Skip to main content /POLITICS

AIRS: Weeknights 7 p.m. ET / 4 p.m. PT
In the Crossfire

Playing the economic blame game

(CNN) -- With corporate scandals brewing on Wall Street and the stock market taking a beating, Americans are seeing their retirement savings plans shrink.

Some Republicans have suggested the roots of the current troubles began under the Clinton administration's watch, while Democrats have criticized the GOP congressional leadership for blocking reforms in the 1990s and President Bush's policies for contributing to the economic slowdown.

Ann Lewis, former White House communications director in the Clinton administration, and Ron Kaufman, a former political director and adviser in the first Bush administration, step into the "Crossfire" with hosts Paul Begala and Tucker Carlson.

LEWIS: ... You know, when you send a signal to companies that you're to have a gentler, kinder regulator and they need not worry so much, we shouldn't be surprised. When you send the signal very clearly to investors that they cannot rely on the numbers that start coming out of these companies, let us not be surprised.

But we've now heard, I guess, two versions of the Republican policy. Ron tells us the economy is going to come back because Elvis is going to come back, and you're going to tell us that it is all Bill Clinton's fault. Let's have some positive economic policy, but let's be clear. What was the Clinton record? Putting Arthur Levitt at the Securities and Exchange Commission, who was the champion of small investors, who fought for transparency, fought for accountability. Who was trying to prevent Arthur Levitt from putting in those reforms? The Republican congressional leadership.

CARLSON: OK. And I'm glad you pointed that out -- the specifics of it. Between 1997 and 2001, Enron is accused of misrepresenting $600 million of earnings. So my question to you is either the Clinton administration knew this was going on and somehow just didn't bother to tell investors, who subsequently lost millions, or didn't know because the fabled tough oversight of the Clinton administration in fact wasn't there. So which was it? Did they know and not do anything?

LEWIS: Or how about you had corporate executives, some of whom were very close to people you know, who were misstating -- I think the polite term is misstating -- the fact is were lying about their numbers. And it took us awhile to catch up with it.

But remember again, in the Clinton administration, you've just heard from Paul, we were trying really hard to expand the economy and with good results. We were trying really hard to build new jobs and with good results. What we were also faced with was a Republican Congress in those last few years [that] refused to fund the SEC, kept cutting the budget of the Securities and Exchange Commission which, let me point out, President Bush also did, didn't want to give the new SEC, the examiners at the SEC, the funds they needed to do the job.

Do you know that examiners at the SEC and lawyers are paid less than anywhere in the government? And that they're ...

CARLSON: I'm fully aware that 40 percent left during the Clinton administration.

BEGALA: Because, as Ann pointed out, they cut the budget for funding. Ron Kaufman, there were several times ... President Clinton and his administration went to the Congress to try to put reforms in place, greater reforms that we needed that would have, certainly could have, prevented many of these economic tragedies, these rip-offs. And these are a few of them.

He went and asked the Congress, Arthur Levitt, the head of the Securities and Exchange Commission, wanted to have a rule to separate auditing and consulting. The Republican Congress blocked him.

The Clinton administration asked for greater disclosure of derivatives. The Republican Congress blocked it.

Larry Summers, our secretary of the treasury, cracked down on tax havens. Bush came in with Paul O'Neill, the new treasury secretary, and reversed those policies. Clinton's support of the law that would have limited 401(k) contributions to 10 percent, Republicans in the Senate watered it down. And then he vetoed a Republican bill in 1995 that made it easier for these corporate con artists to rip people off without being held accountable. ...

CARLSON: Is there a question in there somewhere?

BEGALA: And the Republicans overwrote him. You know ...

CARLSON: You have a little speech here. Get to the question.

BEGALA: Yes, here is the question. Weren't you wrong? Wasn't Clinton right?

KAUFMAN: No. Good try. Listen ...

BEGALA: That's the record.

KAUFMAN: That's -- that's your view of the record, Paul, which is different than the record. The bottom line is, as Tucker said earlier, a lot of these -- all these problems happened during the Clinton years. Is that Bill Clinton's fault? Honestly, probably not. It kills me to say that but probably not.

BEGALA: Well, good for you.




Back to the top