For Immediate Release
Office of the Vice President
January 19, 2006
Interview of the Vice President by Larry Kudlow, CNBC
Grand Hyatt New York
New York, New York
1:25 P.M. EST
Q Vice President Dick Cheney, welcome again to Kudlow&Company.;
We appreciate it very much, sir.
THE VICE PRESIDENT: Good to be back, Larry.
Q I'm obliged really to ask you about this missive from Osama
bin Laden allegedly. But it is, of course, all in the news this
morning. He actually at one point threatens that he's going to be
planning to bomb American cities, and then somehow, the United States
and he and his group will have a truce. I don't know what to make of
it. But the bombing of American cities is something that obviously is
catching my eye, and the eyes of almost everyone. What's your comment
on this?
THE VICE PRESIDENT: Well, first of all, of course, we don't know
yet the authenticity of the tape. We're checking that out. Secondly,
we don't know when it was made. We haven't heard anything at all from
him in over a year now. This would be the first, if it is, in fact, a
current tape from bin Laden. And then we'll have to sit down and take a
look at it, see what it means.
It's difficult sometimes to tell why they do these broadcasts --
whether he's trying to communicate with his supporters around the world,
or whether he intends it as a threat. It's different to characterize
it.
Q Is this the kind of thing that might raise the Homeland
Security threat assessment or threat levels?
THE VICE PRESIDENT: Well, it could. The fact of the matter is
we're on sort of a high state of alert most of the time anyway, as far
as the government is concerned. Obviously, we haven't raised the threat
levels recently. The fact of the matter is, it's a good reminder for
everybody that there is a serious threat out there. It has been more
than four years since we've been attacked. I think a lot of people have
sort of let down their guard and relaxed. This is a reminder that we
can't afford to do that as a nation, that this is very much a very
serious group of people doing their best to try to strike the United
States. And we need to act accordingly.
Q Is this the kind of thing that Congress needs to look at when
they are addressing the Patriot Act, when they come back as people
discuss the NSA eavesdropping of foreign conversations with Americans
and so forth? It's all about homeland security. You think this will
change any minds?
THE VICE PRESIDENT: I don't know. I would hope it would. I think
-- there are reasons why we haven't been attacked again in more than
four years. It's not just dumb luck. You can't -- nobody can promise
that we won't be hit again. As I say, we know they're still out there
trying. But we have a number of people -- some in Congress who now want
to suddenly criticize the measures that have been taken since 9/11 to
try to protect the nation. And that's unfortunate. I think, in fact,
we have been very successful -- both with respect to the NSA program
that has become the subject of controversy. I think the Patriot Act is
vital. I think we have saved thousands of lives. I think we have
disrupted attacks. And I think Congress and our critics -- some in
Congress, obviously, not all, need to be careful before they embark on a
course of action here that said somehow we ought to shut down those
programs, or that we have "exceeded our authority." I don't believe we
have.
We've operated within the bounds of the Constitution. The
President has the responsibility, as well as the authority to do what
needs to be done, and we've been doing it.
Q Okay, shifting gears slightly but still on the international
beat, Iran -- it's becoming a big financial market issue, as well as all
the international security issues. Realistically, is there a way the
United States and the allies can prevent Iran from getting nuclear
weapons?
THE VICE PRESIDENT: I think it's important that we seek that
objective. I don't think we want a nuclear-armed Iran. I don't think
that's in anybody's interest -- either in the region or on a global
basis. We've been working very closely with the European allies -- the
Brits, the Germans and the French have been actively involved in this
effort.
You've got a couple of concerns -- one is just a nuclear-armed Iran
would be a problem. But then you add to that the dimension of the newly
elected President of Iran, Mr. Ahmadinejad, who is hard to believe in
terms of some of the more outrageous statements he's made in recent
months, calling for the destruction of Israel, threatening a course of
action that, obviously, would be a -- be devastating in terms of its
consequences. So I think the U.S., as well as our friends and allies --
we're working hard on this problem. We'll continue to do so. But I do
think we need to prevent the proliferation of nuclear weapons to a
nation like Iran.
