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YOUR MONEY

Interview with Eliot Spitzer; Punting on Obamacare

Aired July 13, 2013 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CHRISTINE ROMANS, HOST: Weiner, Sanford, now, Spitzer -- three politicians best remembered for recent sex scandals, now jumping back into politics.

I'm Christine Romans. This is YOUR MONEY.

Former New York Governor Eliot Spitzer told me he expects the public will give him a fair hearing, as he seeks to return to elected office. This comes five years after he admitted to spending thousands of dollars on prostitutes -- admissions that left his political career in tatters.

New Yorkers won't go to the polls until September. But late night comedians aren't waiting to have their say.

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, HOST, "CONAN": Former New York Governor Eliot Spitzer, who -- you remember him, he was caught freaking prostitutes several years ago -- is running for office again in New York.

Yes, his campaign slogan is Spitzer creating jobs by the hour.

(END VIDEO CLIP)

ROMANS: Ooh! Jokes aside, the public may never forget headlines like these, but five years later, will they forgive?

(BEGIN VIDEOTAPE)

ELIOT SPITZER (D), FORMER GOVERNOR, NEW YORK: I think five years is long enough for me to go to the public and ask them to forgive. Will they? I don't want to predict, because I think -- just as I would never predict a jury verdict, I never have predicted elections, I don't want to predict what the public will do.

I'd ask for it. If the public is willing, I want to serve. That's the most I can ask for. If I get that opportunity, I'll be happy. And I certainly hope that I make a persuasive case based on the totality of my record.

ROMANS: There's also this feeling, though, in New York and elsewhere, that you had your chance, Eliot, as governor of New York, you had your chance and you blew it.

SPITZER: Right.

ROMANS: Why do you deserve another trust for another chance?

SPITZER: Well, first, I'm seeking the public trust and we didn't -- we accomplished an enormous amount, not only when I was attorney general, but we fully funded New York City's public education system. We did not raise taxes. We reformed health care. We put in place and created the New York state stem cell research fund.

I could go, reform of unemployment --

(CROSSTALK)

ROMANS: I could go on, too. You know what they talk about, they talk about, yes, as attorney general you prosecuted crime and you prosecuted prostitution rings.

SPITZER: Right.

ROMANS: And as governor, you know, you lost your job.

SPITZER: Right.

ROMANS: And you lost your job because of hypocrisy.

SPITZER: No, I resigned because I believe it was the appropriate way to say I appreciate what accountability is all about, which is something that I spoke about and I believe it.

Five years later, I am ready to go to the public and say here is the entirety of the record, here is the totality of the record. I think I can serve once more, and I am ready to serve if you want to bring me back.

ROMANS: You were known as the sheriff of Wall Street, right?

SPITZER: Right.

ROMANS: You are talking about now running money for a humungous pension fund, if you are left to this position.

SPITZER: Right.

ROMANS: And -- I mean, you don't have a lot of friends on Wall Street.

SPITZER: You know, let me draw a distinction. There's a universe of folks who don't like me. That's fine. For me, this was never personal, and I would get along fine with them if they wanted to sit down and have a cup of coffee.

But there are people who are in that small universe. A much larger universe that says you are right. We may not want to say it publicly, but you're right. Because they understand markets, they understand what happened between 2006 and 2010. This false bubble that was inflated that then collapsed, destroying huge value for the American middle class, they understand that. So, we have to learn and move forward.

So, I think, yes, there are some folks who are edgy and will say critical things about me, I get that. But there's a larger universe of people who appreciate that what I was trying to do, even though they didn't want to do it at time, was make the markets work and have some integrity.

ROMANS: So, this was the Eliot Spitzer I interviewed way before 2008. This is the Eliot Spitzer who was the sheriff of Wall Street.

SPITZER: Right.

ROMANS: I, on this program, often talked about rebranding. You were in the midst of a pretty -- probably the hardest or most difficult rebranding I have ever seen.

SPITZER: Right.

ROMANS: What's your strategy?

SPITZER: The strategy is to sit down and answer questions, and some of them are tough. I don't shy away from them. I will look the public in the eye and say here's what I have done that is good. And here are the peaks I have had that are higher than many gets to enjoy, through the valleys I have been in more than what most people suffer through -- I recommend the peaks not the valleys, but you've learned more in the valleys. So, I'm hoping that the public will take you back.

