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What Can President Bush Do to Help Californians With Their Energy Problems?

Aired May 29, 2001 - 19:30   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.
TUCKER CARLSON, CO-HOST: Tonight, California here he comes. But what can President Bush do to help Californians with their energy problems? Will he and Governor Gray Davis ever see eye-to-eye?

ANNOUNCER: Live from Washington, CROSSFIRE. On the left, Bill Press; on the right, Tucker Carlson. In the CROSSFIRE, in Stanford, California, Democratic Congresswoman Anna Eshoo, member of the Energy Committee, and in Los Angeles, Republican Congressman David Dreier.

CARLSON: Good evening and welcome to CROSSFIRE. Memorial Day weekend: It's the start of summer for most of the country. Oh, but for California, it may be the start of more rolling blackouts and more political troubles for the state's governor, Gray Davis.

Davis met with George W. Bush in Los Angeles today. There was only one item on the agenda: energy, how to get it for less. The governor asked the president to impose federal price caps on wholesale power prices. The president refused.

Bush's plan: more power plants, more conservation, and $150 million from Congress to help poor people pay their electrical bills. Davis was not impressed. He plans to sue the federal government to get government price controls.

Meanwhile, the California energy crisis grinds on. Somebody's going to take the blame when the Golden State fades to black. The question is who will it be. The governor or the president?

Or Bill Press -- Bill Press.

(LAUGHTER)

BILL PRESS, CO-HOST: Yeah, blame it on me. Why not?

Congressman David Dreier, this is the -- good evening. Welcome to CROSSFIRE.

REP. DAVID DREIER (R), CALIFORNIA: Nice to be back, fellows.

PRESS: First -- first time that President Bush has been in California in seven months, first time that he's been there in the five months or so that he's been president. And yet he had this meeting with Governor Gray Davis today, and they were no closer together at the end of it than they were at the beginning.

My question is...

DREIER: I don't believe that.

PRESS: ... why did he -- why did he -- my question please first is why did he wait all that time, why did he travel all that distance to tell California to drop dead.

DREIER: Oh, come on, Bill.

PRESS: That's what he said.

DREIER: Let me just tell you, you should have been there at the World Affairs Council speech. He talked about a wide rage of California issues, and in the opening, you talked about the fact that the only issue of interest happens to be energy. He talked about global trade, which happens to be a very important California question.

And let me say this: Governor Davis...

PRESS: We're talking about energy, congressman, and a meeting with the governor.

DREIER: I got to -- I got to -- yeah. I mean, I think that we can talk about the issues that the president raised. You all want to talk about energy, I'll talk about energy. But I think it's important to note that global trade is an important California thing and President Bush is strongly for it.

On the issue of energy, Gray Davis in his press conference, Bill, made it very clear that the president of the United States has stepped up and met every single request that was made by the governor to help deal with California's problems save the issue of imposing price caps.

Now, Tucker knows very well -- we learned -- you didn't learn from this, of course, Bill, but Tucker knows that we learned a decade ago with the demise of the Soviet Union that a command-and-control economy is obviously not the best way to deal with the challenges that we have.

We want to encourage conservation, we want to discourage blackouts, we want to encourage exploration. And Bill, the imposition of price caps -- I know it's not politically popular, I know that there are many people who say that we've got to impose these caps -- but it's not the way to effectively deal with these challenges. And there are short-term solutions, which we can pursue, Bill.

PRESS: But wait a minute, the governor also said -- I watched what he said after the meeting -- that this was, the temporary price relief that he's seeking on behalf of the 34 million Californians, was the big enchilada. And as Governor Gravy (sic) Davis pointed out, the people who are making money off this crisis in California happen to be energy companies that are in the Southwest, including Texas.

Let me give you two of them here, Congressman Dreier.

DREIER: Did you just call him -- did you just call him -- did you just call him Gravy Davis? Is that what you said?

PRESS: His name is Gray Davis.

(CROSSTALK)

PRESS: Two of them in -- two of them in Texas, energy companies. Dynergy, their profits in the last year over the wholesale prices they're charging in California are up 251 percent. Another Texas company, Reliant Energy, their profits, gouging Californians, up 1,385 percent. Isn't this why George Bush refuses to help California, because he's helping out his Texas buddies?

