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CNN Novak, Hunt & Shields

Interview With Donald Evans

Aired November 03, 2001 - 17:30   ET

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

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MARK SHIELDS, CO-HOST: I'm Mark Shields. Robert Novak and I will question one of President Bush's closest associates and economic policy-makers.

ROBERT NOVAK, CO-HOST: He is Secretary of Commerce Donald L. Evans.

(BEGIN VIDEOTAPE)

NOVAK (voice-over): The economic recession is deepening with more bad news this week. Consumer spending fell 1.8 percent in September, the steepest decline in 14 years. Factory activity declined for the month more than expected, the fifteenth consecutive monthly drop.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The attacks of September the 11th have deeply affected the lives of hundreds of thousands of people. Not only has it shattered the lives of those who've lost life, the attacks have threatened the livelihoods of American workers.

We need to work together to prevent further loss of jobs by passing an economic stimulus package that in fact will cause the job base to firm up and expand.

NOVAK: President Bush called for a stimulus bill on his desk to be signed by the end of November, but Congress is deeply divided on the issue.

Don Evans and George W. Bush became friends a quarter of a century ago as fellow oil men in Midland, Texas. In 1985 Evans became CEO of the Denver-based Tom Brown, Inc., Energy Company. He was chairman of the Bush for President campaign in 2000 and became the nation's 34th secretary of commerce, his first governmental post.

(END VIDEOTAPE)

NOVAK: Mr. Secretary, the administration has been saying that there is going to be a recovery next year. But now is what you're saying that if there is no stimulus package passed this year, we won't have a recovery?

DONALD EVANS, SECRETARY OF COMMERCE: We'll say it will be later rather than sooner, Bob. I mean, what we're saying is, the sooner we get the stimulus into the economy, the sooner we will begin our recovery.

And, you know, the long-term fundamentals of this economy still look very strong, but obviously the economy has been damaged by the attack of September 11, and the president is determined to put people back to work.

And the unemployment number that came out yesterday was certainly a very disappointing number. There's a lot of people being laid off. What the president wants to do to is put those people back to work.

There are 136 million people working in this great country today. Those that are not working, we want to put them back to work, and the way to do that is to pass a stimulus package, get this economy going again.

NOVAK: Sir, since there is a 14-year low in consumer spending, do you think the Democratic members of Congress have a point when they want more stimulus to put money in the hands of consumers rather than the hands of investors?

EVANS: Yes, I do, Bob. But I also think, you know, the president presented to Congress a balanced approach. What he said, look, about 50 percent of this ought to be spending and about half should be in the form of tax cuts.

I think we should remember that we already have $55 billion of spending moving into the economy because of the $40 billion supplemental and then the $15 billion package that went to the airlines. And so, the package that's being discussed now, the stimulus package, is in addition to what's already going into the economy.

And what the president has been saying is, let's keep this balance; let's have about 50 percent of it in spending and about 50 percent go to the consumer in the form of tax cuts so that they can start to drive this economy again. The consumers are really who have been driving this economy over the last couple of years. Obviously, they've, as you mentioned, they've cut down their spending in the last month, understandable so.

But, you know, the president is saying, yes, let's get some money in the hands of consumers so they can start to spend.

NOVAK: Maybe you can clear one thing up for me, Mr. Secretary.

EVANS: Sure.

NOVAK: The House-passed bill provides a retroactive tax cut for big corporations -- IBM, General Motors, General Electric -- putting money in their pockets in taxes they've already paid. That is not in the Senate bill or in the bill that the administration is proposing.

Can we say that the administration is opposed to that handout to the big corporations?

EVANS: The administration, the president is in favor of a process going through, and that's what's happened. The House has worked their will; they passed a bill. The president has said there's -- you know, it's a good bill.

NOVAK: Well, what's your position on that issue?

EVANS: And, you know, what my position is that the president's bill and proposal is a very constructive one and a very well-balanced one.

SHIELDS: Mr. Secretary, one of the provisions in the president's own stimulus package is to accelerate the tax cuts already passed earlier this year, scheduled for 2004, 2006.