Q Is there a military option on the table as Secretary Rumsfeld
has hinted, as Senator John McCain has proposed? Is there a military
option in this?
THE VICE PRESIDENT: No President should ever take the military
option off the table. Let's leave it there.
Q The other issues are, regarding a possible sanctions campaign,
a naval blockade, pinpoint air attacks, whatever, a lot of people in the
financial community are very worried about $70 ,$80, $90, $100 barrel of
oil, which could have some very negative consequences, obviously, for
the economy -- indeed, the world economy. What's your thinking on that?
Is that something that is in your plans, a contingency that might have
to deal with triple-digit oil?
THE VICE PRESIDENT: Well, the way I think about it, Larry, is that
the problem here is of sufficient magnitude that it needs to be dealt
with. But I also would emphasize that we're attempting to do that
through diplomatic means. Now, whether or not there would be a spike in
the price of oil if, in fact, there's some kind of a crisis with Iran,
it's entirely possible. But I think the consequences of that would be
less significant than the consequences of haven't Mr. Ahmadinejad armed
with nuclear weapons, able to threaten virtually anybody he wants to
threaten, and conceivably even contemplate the use of nuclear weapons.
That would be a major crisis.
So I think -- again, I'd like to emphasize that people need to stay
calm, cool, and collected here as we deal with this problem. But it is
a problem. As John McCain and Condi Rice and others have said, it does
need to be dealt with, and we're dealing with it.
Q You mentioned the Iranian verbal attacks on Israel. If Iran
and any of its client terrorist organizations that it sponsors were to
attack, much as Hitler attacked Poland in 1939, would the United States
come to the military assistance of its longtime ally Israel?
THE VICE PRESIDENT: I don't think there's any question but what we
would support Israel under those circumstances. I think any
administration would.
Q And that would include military assistance?
THE VICE PRESIDENT: Obviously, we would support our friends in
Israel under those circumstances were they attacked.
Q Sir, is there any way to get at this Iranian issue by helping
the pro-democracy groups inside Iran, by bringing U.S. officers. Some
have said we could use the Swiss embassy as a haven. Others have said
private non-governmental groups and that sort of thing. Is there a way
to undermine the current regime by helping out the pro-democracy groups?
THE VICE PRESIDENT: I think it's a matter of long-term policy.
The United States wants to support the democracy proponents in Iran.
One of the more hopeful things about the situation in Iran is you've got
a whole younger generation that is very interested in the West, and the
United States, that, I think, finds the current theocracy that governs
in Iran distasteful, would like to see a change in their own government.
And obviously, a change in policy would follow if there were to be such
a change.
What mechanism might lead to those kinds of changes over time, how
long it would take and so forth, those are all open questions at this
point. But clearly, I think the outside world has an interest in seeing
true democracy come to Iran instead of the kind of system they have now.
Now, of course, nobody can run without the approval of the clerics
at the very top. And you have an unelected group at the very top,
senior mullahs, if you will, in Iran, who dominate the country, who
support Mr. Ahmadinejad, who have been involved in supporting Hezbollah
and other terrorist organizations. I think long-term it's not in the
interest of the Iranian people that that regime continue down that
course.
Q Would the administration be willing to have diplomatic
relations with Iran? Some analysts in this country have said we should
try to reconnect them with the United States, somehow do business with
them? Is that possible?
THE VICE PRESIDENT: It's been impossible, in effect. In the past
it has been very hard to communicate with them. They -- and of course,
they have a track record that means they have, in fact, been staunch
supporters of terrorism. And now they're obviously in the business of
trying to develop their own nuclear weapons. Under the circumstances,
it's not clear what would be gained by having normal relations, if you
will, with Iran. They need to change their policies if they want to be
treated by the international community as a full member of the world
community.
Q Let me switch gears, come back to the domestic side, talk some
politics and some economics. 2005 -- not a great year for the
administration. After the big victory in the election in '04, you kind
of lost your mojo. You kind of lost your momentum in 2005. As you look
back on the year, sir, is there anything you might have done differently
to keep that momentum going rather than the apparent political problems
that happened?
