House Speaker Nancy Pelosi blames the financial crisis on what she calls the laissez-faire policies of the Bush administration and out-of-control executive compensation.
And when President Bush addresses the nation Wednesday night about the crisis and proposed $700 billion government bailout, Pelosi says she hopes he makes it clear that "the party is over" on Wall Street.
"I hope that he [Bush] would explain to the American people why this rescue package is necessary," she tells NPR's Melissa Block. "This is clearly at their doorstep, and now they have a proposal, which is their solution to their problem, and we're eager to see why the president thinks this is the way to go."
Pelosi also discusses how this bailout could affect the budget long term. A full transcript of the conversation is below:
MELISSA BLOCK: And now to the speaker of the House, Nancy Pelosi, who joins us from her office on Capitol Hill. Welcome to the program.
REP. NANCY PELOSI (D-CA): Hello, Melissa. How are you?
BLOCK: I'm fine, thanks. What do you think President Bush can gain tonight with his address to the nation?
PELOSI: What he can gain?
PELOSI: Well, I'm hoping that the American people will have something to gain tonight by his address. I, of course, have been asking for him to apologize to the American people for the complete disarray of our economy caused by the lack of supervision and regulation and the anything-goes economic policies of the Bush administration.
I hope he would tell the American people that the party is over for Wall Street, and no longer will we be responding to lack of supervision and regulation by having the American people bail out Bush's failed policies there. I hope that he would explain to the American people why this rescue package is necessary. Secondly, why he thinks this particular proposal will work. Why it will cost so much money, and what is in it for the taxpayer? What upside do the American people get from this particular approach?
BLOCK: Do you think that Congress also owes the American people an apology? Doesn't Congress share in the responsibility?
PELOSI: No, not at all. This has been a Bush policy for eight years of laissez-faire, anything-goes nonregulation. And they have taken great pride. John McCain himself has said, 'You're looking at the greatest deregulator you will ever see.'
This is clearly at their doorstep, and now they have a proposal, which is their solution to their problem, and we're eager to see why the president thinks this is the way to go. We have some suggestions as to better protections for the taxpayer in terms of oversight, that any funds gleaned from this will go back to the taxpayer and not to the secretary of the Treasury, that we have reform of CEO compensation, that we have forbearance so that we can help people stay in their homes, some suggestions that will insulate the American people and Main Street from the crisis on Wall Street.
BLOCK: There's been some confusion today about whether there is in fact an agreement on limiting executive compensation. Where are the negotiations on that? Is there a deal?
PELOSI: No. This is something that the Democrats in the House and Senate have been insisting upon, but we've gotten no commitment from the Republicans on that yet.
BLOCK: So the reports that are out that Secretary [Henry] Paulson has agreed to this, you're saying they're wrong.
PELOSI: I don't know about the reports, so I don't know. I mean, I haven't heard those reports, but I haven't heard anybody agree to compensation, and I have certainly not heard Secretary Paulson agree to it.
BLOCK: Can you point to progress on any of the provisions that the Democrats and some Republicans also want in this bill? Any progress that's been made in the last couple of days?
PELOSI: We're working in a forward direction. We are making some progress in everyone understanding better what this bill actually does. There are still questions as to whether it will work and why it has to be so expensive. Some of the questions I hope the president will answer this evening.
But in terms of coming to agreement, I think that the concerns of the American people have been heard very clearly about a bailout that does not have compensation reform, does not protect the taxpayer.
BLOCK: And you say that this is moving in a forward direction. The administration wanted a deal by week's end. From the sound of how you're describing things, you are very far away from any possible deal.
PELOSI: Well, yeah. The thing is, is that the administration informed us on Thursday of the nature of the problem after assuring us for a while that everything was coming along fine. Then, on Saturday, they sent us their proposal. Numbers came back on Monday and became more fully aware of what is in the package. They're still learning about it. And we'll have a package when we're ready to have one that would stabilize the markets and protect the taxpayer. But we can't do it any sooner than it is right and ready. We wish we didn't have to do it at all, but that, by all accounts, the needs for us to intervene are necessary.
BLOCK: I want to take you back to the meeting that you sat in on last Thursday with Secretary Paulson and the Fed chair, Ben Bernanke. According to some people who were in that meeting, those two men used really apocalyptic terms to describe what would happen to the economy without immediate action.
And I'd be curious to hear your description of the urgency and the tone expressed at that meeting.
PELOSI: The secretary and the chairman of the Fed, Mr. Bernanke, presented a pretty dismal picture of our economy and how that would translate into the lives of the American people, whether it's their need for credit, the survival of their jobs, their staying in their homes and the rest. You have to listen to all of these presentations with openness, but also with some judgment about how to proceed.
If even a fraction of what they were saying is really the case, there is really need for us to proceed. It's not anything you can take a chance on. The only thing that was strange to us, that they had come in so late about a problem that was so vast. Over time, the secretary has briefed me on the state of the fragility of certain financial institutions or what that could mean to the market. And so, you know, I've gotten bad news from him before. This was very, very, very bad news of a magnitude that spoke out for some of us, of Congress' intervening.
BLOCK: Well, if the problem is described "was that vast," and the picture that dismal, don't you share that sense of urgency? Don't you worry about any delay causing the economy to grind to a halt, as Chairman Bernanke is warning about?
PELOSI: Now, mind you, these are the people who brought us this problem in the first place, the anything-goes policies of the Bush administration. They got us where it is now. They sent a proposal; we have to subject it to some scrutiny. The days of the rubber-stamp Congress that President Bush was used to are over. And, as I say, the party is over for them as well.
And so it isn't a question of, well, let's go real fast and just do what they asked us to do. What does this mean to our budget and our opportunities for other priorities that we have in our country? What does this mean to the taxpayer and his or her exposure in terms of this? What does this mean in terms of home ownership and the rest? There are serious questions that were unanswered.
Quite frankly, I don't think that the product that they sent us — the legislation that they sent us — was ready for prime time, much less passage in the Congress of the United States. We have a responsibility to, again, make sure it stabilizes the market and protects the taxpayer. And I'm not absolutely certain what they were suggesting would do that.
BLOCK: You mentioned the impact on the budget. What does this do to the budget? How is the federal government going to pay for this, whatever form it takes?
PELOSI: It is hoped — and that is what is being suggested by the administration — that this is an investment, and that the taxpayers will get their money back and maybe more. I hope that that is right. But in the meantime, we have a large exposure here. If they think $700 billion is what is necessary to stabilize the markets, then that is what we will vote on. But how we dispense that money will depend on how we think they can spend it in a productive way. And those are some of the conversations we are having.
BLOCK: But, bottom line, won't there be less money to spend?
PELOSI: But we have to make judgments about — there will be less money to spend. But, again, if we are not giving tax cuts to the wealthiest people in America, which is the biggest cause for their deficit that we have right now, and if we can bring the end to the war in Iraq, that will reduce our spending, as well.
So this is a major realignment of priorities. This election is about the values of America in terms of how they are translated into policy decisions related to our budget. Our budget is a statement of our national values in terms of how we allocate our resources.
BLOCK: Speaker Pelosi, thanks very much.
PELOSI: Thank you very much. Nice chatting with you, Melissa.