Rahm Emanuel : ‘Mayor of Chicago’

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Rahm Emanuel, the White House chief of staff and former congressman from Chicago, has made it clear to friends that he’d like to run for mayor of Chicago. But tonight, he made it really clear, publicly, that when Mayor Richard Daley is finished, he’d like that chance.

“I hope Mayor Daley seeks reelection,” Emanuel said in an interview with Charlie Rose airing tonight on PBS and which will air Tuesday on Bloomberg TV. ” I will work and support him if he seeks reelection. But if Mayor Daley doesn’t, one day I would like to run for mayor of the City of Chicago. That’s always been an aspiration of mine even when I was in the House of Representatives.”

“Mayor of Chicago,” Rose replied.

“Yeah, fact I said the one thing if you ask me what I miss, I miss the contact with constituents,” Emannuel said of his current job as chief adviser to President Barack Obama. “You know, I miss being in the — when you were running the office, that touch with people…. I miss that…

“I mean, I love what I’m doing,” Emanuel said. “I find great passion in it because I work for a great president with a breadth of issues that has — if you’re in public policy at a period of time in history that’s important, one day I’ll go back to elected office and say I’ve enjoyed it, I enjoyed that process….

“Right now, I’m a chief of staff — I’m in the Cabinet, president put the chief of staff in the Cabinet, but one day I want to run again for office,” Emanuel said. “Again, I want to repeat, because the ,ayor’s a dear friend of mine, and I support him, I hope he seeks reelection as you know…. but if he doesn’t at some point, that will be something I’ll do.”

There was a time, when Emanuel was a member of Congress and chairman of his party’s election campaigns — indeed the architect of the 2006 midterm electons in which the Democrats gave the Republicans a “thumpin”’ in the House races — that the congressman wanted to be speaker of the House. No more.

In a recent report by Christi Parsons and Peter Nicholas of the Tribune Washington Bureau, Emanuel said that his “intention is to stay next year” as chief of staff. But any idea of returning to the House and becoming speaker is “done.”

“I left Congress,” he said in that interview with the Tribune bureau. “Things happen; there’ll be new classes. . . . You move on to other aspirations.”

“Friends believe he is most interested in running for mayor of Chicago, though none seem to think he would ever consider running against the incumbent.,” Parsons and Nicholas reported. “Daley’s running,” Emanuel recently told one friend, “so I’m not.”

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Here, courtesy of The Charlie Rose Show, is a transcript of the interview with the White House Chief of Staff airing tonight on PBS and which will air Tuesday on Bloomberg TV.

Charlie Rose:
Let me talk about issues financial reform. You’ll get Republican votes?

Rahm Emanuel:
Yes. I think it will be bipartisan because I think people realize, Charlie, that while it’s been 14 months, 12 months and there are still damages from that crisis, that you have a financial system over the last 20 years that raced ahead of where the regulatory system was and it’s our responsibility to get that regulatory system in place to get where the market went and one example of that is derivatives. We have a multi-trillion dollar section of the financial marketplace without a regulatory agency body that oversees it. The goal? Take it from the shadows, bring sunshine to it, transparency and standardization. If we do that, we’ll have done something significant. I mean, Warren Buffet, as you’ve had on this show, has talked about derivatives as kind of an equivalent of a nuclear bomb in the financial sector. There’s no entity that’s responsible for regulating it or bringing a level of standardization and transparency. That’s what this reform’s about. This, I think it’s Thursday, the President’s going to be up in New York to give a speech at Cooper Union where he in March 2008 had given a speech on the necessity and what of the necessity of financial reform, but why you need to do it and what it needs to look like. And it was as important then as it is today and I’m confident that people will see the necessity to pass the legislation.

Charlie Rose:
And you will have bipartisan support even though you didn’t have it in committee.

