Monitor Breakfast

Selected quotations from a Monitor breakfast with economist Gene Sperling.

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Gene Sperling is currently a senior fellow for economic policy and director of the Center on Universal Education at the Council on Foreign Relations. He is a contributing writer and consultant for "The West Wing." Mr. Sperling previously served as national economic adviser in the Clinton administration.

On Democrats' handling of economic issues in the 2002 campaign:

"I think Democrats have, at times, been too timid in making their economic critique of President Bush, perhaps because we are at a time of considering war and terrorism. But I think that the public can differentiate between rallying around the president on national security and wanting significant checks and balances on economic policies that are going awry.

"I think the economy and economic related issues are still the dominant issue on people's minds and I think that Democrats still have an opportunity to make their case ... that they are an important check on the excesses and lack of attention to the economy of the Bush administration."

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On the need for a tax cut at Christmas time:

"I think the economy is fragile enough that stimulus during this year is warranted. I believe it would be good for our economy right now to have a Christmas shopping season rebate.

"I think that the fragility of the economy now [and] the likely higher cost of energy that people will be facing over the winter [has] put enough risk on the consumer spending that has been so important to the economy that a one-time rebate could be helpful. If we were spending money as part of the war effort during this particular moment in our economy, that, too, could conceivably have some one-time benefits if it is part of a long-term fiscal commitment.

"I would not worry about short-term cost in a fragile economy where we need stimulus if it was part of a grand bargain (between Democrats and Republicans) that had more fiscal discipline in the long run. If, on the other hand, my concern becomes more that if we are not doing anything (on a bargain between Democrats and Republicans) then what could be a wise stimulus policy during the end of 2002 and the beginning of 2003 is perceived only as a further deterioration in fiscal discipline."

On the kind of payroll tax rebate he favors:

"I would favor something in the $500 – $600 per family [range]. I just wish timing-wise we could get there sooner. I think that those types of rebates would be most effective if they arrived in people's mailboxes during the Christmas shopping season. But I am also concerned that higher energy costs often have an almost irrational negative impact on consumer confidence.

On prospects for dealing with Social Security's problems:

"I think that the dirty secret in Washington right now is that no one on either side can afford a politically viable Social Security solution because all of the politically viable Social Security solutions before were reliant on using the surpluses that were being saved as the transition funding for a new initiative. So I believe that also this lack of fiscal discipline has truly set back the cause for either side to come forward with a viable Social Security solution."

On his critique of President Bush's economic policy:

"I think the three areas President Bush has faltered in is maintaining confidence in the economic leadership of the federal government, in keeping a commitment to fiscal discipline and increasing savings necessary for dealing with long term entitlements, and in failing to bring together swift, non-political efforts for bipartisan [economic] stimulus.

"I think that had President Clinton had a third term, there would be a greater commitment to long-term fiscal discipline, which would have given people more of a cushion to provide larger stimulus in the short term without sending signals of long-term fiscal deterioration. And I think there would have been a more disciplined, coordinated, and quicker response to economic crisis from the need for stimulus to the response on the corporate scandals."

On President Bush and trade:

"I think President Bush does have some real passion for the free trade agreement with the Americas. I really do. I think this is an area he cares about personally, that he feels from his time as governor and growing up in Texas. I would hope that that personal commitment he has might make that a higher priority but obviously the politics of getting that through will be extremely difficult..."

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