David Axelrod tells NBC’s “Meet the Press” host David Gregory about his Washington surprises. Transcript.

SHARE David Axelrod tells NBC’s “Meet the Press” host David Gregory about his Washington surprises. Transcript.

WASHINGTON–Neither David Axelrod nor Robert Gibbs, the top Obama White House spokesmen moved the bar much on the Sunday shows over who President Obama will pick for vacant Commerce and Health and Human Services cabinet spots. Not many crumbs offered up in the mortgage foreclosure plan the administration will roll out on Wednesday.

On NBC’s “Meet the Press” host David Gregory asked Axelrod, a senior Obama advisor, about any surprises he may have had in the first few weeks in Washington.

“You know, I relearned, David, a lesson that I’ve, that I, that I’ve always known but that came back in stark relief, which is that there’s a different conversation in this town often than what’s going on in the country,” Axelrod said.

“On cable television for the last few weeks you’ve heard the president’s plan is in trouble, you know, this big discussion about Republicans and Democrats and so on and so forth. Out in the country people were saying, “I’m losing my job. I’m worried about my health care. I’m worried about staying in my home. I’m looking for someone to act.” And they were supportive of what the president was trying to do. And it’s always important to remember that the chatter in this town is not the chatter around kitchen tables in this country. And as long as we listen to kitchen table chatter, I think we’re going to stay on a truer course.”

? 2009, NBC Universal, Inc. All Rights Reserved.



NBC News


Sunday, February 15, 2009


Senior Adviser to President Obama


Political Director, Atlantic Media


Columnist, Washington Post


Chief Political Columnist, Politico


Columnist and Editorial Board Member,

Wall Street Journal


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(Sundays: (202)885-4200)

MR. DAVID GREGORY: Our issues this Sunday: Day 26 of the Obama administration, and the $787 billion stimulus bill is on its way to the president’s desk. A legislative victory, but it was far from bipartisan.


REP. JOHN BOEHNER (R-OH): But a bill that was supposed to be about jobs, jobs, jobs has turned into a bill that’s all about spending, spending and spending.

(End videotape)

MR. GREGORY: When will Americans actually see some relief? And what will the administration do to solve the other economic problems, banks and housing? All of this as another Cabinet nomination goes bad; Republican Senator Judd Gregg says never mind as Commerce secretary.


SEN. JUDD GREGG (R-NH): The bottom line is this was simply a bridge too far for me.

(End videotape)

MR. GREGORY: What now? Our guest: senior adviser to President Obama, David Axelrod.

Then the political fallout from a productive yet tumultuous first three weeks. Our political roundtable weighs in: Ron Brownstein, columnist for the National Journal; Eugene Robinson, columnist for The Washington Post; Roger Simon, chief political columnist for Politico; and Kimberly Strassel, columnist and editorial board member of The Wall Street Journal.

But first, the man who was chief strategist for candidate Obama and is now senior adviser to President Obama, David Axelrod.

Welcome back to MEET THE PRESS.

MR. DAVID AXELROD: Great to be here, David.

MR. GREGORY: Certainly a productive time and a huge legislative victory with this stimulus package. The president’s claimed victory. And here’s the bottom line question: What will this stimulus plan do to ease the recession this year?

MR. AXELROD: Well, I think that there’s going to be some immediate activity. You know, let’s, let’s understand, this is the worst economic downturn we’ve had since World War II. So our first mission is to try and slow the trajectory of it and turn it around. This will do that. This will help do that. We believe in the next couple of years that it will create three and a half million jobs. That’s going to be very important. We’re also going to prevent the layoff of key personnel in states, like teachers, police, firefighters. We’re going to help those who are caught in the, in the brunt of this with longer unemployment insurance, helping them with their health care. And ultimately we’re going to put people to work doing the work that America needs done in energy, in health care, in education, rebuilding our roads, bridges, dams and levees. That’s going to have a long-term effect and a short-term effect. But a lot of those projects are going to begin soon. But…

MR. GREGORY: But–yeah.

MR. AXELROD: …let’s be clear, though, it’s not going to be an overnight turnaround. The president’s been clear; it took a long time for us to get in this mess, it’s going to take a while for us to get out of it.

MR. GREGORY: Unemployment is at 7.6 percent. That doesn’t even capture people who have stopped looking for work.


MR. GREGORY: Will this stimulus plan prevent unemployment from reaching 10 percent, do you think?

MR. AXELROD: Well, that’s our hope. That’s our hope. There’s no doubt that without it that’s what–that’s where we were looking, double-digit unemployment. And that’s what we’re trying to forestall. We want to turn this thing around, and we think that this will, will happen. That’s why the president had such a sense of urgency of acting now. As you know, we lost 600,000 jobs last month, over one and a half million in the last three months. The trajectory is horrible. This should help put the brakes on that and slow it down.

MR. GREGORY: So you talk about jobs. The president has promised to save or create actually four million jobs. Your own economic reporting indicates that that won’t be achieved until the fourth quarter of 2010. So as you say, this is not immediate. But there’s one prominent economist who says maybe that goal won’t be reached. This is how it was reported in The Washington Post: “The final package `is just not going to pack the same jobs punch’ as some earlier versions, which cost as much as $100 billion more, said Mark Zandi, chief economist of moodyseconomy.com, whose analyses have been cited by both White House officials as well as congressional Democrats. Zandi estimates the measure will created only about 2.2 million jobs by the end of 2010, leaving unemployment hovering around 10 percent and probably forcing lawmakers to undertake another stimulus plan.” Another stimulus plan?

MR. AXELROD: Well, look, let’s see how this works out. I respect Mr. Zandi, but there are all kinds of analyses by many economists saying different things. We believe that the three to four million number is an, an accurate number, a good guess. But this is–this–it’s–you know, there are some unknowns here. Let’s give this a try. We think this, this is the most ambitious recovery package in the, in the history of this country.


MR. AXELROD: And let’s move forward with it.

MR. GREGORY: But is it ambitious enough? I mean, there are other economists–Paul Krugman writing this week, citing the Congressional Budget Office, saying that the economy is underproducing to the tune of what could be $2.9 trillion. So a nearly $800 billion stimulus package, as huge as that is, may not be enough.

MR. AXELROD: Well, let’s, let’s see how it goes, David. We think this will have a multiplier effect and that, and that ultimately it’s going to pay off, it’s going to turn this around, it’s going to break the, the hard edge of this, of this recession. The interesting thing is, you know, we, we just had a debate this weekend. You heard people saying it was too large, you heard people saying it was too small.


