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MR. DAVID GREGORY: This Sunday, the countdown to November 2nd, Election Day. The president is on the trail trying to protect home turf, stumping for the Democrat vying for his old Senate seat.
(Videotape)
PRES. BARACK OBAMA: You can trust him. You can count on him.
(End videotape)
MR. GREGORY: As the GOP threatens to change the balance of power in Washington, the fight for the Illinois Senate seat is still too close to call. This morning we kick off our election year Senate debate series with a showdown between the Democrat, Illinois State Treasurer Alexi Giannoulias, and the Republican, Congressman Mark Kirk. The big issues: jobs, spending and taxes, and the credibility questions dogging both candidates, making this an intensely negative campaign.
Then, our political roundtable on the bigger picture. How new jobless numbers affect the campaign, whether Democrats can make the election a closer contest than most expect, and another high-level departure from the White House. With us, Time magazine columnist Joe Klein and The Wall Street Journal’s Peggy Noonan.
Announcer: From NBC News in Washington, MEET THE PRESS with David Gregory.
MR. GREGORY: Good morning. With only 23 days to go, the campaign team of President Obama and Vice President Biden heads to Philadelphia today to try to rally Democrats to turn out for Pennsylvania Senate candidate Joe Sestak. But here in Washington this morning it’s all eyes on the tight battle in Illinois.
(Videotape, October 7, 2010)
PRES. OBAMA: Hello, Chicago. Oh, it’s good to be home.
(End videotape)
MR. GREGORY: The fight is personal for the president.
(Videotape, October 7, 2010)
PRES. OBAMA: In some very tough circumstances, in a tough political season, you know, he has not wavered. And that’s the kind of person that you want. That’s the kind of person that you know when the going gets tough in Washington will be fighting for you.
(End videotape)
MR. GREGORY: Democratic State Treasurer Alexi Giannoulias, neck and neck with five-term Republican Congressman Mark Kirk, battling for perhaps the most famous Senate seat up for grabs in this midterm race: President Obama’s former seat. For the GOP, it’s the ultimate prize.
MR. CHUCK TODD: The fact of the matter is if Democrats hold the majority, it’ll be because they held the president’s Senate seat. If they lose the majority, it means that one of the seats they lost is the president’s Senate seat. That’s the ultimate repudiation if you’re a former Illinois senator now sitting in the Oval Office.
MR. GREGORY: It is also a race that was marred by scandal from the start. When President Obama left one end of Pennsylvania Avenue for the other, then-Governor Rod Blagojevich ignored objections from Democratic leaders and appointed a former state attorney general, Roland Burris, to the seat. Blagojevich was later arrested, charged with attempting to sell the president’s old Senate seat. Then the campaigning began and the scandals continued.
(Clip from campaign ad)
MR. GREGORY: Kirk, a Navy reservist, has a list of erroneous or exaggerated claims about his military record, including his service in the Gulf War and during the invasion of Iraq. And Giannoulias, a 34-year-old former college basketball star who played professionally in Greece, has been plagued with questions surrounding his family’s troubled bank and whether Giannoulias, at the time a senior loan officer at the bank, was aware of $20 million in loans to a pair of Chicago criminals.
MS. LYNN SWEET: If all you’re looking at is the negative side, you have a choice between a serial embellisher and a mob banker.
MR. GREGORY: So how will Illinois voters decide, and what will the outcome say about this midterm campaign?
And joining me now, Republican Congressman Mark Kirk and Illinois State Treasurer Democrat Alexi Giannoulias.
Welcome to both of you to our studio and to this debate, MEET THE PRESS style. So there are no set rules. We’re sitting around this table, we’re going to have a conversation, and we’re going to go through the issues. And there’s a lot to get to, so let’s get to it.
I don’t have to tell you both, the specter of President Obama hangs over this race because indeed it was his Senate seat that you are now vying for. And it was on Election Day, November 4th, 2008, in Chicago, when the president and his family appeared after he was then the president-elect, and this is what he said.
(Videotape, November 4, 2008)
PRES. OBAMA: It’s been a long time coming. But tonight, because of what we did on this day, in this election, at this defining moment, change has come to America.
(End videotape)
MR. GREGORY: Mr. Giannoulias, let me start with you. How would you define the change that has come to America under President Barack Obama?
MR. ALEXI GIANNOULIAS: Well, I think it’s important to put things in context. And if you look at the mess that he inherited and the enormous challenges that he inherited—a trillion-dollar deficit, increasing job losses—I think he’s done everything he can to help turn this economy around. The question is, going forward, what more can we do? We focused our campaign on creating private sector jobs, we’ve talked about infrastructure, we’ve talked about moving forward with the next generation of clean energy, clean energy jobs, tax breaks to small businesses, a job creation tax credit for small business, a payroll tax holiday for low to moderate income workers, doing everything we can to get that $1.5 trillion that’s, quite frankly, sitting on the sidelines in the private sector, encouraging and promoting economic growth.
MR. GREGORY: But the country’s better off in this economic recession because of the change that President Obama brought?
MR. GIANNOULIAS: I think if you look at what would’ve happened if some of the measures weren’t taken—and again, they weren’t, weren’t perfect. For example, I think when you look at TARP, the bailouts for the biggest banks, something that Congressman Kirk voted for, I think I would’ve liked to have seen, as a, as a former community banker, some more oversight, some more accountability, requirement that these banks lend money to help increase access to capital, something we’ve done in the State Treasurer’s Office. I think that was a, a missed opportunity.
MR. GREGORY: Congressman, you had said at a rally back in March, a GOP rally, that Obama, that we—about the president, “We are on the way to making this guy a one-termer.” How do you answer that question? How do you define the change he’s brought to America?
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.REP. MARK KIRK (R-IL): A tremendous amount of debt. I’ve got a chart here that shows our debt-to-GDP ratio. And while we did run deficits in the past, we now number our debt in trillions rather than in billions. And I think that represents a long-term danger, especially to the, the American dream. Every American born today owes $43,000 to the federal government the day she or he is born. And we are transferring a tremendous amount of debt to the new generation, much of it owed to overseas creditors who expect to be repaid by our children with interest.