ROMANS: You know, just before this interview, you were on the phone, you were talking to your daughter, sweet conversation of a 19- year-old and her dad. I just heard a little bit of your conversation with your dad.

You look at the polling, you don't poll quite as well with women.

SPITZER: Right.

ROMANS: And that's kind of a paradox. Three daughters, you know, and yet women look at you different than male voters do?

SPITZER: Look, I get that, I understand it. Life is full of paradoxes. Life is full of tensions that are hard to understand.

You know, I think that when people get to know me better, they hopefully like me a bit more than the sort of caricature of me that was out there, the tough guy who was also prosecuting people, that came from the job as attorney general, where it was an adversarial type of role, and then my personal behavior that led to the resignation.

So, I'm aware of all those things. It's not easy to go this. But it's worth it.

ROMANS: So, what keeps you up at night as you try to get back in? What is your worst fear here?

SPITZER: My worst fear is it will have a negative impact on my daughters, we care about first, second and third, and the rest of my family, my wife, and then losing. But people come first.

ROMANS: You have had some tough interviews. You've answered tough questions, and you've had some tough headlines. How does that feel?

Do you have armor that you put on or do you say I made my bed and I'll lie in it? You know? And move forward --

SPITZER: All of that. I mean, first, you have to accept it. I made the decision to get in. I have skin as thick as a rhinoceros has. I'm ready to take those headlines.

ROMANS: But it has to hurt?

SPITZER: Yes, sure it does. Oh, yes, but A, the pain is what sometimes teaches you, and B, the public I think has a forgiving nature, and it has come through a bit in the poll where people are saying, OK, he's --

ROMANS: Did that poll surprise you?

SPITZER: A little bit.

(END VIDEOTAPE)

ROMANS: Spitzer says he expects more tough headlines and more tough questions in the weeks to come, and he says his desire to return to public service is what's driving his bid. It's not a chance at redemption. He's already cleared the first hurdle, collecting more than 27,000 signatures to make it to that ballot running for New York City comptroller.

It may sound like a big demotion for somebody that once occupied the governor's mansion, but the office would put Spitzer in charge of the city's finances, including the $140 billion in five pension funds. He says he would be an activist investor focused on forcing changes on some of America's biggest companies, the job he started to do as the attorney general.

For more from this interview and what kind of investor he would be and how he would interact with Wall Street, visit our blog at CNN.com/yourmoney. And a note, he's got a long way to go until September.

Up next, pushing back part of Obamacare. Could the delay of the employer mandate mean big problems for the president's signature law?

(COMMERCIAL BREAK)

ROMANS: The president warned there would be hiccups with Obamacare. But now, the administration has pushed back the employer mandate by a year, telling businesses they don't have to provide health care to their employees now until 2015.

To some, that's no hiccup. It's more like a big old rude belch, and it could re-write the playbook for the 2014 mid-term elections.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): The presidential punt on Obamacare and the legacy on the line.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Anytime you are implementing something big, there will be people nervous and anxious.

ROMANS: And now, that anxiety is coming from the very champions of health care reform, and that presidential punt, a key provision mandating businesses with 50 or more employees to provide insurance has been pushed back to 2015.

UNIDENTIFIED MALE: It's better to do the delay and get it right, than not do the delay and get it wrong.

ROMANS: And this administration says it's committed to getting it right.

Republicans say it was doomed from the start.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I think what the president did was outrageous.

REP. PAUL RYAN (R), WISCONSIN: I don't know how you can't conclude this was not a total fiasco.

(END VIDEOTAPE)

ROMANS: Steve Moore is an editorial writer at "The Wall Street Journal." He has used the fiasco -- word "fiasco" many times, to talk about health care reform.

Dean Baker is co-director of the Center for Economic Policy and Research. It's a left-leaning think tank.

Steven, you say Obamacare is a jobs killer. You've said it for a long time. Do you think that this move by the administration is vindication for those who said, look, this is not the right thing for the economy? Or is this about Democrats who are worried about congressional seats in 2014? Or both?

STEPHEN MOORE, THE WALL STREET JOURNAL: I think a little bit of both. By the way, Christina, you know, it is true that I think that Obamacare is a fiasco. But I actually agree with the president, I do think that our health insurance system in the country needs a total overhaul, it's just not this one.