MR. AXELROD: We believe it’s, it’s, it’s where it should be…


MR. AXELROD: …and we want to move forward.

MR. GREGORY: The president said his metric was four million jobs. If you have benchmarks along the way, before fourth quarter 2010, if those are not being achieved, will you go back to Congress and ask for another stimulus plan?

MR. AXELROD: I’m not going to presuppose that, David. That’s a hypothetical I’m not going to deal with. We have great confidence in what we’re doing here, that it’s going to produce jobs in the short run and economic progress in the long run.

MR. GREGORY: Mm-hmm.

MR. AXELROD: And, and that’s the assumption we’re making.

MR. GREGORY: OK. There is some criticism about how this stimulus plan actually pays out, where the stimulus is. Is it front-loaded, is it back-loaded? The Economist editorialized this way: “The fiscal stimulus plan has some obvious flaws. Too much of the boost to demand is back-loaded to 2010 and beyond. The compromise bill is larded with spending determined more by Democratic lawmakers’ pet projects than the–by the efficiency with which the economy will be boosted.” Now, here is what The Economist is referring to. This is an analysis by the Congressional Budget Office, and you see it on the screen here. In 2009, just 22 percent, almost 23 percent is spent out. The total outlays for 2010 and beyond is the majority, over 77 percent. Is it too late?

MR. AXELROD: Well, there’ve been discussions back and forth about this. We believe that 75 percent of this money will be, will be spent out in the first 18 months. So there are disputes over, over that. Look, what we’re–first of all, a large part of the package is helping people who are caught in this recession; extending unemployment benefits, health care and so on. That’s going to have a stimulative effect, everybody agrees on that. There’s aid to the states in there to prevent layoffs, and that is going to have a stimulative effect. There are tax cuts in there that we feel are going to have a stimulative effect. And obviously, putting people to work rebuilding this country on energy projects, infrastructure projects, rebuilding classrooms all over this country to bring them up to 21st century standards and so on, all of these things are going to have an impact. And those things are going to happen quickly.

MR. GREGORY: But you’re depending on a psychological bounce that comes from the passage of the stimulus, when the reality is the government outlays payout rather slowly, infrastructure spending pays out rather slowly. There’s questions about whether government contracting will work as efficiently as possible. Do you run the risk of losing precious ground during a time when the economy is worsening day by day?

MR. AXELROD: Look, obviously this is a complex task, administering this program, and we are going to devote significant resources to making sure that it’s done right in terms of oversight, transparency. People will know what’s happening and we’ll know what’s happening. But there are a lot of projects all over this country that are ready to go that have been vetted and cleared, they’re–and were just waiting for funding. That will begin very quickly.

MR. GREGORY: You wanted this to be a bipartisan package. It is not. Out of 219 total Republicans in the House and the Senate, you got three Republican votes. Here’s a sampling of some of the Republicans’ complaints about the bill.


REP. BOEHNER: Here we are with 1100 pages. Eleven hundred pages not one member of this body has read. Not one.

SEN. JOHN McCAIN (R-AZ): But unfortunately, this measure is not bipartisan. It contains much that is not stimulative and is nothing short, nothing short of generational theft.

SEN. LINDSEY GRAHAM (R-SC): Well, you’re going to need a shovel when this bill passes. Not to build anything, just to get the money out the door.

(End videotape)

MR. GREGORY: The opposition by Republicans; do you think this was principled opposition, or do you think this was a calculated effort on the part of the party to rebrand itself?

MR. AXELROD: I don’t know. I think they have a point a view. The point of view was expressed in the economic policies of the last eight years. Those economic policies have not worked, and that’s one of the reasons we’re in the mess we’re in. So we had good conversations back and forth with the Republicans. I think their influence was felt in this legislation. It may–but, but what we weren’t going to do was repeat the same economic theory that…

MR. GREGORY: All right, so how was their influence felt?

MR. AXELROD: Well, I think in tax–in terms of tax cuts. I think the tax cuts reflect some of their, their thinking. I mean, we agreed with them in terms of tax cuts to help small businesses get through this. They–their–the AMT is now added. The AMT fix is now added to this. The, the, the Web site recovery.gov was suggested by Representative Cantor, the leader of the opposition in the House.

MR. GREGORY: This is an, an attempt to track the spending.

MR. AXELROD: Here’s something–here’s what I–yes. Here’s what I, what, what kind of interests me, though. For eight years when we were doubling the national debt, I didn’t hear many of these people moralizing about, about spending. I didn’t hear them scrutinizing. We passed–they passed a bill in 2003 to rebuild the economy of Iraq that was nearly $100 billion with no accountability built in, and I didn’t hear anybody, any of those guys standing up on the floor and saying this was a mistake. So to some degree you have to attribute it to politics. But I also think they have an economic view, which is that we shouldn’t be investing in things like energy and health care and education, that we should rely principally on tax cuts, that this bill should have been smaller. We disagree with all of that.

MR. GREGORY: But is that fair? Is it really that that’s the view, or is it that you’re creating a lot of more permanent government spending, entitlements and investments, in a dead environment, which is very dangerous for the economy of the United States?

MR. AXELROD: Well, again, I think that this is–it’s sort of late in the game to be raising the debt issue for folks who doubled the debt over eight years. But beyond that, much of this spending, most of this spending is going to spend out very, very quickly. Yes, we’re investing in short-term investments that have long-term value. In terms of creating–we’re going to double our use of renewable energy. That’s going to pay dividends in the long run. Building–rebuilding 10,000 schools to put our kids in the classrooms and labs and libraries of the 21st century, it’s going to have a short-term benefit and a long-term benefit.

One of the reasons we’re in the problem we’re in is because for–not just for years, but decades, we’ve been deferring investments in, in, in energy independence, in health care, in education. And what we’re saying is let’s put people to work doing the work that America needs done.

MR. GREGORY: So the lack of bipartisanship in this bill, not a major concern to the president?

MR. AXELROD: Our concern–look, first of all, bipartisanship isn’t just measured by the number of votes you get. It’s measured by the dialogue you have. He, he meant–he, he…

MR. GREGORY: You were the ones who said you wanted 80 votes in the Senate, though.