MR. GREGORY: But, Congressman, as a Republican member of Congress, do you really want to stand by your party’s record on the debt going back since you came to Congress?
REP. KIRK: No. I’ve become very much of a fiscal hawk here. I foreswore earmarks for my own congressional district, we could save $66 billion right there. The Kirk Amendment passed in the House that attacked the bridge to nowhere, even though it was in a Republican district, the chairman of the House Transportation Committee, and now it’s actually the bridges to nowhere will not be built.
MR. GREGORY: All right, I want to come back to the debt in just a minute, but I want to talk about the number one issue, I think, which is jobs, on the minds of every—unemployment is 9.9 percent in Illinois. And look at this chart, which is really a tale of woe in this country. You go back to 2009 in August; since that point, unemployment has been at 9.5 percent or higher. That’s 14 straight months. Congressman Kirk, I’ll start with you. What do you do at this point as the federal government to spur private sector job creation?
REP. KIRK: First of all, we recognize that the stimulus has largely failed. A very small part of it even went to infrastructure development projects. It didn’t answer the question, what happens when all the borrowed money runs out? Secondly, this Congress has been very, very viciously anti-business—new taxes, new regulation. We need senators and congressmen that will back a pro-growth agenda. For example, my Small Business Bill of Rights, 10 new policies to help out the number one employers in Illinois and the United States, small business. Half of all the jobs, 80 percent of the job losses in the great recession. They can’t afford a Washington lobbyist to go find stimulus money or a Washington lawyer to wade through the latest 1,000-page bill that congressional leaders haven’t even read.
MR. GREGORY: So tax, tax relief, tax cuts, in your mind, is really the job creation answer.
REP. KIRK: Well, a pro-growth agenda.
MR. GREGORY: Yeah.
REP. KIRK: Like making sure we don’t pass legislation to take away your right to a secret ballot in a union election. My opponent wants to take that right away, called the Card Check bill. I think that’s a terrible idea.
MR. GREGORY: All right, Mr. Giannoulias, how do you answer the question, job creation?
MR. GIANNOULIAS: I think one of the problem, I think one of the problems, quite frankly, is we have typical Washington, D.C., politicians who have forgotten what it’s like on Main Street. I’m the only candidate in this race who’s worked in the private sector. Congressman Kirk has been in Washington, D.C., for 20 years. If you’re thrilled with out-of-control spending, the out-of-control borrowing that has become the Washington, D.C., ethos, then Congressman Kirk is your man. I think what we have to do...
MR. GREGORY: My question is, what do you do to create private sector jobs, to put people back to work? What you just said doesn’t put anybody back to work, and that’s what people are wondering.
MR. GIANNOULIAS: So what we’ve done in, in the State Treasurer’s Office, for example, low interest loan programs, increasing access to capital. One of the biggest problems out there that I hear from my friends in the business community is that there’s no lending, that it’s tough to get a loan today. Even if you have a line of credit, it’s being tapped. So one of the first things that we need to do is find ways to increase liquidity, to increase access to capital, to make sure that $1.8 trillion that is sitting on the sidelines in the banking system, which can be leveraged to at least $18 trillion, we need to do everything we can to focus on that. We need to focus on green jobs: solar, wind, geothermal, biomass. There’s so many opportunities. But other countries like China are getting ahead of the curve.
MR. GREGORY: The government did do a lot with the stimulus, right? You had actually said the stimulus was not big enough. You’ve also said you’re going to lead a progressive caucus if you’re the senator from Illinois. Will you push the administration, if elected, to enact more stimulus, to spend more money to try to get more people back to work?
MR. GIANNOULIAS: If, if more stimulus means more tax cuts to small businesses, if, if more stimulus means middle class tax cuts, then I’m for it. I will tell you that we also have to keep in mind what the Recovery Act really did. A third of it was tax cuts to middle class families, a third of it was emergency measure to—emergency funding to state and municipalities, something that I’ve seen as state treasurer is important.
MR. GREGORY: But do you acknowledge it hasn’t done the trick? I mean, 14 months of unemployment. They said that it would—if you passed stimulus, it would—the unemployment would get to 8 point--8 percent; 9.5 percent for 14 straight months.
MR. GIANNOULIAS: I think, David, the bigger question is what would have happened—and it wasn’t flawlessly done. But if, if you take a look at what would have happened, I mean, do we need to see soup lines down the street to figure out what would have happened? We avoided—and all economists will tell you that millions of jobs were saved because of the Recovery Act, and we avoided a second Great Depression. That, that is a reality.
MR. GREGORY: All right, let me have you two engage on the big tax debate here. Congressman, do you think that the Bush-era tax cuts should be extended for all Americans?
REP. KIRK: Right. Like CNN just did a survey of economists...
MR. GREGORY: You believe that.
REP. KIRK: ...saying that they should not have a new big tax increase on December 31st. If you look what congressional leaders want to do, they want to hit the U.S. economy with a $900 billion tax increase on December 31st on top of the 10 new taxes that were in the healthcare bill, on top of the taxes that were in financial regulation bill, on top of the taxes that were in the August congressional legislation. I don’t think—the, the key danger here is will our policies increase the chance of a double-dip recession? If you look at the job numbers just last week, we have a significant danger of that. And taking more money out of the private economy and having the government perform as it has poorly done with the stimulus I don’t think is the right way to go.
MR. GREGORY: But it’s interesting you’d say that. And you said just a moment ago, if I heard you right, that you’re a deficit hawk, a fiscal hawk.
REP. KIRK: That’s right.
MR. GREGORY: Well, back in 2004 you were part of this Republican Main Street Partnership. And as part of that group, you had a press release on 2004. I’m going to put some of it up on the screen. “Today the Republican Main Street Partnership, the largest organization of elected moderate Republicans in the nation, offered six principles for the fiscal year ‘05 budget resolution that were designed to put Congress on a path toward a balanced budget. These principles,” you said then, “stand for a key value that once we adopt the budget, we must have the tools to stick to it,” said Congressman Mark Kirk. Now, here was a key part of that: “Tax cuts should only be extended temporarily and limited to those that are due to expire in 2004.” Key point: “We simply can’t afford permanent and across-the-board extensions at this time.” That’s what you said then, when the...
