'Meet the Press' transcript for Dec. 7, 2008

MR. BROKAW:  But help me out here.  Are you looking at the possibility of some kind of a government structure that runs that reorganization?

PRES.-ELECT OBAMA:  I--we don't want government to run companies.  Generally, government historically hasn't done that very well.  What we want...

MR. BROKAW:  Not to run the companies but...

PRES.-ELECT OBAMA:  But...

MR. BROKAW:  ...to run the terms.

PRES.-ELECT OBAMA:  Well, what, what we do need is, if taxpayer money is at stake, which it appears may be the case, we want to make sure that it is conditioned on a auto industry emerging at the end of the process that actually works, that actually functions.  The last thing I want to see happen is for the auto industry to disappear.  But I'm also concerned that we don't put 10 or 20 or 30 or whatever billion dollars into an industry, and then, six months to a year later, they come back hat in hand and say, "Give me more." Taxpayers, I think, are fed up.  They're going through extraordinarily difficult times right now, and they want to see the kind of accountability that, that, that, unfortunately, we haven't always seen coming out of Washington.

MR. BROKAW:  But under that organization or any reorganization that you settle on...

PRES.-ELECT OBAMA:  Right.

MR. BROKAW:  ...should the current management be allowed to stay in their jobs?

PRES.-ELECT OBAMA:  Here's what I'll, I'll say, that it may not be the same for all the, all the companies, but what I think we have to put an end to is the head-in-the-sand approach to the auto industry that has been prevalent for decades now.  I think, in fairness, you have seen some progress made incrementally in many of these companies.  You know, they have been building better cars now than they were 10 or 15 or 20 years ago.  They are making some investments in the kind of green technologies and, and the new batteries that would allow us to create plug-in hybrids.  What we haven't seen is a sense of urgency and the willingness to make tough decisions.  And what we still see are executive compensation packages for the auto industry that are out of line compared to their competitors, their Japanese competitors who are doing a lot better.

Now, it's not unique to the auto industry.  We have seen that across the board.  Certainly, we saw it on Wall Street.  And part of what I'm hoping to introduce as the next president is a new ethic of responsibility where we say that, if you're laying off workers, the least you can do, when you're making $25 million a year, is give up some of your compensation and some of your bonuses.  Figure out ways in which workers maybe have to take a haircut, but they can still keep their jobs, they can still keep their health care and they can still stay in their homes.  That kind of notion of shared benefits and burdens is something that I think has been lost for too long, and it's something that I'd like to see restored.

MR. BROKAW:  Let's talk for a moment about consumer responsibility when it comes to the auto industry.  As soon as gas prices began to drop, consumers moved back to the larger cars once again, to SUVs and the big gas consumers.

PRES.-ELECT OBAMA:  Right.

MR. BROKAW:  Why not take this opportunity to put a tax on gasoline, bump it back up to $4 a gallon where people were prepared to pay for that, and use that revenue for alternative energy and as a signal to the consumers those days are gone.

PRES.-ELECT OBAMA:  Well...

MR. BROKAW:  We're not going to have gasoline that you can just fill up your tank for 20 bucks anymore.

PRES.-ELECT OBAMA:  Well, keep, keep in mind what's happening in--to families all across America.  Yes, gas prices have gone down.  But, in the meantime, maybe somebody in the family's lost their job.  In the meantime, their housing values have plummeted.  In the meantime, maybe their hours have been cut back. Or if they're a small-business owner, their sales have gone down 50, 60, 70 percent.  So putting additional burdens on American families right now, I think, is a mistake.  What we have to do long term is make sure that we have an energy strategy that focuses on fuel-efficient cars, that focuses on providing incentives for fuel-efficient cars.  Same applies to buildings.  We have a enormously inefficient building stock, and we can save huge amounts of energy costs and reduce our dependence on foreign oil by simple things like weatherization and changing the lighting in, in major buildings.  That's going to be part of our economic recovery plan.  It actually allows us to spend some money, put some people to work right away, but it also creates a long-term, sustainable energy future.  And I think making some of those investments in ensuring that we change our auto fleet over the next several years, that's going to be important as well.

