On 'Today': Rove Takes Obama to Task On Mortgage Mess

Karl Rove was invited on Tuesday's "Today" show to discuss Obama's stimulus plan and NBC's Matt Lauer pressed the former Bush senior adviser about the one-sidedness of the vote on the bill by the GOP as he pressed Rove: "219, if you add up the House and the Senate we have what, 219 Republicans. All but three of them voted against this plan...do those 216 Republicans run the risk of being on the outside looking in, if this starts to work?" Lauer also went on to cite Obama's senior adviser David Axelrod ridiculing any member of Bush administration for offering economic advice as Lauer doubted: "Do you have credibility on this subject... would you say that the eight years of the Bush administration were lax on regulation?"

However this prompted Rove to hit back, in the following exchange, as he noted Democrats like Barack Obama were the ones who stood in the way of the Bush administration regulating some of the main culprits behind the mortgage mess - Fannie Mae and Freddie Mac:

MATT LAUER: You've come out and talked about it in your, written about it in your op-ed, you've spoken about this statement which prompted a comment from David Axelrod, the current senior adviser to the President. And I'm paraphrasing here Karl but he basically said, "Why do we need advice from any one attached to the Bush administration over the last eight years? Look at the economy as a result of that administration." How do you respond to that? Do you have credibility on this subject?

KARL ROVE: Well, first of all, look I'm not giving them advice. I'm commenting on what they're doing. I'm sure even this White House would say that people have a right to offer an opinion. Frankly, I thought it was interesting. The biggest accelerant in this economic difficulty was the failure of the government to rein in Fannie and Freddie. It was the Bush administration trying to rein in Fannie and Freddie. A new senator came to the United States Senate in January 2005 and refused to join the reform efforts, in fact, joined a filibuster effort to, to on the, on the bill that the administration offered up to rein it in. That senator was-

LAUER: That senator was?

ROVE: -Barack Obama of Illinois. He could have come and said, "You know what, I agree with the administration, we ought to rein in these imprudent lending practices that are getting us into difficulty." Do you know that, that it took 30 years for Fannie and Freddie to buy $2 trillion worth of mortgages? It took them five years to buy another trillion dollars worth of mortgages. After we tried to regulate them in 2005 it took them two-and-a-half years to get another trillion-two, mostly imprudent loans that they bought up.

LAUER: But, but you bring up this as an example but overall would you say that the eight years of the Bush administration were lax on regulation?

ROVE: No, no! Look, we, we, we were the administration that said this needs to be regulated. This is too big, too dangerous. A Clinton era regulator, Armando Falcon came in, in 2001. He had a term, so he was in office while Bush was in office and briefed the White House on this. And we agreed and began to move to regulate Fannie and Freddie. And it was, again I repeat, Democrats led by Chris Dodd and helped by the new senator from Illinois who blocked it in 2005.

The following is the full interview with Rove as it occurred on the February 17 "Today" show:

MATT LAUER: Alright, Savannah, thanks very much. Savannah Guthrie at the White House this morning. Karl Rove was the senior adviser and deputy chief of staff to President George W. Bush. He is now a contributor to Fox News. Hey, Karl, good morning, good to have you here.

[On screen headline: "Rove On Stimulus, Is GOP Gambling On Obama Failing?"]

KARL ROVE: Good morning to you.

LAUER: About $800 billion, that's what this package is all about. It's gonna get signed today. This is the kind of legislation that normally in Washington takes months and months to pass. They got this in one month. Does part of you admire that and does part of you worry about that?

ROVE: Well, it's, it's a great accomplishment. 667 hours and 10 minutes, that's how long the President has been President, and they got this bill done in less than that time. On the other hand it was rushed at the end, and as a result, people's confidence in this bill is necessaribly, necessarily shaken.

LAUER: But rushed? When you started to hear the jobless numbers, when you started to hear Admiral Dennis Blair, the chief of national intelligence, saying the economy right now in its current condition is the biggest threat we face, more so than al-Qaeda, doesn't it seem that quick and bold action was necessary?

ROVE: Well, quick and bold was necessary, but let's step back a minute. December 18th was when Barack Obama's advisers went to Capitol Hill and said to the, to the members of Congress, "We would like to have a package of roughly $850 billion. We're not gonna give you a detailed plan. We're gonna describe 200, less than $200 billion of that. You go write the rest." And they said, "We would like it to be temporary, timely, and targeted." And we got, we got it timely, that is to say a big bill done quickly, but there is a real question as to how targeted and how stimulative this bill really is gonna be.