REP. KIRK: Right.
MR. GREGORY: ...when the debt was about one-third of what it was today. Congressman, how can we afford to make permanent tax extensions now with the Bush tax cuts in this climate?
REP. KIRK: Because especially in this climate we have congressional leaders that are not interested in spending restraint at all. For example, I back spending restraint across the board; at the DOD, like no second engine for the F-35 fighter, closing down Joint Forces Command, across-the-board reductions. When you look at the state of the economy right now, you have to set a priority. And my top priority is the deficit of jobs and economic growth, and especially this perception that the United States could be falling behind especially Asian economies. If we go through all the tax increases that congressional leaders propose—and by the way, Congress is going to come back right after the election in this lame duck session of Congress with a new round of spending in a omnibus appropriation bill, and new tax increases.
MR. GREGORY: But the question, but the question, Mr. Giannoulias, should tax cuts be paid for?
MR. GIANNOULIAS: And this, this is why this race is so important. This is a fundamental public policy difference between myself and Congressman Kirk. He says he’s a, a fiscal hawk. Look, the congressman has told some real whoppers during this campaign, but that may be the biggest one of all. He voted for every single one of the Bush budgets, which doubled our national debt. He voted to increase his own pay six times. He voted for the bridge to nowhere twice. He voted to raise the debt ceiling four times. The list goes on and on. So, Congressman, saying you’re a fiscal hawk doesn’t necessarily make it true, and your voting record proves that it’s not true. The question is, for the Congressman, the $700 billion in tax cuts for the wealthiest Americans, we don’t have $700 billion. So my question to the congressman is, which country do you plan on borrowing $700 billion from? The Saudis, China? We, we can’t afford it. And that’s one of the problems, quite frankly, with Washington, D.C., this overborrowing, overspending.
MR. GREGORY: Well, Congressman, respond to that. Republican leaders, as you know, have said that tax cuts don’t have to be paid for. And the president’s said, look, there’s $700 billion they want to extend. Where are they going to get the money?
REP. KIRK: We’re going to get the money by spending reductions across the board, by cutting out whole programs and making sure that we have a, a new set of mechanisms. For example, the president has been rumored to be bringing forward a line item veto proposal. Republicans should support that. We should have a new Grace Commission put forward with base closing powers to put a joint bill to House and Senate with just one up or down vote.
But it’s ironic for my opponent to criticize my record of fiscal conservatism. In front of the Chicago Tribune, they asked him, name one spending bill that you would actually vote to cut. He couldn’t name one. And as the Chicago Tribune said, when they endorsed me, it was painful to watch.
MR. GREGORY: Well, speaking of painful, let’s pick up on that because I was going to ask each of you, in this circumstance, what is a painful choice you would make to bring the, the, the budget into balance, a spending cut that you would make?
MR. GIANNOULIAS: Look, the, the—this country has not lived within its means for a very long time, and, and the truth is we’re going to have to take our medicine.
MR. GREGORY: Right.
MR. GIANNOULIAS: And what the Deficit Commission says in December’s going to be important. To answer your question, and this is an area where I think the congressman and I would agree, I would have voted against the omnibus spending bill which included thousands of earmarks, a lot of pork. And, and quite frankly, this is where the president made a mistake. He should have, he should have vetoed it.
MR. GREGORY: But, you know, every, everybody comes into Congress, says we’re going to cut out wasteful spending. I mean, let’s be honest. Most of the spending is an explosion of entitlement spending—Social Security, Medicare and, and the like. What would you do on some of these big runaway programs? Social Security, would you look at upping the retirement age in order to basically cut benefits and save some of that money?
MR. GIANNOULIAS: Again, we’re going to have to take a look at what the Deficit Commission says and look at their ideas. I am personally not in favor of, of increasing the age limit. I do think we do need to look at, on the revenue side, different options, maybe increasing the taxable wage base, finding ways to get more revenue. But I’m all for strengthening Social Security, not diminishing it.
MR. GREGORY: Congressman Kirk, if you were serious about cutting the deficit and cutting spending, why don’t you stand up beside Paul Ryan, the congressman from Wisconsin, who’s put forward some pretty draconian cuts in entitlement spending, like Social Security and Medicare? Do you stand with him in those cuts?
REP. KIRK: I—first of all, we have a whole—we need a whole range of cuts. For example...
MR. GREGORY: But no, my question is do you stand with him in some of his suggested cuts to Medicare?
REP. KIRK: I, I, I have my own cuts which I want to put forward. We should, for example, sell off big parts of the Tennessee Valley Authority, the Southeastern Power Administration. We should consolidate depot maintenance at the Department of Defense. We should have lawsuit reform, which CBO says would save at least the federal government $54 billion. I could go on an on beyond the F-35 engine and the earmark spending, which would save $60...
MR. GREGORY: Do you go beyond the Republican pledge, which is to go back to 2008 discretionary spending levels?
REP. KIRK: I think we need a radical reduction in spending because we have...
MR. GREGORY: Beyond 2008 levels?
REP. KIRK: 2008 is a great start.
MR. GREGORY: Right.
REP. KIRK: You know, this Congress hasn’t...
MR. GREGORY: But you recognize 2008 that’s in the pledge isn’t nearly enough to deal with the size of the deficit, right?
REP. KIRK: But I will tell you, one this that’s missing from this whole debate is no effort to put forward pro-growth policies. If the United States launches on a plan, as my opponent’s policies would do, to be a very high tax, high spending, high regulation economy like many European economies, then we inevitably have the slow growth and high unemployment of those economies. That’s not the American way. The American way is a limited government and lower taxes, and a very robust small business sector, which is especially employing low-income and minority kids coming into the American dream. I very much worry right now that if we’re embracing a European-style very high debt, very high tax environment, we will suffer all of the slow growth problems that they’ve had.