MR. BROKAW:  The other big financial storm that continues to build out there, of course, are mortgages.  You said recently that is an area of particular concern to you.  The chairman of the Federal Reserve, Bernanke, said recently that something that--needs to be done urgently.  During the course of the campaign, you suggested a three-month moratorium.  Is that still part of the policy that you would like to have begun when you become president of the United States?  And what else needs to be done to do something about mortgages?

PRES.-ELECT OBAMA:  Well, I, I'm having my team examine all the options that are out there.  I'm disappointed that we haven't seen quicker movement on this issue by the administration.  And we have said publicly and privately that we want to see a package that helps homeowners not just because it's good for that particular homeowner, it's good for the community.  When you have foreclosures, property values decline and you get a downward spiral all across America.  It's also good for the financial system because keep in mind how this financial system became so precarious in the first place.  You, you had a huge amount of debt, a huge amount of other people's money that was being lent, and speculation was taking place on--based on these home mortgages.  And if we can strengthen those assets, then that will strengthen the financial system as a whole.

So I think a moratorium on foreclosures remains an important tool, an important option.  I think we also should be working to figure out how we can get banks and homeowners to renegotiate the terms of their mortgages so that they are sustainable.  The vast majority of people who are at threat of foreclosure are still making monthly payments, they want to stay in their homes, they want to stay in their communities, but the strains are enormous. And if we can relieve some of that stress, long term it's going to be better for the banks, it's going to be certainly better for the community, it's going to be better for our economy as a whole.  This is going to be a top priority of my administration.

MR. BROKAW:  Have you personally conveyed your disappointment to the administration or had your economic advisers get in touch with Hank Paulson and say, "Why aren't you doing more about mortgages?"

PRES.-ELECT OBAMA:  We, we have specifically said that, moving forward, we have to have a housing component to any actions that we take.  If we are only dealing with Wall Street and we're not dealing with Main Street, then we're only handling one-half of the problem.

MR. BROKAW:  And finally, what about those homeowners out there who are struggling to do the responsible thing, to pay their mortgages?

PRES.-ELECT OBAMA:  Right.

MR. BROKAW:  And now they look across the street and the neighbor may be getting bailed out.  So they feel they're the victim of a double whammy.

PRES.-ELECT OBAMA:  Right.

MR. BROKAW:  They're paying their taxes to bail out the guy across the street and struggling to pay their mortgages.  Why wouldn't they just take a walk on their mortgage and say, "I want in on that"?

PRES.-ELECT OBAMA:  Well, look, that, that's one of the tricky things that we've got to figure out how to structure.  We don't want what you just described, a moral hazard problem where you have incentive to act irresponsibly.  But, you know, if my neighbor's house is on fire, even if they were smoking in the bedroom or leaving the stove on, right now my main incentive is to put out that fire so that it doesn't spread to my house.  And I think most people recognize that even if there were some poor decisions made by home buyers, that right now our biggest incentive is to make sure that the housing market is strengthened.  I do think that we have to put in place a set of rules of the road, some financial regulations that prevent the kind of speculation and leveraging, that we saw, in the future.

And so, as part of our economic recovery package, what you will see coming out of my administration right at the center is a strong set of new financial regulations in which banks, ratings agencies, mortgage brokers, a whole bunch of folks start having to be much more accountable and behave much more responsibly because we can't put ourselves--we, we can't create the kind of systemic risks that we're creating right now, particularly because everything is so interdependent.  We've got to have transparency, openness, fair dealing in our financial markets.  And that's an area where I think, over the last eight years, we've fallen short.

MR. BROKAW:  Mr. President-elect, we're going to take a break.  When we come back, we're going to talk about taxes, the fallout from Mumbai, obviously, Iraq and Afghanistan.  A lot more to talk about when we continue here on MEET THE PRESS with this exclusive interview with the President-elect.

(Announcements)

MR. BROKAW:  More of our exclusive interview yesterday in Chicago with President-elect Barack Obama after this brief station break.

(Announcements)

MR. BROKAW:  We're back with President-elect Obama.  We want to talk about taxes.  That was a central piece of your campaign.  Here's what you had to say.

(Videotape, April 15, 2008)

PRES.-ELECT OBAMA:  We need to roll back the Bush-McCain tax cuts and invest in things like health care that are really important.  Instead of giving tax breaks to the wealthy, who don't need them and weren't even asking for them, we should be putting a middle class tax cut into the pockets of working families.

(End videotape)

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