THE VICE PRESIDENT: It's partly in the eye of the beholder, Larry.
I don't think it was as bleak a year as some have suggested. I think we
had significant success in both Afghanistan and Iraq from a political
standpoint: new President sworn in, in Afghanistan; now a new parliament
-- three successful elections in Iraq with constantly rising
participation. We made major progress in two of the most important
subject areas we've been dealing with.
The economy was also very good. In spite of concerns about
Katrina, for example, we had over 4 percent growth in the third quarter.
We've got unemployment back under 5 percent.
Q Do you get a fair shake in the media? Do you get a fair shake
in the media on the economy? Isn't the economy kind of an underrated
story? But in fact, you and the President -- until very recently --
haven't done much to sell that underrated story?
THE VICE PRESIDENT: Well, it's true, but the fact is, if you just
look at the data, I think any objective observer will say that 2005 was
a very good year for the economy, in spite of things like Katrina.
Katrina hit -- we thought that would throw a real monkey wrench in
the economy, and it didn't happen. Inflation is under control.
Unemployment is down. Growth is very good. Productivity is running at
all-time highs. So I look at '05 and I see a good year. Now you can
say, well, we had some missteps along way -- yes, I think we could have
done better on Katrina than we did. There's a temptation oftentimes,
though, for the press, especially, to zero in on one problem and to
ignore everything else. And I think Katrina was a unique kind of
disaster -- national disaster. And the President himself has said we
could have done better in terms of how we responded to it, and handled
it.
But on balance, I think we look back from the perspective of
history, 10 years down the road, I think '05 will not have been a bad
year.
Q Sir, again, thank you for agreeing to this interview.
Recently the White House Office of Management and Budget came out with a
revised budget deficit for the new year of $400 billion. That's about
$100 more than last year. It was a surprise. Do you worry that this
kind of new higher deficit estimate could really doom the tax cut
extensions on dividends and capital gains when they come up for a vote
in the Senate in a few weeks?
THE VICE PRESIDENT: Well, I certainly would hope not. I think the
case could be made -- and we try to make it all the time that those new
rates on capital gains and dividends have been instrumental in
generating additional revenue for the federal government. And I know
you've been a strong believer over the years, Larry, and I share your
conviction with respect to wise tax policy and what it does with respect
to government revenues. I don't think higher taxes mean a smaller
deficit. I think, in fact, strong economic growth means a smaller
deficit. And it's important that we maintain tax policy that promotes
growth, and we'll continue to make that argument and make that case.
Q In particular, though, I was surprised you didn't have a
greater emphasis on spending cuts in this budget to offset whatever
additional funds for Katrina -- $400 billion deficit is going to raise
some eyebrows. Why not just clear out the pork in the federal budget?
As you know, there's a popular outcry to do so. Why not have the White
House come out against the earmarks? They're pork barrel earmarks.
They've really allowed cash for legislative favors. In some sense,
they're at the heart of the corruption. What's your own view on the
earmark issue?
THE VICE PRESIDENT: I think the earmarks are a problem. I know
from my time of running the Defense Department 15 years ago, it was
frustrating then to be told by the Congress to specify spending amounts
that had nothing to do with national security but were all geared to
satisfy some member of Congress's political needs and requirements. And
it has gotten much worse.
The bill when I -- the authorization bill at Defense used to be
about 70 or 80 pages long 50 years ago. Now it's hundreds of pages long
because of earmarks. One solution for this is the line-item veto. And
the President has constantly supported that. If you had the line-item
veto, he could reach in without having to veto the entire bill and knock
out individual earmarks and do a lot to clean up that legislation. That
would be a significant plus. I think you're right. I think earmarks
are a significant problem.
Q Will the White House come back? Are you going to have bigger
spending cuts than in the past? Are you going to go across the board?
Are you going to really say to the public, look, we know there was pork
in that highway bill, we know there's pork throughout the government, we
know there's a lot of agencies that could do without, or at least do
with less? Are you going to be tough on the budget this year?