MR. GREGORY: One more policy issue, quickly, between you: health care. Congressman, you have said that you would lead the charge to repeal healthcare reform as passed by this Congress. Is that still your position?
REP. KIRK: That’s right. When I came back to the United States, I met with the Republican leader and said we have to be the party of better, we just can’t be the party of no. So we’ve put together the Republican alternative, which I introduced in the Congress, 400 pages. It was not allowed for a debate or even discussion or a vote. But it did three big things. First, the Medical Rights Act that says Congress should make no law interfering with decisions you’ve made with your doctor. Second, lawsuit reform, which was completely skipped and needs to be in there. And third, Congress should defend your right to buy health insurance from any state in the union if you find a plan less expensive to cover your family.
MR. GREGORY: All right. Well, well, but you, you will try to repeal it, the way the bill’s existing?
REP. KIRK: And—yeah. But then let’s look at the healthcare bill we passed: $500 billion dollars in cuts for senior—for seniors who depend on Medicare, another 10 new taxes that hit the economy, and a perverse incentive—you know, what is the essence of the healthcare bill in 30 seconds? It says that if you employ 50 Americans or more, you must offer health insurance to the employees, comma, or pay a $2,000 fine. But health insurance in America many times costs more than $2,000, giving a perverse incentive for these employers...
MR. GREGORY: Right.
REP. KIRK: ...in 2014 to drop coverage.
MR. GREGORY: But, Mr. Giannoulias, what is your—are you running on healthcare reform? Is that something that you will stand by as passed by the Congress?
MR. GIANNOULIAS: I am running on jobs and I’m running on helping small businesses. And look, the healthcare bill was far from a perfect vehicle. That being said, I think it did some important things that the congressman wants to repeal: the denial of coverage for pre-existing conditions, making sure that kids in between college and their first job have health care. And I think morally we shouldn’t have 51 million Americans without affordable basic health care. The, the, the healthcare system as we have it right now, where we spend over 17 percent of our GDP on health care, is bankrupting our families, it’s bankrupting small businesses, bankrupting this country. And, you know, the congressman’s got the talking points of $500 million in Medicare cuts. The truth is, you know, a lot of Medicare expenditures are fraud, waste and abuse, and what this does is create efficiencies within Medicare, which is why the AARP and the AMA endorsed it. But again, it’s—there, there’s a lot needs to be done. I would have loved to have seen a, a provision there to let the secretary of Health and Human Services negotiate bulk drug rates for Medicare the way that the VA does. So again, there was some missed opportunities in the implementation of healthcare...(unintelligible).
MR. GREGORY: All right. I...
REP. KIRK: I would just say, by the way, coverage of pre-existing conditions was in our bill. But when I’ve looked—I’ve traveled throughout Illinois talking to the top hospital systems, and they will talk about these Medicare cuts as representing a—between a $30 million and $100 million cut per hospital across Illinois, leaving them to cancel capital expansion plans, hiring freezes, cuts, so that the effect of the cuts of your legislation are already being felt by state of Illinois healthcare institutions.
MR. GREGORY: All right.
MR. GIANNOULIAS: The difference, the difference is he wants to repeal it, I want to reform it and fix it and make sure that it works for small businesses and for families.
MR. GREGORY: Let me move on to some of the personal aspects of this race. It’s been pretty nasty, negative tone by both of you. Here was a poll in the Chicago Tribune/WGN. Who do you consider more trustworthy or honest? Thirty-five, Giannoulias; 30 percent, Kirk; 16 percent, neither. Can’t be a figure that either one of you are proud of. I, I want to go through some of the issues that have cropped up on both sides and allow you guys to, to talk through it.
Mr. Giannoulias, let me start with you. Back in 2006 you were running for state treasurer. This was part of an ad that you put on the air touting your record.
(Clip from campaign ad)
MR. GREGORY: Financial expert, businessman, banker. Your family bank, the Broadway Bank, was seized by regulators. It went under. You released a statement earlier this year creating some distance from the bank and when it was closed. And let me put the statement on the screen. “It was because my father instilled in his sons the importance of helping others that I decided to leave the bank in 2005”—and that’s the key date here, 2005--“to pursue public service. At the time I left, according to every independent analysis, the bank was one of the best performing in Illinois.”
Now, the Chicago Tribune summarized some of the issues that are at stake here under this headline: “Giannoulias still worked at family’s bank in ‘06; Candidate tells voters he left by late 2005. Giannoulias tells voters he was gone from his troubled family bank by late 2005, but that’s not what he told the IRS. Giannoulias was able to take a $2.7 million tax deduction last year because he reported working hundreds of hours at Broadway Bank in 2006. [He] says there’s no contradiction. ... The issue highlights the fine line Giannoulias walks on the campaign trail in explaining exactly what he did at Broadway and when he did it. ... In this tight Senate race, the tenure as a senior loan officer at Broadway is a bull’s-eye for critics who hit him for the bank’s loans to mob figures as well as troubled lending that contributed to Broadway’s collapse earlier this year. Saying he left in ‘05 gives Giannoulias maximum distance from the bank’s questionable lending practices, the April takeover by federal regulators and other controversies such as a loan by the bank to convicted influence peddler Tony Rezko in early 2006. But by reporting that he worked at least 500 hours at Broadway in 2006, Giannoulias was able to get a break that helped him avoid paying federal income tax in 2009.”
Can you clear this up? Which is it? When did you leave, and did you get a tax break you shouldn’t have?
MR. GIANNOULIAS: Sure. There are—there have been no inconsistencies in anything I’ve said. I left day-to-day operations in ‘05 and I fully left the bank in 2006. Paid million dollar—millions of dollars in taxes over the last five years. But this is not what people are talking about, David. And when I—when you bring up the bank, you know, my father came to this country as an immigrant. He started a community bank 30 years ago. This was not some fly-by-night company. It was his whole life, it was his whole legacy. And he’s helped thousands of people, thousands of people achieve the American dream. But because of this devastating recession, we’ve seen more community banks go under than ever before. Another almost thousand community banks are on the watch list. And you know what? While I’m very fortunate and my family’s very fortunate, I know what it’s like to lose a family business because of this, because of this recession.