MR. AXELROD: I wanted 100 votes, David, but I don’t think that that is the measure. The measure is do you move it forward and do you have productive conversations? President met with members of–Republican members of Congress. He went to both caucuses. Our staff met with most members, or many members of the Republican caucus. And, and that is a healthy thing. But old habits die hard, we understand that. We’re going to keep on dealing with both parties on Capitol Hill and trying to set a standard of civility that we think ultimately will pay off.

MR. GREGORY: Would you concede that it was a mistake to have House Democrats write the bill, make some of these appropriations? Some of this spending, it appeared, got away from the White House.

MR. AXELROD: I think that if you look at the bill, the president said coming into this discussion that he wanted a bill in the neighborhood of $775 billion. And we hit it almost on the nose. He said he wanted to make investments in energy, in health care and education, put people to work in advancing those goals. We’re doing that. He said he wanted to give significant help to people who have been–lost their jobs in this economy, with unemployment insurance and health care. We’re doing that. He said he wanted to help states get through this disaster so they don’t have to lay off critical personnel and police and fire and teachers. We’ve done that. I think this bill accomplishes much of what the president set out to do, and we’re very, very pleased with it.

MR. GREGORY: What does this experience tell you about how you should approach the rest of your agenda and approach Republicans? Do you slow down? Do you try to compromise more?

MR. AXELROD: Well, look, we’re faced with an economic emergency here, and we’re going to have to move forward quickly on, on a number of things: on financial regulatory reform, so we have some rules of the road governing the markets; on financial stability, we have to move forward on that. There are a range of things we have to do, because the country’s in trouble right now. And so we want to move deliberately, thoughtfully. But we can’t drag our feet, because people are counting on us to act in the midst of this crisis.

MR. GREGORY: So keep moving forward and move forward strong?


MR. GREGORY: Let me ask you about a few agenda items in the stimulus that have become controversial. Here was a complaint from a Republicans, and it had to do with some of the health care provisions that we included. The AP reported it this way: “Some Republicans … focused their criticism on a new federal council that will coordinate what’s called comparative-effectiveness research–when doctors and statisticians sift medical records to determine which treatments work best for a particular disease. The government already spends hundreds of millions of dollars on such research. Democrats will greatly boost that spending, but they also establish a 15-member council whose members will annually report on the state of comparative effectiveness research and make recommendations. Republican lawmakers claim the council will become a `governing rationing board’ that will make life-and-death decisions about which treatments doctors will be able to use. `Congressional Democrats are using the cover of an economic crisis to advance an agenda that will destroy the doctor-patient relationship and set us on a course for government-administered health care,’ said Representative Tom Price,” from Georgia, who is “a doctor.” Is this going too far?

MR. AXELROD: Well, of course that’s hyperbole. The reality is that we spend an enormous amount of money on health care each year, the government does and individuals do. The costs are out of sight. And one of the reasons is that we have a lot of duplication, we have a lot of inefficiency. One of the things we had in the bill was computerizing our medical records so we’re not duplicating tests, we’re reducing medical errors and improving care. We have to get a hold of this issue of cost. It has nothing to do with the, the patient-doctor relationship, it has to do with making our health care system more efficient so it doesn’t implode.

MR. GREGORY: But what…

MR. AXELROD: And I think most Americans want us to do something about that.

MR. GREGORY: But what’s the role of this council?

MR. AXELROD: Council is going to be looking at best practices, at, at, at what, what is working and what isn’t and, and making recommendations about how we proceed, particularly within the, the, the federal system.

MR. GREGORY: Let’s talk about another agenda item, the Buy American provision. This survived in the package despite some concerns that the White House had. And what it basically says, a lot of the stimulus spending, a lot of these projects will have to rely on the use of U.S. iron and steel. The president said he didn’t want protectionist measures in there. A lot of our trading partners think that’s exactly what this is.

MR. AXELROD: Well, first of all, we want to promote American businesses, we all agree on that. There is–there was language added to that provision that I think that respects our international agreements, and that was something that we wanted in there.

MR. GREGORY: All right.

MR. AXELROD: Because the last thing we need in the midst of a worldwide economic slump is, is a trade war. And I think that’s a concern everyone has.

MR. GREGORY: But this provision would exclude China and India from bidding on these projects. Is that the message we want to send?

MR. AXELROD: As I said, the, the, the, the language in the bill is consistent with our international treaties. And we insisted on that, and that’s the way it is.

MR. GREGORY: But there are major trading partners, like China and India, who are excluded?

MR. AXELROD: The language is consistent with our treaties. We–but we…

MR. GREGORY: All right, but that’s a fact.

MR. AXELROD: …we, we, we believe that it, it achieves, it achieves our goals without risking the kind of trade war we can’t afford right now.

MR. GREGORY: How about executive compensation? In this stimulus bill is a measure from Senate Democrats that goes beyond what the White House laid out, basically saying that cash bonuses would be prohibited, other incentive compensation for executives at companies who will receive or have received bailout money. Are you concerned about this?

MR. AXELROD: Well, the president’s expressed himself on this. He shares the outrage that most Americans feel about excessive bonuses at firms who are receiving extraordinary assistance from American taxpayers. That’s why he’s laid out some very tough provisions himself, some of which are tougher than what was in the congressional bill, like a hard cap on, on compensation for executives at firms that receive extraordinary experience.

MR. GREGORY: At $500,000. But this goes beyond that.

MR. AXELROD: Well, it does in some ways, but not in that way. The point is that we’re all on the same side of this argument. We believe that there should be limitations. And we’re going to work with Congress to, to administer them in a way that’s, that’s practical.

MR. GREGORY: So are you going to try to fix this?

MR. AXELROD: We’re going to, we’re going to have a dialogue with Chairman Dodd and, and Frank and, and talk this through.

MR. GREGORY: So this may be altered in some way from the final package.

MR. AXELROD: We want it to, we want it to work, we want to achieve the goals we need to while moving the financial stabilization plan forward.

MR. GREGORY: But are you for or against the cash bonus prohibition?

MR. AXELROD: Well, we–they borrowed an idea from us, which is to, to make most of the compensation come in stock that only vests when they repay the federal government.

MR. GREGORY: OK. The stimulus plan was the first step, and now you move on to the financial industry. The president talked about that this week, so did Secretary Geithner. This was The Washington Post editorial which captured some of the criticism of Secretary Geithner’s plan: “An Unfinished Product: America’s banks need a plan. The Obama administration delivered a concept.” Was it a mistake for Secretary Geithner to just issue principles and not specifics? Some critics have said this was in line with what the Bush administration did. Too reactive, not bold enough. Wall Street certainly didn’t like it.