DREIER: Bill, I'm sure that you listened very carefully to the president's address to the World Affairs Council today in which he said that he calls on his administration and the Federal Energy Regulatory Commission to take every step necessary to ensure that price gouging is not taking place. He established that as a priority in his speech, and he's established that as a priority of this administration.

He also made clear in that speech today that he has pursued the same policy as the past administration when it came to the imposition of price caps. And frankly, he's doing the right thing there.

You know, sometimes, Bill, when you look at issues, it's easy to pander to the lowest common denominator. It's very easy to all of a sudden be a populist. But occasionally, doing the right thing is, I believe, something that we Republicans regularly do, and frankly, as I think the president also pointed out well in his speech, the finger- pointing which has taken place on this energy issue has not been helpful in our quest to deal effectively with the problem that's out there.

CARLSON: OK, congresswoman...

REP. ANNA ESHOO (D), CALIFORNIA: Yes.

CARLSON: ... now there's a lot of talk about whose fault is all of this, and I thought last Friday Vice President Dick Cheney in his pithy Western way got right to the heart of it. Here's what he said.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: They didn't address it soon enough. They knew a year ago they had problems. They postponed taking action, because all of the action was potentially unpleasant. It would have involved price increases and so forth.

(END VIDEO CLIP)

CARLSON: In other words, it's your fault. The California energy crisis is the fault of politicians in California, who knew this was going on, and sat by and fiddled while the state went dark, and did not take appropriate steps because they were politically difficult. Why is this not true?

ESHOO: Well, let's look up first at the -- what everyone agrees was one of the most faulted pieces of legislation that lobbyists, the utility companies, the Democratic legislature and a Republican governor put into place. Californians acknowledge that. So we can just set that off on the side of the table. So we know that it was flawed.

But what we're getting from the administration, and my dear friend David Dreier, whom I think is out of step with some of his California Republican colleagues, who support price caps, who support cost-of-service based rates, plus a profit, which would be about 30 or 40 percent profit for the companies.

What the administration seems to just absolutely slide over is the gouging and the gaming. We have megawatts that are available to Californians today, and we are being gamed by a system where they are withholding the power.

There isn't any -- there isn't -- and that's documented. The federal agency has documented that there is gouging.

CARLSON: Well, I understand that, congresswoman, but you're not answering the question, which is...

ESHOO: No, I think I am.

CARLSON: ... Gray Davis has been governor...

ESHOO: I think you don't like my answer.

CARLSON: Well, perhaps not, but that doesn't change the fact that Gray Davis has been governor for two years, President Bush has been there four months, and you said, well, the law was...

(CROSSTALK)

ESHOO: The only -- let me just comment on...

CARLSON: But why hasn't he dealt with it?

ESHOO: Let me just comment on two things. Under the Davis administration, 13 new power plants have been licensed. Eight are under construction. Four will be up next summer.

So long term, we are building our way out of this. And we must have generation, we must have conservation. But we also need price relief.

DREIER: And Anna, you've got to -- Anna, you've got to acknowledge that a lot of things that have been done to ensure that we can pursue those 13 power plants have come from the federal government. We in fact have helped the state to provide relief. And that's why Governor Davis was right on target, Anna, when he said that without -- with the exception of the imposition of price caps we in Washington, the federal government, has taken every step necessary for the state of California to address the energy needs.

PRESS: Yeah, but David Dreier...

ESHOO: David, California Democrats...

PRESS: Go ahead...

ESHOO: ... have attempted to meet with the president, with the vice president, with the secretary of energy, and our request has fallen on deaf ears.

DREIER: Anna, let me just tell you, I will encourage....

ESHOO: So I think that's real unfairness.

DREIER: ... I will encourage those meetings.

ESHOO: That's a real unfairness. I look forward to you helping us get in the door.

PRESS: All right, Congressman Dreier...

ESHOO: But make no mistake about it, Californians need price relief. They know they're being gouged. We need a timeout. And the federal agency that's in charge of this will not budge. They are frozen in political ideology and California...