MR. GREGORY: Well, but let’s get to the substantive point. Why did you say that you left in 2005 but you still told the IRS that you were there working in 2006 in order to get the tax break?
MR. GIANNOULIAS: David, nothing I said has been inconsistent. I said I left day-to-day operations in 2005. And I fully left the bank...
MR. GREGORY: But you did work there in 2006?
MR. GIANNOULIAS: Exactly. As I’ve, as I’ve always said. Nothing, nothing is inconsistent. And I make my tax returns public. Unlike the congressman, I make my tax returns public. Everyone can see what I pay in taxes. I paid my state treasurer’s salary in taxes. I’m getting a refund because of a, a widely known business, business failure, and I’m giving that money to charity.
MR. GREGORY: Were you aware of some of the, the loan activity to criminal figures?
MR. GIANNOULIAS: Look, what—the way a, a community bank does business—I know when you run for office, these stories get sensationalized. When a bank decides who to give a loan to, they look at the credit worthiness of the borrower, they look at the credit scorer of the borrower, they look at the appraisal value of a property. So any, any bank, of course there are some individuals that—with colorful pasts that we didn’t want to do business with. But that doesn’t represent the thousands of people that...
MR. GREGORY: But my question, Mr. Giannoulias, were you aware that there were crime figures who were getting loans by your bank?
MR. GIANNOULIAS: As...
MR. GREGORY: You were a loan officer there.
MR. GIANNOULIAS: As I, as I continue to mention, as I continue to say, if I knew now what I know—if I knew then what I know now, these aren’t the kind of people that we do business with.
MR. GREGORY: All right.
MR. GIANNOULIAS: But that’s not how banks work.
MR. GREGORY: So you’re saying you didn’t know, you didn’t know? I mean, that’s the, that’s the easy question. Did you know that they were crime figures that your bank was loaning money to?
MR. GIANNOULIAS: As I’ve said, I didn’t—we didn’t know the extent of that activity. But again, if you look at any bank...
MR. GREGORY: You didn’t know the extent, but you knew that they had—that they were...
MR. GIANNOULIAS: If you knew—David, if you look at, if you look at any bank, an even bigger bank, you’re going to find hundreds of individuals that...
MR. GREGORY: That’s not what I’m asking. Mr. Giannoulias, did you know that they were crime figures that you were loaning money to?
MR. GIANNOULIAS: I didn’t know the extent of their activity, of course not.
MR. GREGORY: Didn’t know the extent of it.
Well, this is what you’ve said, Congressman Kirk, about all of this in your ads, and, and some things you said on television, to Fox News in February: “Well, it appears that the Broadway Bank, which is the Giannoulias family bank, has extensive ties to the mob, to convicted felons.” And you ran—this is a portion of the ad that you’re running with the Senate committee, Republican committee.
(Clip from campaign ad)
MR. GREGORY: Are you saying that he has ties to organized crime?
REP. KIRK: This is a list of all the bank loans to convicted mobsters and felons. The ones in yellow are the ones where he was the senior loan officer of the bank; people like Michael “Jaws” Giorango, Demitri Stavropoulos, Boris Stratievsky. There are all infamous mob figures and bankers who have very long and storied records. And you don’t have to pull their rap sheet, it was in the Chicago Tribune.
MR. GIANNOULIAS: Again, this is the congressman who’s never worked in the private sector, doesn’t know the—what it takes—what a bank does when they look at whether or not to approve or deny a loan. So he pulls some names and he tries to make it a, a political attack. People aren’t buying it. That’s why we’re up in the polls. But this is what’s wrong with politics. Someone like Congressman Kirk, who has no idea what it’s like in the private sector, to go out there and say these are convicted mobsters, that’s not—those aren’t the kind of people that...
MR. GREGORY: But in the rough and tumble of a campaign, I mean, do you really stand by all of those ads saying that he has—I mean, he’s sitting right here. Does he have connections to organized crime, in your judgment? Or was there bad judgment made by the bank?
REP. KIRK: The Broadway Bank provided an extraordinary amount of loan capital, totaled millions of dollars, to mob figures and convicted felons after they had been convicted. And, and that’s absolutely the—you know, I was in the private sector. I did work. But I’ll tell you the private sector experience that I don’t have. I don’t have experience in, in loaning money to mob figures. I don’t have experience in reckless loans to commercial real estate and brokered hot money deposits, leading to a collapse in the bank. The New York Times’ analysis of Treasurer Giannoulias’ work at the bank showed that it was his decisions that helped lead to this collapse.
MR. GIANNOULIAS: That’s not true. That’s...
REP. KIRK: Transferring a $390 million bill onto the back of the FDIC.
MR. GREGORY: Right. Let me give you the final word here, and then we’re going to take a break.
MR. GIANNOULIAS: Again, we shouldn’t be surprised that the congressman is lying again. If you look at the loans that were past due when the bank was taken over, like thousands of, of community banks that are dealing with challenges, less than 9 percent of the loans were even around. So it’s, it’s a political war, I understand that. But for him to say that—to characterize my family that way is misleading, offensive. People aren’t buying it. And the congressman wouldn’t know the difference because he’s been in D.C. for 20 years.
MR. GREGORY: All right. We’re, we’re going to leave this issue here. We’re going to take a break. There are some credibility questions that have been raised about some statements you’ve made, Congressman, in the course of the campaign. We’re going to take a break here and come back and deal with those. Right more—back with more of our Illinois Senate debate after this brief commercial break.
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MR. GREGORY: Coming up, we continue our debate with the two candidates vying for the Senate seat once held by President Obama after this brief commercial break.
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MR. GREGORY: We are back to continue our debate with the candidates battling to become the next U.S. senator from Illinois, a seat once held by President Obama.