MR. AXELROD: Well, first of all, I understand Wall Street’s reaction. They would have preferred that Secretary Geithner wheel, wheelbarrow down the center of that room with cash and then say we’re going to take care of all your problems. That wasn’t a practical, a practical answer. What he laid out was a very thoughtful strategy for dealing with this problem. In the coming weeks he’s going to lay out the tactics that animate that strategy. And you know, if, if, if anything, I think there was some anticipation that was not in keeping with what he had planned for that event. He planned to lay out a strategy. The strategy is sound. We believe the strategy will help lead us out of the morass that we’re in. And you know, we’re going to, we’re going to fill in the details in the next few weeks. The president’s going to speak to the housing component of it this week, and I think that people will be well satisfied with what he comes up. But let’s be, let’s be clear; it is a very complex problem, the likes of which we’ve never seen. We’re going to do it thoughtfully. One of the complaints about what happened on the first half of the administration of this program by the Bush administration was that it was very, that it was very scattered, that there were starts and stops. And we want to make sure that when we lay these details out, that they’re the details that we believe in and that we–that will work.

MR. GREGORY: The president was very pointed talking to columnists on Friday, saying, “That he won’t let the financial system collapse.”


MR. GREGORY: Will it be a–necessary to nationalize major U.S. banks at some point to keep them healthy?

MR. AXELROD: Our goal is to have a strong, vibrant private sector of financial system. And that’s, that is our assumption and that’s what we’re working towards.

MR. GREGORY: So nationalization is not something you anticipate?

MR. AXELROD: Well, we will do what we need to do, but our long-term goal is to have a strong private sector banking and financial system.

MR. GREGORY: Let me address housing. You said the president will take this on on Wednesday. The plan appears to be an effort to try to modify people’s loans by reducing their payments. And the metric for this is that you would try to reduce it to 31 percent of people’s incomes. Housing experts I’ve talked to say the problem with that is that people who are having a hard time in this economy making their payments now and who are saddled with additional debt–it might be credit cards, student loans, auto debt–still have a hard time making those payments. And we see a redefault rate, even with payment modification, of between 50 and 60 percent. Can you address the housing problem without dealing with either principle protection or some kind of insurance for principle?

MR. AXELROD: I’m not going to–David, I’m not going to get into the details of the plan here, the president will unveil them. But we obviously have a major problem; problems with foreclosure, problems with people living on the edge and problems with home values around the country just plummeting, which is affecting family, family finances everywhere. We want to do something that will address all of those things.

MR. GREGORY: Are you concerned, though, about the fact that people are just not able to make their payments, even if you reduce them?

MR. AXELROD: Obviously we’re concerned. You know, the president, one of the things that he’s taken to doing is getting letters each day, a sampling of letters that people have sent to the White House. He showed me a letter the other day that was just heart wrenching from a woman in Arizona whose husband lost his job. He now has a job that’s one-third the pay and they’re really struggling to make their payments and meet their responsibilities. And she was emblematic of people all over this country.


MR. AXELROD: We want to do what we can to help the American people and to solve this problem, which is at the heart of our financial challenges.

MR. GREGORY: You’ve got the economy overall, you’ve got the banks, you’ve got housing, you’ve also got the auto companies. They have to demonstrate whether they’re viable this week coming up, whether they can keep getting government aid. This was how The Wall Street Journal reported it on Saturday: “GM,” General Motors, “to Offer Two Choices” to the government, “Bankruptcy or More Aid.” Is the administration prepared to offer more bailout money to at least two of the Big Three?

MR. AXELROD: Well, of course, we need to see what it is that they come up with this week. We’ve got a working group going on this and, and, you know, we’re ready to receive what they bring us. One thing is clear–really, two. We need, we need an auto industry in this country. There are millions of lives, livelihoods that depend on it. Not just at the auto companies, but spin-off manufacturers, dealers and so on. So we have a real interest in seeing the auto industry survive.


MR. AXELROD: But it’s going to require a major restructuring of the auto industry.

MR. GREGORY: But can the auto industry withstand a bankruptcy at GM?

MR. AXELROD: Well, I’m not going to–as I said, we’re going to need a major restructuring of these companies. How that restructuring comes is something that has to be determined. But it’s going to be something that’s going to require sacrifice not just from the autoworkers, but also from creditors, from shareholders and the executives who run the company, and everyone’s going to have to get together here to build companies that can compete in the future.

MR. GREGORY: In our remaining moments, let’s talk about some of the political fallout this week in trying to fill the Cabinet. Judd Gregg, your choice–the president’s choice for Commerce secretary, backed out. And it was–raised a lot of questions about what was really going on here. Press Secretary Robert Gibbs indicated that Gregg actually approached you guys for the job initially, then Gregg said no, it was the other way around. What happened here?

MR. AXELROD: Well, what happened was that Senator Gregg was very interested in serving in the Cabinet, and I think that he had second thoughts. As he said–you know, as you know, he’s quite the maverick in the Senate. He said that he finally concluded that he didn’t belong in anyone’s Cabinet. And so he had, he had second thoughts and he withdrew. And we’re going to move on.

MR. GREGORY: Was there a bigger issue made about the role that he would play or wouldn’t play in the census, a new census coming up? You wanted to bring that into the White House instead of having the Commerce secretary have jurisdiction over that. Wasn’t that a big issue for him?

MR. AXELROD: To my knowledge that was not the–a major point of discussion. And let’s be clear, we want professionals to run the census, people who are expert in the field. We want to make sure that every American is counted. It’s important to them, it’s important to the states in which they live. And we’re going to proceed on that basis.

MR. GREGORY: You won’t politicize the census?

MR. AXELROD: Absolutely not. Absolutely not. We are interested in the best census ever, and a census that reflects as accurately as possible the true population of this country.

MR. GREGORY: Is the president prepared to name a new Commerce secretary? Does he have somebody in mind?

MR. AXELROD: We’ll be having an announcement shortly. Yeah, you know..

MR. GREGORY: This week?

MR. AXELROD: Well, I’m not going to put a day on it. It’s going to be a busy week. As you know, he’s going to Canada.

MR. GREGORY: Mm-hmm.

