My Interview with Senior McCain Advisor Carly Fiorina

What follows below is an unofficial transcript of my interview on Kudlow & Company last night with Carly Fiorina. Ms. Fiorina is the former chairman & CEO of Hewlett-Packard and a senior economic advisor to John McCain.

Kudlow: Alright. Dueling economic visions today from Senators McCain and Obama. Here to talk about it, we welcome back senior McCain advisor Carly Fiorina. Carly it’s wonderful to see you.

Fiorina: Nice to see you Larry.

Kudlow: We’ve got a couple [clips], we’ve got some great sound. I want you to respond. Obama in St. Louis is criticizing your man and his talk out in Denver. First of all, here’s Senator Obama on his tax plan.

[Senator Barack Obama: If Senator McCain wants to debate about taxes in this campaign, then it is a debate I am happy to have. Because if you are a family making less than $250,000 a year, my plan will not raise your taxes. Not your income tax, not your payroll taxes, not your capital gains taxes, not any of your taxes.]

Kudlow: Alright, so he’s saying anything under $250,000 is tax-hike free. What is your response to that?

Fiorina: Well, I don’t know how he does it. Because first of all, he said that he does not agree with making the tax cuts permanent. Which means every American will experience an increase in their taxes. Secondly, 100 million Americans have some form of investment in a mutual fund, some stock market investment. So 100 million Americans would get hit by his capital gains tax increase. Third, in the last six months he has voted twice for a Democratic budget that would raise everyone’s taxes. He voted to increase the tax rate at 23, 25, 28 percent, which basically means if you’re making under $32,000 a year, your taxes would go up. He’s also said that his massive government spending programs are “paid for.” And the only way he can do that is by raising everyone’s taxes.

So one of the things I’ve come to know is, honestly, that I think there is Barack Obama’s words, and then I think there are his actions. And his actions to date support the fact that he would raise taxes. Not only on people making less than $250,000 a year, but importantly, on small business owners, 23 million of whom file as individuals. And it is those small businesses that are the one bright spot in this economy. They have produced 233,000 jobs in the last six months, while the rest of the economy lost 400,000 jobs.

Kudlow: Alright, let me give you another one from Senator Obama today in St. Louis. Here it comes, please listen.

Fiorina: Okay.

[Senator Barack Obama: What Senator McCain is going to need to explain is why his tax cut for the middle class would leave out 101 million households. And why for the families who are lucky enough to get a tax cut under his plan, it would be worth only about $125 dollars in the first year.]

Kudlow: So Carly Fiorina, I don’t understand this. He says Mr. McCain’s middle-class tax cuts would leave out 100 million or 101 million households. Do you have a thought on this? A response?

Fiorina: Well I really can’t respond because I have no idea where he gets the numbers. Here’s what John McCain explicitly has said. First, he would give every family, he would double the exemption for dependents from $3500 dollars to $7000 dollars, for all families, or all parents who are raising children regardless of their income. Second, he would repeal over time, the alternative minimum tax which hits about 60 million Americans. Third, he would make the tax cuts permanent which hit many Americans. Fourth, he would not raise the capital gains tax. Fifth, he would propose to lower the estate tax to 15 percent, while Barack Obama would raise it to 45 percent. So I simply don’t understand where Barack Obama gets his numbers. We’ve laid out the McCain economic plan in great detail today, in a 15-page outline proposal that says very clearly what we’re doing and how we intend to pay for it and balance the budget.

Kudlow: I noticed Mr. McCain is really kind of, pardon the phrase, getting with the energy drill, where he’s now talking about an energy plan that expands all forms including drilling offshore and shale. It will be a big American job creator.

Fiorina: Absolutely.

Kudlow: Not jobs in Bangladesh or Viet Nam, but right here. High paying jobs. This sounds like a change.