Congressman Kirk, there have been some credibility issues raised on the campaign trail for you as well, and it has to do with your military record. You hold the rank of commander, you’re in the Naval Reserve as an intelligence officer. You served during the conflicts of Afghanistan, Iraq, Haiti, Bosnia; awarded the Navy and Marine Corps Commendation Medal for Kosovo service in 1999; all of which makes it curious some of the exaggerations in the course of the campaign trail. This is how the Associated Press summarizes it back in June, I’ll put it on the screen: “Kirk’s problems began with the revelation that his frequent references to being named the Navy’s intelligence officer of the year were false. Instead, a lightly different award had gone to the intelligence unit that Kirk led, not to Kirk personally. That was followed by a long string of other errors and exaggerations. A letter from his office said he served in the Gulf War when he didn’t.” The first Gulf War. “He has also referred to serving in the invasion of Iraq, although his duties kept him stateside. He said his Reserve work sometimes includes running the Pentagon war room, even though he overseas only the intelligence operations. Although he had clearly described coming under fire while flying missions over Kosovo and Iraq, Kirk began to hedge and say that he couldn’t be sure his plane was targeted by the anti-aircraft fire. And he didn’t mention that he rode along on only a handful of flights—perhaps just three. Kirk’s campaign also denied he had ever improperly mingled political activity with his military duties, only to have the Pentagon confirm that he had done exactly that on two occasions.”
There was also an interview you gave to the Chicago Sun-Times during which—that you’d come under fire, that you’d been shot at while in Kandahar, only to have that account contradicted by your statements—something that was on your own Web site earlier in the year. So my question is, given your own military record, why would you exaggerate these?
REP. KIRK: Well, I made mistakes with regard to my military misstatements, I was careless, and, and I learned a very painful and humbling lesson. This is very important to me. I—in my Naval training as a Naval officer, we are trained to take command, to be responsible, to be accountable for our personnel, for our unit and our mission. And I am completely accountable for this. And so I corrected the record...
MR. GREGORY: Well, but, but how do—how does one get careless on that? I mean, if you’ve served overseas, and you have, anybody who’s in combat is very clear on whether they were in combat or not. So, you know, if you’re a voter and you’re listening to this, should there not be some credibility test for you? Should that have some weight in whether you can be trusted, if you’re going to exaggerate your military record, something that sensitive?
REP. KIRK: There certainly should be. And, and the level of scrutiny here is completely appropriate because this is a very high office. For me, what I did is first correct the record, then apologize to the people of Illinois. Then I released all 21 years of my officer fitness reports, these are my confidential personnel files, to everyone so that they could read. I’m very proud of my record. I’ve served in Afghanistan, in Northern Watch and Operation Allied Force. I believe in this country very greatly, and I would give my life for it.
MR. GREGORY: Mm-hmm.
REP. KIRK: I think it’s made me a better congressman and a better advocate.
MR. GREGORY: But bottom line, Congressman, did you say that you were once shot at when in fact you were not?
REP. KIRK: Well, for example, when you’re flying over Iraq as a big NATO strike package...
MR. GREGORY: Yeah.
REP. KIRK: ...usually the Iraqis opened up on us. But whether the squadron came under fire or not, it’s a very confusing...
MR. GREGORY: All right.
Mr. Giannoulias, you’ve called him a liar in his ads. I mean, it’s a very serious charge. Do you accept his explanation?
MR. GIANNOULIAS: Well, again, that’s for the congressman to explain to the voters of Illinois. But even more troubling than the, the untruths about his military record and his phantom teaching career, more troubling to me are his votes in the—in Washington, D.C. Here’s someone who you don’t know where he stands. The Chicago Sun-Times pointed out on Friday, you don’t know where he stands on important issues. Now, David, the people of Illinois may not always agree with everything I say, but they’ll always know where I stand. Congressman Kirk votes for cap and trade, and he said he’s doing it for the national security interests of the United States; and then he runs as a Republican for the Senate and says he would never vote that way again, it was a huge mistake. They asked him his thoughts on the Dream Act, Don’t Ask Don’t Tell, he said he’s not sure yet.
I’ll tell you where I stand, and that’s leadership. That’s what the people of Illinois want. That’s what I’ll give them for the rest of my career. And I think that is a, a fundamental difference in principles, in values and morals, between myself and the congressman.
MR. GREGORY: I want to close with this thought. We’re in partnership with Facebook and their politics page, and we’ve solicited a question from Dmitri Morris, and it’s interesting. I’ll—Congressman Kirk, I’ll start with you on this. “Name two issues in your party’s platform that you do not agree with and why?”
REP. KIRK: For example, I backed stem-cell research. I very much support hate crimes legislation; when it went through the House, it was the Conyers-Kirk Bill. I also supported health insurance for low income kids through the SCHIP program. Been rated as one of the most independent members of Congress; a fiscal conservative, a social moderate.
MR. GREGORY: Mr. Giannoulias?
MR. GIANNOULIAS: I...
MR. GREGORY: Two areas of the Democratic Party you don’t agree with, where you’d buck your party.
MR. GIANNOULIAS: Well, as I mentioned, the way TARP was handled I think was an enormously—we missed, we missed...
MR. GREGORY: But the Republicans started that.
MR. GIANNOULIAS: We missed, missed—there’s a missed opportunity. I think I would’ve loved to have seen increased access to capital requirements on these banks, that they lend money out. When we fought and saved jobs at Hart Schaffner Marx, one of the things we did was go after Wells Fargo. We looked at them and said, listen, you can’t let this company falter, you can’t let them fail. And I—you know, the, the congressman always uses the word independent. The truth is the only thing he’s been independent of in this race is the truth. This is an incredibly important race. We need some fresh leadership, we need some new ideas, we need to help create jobs. People in Illinois are getting crushed, crushed by this recession. Washington, D.C., isn’t working. And my question is why in the world do we send the same people who created this mess back to Washington, D.C.? That’s why the people of Illinois need, need some new ideas and some fresh voices.
MR. GREGORY: The debate will continue. The campaign will continue in crunch time now. Good luck to both of you, and thank you for sharing your views here with us this morning on MEET THE PRESS.
