She grilled, "You know, in 1965, everyone was told that over 25 years, the cost of Medicare would be $12 billion. The actual cost, $107 billion." Sawyer added, "Ten-times what the estimate was. Can you know this cost? And can you guarantee it's not going to be more than the administration believes?" Early Show co-host Maggie Rodriguez quizzed Romer, the Chairwoman of the President's Council of Economic Advisors, on Obama's repeated insistence that he has no interest in meddling in the private sector. She wondered, "He sounds like he's being forced to do these things. If he believes that big government is actually a bad thing, why doesn't he at least try less intrusive options, which are certainly be offered up?"
After Romer responded with a talking point about how the status quo "can't remain," Rodriguez pressed, "But why not start less aggressively?" Regarding the issue of new government regulatory reform for the credit card and mortgage industry, the CBS host queried, "How can the consumer feel confident in – in trusting such a controversial proposal when, for example, the President conceded yesterday that unemployment will hit 10 percent, when the administration had predicted that if we passed the stimulus, it wouldn't go over eight percent?"
On the issue of new regulations for credit cards, GMA's Sawyer challenged, "And does it mean that you can run up a high bill, a high debt on your credit card and effect government protection?" She also speculated that such legislation could lead to "second guessing the banks, the mortgage industry."
Romer appeared unprepared for this hardball from Sawyer on a proposed health care overhaul:
DIANE SAWYER: Turning for a moment to health care, if I can, this morning. The Congressional Budget Office, as we know, issued a report which created kind of a bombshell about Senator Kennedy's bill, which is the leading Democratic bill at this point. Saying that not only would it be the huge cost over ten years, but at the end of the day, you'd still have, net, 36 million people who wouldn't be covered. Even Senator Dodd said he was concerned and surprised by those numbers and he helped draft the bill.
CHRISTINA ROMER: So- the crucial thing- Last Monday, the President gave his vision of health care reform. And here I just have to tell you, do you notice how health care reform and financial regulatory reform, sort of all go together. This is the President's theme of not only getting through this crisis, but coming through stronger. A new foundation for the economy. And he laid forth principles, such as making sure we contain cost growth. Expanding coverage. And put some very concrete proposals on the tables.
NBC's Today show also featured an interview with Romer, but it was brief and amounted to only one clip of the official explaining the administration's regulatory plans. News anchor Ann Curry did label the proposal a "tough sell" in Congress.
It's unclear what prompted such skeptical inquiries from CBS and ABC hosts, but more of this type of actual journalism would certainly be appreciated by many Americans.
A transcript of the June 17 GMA and Early show interviews can be found below:
Good Morning America
7:03
SAWYER: And we followed up on this a few minutes ago, when, from Washington, we talked to Dr. Christina Romer, who is chairwoman of the President's Council of Economic Advisers. So, as we heard Jake Tapper say, this could be a real challenge up on Capitol Hill, with a lot of people saying these enormous, new regulations could intrude into every part of the commercial financial world. Second guessing the banks, the mortgage industry. What's your response?
ROMER (Chair, Council of Economic Advisors): I think the key thing to say is that the status quo is not an option. One of the things that we've seen from the crisis that we've been going through is that there were gaps. There were failures in our regulatory system. And we need to make it better. What we're proposing is an important overhaul, the biggest overhaul since the Great Depression.
SAWYER: If I can bring it down to the consumer for a moment. There's one quote I noticed in the paper this morning, saying that the consumer protections would, in effect, be deciding how people live. Not just how people get to decide for themselves. And the question is, take credit cards alone. What will be new for the consumer on credit cards? What would you prevent? And does it mean that you can run up a high bill, a high debt on your credit card and effect government protection?
ROMER: No. Very much what the new Consumer Financial Protection Agency is supposed to do is to really watch out for all the ways in which consumers borrow. You know, we have a lot of those regulations today. They're just kind of spread around to a lot of different agencies, a lot of different regulators. Very much what our proposal says is, the consumer deserves one agency, whose only job is to watch out for them.
SAWYER: Turning for a moment to health care, if I can, this morning. The Congressional Budget Office, as we know, issued a report which created kind of a bombshell about Senator Kennedy's bill, which is the leading Democratic bill at this point. Saying that not only would it be the huge cost over ten years, but at the end of the day, you'd still have, net, 36 million people who wouldn't be covered. Even Senator Dodd said he was concerned and surprised by those numbers and he helped draft the bill.