Look, this decision to delay the implementation of Obamacare I think is a bit of a political decision. These are very important mid- term election with both the House and Senate in play. Republicans think they may be able to take the Senate, and Democrats are hoping they can take the House.

And by delaying this until after the election, I think Democrats are actually being honest that this is not really a very popular bill with the public as they hoped that it would be. And by delaying this, some of the most unpopular parts are put off until after the election.

But, you know, the thing is -- if this is not an issue in the 2014 elections, it certainly won't be one in 2016, which, of course, is even bigger than that mid-term.

ROMANS: You know what? I want to bring in Dean Baker, because Dean, this is not about getting people elected. This is about getting people covered -- covered by getting health insurance, by getting health insurance out there, health coverage to people who don't have it right now.

You know, does the president moving this forward, does he get any closer to that goal or is he pushing it further away?

DEAN BAKER, CO-DIRECTOR, CENTER FOR ECONOMIC AND POLICY RESEARCH: Well, it doesn't change at all. It's a relatively minor prevision in the act, and the Congressional Budget Office assumed this would not be in place. So they did not have to change their projections at all.

The main thing that happens, January 2014, is that the exchanges go into operation, and what that's going to mean is that every person in the country regardless of their health care condition will be able to get affordable coverage, and that's going to be huge change.

ROMANS: I want to ask you real quick. Do you think there is any chance they could move the individual mandate forward, too? Because some are saying, well, now, it looks like they are giving the businesses a break, but they're saying, hey, you know, individual workers, it's up to you?

BAKER: No, it's very unlikely they are going to do that. Let me just say, this was a very peculiar provision because the mandate for employers deepened on the family income for their workers, which for the most part -- I'm an employer, I have no idea what people earn. It's a very strange position. It was a result of the politics through which the bill was passed.

So, it's not surprising to me that they decided to put it off a year. It's very hard to implement.

MOORE: Well, I think one of the main motivations for putting this off was the fact that as we have talked about in this show, Christine, is there are negative employment implications to this, unquestionably, that employers are going to hold back their employment to less than 50 workers, and they are -- we are starting to see some initial signs of cutting back on hours worked, and that's very harmful especially to the lowest income workers in the country.

Now, the other point that Dean made about covering people who don't have insurance -- I think at this point, Christine, both Republicans and Democrats agree that any system we go to is going to cover the vast majority of Americans. We are going to have a system where people don't go without health insurance. But here's the most amazing part, the Congressional Budget Office, which Dean just mentioned, they indicate that after 10 years of implementation of the law, we are still going to have 20 million to 30 million uninsured people. So, this doesn't accomplish that goal, Christine.

BAKER: Well, Steve, as you know, most uninsured people are immigrants, that I would be happy to have covered, but Republicans insist they would not be covered. So, President Obama gave in on that.

But in terms of the job killer story, this is actually one reason why I'm really happy that President Obama did this, because we've have Stephen and these other people running around saying, job killer, job killer, and I think they are wound up and have to say that 10 times an our hour or something -- we get to test that, because if that's really true, we are going to see a hiring boom in the second half of 2013, because now, this nasty provision doesn't take effect.

Now, in reality, it's a joke -- 95 percent of large employers already cover their workers.

ROMANS: Right.

BAKER: So, the idea of it having a massive job killing, it's silly. Maybe Steve will stop saying it.

MOORE: Dean, it's not just me saying this, though.

BAKER: I know, believe me, I know.

(CROSSTALK)

ROMANS: We don't know. Economist run the numbers, and economists also said --

MOORE: Yes, I know, but it's not economists, it's employers saying it, Dean. It's employers that run small businesses that run restaurants, that run retailers. They are the ones saying I am going to have to cut back on my hours. You don't have to believe me about this.

BAKER: I don't believe them. They have an interest in saying that, Steve, you know that. And I look at the data, and it does not appear in the data, and we will get a chance to test it and we won't have to argue, Steve.

MOORE: We had a big pickup in the last job reports.

ROMANS: Some are mad because they spent several thousand dollars on consultants what to do, and they've got another year to wait.

People who are making the money is the cottage industry telling small businesses what do to. I don't know how to get a piece of that. It's not a publicly traded entity.

Last word to Stephen, House Speaker John Boehner called the delay outrageous. I want you to listen to this.