REP. KIRK: Thank you, David.
MR. GREGORY: We will be watching closely, of course.
And coming up here next, we will have our political roundtable and talk about some of the big issues that continue on the campaign trail. We’ll have more from the campaign trail next week; the Colorado Democratic Senator Michael Bennet will square off with Republican and tea party favorite Ken Buck. That’s our Senate debate series coming up next week here on MEET THE PRESS.
And up next, the big picture in the midterm fight: new jobless numbers, tight races across the nation, another high-level Obama administration departure. How will it all impact the campaigns? Our roundtable weighs in, Time magazine’s Joe Klein and Wall Street Journal’s Peggy Noonan, after this brief station break.
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MR. GREGORY: We’re back. We turn to our roundtable to get some perspective on today’s debate, as well as all the other issues we’re looking at as we get closer to November. Joining me now: Time magazine columnist Joe Klein, whose most recent piece is the cover story on this week’s issue of the magazine, which is very compelling; and author of “What I Saw at the Revolution: A Political Life in the Reagan Era,” The Wall Street Journal’s Peggy Noonan. Plenty to get to this morning.
And, Joe, here was the Bloomberg headline this week: “Dodging Embarrassment Tops Obama Agenda in the Illinois Senate Race.” He is involved in this race. He has been campaigning for Giannoulias. There’s a lot here on the line for him.
MR. JOE KLEIN: Yes. And Giannoulias just said he didn’t know the full extent of the criminal activity of people that his bank was giving loans to? I don’t think I’ve ever seen a politician say anything like that before.
MR. GREGORY: It’s, it’s part of what has been such a negative campaign, Peggy. And we put this on the screen now, it’s, it’s a tight race in part, you know, perhaps because of Congressman Kirk’s, you know, statements about his military record; but Giannoulias, in some quarters, is seen as more of a flawed candidate, and perhaps that, that answer is going to dog him.
MS. PEGGY NOONAN: Yeah, I think it might. Look, it is a very—one of the things that turns off people about politics is that it can be so negative, so personal. They know as they look at their own lives, anything they did could be made into something huge, negative and bad if it were turned into a 60-second spot. And a lot of people running for office this year do not want to talk about issues or do not want to talk about their past stands on issues, and so they’re just pounding each other personally. He lied, she lied, he did this. It lowers everything and is not fortunate during a crisis.
MR. KLEIN: It does, yeah. It seem...
MR. GREGORY: Does Obama help him, though, here? He’s, he’s really been aggressive in campaigning. Is there an Obama effect in Illinois?
MR. KLEIN: Well, Obama’s—listen, I, I was in Kirk’s old district during this road trip, and Obama has like 60 percent--59, 60 percent approval in that district, a—you know, a district that’s gone for Republicans in the past. Obama’s still very popular in, in Illinois.
But I want to pick up on what, what Peggy said. And the amazing thing to me about this debate is how much it is at variance with the way people are actually feeling in this country.
MR. GREGORY: Mm-hmm.
MR. KLEIN: They are freaked out, they’re panicked. They’re really scared that the jobs that we’ve lost are not coming back this time, and that their kids won’t live as well as they have. And instead of this kind of tit-for-tat political stuff that you see in all the negative ads, they want to hear real ideas about how we’re, how we’re going to rebuild the economy.
MR. GREGORY: To that point, here—the cover piece I just mentioned. This is a portion of it that, that I thought was so interesting. You write this: “I found the same themes dominant everywhere—a rethinking of basic assumptions, a moment of national introspection. There was a unanimous sense that Washington was broken beyond repair,” which I just want to underline. “But the disgraceful behavior of the financial community, and its debilitating effects on the American economy over the past 30 years, was the issue that raised the most passion, by far, in the middle of the country.” It’s as if to say Americans are saying, who do we trust now?
MR. KLEIN: Right, exactly. I mean, the investment community, people are putting two and two together. The same people who did the mergers and acquisitions that led to a lot of these jobs being shipped overseas are the—then turned their attention to the housing market and began giving, with the help of Fannie Mae and Freddie Mac, these mortgages to people who shouldn’t have gotten them and then created these crazy financial products, made a gazillion dollars off them, and then the—and, and caused the crash of 2008.
MR. GREGORY: Mm-hmm.
MR. KLEIN: So people are looking at the financial community, they’re looking at China, and they’re not seeing the president of the United States or the Republicans really talking about this.
MS. NOONAN: So true.
MR. GREGORY: And, Peggy, to that point, I mean, you, you have—look, you’ve got some populism, you’ve got the tea party, you’ve got Christine O’Donnell. Some of these candidates come out of a place of deep economic anxiety that could be prolonged. I mean, there could be a real effect on our politics of prolonged unemployment and economic malaise.
MS. NOONAN: Yeah, there could. Look, I think—Joe and I were talking before we came out—the biggest change politically in my entire lifetime is the fact that the American people now no longer feel that they will be handing on to their country a stronger, better place where their kids will get a job and their kids can get a house. The—I wouldn’t call it pessimism, but a new sober, almost sadness is out there...
MR. GREGORY: Hm.
MS. NOONAN: ...and I think in part is shaping things. Nobody expects the kind of economic growth that we are going to need to produce enough jobs not only for everybody to keep their job, but for young people coming up, the new people, to keep these jobs.
MR. GREGORY: And you write—in the, in the preface to the new book you talk about Reagan and that sense of optimism and belief in the future.
MS. NOONAN: Yeah.
MR. GREGORY: And our, our recent poll indicated that what’s really tough is not only that so many people are out of work, they don’t have much faith in the president’s policies to turn things around. That is kind of a death knell for a political party or for a president.
MS. NOONAN: Yes. And I think part of what’s coming in just a few weeks in November is, is probably a rebuke...
MR. GREGORY: Mm-hmm.
MS. NOONAN: ...of our current leadership, and I, and I think that might be fairly severe. But the larger issue is that I don’t think the American people look at Washington and see people who, A, can know what needs to be done; and B, can actually summon the will and grit to do it. They don’t see that leadership...