DREIER: It's not just ideology. A decision was made today by the 9th Circuit Court of Appeals on an Oakland case which basically said that unlike what Governor Davis said today, the federal government does not have, in fact, the responsibility and the state of California does not have the legal obligation, the legal right to get the imposition of price caps.

PRESS: All right, Congressman Davis...

ESHOO: Well. that was the court intervening, but the federal agencies still has the responsibility -- and you know it, David -- under the federal power act for just and reasonable prices.

DREIER: What I'm saying is...

PRESS: All right, members -- members, I'm going to jump in here, I'm sorry, with another question. Congressman Dreier...

DREIER: After you, Bill.

PRESS: ... you keep saying, you know, except for price controls -- it's like saying Switzerland would be a great country except for the mountains. You can't get rid of the issue of price controls.

You may call it...

DREIER: Bill, I love -- I love...

PRESS: Please. You may call it pandering to do something to help the 34 Californians -- 34 million Californians, but I want to go back to what Governor Davis said after his meeting today with President Bush, one reason he thought he should act. Here's what the governor said. He said: "I did tell him that if we have to pay $50 billion more for power next year, it could well trigger a recession in California, which could drag down the American economy into recession as well."

Isn't that one reason why President Bush ought to really rethink his intransigence on temporary price relief?

DREIER: There is no doubt about the fact that California's energy problem could ripple across country. We've obviously -- obviously seeing this increase in gasoline prices, which has been a very serious problem, and we've not getting refineries online, which is something that's necessary for us to deal with that issue.

But Bill, I love your juxtaposition of mountains in Switzerland to a command-and-control economy. The (UNINTELLIGIBLE) happens to be to go back to the Soviet model, which is really what this consists of.

ESHOO: Oh, that's ridiculous!

(CROSSTALK)

DREIER: I'm saying that...

PRESS: We are talking about California and the United States!

ESHOO: That's absurd. That's absurd.

(CROSSTALK)

DREIER: But for Bill to believe -- Bill, for you to believe that the imposition of cost controls happens to be the only solution to this problem -- I mean, you know, Switzerland, the mountains, hey, the fact is we need to do lots of steps that will encourage conservation, eliminate the prospect of blackouts and encourage exploration, and this administration has taken steps to do that, and I believe that we are going to be able to mitigate the problem with these steps.

ESHOO: But David, David, why did president cut -- make a 27 percent cut in renewable energy and conservation in his own budget?

DREIER: Well, we know that he is...

ESHOO: This is, in a sense, unhappily, unhappily, a lot of happy talk, because, it is not actually doing anything for California. It is doing nothing for California.

(CROSSTALK)

DREIER: Well, you don't recognize it, but Governor Davis has recognized it.

PRESS: Congressman and congresswoman, a lot of energy in this debate. We appreciate it. We are going to take a break. When we come back, we might ask the really revolutionary question: how real is this crisis anyway? More CROSSFIRE coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: For too long, too often, too many have wasted energy pointing fingers and laying blame. Energy is a problem that requires action. Not politics, not excuses, but action.

(END VIDEO CLIP)

PRESS: Welcome back to CROSSFIRE. Two political adversaries held a big summit meeting today. No, not Yasser Arafat and Ariel Sharon, trying to solve problems in the Middle East. A lot tougher than that: President Bush and Gray Davis, trying to solve California's energy crisis. Is there a role for the federal government to help? Or is California on its own?

Two members of Congress battle it out tonight. From California, Republican David Dreier in Los Angeles and Democrat Anna Eshoo in Stanford -- Tucker Carlson.

CARLSON: Congresswoman, let's talk about price controls for a moment, which you offer up as a short-term solution to the California energy crisis. Leave aside the fact that, as David Dreier pointed out, they didn't work very well in Bulgaria, even that short-term price controls become forever, as they tend to do.

How about this idea that price controls when applied to energy are bad for the environment, because they don't encourage people to save energy. If energy prices are artificially low, then what incentive do you have to turn off the lights, or to find ways to conserve energy? So, isn't the plan that you are pushing really coming at the expense of the environment in favor of short-term political gain?

ESHOO: Hardly. And especially from someone that has always enjoyed 100 percent rating by conservation and environmental organizations. We need...