MR. AXELROD: We’re, we’re announcing the housing plan. We’re signing this bill. But shortly.

MR. GREGORY: What about somebody to replace Tom Daschle as secretary of HHS? Another announcement coming there?

MR. AXELROD: Yes. We’re obviously going through the process of evaluating candidates.

MR. GREGORY: Mm-hmm.

MR. AXELROD: Now, it’s an extraordinarily important job, health care is a major issue in this country, and HHS has a lot of other responsibilities. So we want to make sure that we make a great choice. Tom Daschle was, was an extraordinary guy, great expertise in health care. We want to make sure the next choice is, is up to this role.

MR. GREGORY: Let me have you address some criticism from the prior administration, specifically the vice president, who offered some pretty strong things to say about the administration’s approach to the war on terror now in, in the new administration. He said this to Politico: “`When we get people who are more concerned about reading the rights to an al-Qaeda terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry,’ Cheney said. … He said he worried that `instead of sitting down and carefully evaluating the policies,’ Obama officials are unwisely following `campaign rhetoric’ and preparing to release terrorism suspects or afford them legal protections granted to more conventional defendants in crime cases. The choice, he alleged, reflects a naive mind-set among the new team in Washington. `The United States needs to be not so much loved as it needs to be respected. Sometimes, that requires us to take actions that generate controversy. I’m not at all sure that’s what the Obama administration believes.'”

MR. AXELROD: Well, first of all, let me say that if respect in the world is what we’re after, I’m not sure that that cause was advanced by some of the things that the vice president has said and done over the last eight years. And what he said here is really irresponsible. The fact is that the president has announced a very, a very methodical system for evaluating how we close down Guantanamo, how we’re going to deal with those detainees, and, and, and he’s proceeding in a thoughtful way. He believes, and I think most Americans do, that we can protect the American people and be consistent with the values that have animated this country for over two centuries. The vice president seems to think it’s a zero sum game. I think that’s one of the things that was on the ballot last November. It was decided. Apparently the vice president is having a hard time dealing with those–with the verdict of the American people.

I will say this. President Bush could not have been more generous in, in the transition in, in every conceivable way. And when he left, he said, “I, I’m rooting for you guys. I hope you do well.” I believe that. Apparently the memo didn’t go down the line.

MR. GREGORY: The first few weeks in Washington, any surprises for you?

MR. AXELROD: You know, I relearned, David, a lesson that I’ve, that I, that I’ve always known but that came back in stark relief, which is that there’s a different conversation in this town often than what’s going on in the country. On cable television for the last few weeks you’ve heard the president’s plan is in trouble, you know, this big discussion about Republicans and Democrats and so on and so forth. Out in the country people were saying, “I’m losing my job. I’m worried about my health care. I’m worried about staying in my home. I’m looking for someone to act.” And they were supportive of what the president was trying to do. And it’s always important to remember that the chatter in this town is not the chatter around kitchen tables in this country. And as long as we listen to kitchen table chatter, I think we’re going to stay on a truer course.

MR. GREGORY: We’ll leave it there. David Axelrod, good luck with your work.

MR. AXELROD: Good to be here. Thanks, David.

MR. GREGORY: Appreciate it.

Coming next, looking back at the first three weeks of the Obama administration and what’s next on the agenda. Insights and analysis from our roundtable: Ron Brownstein, Eugene Robinson, Roger Simon and Kimberly Strassel all here, only on MEET THE PRESS.


MR. GREGORY: Insights and analysis from our political roundtable, after this brief station break.


MR. GREGORY: And we’re back, joined by Gene Robinson, Ron Brownstein, and Kim Strassel and Roger Simon.

Welcome to all of you; especially Kim, new to the program, a fresh face. Glad to have you here.

MS. KIMBERLY STRASSEL: It’s great to be here.

MR. GREGORY: So let’s get right to it. Winners and losers this week according to the AP. Liz Sidoti writes this: “The Winners: Obama: The new Democratic president used his popularity and bully pulpit to get the notoriously sluggish Congress to work through the huge package in relatively short order. The Losers: Obama: He spent weeks preaching of bipartisanship and spending political capital but reverted to combative, buck-stops-here talk when Republicans rebelled at the cost and scope of the plan.”

Gene, how do you sort it out?

MR. EUGENE ROBINSON: In my opinion, you have to say that Obama is a winner this week because he got through an, a, a huge, complicated, almost $800 billion spending rescue bill in record time. I mean, this doesn’t happen in Washington. And, and you know, sure, the beginning of an administration is the time when you really want to spend some political capital and, and, and, and those chips, but wow. I mean…

Offscreen Voice #1: Yeah.

MR. ROBINSON: …this is, this is the biggest spending bill of this kind ever passed, and it happened…

MR. GREGORY: And it’s interesting. Frank Rich in, in the Times this morning talks about the fact that, yeah, in Washington and in the echo chamber a lot of people were writing him off, and yet he maintained his popularity around the country. Even though there was lagging support for the stimulus at points, when Obama was attached to it, it was still popular. John Harwood also writes this in his piece in the Times: “The bright spot for Mr. Obama is that the communications and social networking strengths he and his team demonstrated during the campaign may fit the task of preserving presidential initiative. … `Leaders with projects and an electoral mandate keep people with them by mobilizing, educating, and persuading,’ [Pollster Stan] Greenberg said. `It has actually been a long time since we’ve had a president with that kind of momentum that has carried through to pass major elements of the reform agenda.’ With enactment of the stimulus package, `Obama will now have done this’ in less than a month, Mr. Greenberg added. `Now he has to keep support for much tougher measures.'” Ron:

MR. RON BROWNSTEIN: Yeah, , I think it’s really kind of silly to compare the victory of the week and the bumps of the week. I mean, as Gene said, the magnitude of the–this bill was a presidency in a box. He achieved more of his aims in this single legislation than many presidents will achieve in an entire term. I mean, there is more new net public investment here on things the Democrats consider essential for long-term growth–like education, scientific research, alternative energy–than Bill Clinton was able to achieve in two terms. And there are–I mean, there are other aspects of this, as well. If you go back to 1993–first of all, Bill Clinton didn’t pass his economic plan till August, Ronald Reagan until the end of July. When Clinton’s plan passed, 41 House Democrats voted against it, and six Senate Democrats. So the other side of the Republican unity against this was the incredible Democratic unity for it. Only seven House Democrats, no Senate Democrats voting against it. What we’re seeing here I think in party by–in this House–the difficulty you talk about in winning Republicans is a fundamental long-term change in our political system. Both parties are more unified than they were a generation ago.