THE VICE PRESIDENT: Well, I just came back -- broke off a trip to
the Middle East, an important trip when I was out dealing -- Iraq,
Afghanistan, and so forth, to cast the tie-breaking vote in the
reconciliation debate in December. This is to cut $40 billion out of
mandatory spending for the coming fiscal year. And my vote was the one
that got it through the Senate. We passed it 51-50. So we're committed
to doing everything we can to try to restrain federal spending.
My big concern is not only the short-term problems. The President
is concerned about that, as well, too. But where are we going
long-term. Ultimately, I think the fate of the republic turns less upon
the deficit in any one particular calendar year, fiscal year than it
does on the long-term proposition we're faced with, with respect to the
coming retirement of the baby boom generation, what happens to Medicare
costs, and so forth long-term. Those are the problems we need to deal
with. And this takes us back around to what the President was pushing
very hard this year on Social Security. We've talked about it before,
but we'll continue to push hard. But ultimately, we need to reform --
Q You will continue to push hard on Social Security this coming
year?
THE VICE PRESIDENT: Yes.
Q The President mentioned it today in his speech in Virginia.
But that is going to be a priority?
THE VICE PRESIDENT: It will continue to be a priority as long as
we're here because ultimately it has to be addressed.
Q Will you also push hard on tax reform? A recent study by the
Tax Foundation says it costs a cool $265 billion a year to comply with
the IRS and this tax code. Connie Mack presented you with
recommendations and so forth on tax reform. Is tax reform on your list?
THE VICE PRESIDENT: It's clearly something we're looking at. I
don't want to get into the business here of giving you a forecast on the
State of the Union speech. That's coming up shortly. But we'll
continue to look at the tax reform issues, as well. And we've talked
before, I think it's very important to make the effort to maintain the
reductions in rates that we've put in place now over the last five
years, as well as the reduction in the tax on capital gains and
dividends. We took that down to 15 percent. We need to make these
changes permanent if, in fact we're going to continue the kind of
economic growth that we all want to see.
Q Speaking of regulations and so forth, what's your take on this
extraordinary action by the state of Maryland which is forcing or
mandating Wal-Mart to spend 8 percent of their payroll on health costs.
If they don't, the differential goes to the state itself. What's your
thought on that? Is this something you want to see across the country
and the U.S.?
THE VICE PRESIDENT: Well, I haven't gotten into the issue in any
great detail, Larry. I can't claim any expertise on it, so I'll take a
pass.
Q The Washington Post calls it a legislative mugging of
Wal-Mart. What do you think?
THE VICE PRESIDENT: Well, again, I don't know enough about it,
Larry, to have an opinion on it.
Q All right, let me come back, a lot of people talk about the
culture of corruption in Washington. And some commentators believe it's
going to be a rough year for Republican candidates for both the House
and the Senate. Your thoughts? And will you be out there on the
campaign trail this year?
THE VICE PRESIDENT: I will be out on the campaign trail this year.
I've already been out, and I expect to be very actively and aggressively
involved.
I think it's also important to point out that from time to time we
do run into problems with respect to individual members of Congress who
don't adhere to the rules and regulations. We've seen that as -- no, I
don't think either party has a corner, if you will, upon avoiding those
kinds of problems. We had the issue of Congressman Cunningham this
year. There are other issues pending with respect to the Democratic
side of the aisle, as well, too. It's important that Congress conduct
itself at all times in a manner above board. And when rules are broken,
when laws are violated, that people be prosecuted. And I think that
will, in fact, happen.
Q Last question, sir, how do you feel? Are you ready for the
battle ahead that's going to be on almost all fronts, international,
economic, domestic and so forth? How are you feeling?
THE VICE PRESIDENT: I feel good, Larry. I've been very fortunate
to have the opportunity to serve in this administration, and I look
forward to the next three years as the President's number two man.
Q Vice President Dick Cheney, thanks ever so much for joining us
on Kudlow&Company.;
THE VICE PRESIDENT: Thank you, Larry.
END 1:49 P.M. EST
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