Under the president's proposal, that means a couple struggling along with two kids on a $1-million-a-year income would get an $85,000 tax cut over the next four years, while the new heroes of America -- the firefighters, the police, the Marine sergeants at risk in harm's way -- making under $66,500 get no tax rate cut.

Doesn't that sound like a little unfair?

EVANS: Well, Mark, what he's saying is, look, we need to get money back in the hands of the consumers. Those that are paying two taxes, we need to get money in their hands. And that's what he says should be a part of this stimulus package.

He also said that there are a number of people that did not participate in the rebates of this last year, those who do file an income tax return but don't pay taxes. And he said, in his proposal, that those people should receive a rebate.

So he's thinking about those at all ends of the income spectrum, from the low end -- all Americans that are participating in this economy, he feels like should participate in the recovery.

SHIELDS: But the millionaires get 85 grand for the four years and the cops and firefighters...

EVANS: No, Mark, he didn't say that. Now, what he said was, let's look at accelerating the marginal tax cuts. And he didn't say -- in that area -- he didn't say all of them.

I mean, I think it's -- do you accelerate those at the high end? I'm not sure you do. That's something I'm sure will be worked through in the process. What he is saying is, you know, we've got millions of people out there paying taxes, and we ought to put money back in their hands.

SHIELDS: The economic news on Friday was more bad news for American manufacturing...

EVANS: Right.

SHIELDS: ... 1.1 million jobs lost in American manufacturing over the last year.

EVANS: Right.

SHIELDS: And during World War II, the United States was the arsenal of democracy. We're now engaged in what the president says will be a long, difficult and painful war.

And aren't we, because of erosion of our own manufacturing base, very much at the mercy for supplies, equipment, machinery from unreliable foreign manufacturers?

EVANS: Well, Mark, this is a very powerful economy. This is a $10 trillion economy. And although the manufacturing base has been hurt this last year and is certainly in a slowdown period, it's still a very, very strong industry and a very strong sector of our economy.

So I think there is every reason to believe that as this economy recovers, which it will -- I mean, every downturn we've ever had we have always had a recovery, and we'll have a recovery again in this economy.

And as we recover, I'm confident that the manufacturing base will play a big role in that. Part of the president's stimulus package was, let's accelerate depreciation so those manufacturing companies that you're talking about can go out and buy equipment, invest their dollars in goods that will put people back to work, so that will also help that industry.

So he's very focused on the manufacturing base of this country. And like I said, I'm very confident that they'll play a big role in this recovery that will happen in the coming year.

NOVAK: Mr. Secretary, you've been a big supporter of the energy program of the president. Senate Republican Leader Lott on Friday said that if the energy bill doesn't progress in the Senate, which it doesn't look like it should, he is going to attach it to the stimulus package. Is that a good idea or not?

EVANS: Well, listen, I'll tell you what's a good idea, and that's to pass an energy bill. I mean, the president...

(CROSSTALK)

NOVAK: ... attach it to the stimulus...

EVANS: Wait, listen. He's got to be -- I'm not in the Senate, I'm in the administration. I mean, they're going to have to decide, you know, how they try and move the bills through the Senate and through the House.

What I know is important is what the president said on January 20, 2001. He said, this country needs a national energy policy. And we need one now more than ever before, and that's why he delivered one to this country in the spring of 2001. We've got to finish it by having Congress and the Senate pass a bill.

NOVAK: Just before we take a break, Mr. Secretary, one of your Cabinet colleagues told me he thinks there's an orgy of spending going on on the Hill. Do you think the president will threaten a veto if this spending exceeds his dimensions?

EVANS: Well, listen, the president is a leader who keeps his eye on the long-term fundamentals of this economy. And he knows how important fiscal responsibility is.

And that's why he was very clear when he went out with his package several weeks ago: "Here's the box. If the box needs to be in the $60 to $75 billion range, whatever it is we do -- here's what I propose we do. But what we do needs to fit inside that box so that we can maintain the fiscal responsibility of this government and we can protect the long-term fundamentals of this economy."