MR. GREGORY: Mm-hmm.

MR. BROWNSTEIN: And I think in some ways this is a wake-up call for Obama that there is a limited number of Republicans who have electoral or ideological incentives to work for him, and he may have to try to build a broader definition of what it means to have an inclusive and bipartisan presidency.

MR. ROGER SIMON: People didn’t really vote for bipartisanship.


MR. SIMON: They voted for an end to gridlock brought upon by hyperpartisanship. I don’t think it was such a bad thing for President Obama to reach out his hands to the Republicans and have those hands slapped away. Here’s a party shattered after two congressional elections in a row, whose only unifying principle is that they’re against Obama. In the end, that’s not a winning hand for the Republicans. With just Democratic votes and a very few Republicans…

MR. GREGORY: Mm-hmm.

MR. SIMON: …President Obama is being seen to get things done. Now, if those things succeed, and that’s a big if, that’s a huge victory for him and a huge defeat for the Republicans who turned their backs on him.

MR. GREGORY: Kim, do you–what do you think this GOP opposition was about? Do you think it was purely principled, or was there a calculation made at some point to say, “You know what, there is much to be gained here politically from being unified and opposing this president”?

MS. STRASSEL: Look, I think it was both. But what was interesting about this stimulus debate is that I think you saw the beginning examples of how the Republicans are going to attempt to deal with this bipartisan question that the president’s put out. And you saw it two ways. One, you saw it in terms of saying, “We’re happy you’re coming to us, reaching our your hands. We want to work with you, too. The problem is your party. Are you going to do something about them? They wrote this bill, we weren’t included. Are you going to try to put them in line?” The other thing I think you’re going to see Republicans trying to do is talking about how they want to define bipartisanship. And they’re going to say, “It’s not enough to come visit us on the Hill, it’s not enough to have us come over for your Super Bowl party.”


MS. STRASSEL: “You have to make some ideological concessions. Those weren’t present in this stimulus.”


MS. STRASSEL: Now, the, the question will be whether or not the public thinks that’s true. But that’s what they’re going to be doing.

MR. GREGORY: Here’s what’s striking is that the president of the United States got up in his press conference on Monday and said only the government can fix this economy. That is a profound, ideological position that divides.

Offscreen Voice #2: Yes, it is.

Offscreen Voice #3: It is.

MR. GREGORY: Gene, you wrote something about what Republicans were up to this week that was pretty tough. You wrote this, Republic on Tuesday: “Republicans are using this debate as a branding opportunity, positioning themselves as careful stewards of the public purse. This is absurd, given their record when they were in charge. It’s also cynical. They know that some kind of stimulus will get passed anyway. If it works, they’ll claim their principled intransigence made the plan better; if it doesn’t, they’ll say, `I told you so.'”

MR. ROBINSON: Yeah, I’m, I’m sticking with that. I think, I think that’s going to–I think that will happen. And I do think they use it as a branding opportunity. They used it to, to rally the Republican base not just on Capitol Hill, but, but in the country as well. You know, that’s a smaller base, both on Capitol Hill and out in the country. And that’s the essential problem. By, by kind of going with the, you know, low tax, low spending ideology that the party has hewn to for, for decades now, you get the base. But, but that’s a shrinking base and you don’t win elections.

MR. BROWNSTEIN: You know, you don’t even have to look back to make the point that Gene is making. During the Senate debate, 36 of the Senate Republicans voted for an alternative that would have cut taxes over the next decade by 2.5 trillion, reduced the top marginal rate to 25 percent. For John McCain to talk about–who voted for that alternative of a $2.5 trillion tax cut over the next decade–to talk about generational theft, I mean, pot, meet kettle. I mean, essentially the best argument that Obama–one of the best arguments, if not the best argument that Obama has in this debate at this point is that Republicans by and large are offering a continuation of the policies of President Bush. It is a tax cut-centered vision of how you revitalize the economy. And the reality is, I mean, if you want–I, I think if the Republicans want to bring a referendum to the country on whether to continue in the direction we have been in the last eight years, you know, we kind of had that election in 2008. And in many ways, I think that is the weakest position that they are offering. They are essentially saying to continue the same economic strategy as Obama says.

MR. GREGORY: Right. Well, and, and, and, Kim, David Axelrod just said that Republicans are hypocrites for now saying–standing up and saying we should be stewards of, of our–not just the economy, but of our spending, and that we should be deficit hawks.

MS. STRASSEL: Well, the thing is, is–I mean, to make the argument that the vast majority of Americans out there think that tax cuts are responsible for today’s economic mess, I’m not quite sure that flies. If you go out and ask a lot of Republicans, a lot of independents, a lot of moderates why they lost faith in Republicans, it was because they spent too much.

MR. GREGORY: Mm-hmm.

MS. STRASSEL: So I think it is a bit odd to have an administration that again and came in and said, “Well, they spent too much, so now we’re going to spend too much as well, too.” And this increasingly is going to be a story about the deficit. People are talking about the fact that when you add in the stimulus and you add in the bank bailout, we could be moving into a deficit as a percentage of GDP 13 percent. Now, to put that into context, people were howling back during the Reagan years when it was 6 percent. So this is going to be the focus going forward. And it, and it could constrain Democrats as to what they can do on their agenda.

MR. BROWNSTEIN: Well, Kim, Kim, can I just–I mean, that is obviously a troubling number. And Obama, if he is going to maintain support from especially the red state Democrats, is ultimately going to have to demonstrate some commitment to, to long-term fiscal restraint. They’re going to have their fiscal summit at the end of February, the day before his speech to Congress. But how do Republicans have credibility to talk about fiscal discipline when they vote for a $2.5 trillion tax cut that would reduce the top marginal rate to 25 percent at a moment when the economy has already–when the government is already facing a trillion-dollar deficit? How does John McCain get up and talk about generational theft after endorsing a plan that would so severely deplete federal revenue? I mean, what, what is the, what is the basis on which to make that complaint at that point?

MS. STRASSEL: Well, the thing is Republicans aren’t in charge anymore. The focus is on President Obama. And they came in claiming fiscal responsibility. And, and this is going to be the big question. We’re talking about uncertainty in the markets, by the way, too.

