HH: Last hour, Senators McCain and Grassley joined in to explain why the stimulus bill isn’t a stimulus bill. We begin this hour with Senator Lindsey Graham of South Carolina. Senator Graham, welcome back to the program. How goes the battle against the Porkapalooza?

LG: Well, all I can tell you is that the process stinks, and the substance of the bill sucks.

HH: Well, that’s concise.

LG: Yeah, it is concise. You know, we’re fighting. MoveOn.org has lit up their e-mail tree. They’re really losing public opinion, so they’re trying to get their base energized to hold Democrats. Harry Reid just announced on the floor that he wants this thing passed tomorrow night, which means he must believe he has sixty votes to bring about cloture. Republicans are not going to agree to end the debate on this bill unless we’re made to, so I hope we don’t have Republican defections, but it sounds like we might.

HH: Now in order to get to 60, because they’re lacking the Minnesota seat…

LG: Right.

HH: Either Norm Coleman…they need two Republicans, right?

LG: Well, if Ted Kennedy comes back, they would need two. If Ted doesn’t come back, they would need three. And all I can say is from our base point of view, from your audience point of view, get involved on this one. Let people know that there is a better way. The process does stink. I mean, the House Republicans were told by Nancy Pelosi we won, we write the bill. They had no input at all. And not one House Republican voted for the bill. I think it had to do with the stinky nature of the substance of the bill, but the terrible process. We’ve come to the most deliberative body in the world, right, called the Senate? We’re doing this in two days. We’ve never had a chance to sit down with Democrats and find the middle ground. The Finance Committee markup in the Senate lasted an hour and forty minutes. Not one Republican amendment was accepted. We’ve had about fifteen amendments offered on the bill. And this is a bill that costs over a trillion dollars. It is a terrible process, and the bill does not stimulate the economy. It mortgages your grandchildren and children’s future.

HH: Now Senator Graham, if cloture is defeated…

LG: Right.

HH: Do you expect the Democrats to come to you and begin to negotiate with the Republicans in good faith?

LG: Yes. Well, they’ll have to. Now that…you nailed it. This is a big play by Harry
Reid. If he loses the cloture vote, that means the process goes forward, and I’ve got a bunch of amendments that highlight how bad this bill is for the next generation, and how little it does to stimulate the economy. So if he loses on cloture, that means we can keep offering amendments that highlight the weakness in this bill, which I think would require them to stop, call a time out, and see if we can get in a room and do something reasonable for the American people.

HH: Now Senator Graham, are you prepared to tell us which Republicans you’re concerned about?

LG: Well, I think you know (laughing).

HH: Well, I can speculate that Senators…

LG: Start at Canada and work your way down.

HH: That’s it. Start with everyone with a Canadian border. That means Ohio, and the Maine sisters. But you know, Susan Collins, I helped her in her campaign. I thought she was a very good fiscally responsible person.

LG: She is a good lady.

HH: Arlen Specter’s running for re-election. I can’t imagine he wants to light this up, the conservative base. George Voinovich is my home state of Ohio, and he’s pretty much of a fiscal conservative.

LG: Yes.

HH: I don’t think he wants to hurt Ohio, so I don’t know where they get two or three Republicans.

LG: No, this is, these are all wonderful people, and here’s what the polling says. About 60%, close to 60% of the American people do not like this bill, and believe it will not help in a year. 75% believe we should do something. Count me in that category. I’d like to do something that stimulated the economy that’s fiscally responsible. And I believe this bill will do more harm that good. That’s pretty powerful to have the American people with a president this popular seeing the difference between the president’s personality and the substance of this bill.

HH: Now Senator Graham, I know whether it’s Maine, Pennsylvania or Ohio, people are concerned about the values of their homes. Now some people lost their homes, and that’s bad.

LG: Sure, right.

HH: But putting a bottom under housing is the one thing I think Republicans and Democrats can agree on.

LG: There you go.

HH: I had the chairman of the National Association of Home Builders on a couple of weeks ago.

LG: Right.

HH: They want a tax credit, they want 4% financing, and there’s nothing in this bill to help housing.

LG: Well, we just finally, they accepted the Isakson amendment that would give a $15,000 dollar tax credit, that the homebuilders want. Johnny Isakson’s amendment allows a $15,000 refundable tax credit to be applied to the down payment of the purchase of a home. This is what they did in the 70s to alleviate excess inventory. The Democrats took it without a vote, because it was going to pass.