LAUER: 219, if you add up the House and the Senate we have what, 219 Republicans. All but three of them voted against-

ROVE: Right.

LAUER: -this plan.

ROVE: Well, I'd like to look at it a different way. Twice as many Democrats voted against the President's plan as Republicans voted for it.

LAUER: Oh but let's, let me look at it my way for a second okay? 216 Republicans seem to have placed a bet on failure. Isn't that safe to say?

ROVE: No, no. What they bet on was this was not the right way to stimulate the economy. The one, the interesting thing was, in both the House and Senate, the Republicans went out of their way to offer alternatives and to discuss items with the White House and with their Democrat colleagues when they were allowed to. In the House they weren't allowed to talk at all.

LAUER: But even, but in the, in the op-ed you wrote in the Wall Street Journal, you said this will have some impact on, on the economy. And part of it will happen by its own due course anyway.

ROVE: Right.

LAUER: But do those 216 Republicans run the risk of being on the outside looking in, if this starts to work?

ROVE: It, it depends, it depends. If they go out and adopt the rhetoric that this is a, that the, that the economy is gonna go to Hell in a hand basket, then they're gonna have a problem. But if on the other hand, they say, "You know what, there are better ways to do this and we didn't need all this pork, we didn't need all this special interest spending, we wanted a bill that worked right now." There's gonna be more money spent under this bill between 2011 and 2019 that will be spent this year. That's, that's pretty remarkable for a bill that's supposed to stimulate the economy today.

LAUER: You, you, you've been, you've come out and talked about it in your, written about it in your op-ed, you've spoken about this statement which prompted a comment from David Axelrod, the current senior adviser to the President. And I'm paraphrasing here Karl but he basically said, "Why do we need advice from any one attached to the Bush administration over the last eight years? Look at the economy as a result of that administration." How do you respond to that? Do you have credibility on this subject?

ROVE: Well, first of all, look I'm not giving them advice. I'm commenting on what they're doing. I'm sure even this White House would say that people have a right to offer an opinion. Frankly, I thought it was interesting. The biggest accelerant in this economic difficulty was the failure of the government to rein in Fannie and Freddie. It was the Bush administration trying to rein in Fannie and Freddie. A new senator came to the United States Senate in January 2005 and refused to join the reform efforts, in fact, joined a filibuster effort to, to on the, on the bill that the administration offered up to rein it in. That senator was-

LAUER: That senator was?

ROVE: -Barack Obama of Illinois. He could have come and said, "You know what, I agree with the administration, we ought to rein in these imprudent lending practices that are getting us into difficulty." Do you know that, that it took 30 years for Fannie and Freddie to buy $2 trillion worth of mortgages? It took them five years to buy another trillion dollars worth of mortgages. After we tried to regulate them in 2005 it took them two-and-a-half years to get another trillion-two, mostly imprudent loans that they bought up.

LAUER: But, but you bring up this as an example but overall would you say that the eight years of the Bush administration were lax on regulation?

ROVE: No, no! Look, we, we, we were the administration that said this needs to be regulated. This is too big, too dangerous. A Clinton era regulator, Armando Falcon came in, in 2001. He had a term, so he was in office while Bush was in office and briefed the White House on this. And we agreed and began to move to regulate Fannie and Freddie. And it was, again I repeat, Democrats led by Chris Dodd and helped by the new senator from Illinois who blocked it in 2005.

LAUER: Let me end on a completely different subject. There is a report in the New York Daily News this morning that former Vice President Dick Cheney is furious at former President Bush for not pardoning Scooter Libby, that he went back and back in person and on the phone trying to get that pardon for his. his former aide, Scooter Libby, and it didn't happen and he's furious. What do you know about this?

ROVE: Well I know that he felt strongly about this, but I think the tabloids tend to get these things overblown. These are two very close men who have, who had, who have a long and enduring relationship that' good and positive.

LAUER: Hasn't been soured because of the lack of a pardon?

ROVE: Look, look, no. I don't, I don't detect that at all. It's obviously something Dick Cheney feels strongly about, but the President laid out in his commutation of Scooter Libby the grounds on which he was making his decision.

LAUER: Karl Rove. Karl thanks for coming in.

ROVE: Thanks for having me.

LAUER: Good to have you here. Appreciate it.