CARLSON: Well, it's not too soon to start.

ESHOO: We need three things. We need three things. We need more generation, we agree upon that. We need, and can, conserve more. In fact, Californians don't take a back seat to anyone. In fact, if we saved, if we lessened our miles per hour by three in terms of our consumption, it would equal 390 million barrels of oil, which is equivalent to a yearly production of what Qatar and Oman puts out, so we can do these things and we are on our way doing them. In fact, conservation continues to rise in California.

But the third thing that we need is price relief. And it is absolutely absurd, in my view, to take something, a system, a cost of service based rate, which is what consumers have paid until this scheme -- as a matter of fact, it's the way we have operated in this country for over 200 years -- cost plus service-based rates, plus a profit for the companies. So, I don't find...

CARLSON: So, wait a second, congresswoman...

(CROSSTALK)

ESHOO: ... any communist system.

(CROSSTALK)

CARLSON: And I'm not even accusing of you being a communist, but it strikes me that your second solution is at fundamental odds with your third...

DREIER: Bill Press is the only communist on the show, Tucker, Bill Press is the only communist on the show.

ESHOO: Hardly.

PRESS: Thanks a lot, David Dreier, that's the last time you will be on the show.

CARLSON: You haven't answered my question, which is why...

DREIER: Thanks.

ESHOO: In fact, in fact, Tucker...

CARLSON: ... hold on, why would people conserve if the prices are artificially low? What incentive does that give people to turn off the lights, please?

ESHOO: Well, Tucker, if you received the utility bill that we are receiving, you would come to Jesus, and you would have new faith about this.

CARLSON: So, it's a religious thing.

ESHOO: It is absolutely -- well, it may be faith-based on the part of the administration, but it isn't when it comes to Californians. We are being gouged, the federal agency documented that. They also put a price tag next to it. They said that there were going to be refunds, and they have never done anything.

So, there is an acknowledgement of the scheme that Californians are suffering from. No one is going to waste energy. Californians know that we have a crisis, but we need a time-out, because the market is dysfunctional. We don't have any competition. We don't have a market that is working here.

(CROSSTALK)

DREIER: I'll tell you, we totally agree with that whole issue of the failure of the California plan, and there is going to be a rebate, and the president talked about it today, and I was very happy that Governor Davis applauded when President Bush talked about $300 rebate that is going to come to every tax-paying American. ESHOO: The president has also said, use your tax rebate for high energy prices.

DREIER: Well, we want to do anything we can to help.

PRESS: Congressman, let me ask you about the politics of this whole thing. California is the largest state. Again, 34 million Americans, and here's California asking for some help. And I want to show you our latest CNN-"TIME" poll as to President Bush, what a good job he's doing, or bad job, on energy. This is just last week. Good job, 38 percent. Bad job, 49 percent.

In California, the bad job rating is for President Bush is 70 percent. So, I just want to ask about the politics. Get away from the details. Isn't it politically stupid, that's my question, to really write off California the way Bush is doing?

DREIER: He is -- let me just tell you something...

ESHOO: I don't -- for the life of me, I don't understand it.

DREIER: It's crazy to claim that he has written off California. Bill, you know that he has not written off California and his presence here today is very clear evidence of his interest in California.

PRESS: Why did he wait so long?

DREIER: And -- let me just -- he waited so long because...

ESHOO: But David, we need more than a speech in California.

DREIER: He was focusing on the energy, he was focusing on the economic growth package and the budget package, and he went to 26 states to get the support, will help California by providing the tax relief, by getting the votes that wouldn't have come from California in Congress. I'll tell you...

ESHOO: But David, we need more than a visit. We need more than a speech.

DREIER: Oh, no, this is not just a visit.

ESHOO: We need action.

DREIER: Let me just tell you again, Anna...

ESHOO: We need action.

DREIER: Once again, Anna, Governor Davis has acknowledged...

ESHOO: You don't have to shout at me, David. I'm your friend.

DREIER: I'm just telling you that Governor Davis has acknowledged

DREIER: I'm just telling you, Governor Davis acknowledged that President Bush has taken every step, saving imposing cost caps...

PRESS: Except the one that counts.