Fiorina: Well John McCain has said for quite some time that we need to break our dependence on foreign oil. He’s said for quite some time that we must take the lead in climate change. But he also, to your point Larry, began a very serious conversation with the American people about our dependence on foreign oil as thirty years in the making. And we now have to really get serious about it, because it threatens not only our national security, but our economic security, and as well, our environment. And we’re going to start with producing more of our own energy. Whether that’s nuclear power, which could produce up to 700,000 jobs as we build out nuclear power plants. Whether that’s clean coal, the demonstration projects for clean coal alone will employ about 30,000 Americans. Or whether that’s natural gas, or whether that’s offshore drilling, we have to produce more of our own.

Kudlow: I hear you. I notice—I read the speech very carefully—no mention of cap-and-trade.

Fiorina: Well if you had gone back and read his speeches from his energy, when he launched the Lexington Project, you would have seen some mention of cap-and-trade…

Kudlow: I know, but I don’t want to go back!

Fiorina: I know that you and the Senator…[laughter]

Kudlow: I don’t want to go back. I like this speech. I didn’t see it. I couldn’t see it, I couldn’t smell it. It was awesome! No cap-and-trade.

Fiorina: Well I think, again, knowing that you don’t exactly agree with that part of the plan, I think what Senator McCain is doing with cap-and-trade is to put incentives on the side of alternative technologies. Today all the incentives are on the side of oil, in particular. And so he’s trying to shift the incentive structure. In other words, he’s trying to use techniques that we know work in the free market to try and shift where people make their investment. And by the way, you were talking earlier about the automotive industry. That’s an industry that we clearly need to revitalize. And I think with enough incentives, to really focus on some of these alternative technologies, it could help to revitalize that industry.

Kudlow: Well hope springs eternal on that one, but I appreciate the thought. Let me ask you another one. I did not see the phrase, “obscene profits.” Does this mean Mr. McCain now is throwing his hand with the great American energy companies? It’s okay to be profitable?

Fiorina: Well maybe you’re confusing in that question Senator McCain with Senator Obama. It is Senator Obama who is for a windfall profits tax. Senator McCain…

Kudlow: I understand, but Senator McCain keeps using [the phrase] “obscene profits” which drives me crazy. I didn’t see it today. I was very happy.

Fiorina: Well Senator McCain has said that he is against a windfall profits tax. He has also voted against the 2005 Energy Bill which was full of giveaways to big oil. Barack Obama voted for it. McCain voted against the bill that was laden with pork for agricultural subsidies, which as you know and you would agree I think, distorts markets. Barack Obama voted for it. So, part of my point here is to contrast Barack Obama’s actions with Barack Obama’s words. But also to say that John McCain, while he may absolutely empathize with the American people while they are paying record prices at the pump, and seeing massive, and from their point of view, obscene profits at the oil companies, he doesn’t propose taxing them

Kudlow: Alright. Just one real quickie. I’m sorry we don’t have time. It is being reported that you are meeting with Senator Hillary Clinton’s supporters, particularly her financiers. Can you just tell us one bullet, one line, what are you saying to them on behalf of the McCain campaign?

Fiorina: No woman’s vote should be taken for granted. Women represent 52 percent of the voting public. They are not a constituency, they are the majority. And women are also an economic force, because they start small businesses at twice the rate of men. And we know that small businesses are producing the majority of jobs in this country. So in other words, every woman’s vote deserves to be taken very seriously. John McCain will take every woman’s vote seriously. And he will fight for their votes.

Kudlow: And it’s high time we had a woman in the Treasury Department. Is it not? Running it?

Fiorina: [Laughter] Well Larry, that’s up to somebody else, namely President McCain. Meanwhile I’m happy to be doing my part. And by the way, I still support a strong dollar!

Kudlow: I know you do. And actually, in the policy blueprint today, Mr. McCain came out right at the top of that thing for a strong dollar.

Fiorina: That’s right.

Kudlow: Carly Fiorina, thank you ever so much for coming back. Thank you for your time.