(BEGIN VIDEO CLIP)

BOEHNER: The idea that we are going to give big businesses a break under Obamacare, but we are going to punish small businesses and families? Wrong. And we'll have another vote, count on it.

(END VIDEO CLIP)

ROMANS: Another vote -- the House has already voted 37 times, 37 times to repeal Obamacare. I mean, is the 38th time going to make any difference?

MOORE: No. It isn't. And look, I am with you. The Republicans made their point that they are against this. What I would like to see is them make some kind of defining some parts of Obamacare, maybe there's a big slush fund, and go after some of the most unpopular parts.

ROMANS: We are going to be talking about Obamacare for years to come, guys.

Stephen Moore, thank you so much, and, Dean Baker. Nice to see both of you today. Thank you so much.

Coming up, more on the Obamacare delay -- a punt, a dropped pass or a flat-out penalty? The president delays a major component of his signature health care law. Small business now makes a call on the play, next.

(COMMERCIAL BREAK)

ROMANS: Whiplash. That's what some business owners say they're feeling now that the president has delayed a key part of Obamacare. The administration has pushed back the employer mandate by one year. That means businesses don't have to provide health care to their employees until 2015 now.

Zain Asher joins.

Zain, you know, you talk to businesses about the delay, and what's their reaction?

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Well, it's obviously relief among some businesses, OK, but there is a feeling this sort of prolongs the inevitable. Some businesses are saying we already made changes. This delay is a little bit unfair.

I did speak to one business owner who said, listen, Zain, when all is said and done I make about $1 million in revenue but my profit margins are 4 percent. So, when all is said and done, I take home about $40,000 to my wife and kids. How am I supposed to be able to afford health care for all my employees?

Take a listen.

(BEGIN VIDEOTAPE)

GEORGE EBINGER, IHOP FRANCHISEE: Supposed to be the Affordable Health Care Act, there's nothing affordable about it.

ASHER (voice-over): George Ebinger owns three IHOPs but says Obamacare will pancake his profits.

EBINGER: Frankly, there's people that are going to go out of business over this.

ASHER: Now, a one-year delay means that businesses with 50 or more full-time workers don't have to offer health insurance until 2015. One year later than planned.

EBINGER: This stay, giving us a year, is an opportunity to bring in some other changes in the regulation.

ASHER: The CEO of Fatburger, which has 75 U.S. franchises, agrees.

ANDY WIEDERHORN, CEO, FATBURGER: A delay is better than nothing but we really need to improve the law. Small business is feeling the whiplash effect of being a moving target.

ASHER: Both men support legislation in congress to change how the law defines a full-time worker. Under Obamacare, it's 30 hours a week. They say it should be 40 or business owners will be forced to cut hours and split workers between different franchises.

WEIDERHORN: I have seen them start to prepare for job sharing and job sharing is bad. Managing around a 30-hour workweek is ridiculous.

EBINGER: We're going to end up cutting back some hours. We're going to end up increasing prices. $5.49 now for a full stack of pancakes and probably look at $7.

ASHER: Only 3 percent of America's small businesses are affected by this part of Obamacare. The other 97 percent have fewer than 50 workers.

But with 150 employees, Ebinger says the costs for him are steep.

EBINGER: I don't believe I would be able to get away with less than $200,000 in health care costs.

ASHER (on camera): What would that mean for your profits?

EBINGER: It would mean there wouldn't be any profits.

ASHER (voice-over): He said the health care law delayed or not has put his expansion plans on hold and that layoffs are possible.

EBINGER: Who do you tell to go home, who do you tell not to be here? What do I tell my employees when I have to lock the front door when I can't afford to stay open, because I can't pay the penalty and I can't buy the health care?

ASHER: Still, health care is something both men say workers should have.

WIEDERHORN: Everyone wants coverage, but there is a cost to it and we need to be efficient about it and equal about it.

EBINGER: I would love to have all my employees to have full health care with dental, paid vacation for two weeks. You know? It's not in the cards.

(END VIDEOTAPE)

ASHER: And what's interesting is the owner of those IHOPs that I spoke to has actually said to me that, you know, he polled 150 of his workers and he asked them, if I gave you guys health insurance, which one of you would take it? He said he only got two responses.