HH: Step one. What about the 4%?

LG: Well, the 4%, John Ensign will present. I doubt if it will pass, but here’s the point that you’re making so well. Housing is the root cause of our financial problems. This is about a $900 billion dollar bill now, and it has a one component for housing, and that’s not what it’s going to take to fix housing. You’re going to be coming back to the American people with a housing package that’s going to cost three or four hundred billion, and we still haven’t done anything about toxic assets that the banks own, and you’ve got $310 billion left in TARP to do that, and that’s not enough. So the $900 billion they’re spending to stimulate the economy does not stimulate the economy. It does nothing for housing or dealing with the toxic assets that prevent people from getting credit. It is a huge waste of money.

HH: Senator Graham, I went to www.readthestimulus.org, which is a project of the Heritage Foundation, Kithbridge and a bunch of others, and I looked in vain for serious defense spending. I mean, if you’re going to blow a trillion bucks..

LG: Right.

HH: At least get me some destroyers or some cruisers.

LG: (laughing) Yes, that’s true.

HH: There’s nothing in there.

LG: Well, John McCain has the amendment tomorrow that I am a co-sponsor of, it’s $415 billion, four fifteen, it allows I think $45 billion for infrastructure spending that’s shovel-ready, it allows I think $18 billion for the Defense Department to reset equipment coming back from Iraq, and build military construction projects that are ready to go. It has tax cuts, and it has safety net spending, and it’s $415 billion. I think it will stimulate the economy. The message of the McCain amendment, and the Graham amendment, and others, spend less, do more, and that will be voted on tomorrow.

HH: A couple of last questions, Senator Graham…

LG: Yeah.

HH: And thank you for the time. I know you might get called away.

LG: No, I’m good.

HH: You were close to Senator McCain through the long campaign.

LG: Right.

HH: I asked him last hour, and he couldn’t remember it, and I don’t remember it, but I’ll ask you. In the course of the long campaign against now-President Obama, did he or anyone close to him every suggest that in the first three months of office, they’d propose spending a trillion dollars?

LG: Well, I think if they proposed, if we knew that this was what they were going to do in terms of bipartisanship, people would have laughed. The one thing about this president, he’s a nice fellow, he’s very articulate, and he’s talked to the best hopes of the American people about a new way of doing business. I have never been more disappointed. The old way of doing business is far better than this. There’s not a bipartisan bone in this body when it comes to spending almost $900 billion dollars. So the rhetoric of the campaign and governance are miles apart, and that is sad. Something this important for the American people, that will last and affect our economy and our national debt for decades, is being rammed through the House and the Senate in a week, and President Obama has visited our caucus, had lunch with us, but we’ve never sat down and tried to find common ground. It’s a huge disappointment in terms of the way he’s proceeded.

HH: Two last questions. The rhetoric this morning included a suggestion that we would have a catastrophe if this didn’t pass. It’s not the kind of speech that most Americans are used to from the president, because it kind of ups antes, and gets people nervous.

LG: Right, exactly.

HH: Are you surprised by that?

LG: Big time, because I think he’s got his back against the wall now. He should have started with housing, because housing is the root cause of this. A lot of Republicans would have supported the 4% mortgage, the Isakson amendment, my amendment to give money to the FDIC to negotiate loans underwater, that would have been a great housing package for about $250 billion dollars. Then we could have moved on to banks and stimulus. But he chose stimulus, he backed the House bill that stunk up the place. It came to the Senate, they’re trying to make it better by picking off a few Republicans, but now he’s got a President’s Day date of the 14^th of February. He can’t back out, he’s got himself in a canyon, and he’s changing his rhetoric, and I think this is scare tactics to try to justify passing a bill that really on its merits shouldn’t pass.

HH: And a last question, the cap on executive salaries, I know from which it comes, but it’s just to me an invitation to the best and the brightest who can make more elsewhere to leave.

LG: It’s populism at its worst. I sometimes disagree with you and people who listen to your show. I try to make the best judgment I can. This idea of capping salaries in the private sector is a dangerous precedent. And if we allow it to happen here, when does it end? And it will not help alleviate the basic problem that our economy faces. And it is a bad practice, it is playing to people’s cynicism, and it is not responsible government, and it is cheap politics.

HH: Senator Lindsey Graham, I appreciate as much time as you’ve given us. We’ll check back with you as the battle continues, thanks for spending time with us tonight.

End of interview.