DREIER: ... that California needs to deal with this issue. And I will say that I'm convinced that we are the right track here and the governor, maybe the reason for the popularity is that the governor has hired Mark Fabiani and Chris Lehane, the operatives of the Gore campaign, our tax dollars -- Bill, you are still a California taxpayer aren't you --I mean your tax dollars are paying for those guys to be...

(CROSSTALK)

CARLSON: Congressman, let me ask you about that, because that is actually a fascinating question. One thing that Governor Davis hasn't acknowledged but everyone talks about is that he hoped to run for president in 2004. So, you know, he blames everything on these out of state energy companies, you know, some things haven't changed in California -- blaming the foreigners for the problems -- and then he goes and hires Chris Lehane and Mark Fabiani from the Gore campaign, the masters of disaster, the people who smeared Gore's political enemies for an entire year on television. If his interest is helping California, why is he hiring two political hatchet men? Explain that.

ESHOO: Well, I think anyone that is part of "THE SPIN ROOM" should go and ask the governor about that. That's not what I'm involved in.

CARLSON: Well, give us the insight, Congresswoman, come on.

DREIER: "THE SPIN ROOM" is history.

ESHOO: I'm seated here in the heart of Silicon Valley, which is my Congressional district. And this is an economic issue. We are the 6th largest economy in the world, California. There's a human face to this and I don't think that on this program or on any other that we should lose sight of that.

CARLSON: Well, that face appears to be Gray Davis' face.

ESHOO: Tucker, don't make light of this.

CARLSON: He's at 60 percent disapproval. This is a desperate political move that -- are you denying that his political future is not playing a huge roll in his decisions?

ESHOO: You know what I'm doing? I'm dealing with the policy. And I have always thought that the best politics is very good policy.

DREIER: Absolutely. I totally agree with that.

ESHOO: We need price relief now. The president hasn't spoken to how he's going to bring about price relief right now.

DREIER: Yes he has. ESHOO: Not two years from now. No, there isn't any plan. I wish that there were. I will march into the front door of White House and work with the president to bring price relief, not only for my constituents, my district, but all of California.

(CROSSTALK)

PRESS: David Dreier, we have 15 seconds left. I just want to ask you, before Gray Davis became governor two years ago, in the preceding 12 years there was not one new power plant built in California. Under Republican George Deukmejian or Republican Pete Wilson. Why not, follow Republican?

DREIER: Because of all the constraints imposed by the federal government that have jeopardized that. Could I just close by saying that our thoughts and prayers are with the family and loved ones of Joe Moakley, our colleague who passed away yesterday. He served as ranking member of the committee that I chair and it's a horrible loss and Anna and I will certainly concur on that one. He was a great individual.

ESHOO: You know the Last thing that Joe said to me, David, was Anna, tell me how I can help you in California, because you know that I will. So, I hope that we are going to join hands and that you will join your Republican colleagues from Southern California in calling for price caps.

(CROSSTALK)

CARLSON: Congresswoman, Congressman, we're going to have to leave it there. Congresswoman Eshoo, Congressman Dreier, thank you very much. Delightful...

DREIER: Always great to be with you guys.

CARLSON: Nice to be with you, thanks. The lights will soon go down on Bill Press and me, but before they do we are going to sum it all up in our closing comments when we return. We will be right back.

(COMMERCIAL BREAK)

PRESS: Tucker, you know what I find curious? I really think that Gray Davis was floundering politically on this until George Bush walks right into his trap with this meeting today. I mean, only George Bush could turn this into Davis versus Goliath.

CARLSON: And he becomes the latest in the people Davis is blaming for this. I mean, if you replace Texas oil companies with illegal aliens he sound exactly like the governor before him, Pete Wilson, always blaming some foreign influence for the state's problem. This is a theme in California and it's pathetic.

PRESS: But it works. It works when you've got the...

CARLSON: Well, it doesn't make it any less pathetic. PRESS: When you've got the Texas oil companies and a Texas governor. All right, from the left, I'm Bill Press. Good night for CROSSFIRE.

CARLSON: I'm Tucker Carlson from the right. Join us again tomorrow night for another edition of CROSSFIRE.

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