SHIELDS: We have to take a break, but when we come back we'll ask Secretary of Commerce Don Evans if trade negotiation authority is essential for the U.S. economy.

(COMMERCIAL BREAK)

NOVAK: Secretary of Commerce Don Evans, if trade authority to give the president bargaining power is so important to the economy, why is it the administration seems to be backing away from it?

EVANS: I wouldn't say we're backing away, Bob. I'm still spending a lot of time on the Hill talking about it and visiting with congressmen, senators, talking about the importance of it.

I'm traveling across America and talking about it. I've spent the last three or four days this last week across this country speaking to how important trade promotion authority is for the president and for the president to lead this world when it comes to liberalizing trade; how important it is for the American worker and the American economy and American businesses.

We're not backing off at all. The president spoke about it earlier in the week to the National Association of Manufacturers, that you brought up earlier, how important it was to them. And he understood how important it is.

NOVAK: The U.S. trade representative, Ambassador Robert Zoellick, in advance of the big trade meeting in Qatar, was very, very harsh on the Japanese. He said they are not being -- they are not going along with an open trading system. Is that Bob Zoellick's opinion, or is that the administration's position?

EVANS: Well, listen, I think we've been clear with Japan. They need to continue to find ways to open up their economy, open up their markets to American products and American goods and American services. We certainly think they could be much more forward-leading than they have been, much more aggressive have been, and we're going to continue to press them on that.

SHIELDS: Don Evans, you and President Bush have both emphasized over and over that you want to restore the public's confidence and comfort in flying again, that it's safe and secure.

Now, to that end, wouldn't it have made sense for the president to have a signing ceremony Friday in the Rose Garden by simply passing the bill, the airport safety bill, that the Senate had passed by 100 to 0? Wouldn't that really have helped to restore confidence and get people back in the air?

EVANS: Well, that's part of it, Mark, and that would help, but it's important to get it right.

And, you know, listen, I tell you who's responsible for the airport security of this country, for the national security of this country, the economic security of this country -- and it's the president. And he knows that.

And so, if you're going to hold him responsible for it and hold him accountable for it, which the American people would do, then it seems to me that serious consideration should also be given to the kind of standards, the kind of guidelines, the kind of system that ought to be put in place.

SHIELDS: At a time of record increases in unemployment, the biggest in 21 months, American taxpayers have bailed out the United States' airlines to the tune of $15 billion. Is it too much to ask, when you've got a taxpayer bailout like that, that we put a freeze on the bonuses and pay of the airline executives?

EVANS: Well, listen, they've got to run their own companies.

Bob, let me tell you, I remember back in the early '80s when the president and I were going through one of the toughest economic downturns in the history of the industrialized world, the collapse of the oil and gas industry.

And I remember what I did: What I did was I cut my salary before I started laying off people. And I had to lay off people.

I remember what the president did. And the president, when he merged his company into another company, had to move it to Dallas, he called me up and he said, "Don, I'm going to merge company. I've got to find work for some of my employees."

And so I know what the president did. I know he understands the pain of going through periods like this. I know he understands the importance of executives being leaders through here, how important it is to set the example, because I remember him doing it himself in an economic downturn. It's what I did in an economic downturn.

But, listen, I mean, you know, we're not going to be mandating to executives or leaders or CEOs what they ought to do. That's their job, their responsibility. They're accountable to their shareholders. They aren't accountable to us .

NOVAK: Mr. Secretary, the administration wants people to fly again, businesspeople fly again, get the economy rolling again, help the airlines. I was on a business trip on Friday, and I was frisked, I was told I couldn't go to the washroom, I was made uncomfortable. People don't want to fly when they're treated that way.

Do you think that really adds to security, to make business travelers miserable?

EVANS: Bob, we've got to get the security right first. We've got to make sure that those on airplanes feel secure and feel safe. And so, we're obviously going through a transition period where we're going to have to toughen up security. Secretary Mineta was very strong earlier in the week that he was not happy with some of the lax security that we are seeing across the country. And so, we're going to be really...