Offscreen Voice #4: Mm-hmm.

MS. STRASSEL: A lot of uncertainty out there among investors about how are you going to pay for this down the road? It isn’t just a lack of details in the bank bailout plan, it is a lack of details about which industry is going to get taxed, who’s going to get hurt, what’s going to happen?

MR. GREGORY: And, and–but there’s–and, Roger, there is a, an economic reality right now, which is as the ratio of public debt to GDP increases–now, of course after World War II it was 122 percent of GDP; you know, a huge, huge figure. But the reality is that the Chinese are not servicing our debt in the way they have, their economic problems mean it may not be sustainable for them to do that going forward. These are real issues.

MR. SIMON: They are real issues, and the deficit is a real problem and the deficit as a percent of GDP is a real problem. But it is not the chief problem facing America at the moment.

MR. GREGORY: Mm-hmm.

MR. SIMON: And the president recognizes that. If you worry–if you, if you become a deficit hawk now and say we’ve got to pull back, then you’re going to go off the cliff. That’s what the, that’s what the president is saying.

MR. ROBINSON: You–I, I, I think the…

MR. SIMON: You got to spend now to get out of this problem.


MR. ROBINSON: The way to sum it up…

MR. SIMON: Worry about the deficit later.

MR. ROBINSON: The way to sum it up, there are no atheists in fox holes. There are no deficit hawks in unemployment lines.


MR. ROBINSON: And, and, and right now we’re worried about the economy.

MR. GREGORY: Let, let, let, let’s pull back a little bit and talk a little bit about what we’ve learned about Obama’s approach to policy, to his agenda and what comes next.

Ron, you were one of the columnists who interviewed him on Friday on the way to Chicago, and your column in the National Journal speaks to this. Here’s a portion of it: “[Obama] was insistent that a president’s responsibility is to resist the daily (if not hourly) scorekeeping of the modern political and media system and keep his eye on the horizon. `My job is to keep the country–is, is to help the country take the long view. … We’re going to with–work with anybody who wants to work with us constructively,’ he said at one point–and open to adjusting his own course to bring others along or simply to respond to evidence that his ideas aren’t working.” But he also maintained that he–his clarity about…


MR. GREGORY: …his goals. What have we learned about Obama’s approach to leadership?

MR. BROWNSTEIN: Well, I think, I think he was saying very clearly, on a variety of subjects, the common theme was that he is focused on ends, not means. He has very clear places he wants to get. He said his bottom line on every issue, “Is it going to expand opportunity and security for average Americans?” but that he will adjust his course on how to get there. And he said–you know, we talked to him quite a bit about the–what he–the lesson he took from this first round of trying to work with Republicans, and he said, “Look, I’m going to continue to reach out. I believe that I am open–I want to be open to good ideas from any source.” But then he also said something quite striking, David. He said, “I am an eternal optimist, but that doesn’t mean I’m a sap.” And what he was saying was, you know, we can do this in a cooperative way or in a more confrontational way; that he wants to find ways to work with Republicans. And indeed, not only with Republicans per se in Congress, but with a broader range of interests that don’t always talk to Democrats, or the Democrats don’t always work with. But that if Republicans continue on, on a, on a course that he views as more confrontational…

MR. GREGORY: Mm-hmm.

MR. BROWNSTEIN: …that he’s prepared for that, as well.

MR. GREGORY: Kim, how–this is interesting to me, comparing Obama and his approach to bipartisanship, and that of President Bush, who, who I covered. How do you see those difference? Because you’ve talked to President Bush about this in terms of working with Democrats and, and some of the failures he had along those lines.

MS. STRASSEL: Well, I mean, one thing that I think this president understands is that you have to go out there every day and say that you’re doing it, you know, and put a lot of pressure on the other side to respond to you. I mean, I think that one thing that’s fascinating about Ron just said is that he’s not a sap. One question is how he’s actually going to learn to work with his own party. If you look at the last three weeks…

MR. GREGORY: Mm-hmm.

MS. STRASSEL: …well, the first three weeks of his term, every headache this president has had has been caused by his own party; the writing of this bill by House Democrats, which allowed Republicans to frame it the way it was. You’ve now got the Chris Dodd provision that we were talk–you were talking about earlier, in there…

MR. GREGORY: Yeah, executive compensation.

MS. STRASSEL: …that threatens to undermine their own TARP program.


MS. STRASSEL: You had a lot of pressure from left-wing groups, minorities to not allow Judd Gregg to have the census in the Commerce Department.

MR. GREGORY: The Buy American provision.


MS. STRASSEL: The Buy American provision. And so, you know, this is who he’s going to have to stand up to in the end if he is going to want to move ahead on some of these things.

MR. GREGORY: Mm-hmm. I want to talk about the banking crisis, as well. And, Roger, you have a view from Peoria on all of this.

MR. SIMON: I do.

MR. GREGORY: “The Geithner financial rescue plan, so complicated that he didn’t really detail it in his speech, will cost about $1.5 trillion–and that’s probably just for starters. `There is enormous–this is enormously complicated,’ Geithner said. `There are a million ideas out there.’ Actually, I liked the idea of the guy who stood up at Obama’s town meeting in Elkhart, Indiana, on Monday and said he knew where Obama could send the bailout money. `Send that check to our mailbox,’ he said.” And this is the challenge, that Americans don’t have a lot of love right now for the banks, and nor do they really understand the complexity of the credit markets.

MR. SIMON: That’s correct. I mean, it’s good that Barack Obama doesn’t want to be a sap, but he has to convince the American people that we’re not being played for saps.

MR. GREGORY: Mm-hmm.

MR. SIMON: Everything about the bailout, everything rewards bad behavior. Companies–company presidents that ran their companies into the ground, given billions of dollars. Banks that took hideous, ridiculous, ignorant risks, give them billions of dollars. Companies that have already received bailout money but have not used that money to make loans to Americans, but instead have used it to gobble up other banks…


MR. SIMON: …give them billions of dollars.


MR. SIMON: That is the trouble that President Obama and Tim Geithner face.

MR. GREGORY: OK, but when does populism and punitive measures become bad policy? Because the reality is you may not like the bankers, but there is a really prospect for systemic risk.


MR. GREGORY: Forty percent of our lending in this country through the secondary market, the credit markets, is frozen. The banks are undercapitalized. They need money. And until these rotten assets get off their books, the wheels…


MR. GREGORY: …of our economy don’t get moving again.