Rahm Emanuel:
Yes. The committee based — there was Senator Dodd, as I understand it, offered the Republicans the opportunity to have amendments. They said they didn’t want to. They were going to reserve that right to do it on the floor so they passed it out in voice vote in 15 minutes. But there were a lot of discussions, a lot of good discussions happened. Now you know Senator Shelby at one point was negotiating with Senator Dodd then Senator Corker, but I’m confident that we’ll have bipartisan support because I think that people, Republicans realized that the regulatory structure that we have today is not up to the task where the market is. And the economy needs that if we’re going to have the type of foundation the President talked about to have a sustainable growth in our economy, to have the right type of regulatory oversight as well as transparency that is so essential so people know our markets are important. And let me say one thing. This is important for America’s leadership in the world. We lead in the financial sector. It’s one of the parts in the economy we lead. But if people don’t trust our market, we can’t maintain that leadership. That’s why this regulatory reform is not against Wall Street, it’s fundamentally in the interest of the economy. Wall Street, though, has advanced beyond the regulatory supervision and we need to catch up in a way that ensures that we don’t have the crisis we had in the past and we’re prepared for future ones.

Charlie Rose:
The banks have been lobbying hard against derivatives.

Rahm Emanuel:
Yes, they have.

Charlie Rose:
Republicans have been up here raising money and talking about it, accusing the President of playing politics. Conventional wisdom says the toughest things are derivatives and consumer agency inside the Federal Reserve.

Rahm Emanuel:
That’s two of one. But without a doubt, those are in the top three or four issues. But here’s — I don’t want to have to just repeat what I said about the derivatives. But I take it if you look at this, this is an area that just a few years ago was a minor part of the market. And when I say a few: last ten years. It has exploded in its scope, scale and size. And yet nobody knows what’s going on. It happens in the shadows of the financial industry and sector. It is unhealthy to not bring that on to some platform with some standardization and some transparency. Even people in the industry believe that should happen. Now, there’s — the devil’s in the details. People want to protect the privacy of end users. But bringing that transparency, bringing that standardization is essential to not just the past, but to ensure that we don’t have the type of crisis in the future. The consumer office is also a big deal. But the banks have decided to fight these two. I think it’s in their interest to make sure that this legislation is comprehensive in both those places.

Charlie Rose:
What’s the impact of the SEC’s complaint against Goldman Sachs on financial reform, and what argument are you making?

Rahm Emanuel:
Well, it’s essential I make one point. One is, it’s an independent agency acting independently, having no knowledge of what they had done. Third, it’s out there. But I believed, as the president did in March 2008, we needed financial regulatory reform. Everybody saw the implications of how the financial system, when it went off the tracks, took the economy with it. You need to get those reforms today regardless.

Charlie Rose:
How was it that the “New York Times” knew about this before Goldman Sachs did, the filing of the complaint?

Rahm Emanuel:
I have no idea.

Charlie Rose:
And that soon thereafter there was, you know, literally within an hour or so, the White House was — in terms of information coming from the White House.

Rahm Emanuel:
I can tell you with absolute — everybody at the White House found out like everybody else, when it hit the news.

Charlie Rose:
When it hit the New York Times, you had it.

Rahm Emanuel:
No, when it hit the news, it is — the SEC is an independent agency, operates independently. Nobody at the White House knew anything ahead of anybody else.

Charlie Rose:
And what does it say to Wall Street?

Rahm Emanuel:
Well, I think you’ve got to ask people on Wall Street what it says. You know, the SEC moved. They conducted their investigation. They’ve brought this there. I think that Goldman will obviously make their counter. But I think what’s more important is not this particular case or what SEC did. The need for this reform has existed for over a year.

Charlie Rose:
But does the Goldman Sachs complaint make the case for reform easier?

Rahm Emanuel:
Does it make it easier? Look, the same forces that were opposed to it are still opposed to it. They are the same forces that would have been hiring people to try prevent the legislation or weaken parts of it are still going to do that. I believe that we’re going to get this legislation done because I think people realize that not doing it is worse and is bad for the economy and bad for America’s leadership and bad for making sure that we prevent future crises. You know, I can’t judge everybody and how they’re going to act in the Senate. I’m confident, as I was last time we talked, we will get financial reform because people — the time from the last crisis is not so far back in the rearview mirror people can’t remember the consequences.

Charlie Rose:
All right. Let me move to healthcare and the significance of that and what it changed, because people have said to me if healthcare hadn’t passed, you would have been one of the people blamed for it not passing. But it did pass, and the president gets the credit.

Rahm Emanuel:
Absolutely.

Charlie Rose:
So what’s the significance of passing it, healthcare, at this time?