NOVAK: Frisking me helps.

(LAUGHTER)

EVANS: Well, I don't know about that, Bob.

But, listen, we've got to make sure that those that get on an airplane and take off from an airport feel secure. Now, next, yes, we need to make sure that this process is efficient and is swift. But that's going to take time to get that system in place.

SHIELDS: Mr. Secretary, a year ago, you were the chairman of the Bush-Cheney committee, which won the White House. And next Tuesday is election day.

EVANS: Right.

SHIELDS: Republicans run in New Jersey and New York City and Virginia. Can those Republican candidates say to voters of America, "Are you better off than you were one year ago than you are today?"

EVANS: Yes, they can, they absolutely can.

SHIELDS: Even with the economy?

EVANS: Because they've got a great leader in the White House. They have a leader in the White House that has united this country, united this world, unlike it's ever been before. They feel very comfortable with their leadership.

But when I talk to people, quite frankly, Mark, all across the country, they say, "You know what, I'm glad your man won." And so, when I hear that all up and across America, I would say, yes, they're better off than they were 12 months ago.

SHIELDS: We'll be back in just a moment with Secretary Don Evans and "The Big Question."

(COMMERCIAL BREAK)

SHIELDS: Secretary Don Evans, tell us, the president has talked about sacrifice and the difficulty of this war. What sacrifice, beyond waiting in line, are you and your president asking of the American people, particularly the American business community?

EVANS: Well, Mark, I would say that we're asking them to be more alert, more aware, more conscious of what's going on around them. I mean, I think that people don't feel they ought to be participating, and they are participating. They are all part of this war against terrorism. And they need to understand that.

And if there is a sacrifice, it's just a greater awareness of what's going on around you. And if there are situations that don't look friendly to you, they should be reported to the local law enforcement agency or the federal agency.

So, you know, I would say that's what we're calling on the American people to do, to be involved and active participants in this war against terrorism.

NOVAK: Mr. Secretary, has your old friend George W. Bush changed since September 11?

EVANS: He's the same friend I've had for 30 years, the same basic beliefs, the same basic core beliefs, the same basic principles that guide him. He is as comfortable as he always was. He is as steady as he always was.

He's the same guy that understands that his life -- the purpose of his life is to serve you, to make your life better. This is a unique moment in the history of the world. He has unique skills to be a leader during this moment.

But is he a different person? No, he's not. He's the same person that I've always known, a great friend for the last 30 years.

NOVAK: Secretary of Commerce Evans, thank you very much.

EVANS: Thank you, Bob.

NOVAK: Mark Shields and I will be back with a comment after these messages.

(BEGIN VIDEO CLIP)

NOVAK: Mark, the administration has taken this very steady line that the recovery is coming, but we've got to have a stimulus package. Now, I thought that Don Evans made the best of that by saying yes, the recovery will come, but it's going to be a lot later unless you pass the president's stimulus package.

SHIELDS: Bob, there isn't probably a more popular Cabinet officer in Washington than Don Evans on both sides of the isle. But I have to say he failed to answer the question to the administration as to what sacrifice the American people are asked for other than waiting in line and looking more alertly. I mean, there's something -- people wan to participate.

NOVAK: The one piece of news I got out of our interview was how tough the secretary of commerce was on Japan. You know, every administration starts off saying we're not going to criticize Japan, but they always end up doing it because the Japanese are very frustrating on trade questions.

SHIELDS: That's right.

And you do get a sense of why George W. Bush and Don Evans are close. Not simply 30 years -- this is a fellow who talks about his president not only respectfully but very, very confidentially, carefully, and selectively. And this is a guy who wouldn't tell you if your coat was on fire. That's Don Evans.

NOVAK: I'm Robert Novak.

SHIELDS: I'm Mark Shields.

NOVAK: CNN's coverage of America's new war continues.

SHIELDS: Thanks for joining us.

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