MR. KLEIN: That’s right.
MS. NOONAN: ...as likely, and so they are frustrated because, you know, they hire leaders to make things better. And now they don’t feel, whoever they hire, it’ll get better.
MR. GREGORY: What, what is the dominant feeling or sentiment you hear expressed out there about the president himself?
MR. KLEIN: Well, I didn’t go through the deep South where—which is very red, and I also didn’t go into urban neighborhoods, which are very blue. I went down diagonally across the center part...
MR. GREGORY: Right. We have the map we can show, actually, of your travels.
MR. KLEIN: Oh, really?
MR. GREGORY: Yes, yes.
MR. KLEIN: I like—do I want to remember this? But anyway, people respect him. You don’t see the fist-shaking anger that you often see on cable news. Certainly, there’s some Obama haters out there. Most people respect him, but they don’t quite admire him. He’s floating over this debate in an—you know, and, and doesn’t seem to be part of the things that people are most concerned about. They don’t understand what’s in the health reform legislation, they don’t understand what’s in the financial reform regulation. They’re beginning to see the stimulus in a different way because you can’t drive 30 miles in this country without hitting a road crew. And they’re feeling a little bit better about the auto bailout. But they feel that the big issues that we’re talking about here—the jobs being expressed overseas, China—they haven’t heard from him. For every time someone mentioned Afghanistan, the war in Afghanistan, which is an issue I’ve been obsessed with, they mentioned China 25 times.
MR. GREGORY: Right.
MS. NOONAN: Can I say...
MR. GREGORY: Yeah.
MS. NOONAN: ...that I, I think the issue, the way I would put it with regard to the president, is a certain off-pointness. The country has consistently be—been talking about and thinking about A, B, and C, and he’s on some other letters of the alphabet. And even when he comes forward, I think the past week when he is on the stump, the issues that he’s speaking of seem extraneous to the central issues and anxieties.
MR. GREGORY: But, but is there a confidence, though, Peggy, is there confidence in the Republican Party?
MS. NOONAN: Oh.
MR. GREGORY: In other words, the frustration I hear is...
MR. KLEIN: No.
MS. NOONAN: No.
MR. GREGORY: Right, that we don’t see it now.
MS. NOONAN: No, I got to tell you...
MR. KLEIN: No.
MS. NOONAN: ...it’s part of the sadness.
MR. GREGORY: But the frustration I hear is that we don’t have people in Washington who are real problem solvers, who are willing to speak like adults to other adults and say this is what has to happen.
MS. NOONAN: Yeah.
MR. KLEIN: That’s right.
MS. NOONAN: I think, look, the rise of the tea party, the great cliche we’ve all been talking about, is very interesting, very evolving, very changing. But its most interesting element is that it is not only a reaction to Democratic Party leadership, it is a critique of the past 10 years of Republican leadership.
MR. GREGORY: Hm.
MS. NOONAN: The Republican Party will either evolve and change in some interesting ways...
MR. GREGORY: Right.
MS. NOONAN: ...along with the tea party or not.
MR. KLEIN: Here...
MS. NOONAN: But are the voters saying I love the Republicans?
MR. GREGORY: Not yet.
MS. NOONAN: No, they are not.
MR. GREGORY: Hang onto that thought. I want to show—Sarah Palin was speaking last night, and it’s so interesting, some of what she said and the following that she has. I want to play just a piece of her speech, because it gets to what may be next. This is what she said.
(Videotape)
FMR. GOV. SARAH PALIN (R-AK): I get to say some things that maybe some of you can’t say because I have no title, I have no uniform, I have no office. You know, it’s Todd and me and we’re traveling. I get to say what I feel, and I’m going to speak for some of you who may be thinking it but can’t say it.
(End videotape)
MR. GREGORY: What does she represent, Joe? I mean, is she—she talked about a Reagan-like revival, you know, on the right. Is she running?
MR. KLEIN: She, she may well be running. She represents maybe 30 percent of the population. I mean, from what I saw, the tea party had an enormous impact within the Republican Party but not beyond it, and maybe to, to some independents.
If this can be described very, very briefly, people think the—they know what the Republicans stand for: lower taxes, less government, less regulation. They have no idea what the Democrats stand for, except for these big, slovenly pieces of legislation that we’ve seen which inevitably contain ridiculous provisions. One candidate in, in Nevada, a Republican running for Congress, said that there’s a provision in the healthcare reform bill that small businesses have to set aside areas for breast-feeding women to use their breast pumps. My dad was a small businessman. He didn’t need to be told by the government to do that.
MR. GREGORY: Mm-hmm.
MR. KLEIN: He would have just said, “Use my office.”
MR. GREGORY: We’ve got less than—we have about 30 seconds. What’s the dynamic in the next 20 some odd days before the election that may impact the results?
MS. NOONAN: That may impact the result. I do think the result is probably pretty set. I think it’s going to be a rising up against huge spending. At least the American people feel maybe they can put some pressure on politicians to start to control federal government spending.
MR. GREGORY: And to contract government when it’s not held in very high esteem.
MR. KLEIN: Yeah. And that’s, that’s a conundrum because when you talk to people out there, the deficit vs. stimulus argument that goes on here in Washington is settled. People would rather have the government spending money on job programs that actually work than on deficit reduction, which they’ve never really cared about in any case, although they say so when things aren’t going well.
MR. GREGORY: All right.
MS. NOONAN: But they have a sense it’s out of control, the spending, at the same time. They do. That it’s too big. Deficits—oh, my God, when you get into the T’s, trillions, you’re in trouble.
MR. GREGORY: That’s a good place to end. Thank you both very much. We will leave it there and we will be right back.
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MR. GREGORY: That is all for today. Be sure to join us next week when we continue our Senate debate series. We will turn our attention to Colorado, where Democratic incumbent Senator Michael Bennet is locked in a tight battle with Republican challenger, tea party favorite, Ken Buck. If it’s Sunday, it’s MEET THE PRESS.
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