ROMER: So- the crucial thing- Last Monday, the President gave his vision of health care reform. And here I just have to tell you, do you notice how health care reform and financial regulatory reform, sort of all go together. This is the President's theme of not only getting through this crisis, but coming through stronger. A new foundation for the economy. And he laid forth principles, such as making sure we contain cost growth. Expanding coverage. And put some very concrete proposals on the tables.
SAWYER: Members of Congress, though, like House Minority Leader John Boehner have said, whatever is being said, the costs are unknowable and going to be astronomical. And there's a cautionary tale in Medicare. We went back to look. You know, in 1965, everyone was told that over 25 years, the cost of Medicare would be $12 billion. [ABC graphics appear onscreen showing disparity.] The actual cost, $107 billion. Ten-times what the estimate was. Can you know this cost? And can you guarantee it's not going to be more than the administration believes?
ROMER: Of course, you can't ever know the future. What the President, though, has said is, we're absolutely going to pay for this thing. Any health reform that we do, absolutely can't grow the deficit in the short-run. And it needs to make the fundamental kind of reforms that will slow the growth of costs in the long run, because that's the thing that's fundamentally going to bring down the budget deficit, eventually.
The Early Show
7:03
CHRISTINA ROMER: Good morning. Great to be here.
RODRIGUEZ: Thanks for being here. For the people at home wondering ‘how will this help me?,’ can you give us a nutshell answer in layman's terms please.
ROMER: Absolutely. I think there are two crucial things it will do. One, it’s going to make our economy, our financial institutions, more stable. That is a big goal of the President. You’ve seen really a theme the last several weeks of the new foundations, sort of coming through this crisis stronger and healthier. Health reform is part of that. Financial regulatory reform is part of that, to really make it so that our financial institutions are more, you know, are less risky, more stable. So that's going to be crucial for all of us, because we know that financial crises are terrible for the overall economy. And then for individuals, the new Consumer Financial Protection Agency is really going to take all of those consumer regulations and put them into one place, so that there’s one agency whose only job it is, is to watch out for consumers, the deceptive practices, transparency, making sure there is a plain vanilla option, even when there are more complicated ones. All of that’s going to be great for the consumer.
RODRIGUEZ: But this all comes with a lot of government intervention, which the President said yesterday, is not ideally what he would like to be doing. And that reminded me of when GM – the government took a majority stake in GM and he said that he was a reluctant shareholder. He's talking like somebody whose hands are tied. He sounds like he's being forced to do these things. If he believes that big government is actually a bad thing, why doesn't he at least try less intrusive options, which are certainly be offered up.
ROMER: You know, the crucial thing is that the status quo can't remain. What we’ve seen from the-
RODRIGUEZ: But why not start less aggressively?
ROMER: I think the truth is we are striking a really appropriate balance. We are not bulldozing the whole system. We're very much starting wh the regulatory structure we have and improving it. The other thing that's important, you know, you mentioned using less intrusive. Well, one of the key things that the President’s going to be talking about are higher capital requirements, that’s a very sensible, kind of market-braced – market-based approach that says, ‘let's make sure that the firms making decisions have money on the table so that they don't take excessive risks.’ So that they are there to absorb the first losses. And that's incredibly important.
RODRIGUEZ: Dr. Romer, you said it's not a bulldozer, but it is the most sweeping reform in 70 years. How can the consumer feel confident in – in trusting such a controversial proposal when, for example, the President conceded yesterday that unemployment will hit 10 percent, when the administration had predicted that if we passed the stimulus, it wouldn't go over eight percent?
ROMER: You know, the crucial thing is the consumer, when you mentioned the – what may happen to the unemployment rate. One of the crucial things that we know caused the mess that we’re in now is lax financial regulation, firms falling through the gap, the fact that we don't have resolution authority now. So when we have a big firm like AIG that gets into trouble, we don't have the tools for dealing with it. So the crucial thing is to actually make sure we don't face this kind of crisis again. That's the number one thing that’s going to be good for American families and the whole American economy.