MR. ROBINSON: So, so you have to, you have to get the financial system moving again. The question is, how do you do it in a way that is politically palatable? I mean, it is not palatable.

MR. GREGORY: Is that possible?


MR. BROWNSTEIN: (Unintelligible)


MR. ROBINSON: Well, you know, I think it is. I mean, I think, you know, the Obama administration did not like the compensation limits that Senator Dodd had inserted in the bill.

MR. GREGORY: Mm-hmm.

MR. ROBINSON: But they’re going to live with them, and they’ll interpret them with some wiggle room, probably. But it–I think that’s one important step…


MR. ROBINSON: …to show that there’s some equity, some suffering on Wall Street…

MR. GREGORY: But here’s the issue…

MR. ROBINSON: …concomitant with the suffering in the country.

MR. GREGORY: The Journal had an interesting piece this week about the fact that in Japan, in the lost decade of the ’90s, one of the things they didn’t do was act aggressively enough…


MR. GREGORY: …to nationalize banks soon enough.



MR. GREGORY: Because of just this issue.

MR. BROWNSTEIN: Well, he, he…

MR. GREGORY: They were worried about the public’s outrage.

MR. BROWNSTEIN: He talked, he talked about that specifically in the interview, and he talked about the Japan model, which he said moved too slowly and led to a lost decade. And the Swedish model, which is the other pole, where they did in fact temporarily nationalize the banks. And it was striking, he said explicitly that he did not want to go down that route. That was not his preferred course, that there were too many banks in the U.S. as compared to Sweden to make that attractive. But when I asked him if he would rule out that option, he said, again, ends not means; “I am going to get the credit system to work, and I am–and my message to the American people is I’m going to do whatever it takes to do that.”

MR. GREGORY: Mm-hmm.

MR. BROWNSTEIN: Now, as Gene says, the problem here is that you have a great deal of distrust of the banking system and of Wall Street at a time when we have ultimately no choice but to figure out a way to make it work better or else that–there are going to be more people needing checks in their mailbox for, for, for the economy shutting down.

MS. STRASSEL: But the bigger question, will you shut them down? I mean, look, I think this GM story this week is fascinating.


MS. STRASSEL: Who didn’t think six or eight weeks ago when we did this…

MR. ROBINSON: Hm, right.

MS. STRASSEL: …that Detroit wasn’t going to be back and say, “We need more money.”


MS. STRASSEL: No one wanted to shut them down because it was the politically unpopular thing to do. And this is going to be the question facing the banks right now, too. They’re going to have these stress tests.

MR. BROWNSTEIN: Starting at square one.


MS. STRASSEL: Does that mean that the administration is actually going to say at the end, “You can’t make it, you’re going away”?

MR. ROBINSON: Good question.

MR. BROWNSTEIN: Look at the magnitude of the decisions we’re talking about. I mean, this is–I mean, a presidency is a month old, whether to allow GM to disappear.


MR. BROWNSTEIN: Whether to allow Citibank or a potential…


MR. BROWNSTEIN: I mean, it is just–these are extraordinary times.

MR. GREGORY: And, and here’s something else for the taxpayer, Roger, and this is really striking. You talk about the money to the Big Three, or to the Big Three. You have car sales that are at their lowest levels since 1982, despite a rise of 33 percent in the population. You have $160-plus billion for the insurance company AIG. There is the real prospect that the government is never going to get this money back.

MR. SIMON: Oh, it’s true. And, and it, it–showing all the self-restraint he can muster, Vice President Biden said, “Look, even if we get everything right…”


MR. SIMON: “…there’s a 30 percent chance that we’ll fail.” It probably took all his self-restraint to put it at 30 percent. Probably 50/50 might be closer to that.

MR. BROWNSTEIN: Do you think the chance that he’ll be replaced is higher or lower than 30 percent in 2012 at the, the rate he’s going?

MR. GREGORY: Here’s a question. On the economy overall…


MR. GREGORY: …how are we going to know if it’s working, and how much time does Obama really have?

MR. ROBINSON: It’s a, it’s a good question. I think there’s a realization in the country that this doesn’t happen overnight, that you–that, that we’ve dug such a deep hole and it’s taken so long to do it that, that, you know, I think if, if things are perceived to have stopped getting worse in, in–within six months, say…

MR. GREGORY: Mm-hmm.

MR. ROBINSON: …or, or, or nine months, and, and if, if we can–think we can see a bottom then, you know, I think people’ll give him some more time. But the big question, I think, is the one you asked. All that’s been done, all these hundreds of billions and trillions of dollars, is it enough?

MR. GREGORY: Mm-hmm.

MR. ROBINSON: In fact, does, does the, does the bailout have to be bigger?


MR. ROBINSON: Does, does the stimulus have to be bigger?


MR. ROBINSON: This is a huge economy, and, and a lot of economists think it’s not that easy to, to turn it around.

MR. GREGORY: And you know, we talk about the importance of kitchen table conversations. Do–are Americans prepared to do much more than the government is already doing?

MR. BROWNSTEIN: I think Americans at this point are prepared for bold action by the government because they are deeply concerned about where we’re going.

And I just want to go back to a point Kim made before that I, I want to agree with.


MR. BROWNSTEIN: You know, as he–as Obama moves into this decisions, he does have to keep in mind that he needs, as president, to operate in a different compass than even Congressional leaders of his own party. Their institutional imperative is to find the center of their caucus. As president, your job is to find the center of the country. And those are not the same things. You saw it, you saw it in the stimulus bill. And ultimately if he is really is going to set a course that is kind of independent, ends focused, not means focused…

MR. GREGORY: Mm-hmm.

MR. BROWNSTEIN: …he will have to–sooner or later, on entitlements or the budget or other issues, he is going to have to discipline his own side as well as being willing to confront Republicans when he views them as obstructionist.

MR. GREGORY: We are going to leave it there. Thanks to all of you.

We’re going to continue our discussion, I should point out, online, and ask our roundtable some questions that our viewers submitted via e-mail. Watch our MEET THE PRESS Take Two Web extra. It’s going to be up this afternoon on our Web site at mtp.msnbc.com. And we’ll be right back.


MR. GREGORY: That’s all for today. We’ll be back next week. If it’s Sunday, it’s MEET THE PRESS.




Meet the Press (NBC News) – Sunday, February 15, 2009

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