So, I think, what people have to remember is, even if you're employer does offer health insurance, you still have to chip in. And if you're only making $10 or $12 an hour, if you don't have a family, then, sort of tricky like --

ROMANS: The small businesses have until 2015 now to accommodate this. And, frankly, there are some small business owners who are angry because they've spent a lot of money on accountants and lawyers to try to figure out how to comply and now they have another year of uncertainty.

But for the individual workers, they can go to exchanges this fall to buy health insurance or they can remain uninsured for another year.

What does it mean for individual workers?

ASHER: Well, individuals who would have gotten health insurance through these businesses now have to go out and get it on their own or pay a fine. So, there was a concern this sort of shifts the burden from the employers to the workers and is that really fair?

ROMANS: All right, Zain, we'll talk about this more, I'm sure, in the weeks and months ahead. No question. Thanks, Zain.

Up next, stocks are up but the global economy is slowing. What that means for your money, next.

(COMMERCIAL BREAK)

ROMANS: Another week, another record high for stocks. But is that bull market getting tired?

Experts surveyed by CNN Money say stocks will maintain the double digit gains in the second half of the year but don't expect another rally. That's not all. Give me one minute on the clock. It's money time.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): You won't need an e-book to read a good conspiracy on the beach this summer. A judge ruled that Apple conspired against Amazon with a group of major publishers to fix the price of e-books. That meant you paid more even if you weren't using an Apple iPad to read your e-book. Employees at the IRS may not have to worry about paying taxes on their bonuses this year.

That's because there won't be any bonuses if the new boss gets his way. He blames it on cost cutting measures due to the sequesters.

Consumers are learning the lessons of financial discipline. Credit card delinquencies fell to the lowest levels since the 1990s.

Unfortunately, living within your means probably means you won't be buying a mega yacht, like this any time soon. The world's largest yacht is shrouded in secrecy with the buyer not public and the price tag thought to be more than half a billion dollars.

And another welcome back to Twinkies, back from bankruptcy that is. The new Twinkie is built to last with a shelf life of 45 days. That's double their predecessor.

(END VIDEOTAPE)

ROMANS: The Federal Reserve is looking for any sign of economic strength so it can pull back its historic stimulus. That means every piece of economic data is getting heightened scrutiny on Wall Street, but there are also some unconventional ways to read this economy.

So, let's forget about the monthly jobs report, forget about gross domestic product and the consumer price index. Forget all that.

Check out these economic readings. What do shark attacks, hot waitresses, and men's underwear have in common? Well, they're economic indicators, of course.

Why men's underwear? The theory said to Count Alan Greenspan, undies are the first thing men stop buying when times are tough. So, if sales bottom out, there goes the economy.

This chart shows us skivvies' recovery.

Another theory, the hemline index. It's been around since the 1920s, the shorter the skirt, the better the economy. Two Dutch economists actually studied it. Their conclusion, hemlines can't predict the economy, but recession do lead to longer skits, after a three-year lag time.

Today's maxi dresses are perhaps signs of a financial crisis hangover.

Connie Francis only had part of the story. Lipstick may tell a tale on the economy. This indicator says that when money is tight, women indulge in small luxuries instead of big one. But lipstick sales, well, they fell during the last recession, so maybe we kiss this indicator good-bye.

And from lips to jaws.

In the movie, Amity Island was packed and according to the shark attack indicator, that's a sign of a strong economy. More people vacationing means more people in the water and more shark attacks. Since the end of the recession, the numbers have been trending upwards.

Then, there's the hot waitress index illustrated by the show "Two Broke Girls."

UNIDENTIFIED FEMALE: Please, I really need this job. We've lost all of our money.

ROMANS: The theory goes, the hotter your waitress, the worse the economy. Why? Because in boom times, beautiful women are more likely to work as promotional models, product reps and other jobs where hotness helps.

Ridiculous? Yes. But it gets worse. Sugardaddie.com surveys its clients on the economy. It's a dating site that pairing wealthy men and women with attractive sugar babies. In a survey, those daddies are predicting a downturn. Now, if they stop buying themselves underwear, we should really be worried.

(END VIDEOTAPE)

ROMANS: Do you have an economic indicator I have not thought of? Let me know @ChristineRomansCNN, and on Facebook.

For more of my interview with Eliot Spitzer, visit our blog at CNN.com/YourMoney. We're here every Saturday 2:00 p.m. Eastern. Sunday at 3:00.

Until then, find me online. That's it for me.

(MUSIC)