally, a big topic up here these days is the Democrat’s challenge to New Hampshire’s roll as the First in the Nation Primary. How do you view it’s importance in the election process?

Rove: Well, for over 50 years, New Hampshire and its First in the Nation Primary have played a pivotal role in America's Presidential politics. While the winner of each party primary in the Live Free or Die State has not won the nomination each time, the primary has always been the center of attention and put New Hampshire at center stage.

I do understand the concerns of both major political parties about how long the process has become. It used to be that the primary and the selection process started later in the year and I think that was probably healthier. Both parties are trying to come to grips with how to shorten the season, and how to make certain that you don’t place overdue emphasis upon candidates with substantial name ID and big pocketbooks who have an advantage the earlier the process begins. So I understand that. But look, it has been an institution and it’s hard once an institution has been created to change it for less than important reasons.

VNH: A lot of our activists are beginning to question the impact they can have on the process. The feeling is that Washington doesn’t really listen to them until they need their votes. As someone who has been active in both campaigning & governing, what would you say to them?

Rove: I’d say, look, don’t despair. We’ve cut taxes, we’re fighting a war on terror, we’ve put in place innovative policies in education and in health to strengthen the power of the individual and return accountability and responsibility to these great public institutions. We’ve fought and laid a strong foundation for reform of entitlements such as Social Security and Medicare. Our movement is on the march. That doesn’t mean that everybody’s agenda gets adopted in toto and that the job gets done overnight. There are differences within our movement on what the goals ought to be and there are, obviously, difficulties in getting everything passed into law — particularly when you have a Senate where 40 determined Democrats can block action. But I’d say, don’t despair. We’ve had a successful Presidency here, now in it’s second term, that has fought hard for the Conservative goals of our grass-roots movement and is achieving and winning on many fronts all the time.