Rahm Emanuel:
Well, I think there’s multiple significances. I mean, let me start from the kind of meta. Or let me start from the particular. For individuals, I mean, look today, united health announced, the insurance company, they’re going to allow kids up to the age of 26 to stay on their parents’ insurance policy so they get coverage. A lot of kids coming out of college are going on to work, don’t have healthcare, but they’re now going to be able to stay on their parents’. That was one of the insurance reforms. United health decided to get ahead of it. It’s coming online a couple months from now. They decided to do it early. That’s a deliverable for people. So it’s a particular. Seniors this year will get $250 so they can buy — who kind of have used up as part of the prescription benefit, they’ll get another $250 so they can buy in that kind of donut hole where the gap exists in coverage. Three, there will be other parts of the insurance reform so insurance companies cannot discriminate on pre-existing conditions. Those reforms will hit in. Then on the meta; if I wanted to talk about it two issues, I would also explore what it means. You actually have the first real reform of Medicare so we can control costs. I have always somewhat described this as entitlement reform in a healthcare box. And lastly, it says to the world, which was quite clear the other day when 52 leaders from around the world showed up for the nuclear and terrorism conference, that a superpower like the United States can once again do big things. And if you’re going to –

Charlie Rose:
Healthcare changed the perception –

Rahm Emanuel:
No.

Charlie Rose:
– of the president around the world.

Rahm Emanuel:
Oh, there’s no — I mean, that’s not the reason he did healthcare. He did healthcare so we can control costs, change the incentives in the healthcare system, expand coverage, give people choice in the system. There was a residual benefit or an extra benefit in addition that no doubt showed the president in his capacity, given how much political capital he had spent in it that he also, on the international arena, people saw the power that came from that because of the success. And every success begets another success, which is what happened with also the reform of the higher education system that was part of that legislation. And it’s given a forward momentum now to also deal with financial reform.

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Charlie Rose:
But you also went there before you did the united — before you had everybody come to Washington, you also went to Russia, to Prague, to sign an –

Rahm Emanuel:
With the STAR treaties, yeah.

Charlie Rose:
And they took notice of healthcare’s success –

Rahm Emanuel:
Yeah, I mean –

Charlie Rose:
– and he perception of Barack Obama as a leader.

Rahm Emanuel:
There’s no doubt about it. And, you know, America’s leadership around the world has, without a doubt, been restored. A lot of leaders had noted to the president it’s nice to have America back in that place of world leadership. He set out the goal of reducing our nuclear arms arsenal, but doing it in a way that was responsible and protects America. We reached a comprehensive treaty with the Russians. It also gave us momentum to bring — we had more world leader — we had the most amount of world leaders here in the United States since the UN was first — the charter in 1947 in San Francisco. There is that benefit that’s not — it’s an additional benefit. The core issue, which is what drove the president to put so much political capital, was to finally get healthcare costs under control and provide people coverage and also type of insurance reforms that had not existed before.

Charlie Rose:
And so when you and the president look back at the process from the day of inauguration to the day the legislation passed, what are the lessons you have learned? Because argue you lost your narrative, you lost your message. You should have done this or done that.

Rahm Emanuel:
First of all, let me say this, we also — you should have done this, you should have done that. There’s a lot of analysis. There’s a lot to learn even in successes. You learn mainly sometimes from failure. But there’s a lot to learn from successes. Everybody president’s tried to universal healthcare because of the complexity. I mean, President Obama is a very good communicator. President Clinton is a very good communicator. Given the complexity, both of them, one succeeded in getting it, the other didn’t, but at some point in that process of trying to pass it, lost control of, quote, unquote, the narrative. And that tells you how complex it is. It also tells you amount of courage and commitment and fortitude and strength the president had to see this through in working with the partners in Congress in getting it done. That said; there were choices made that were the right thing for getting it done. And I think people will see that while the process was, quote, unquote, you know — they didn’t like it from a viewing standpoint, the product is incredibly successful product in achieving the goal of controlling costs which is one of the president’s core objectives. And I think, you know, the other thing is also the — you take away certain lessons about how you want to work with Congress, how you want to keep a dialogue with the American people and carry them through a process and a story, and also, the role of the president and what he can and do in shaping opinion and making a connection with Americans. All that comes into play as we work through other issues.

Charlie Rose:
Was there a crucial moment in the Oval Office where the president said I hear different people saying let’s take a half a loaf. Let’s go piecemeal. We’ll do a little bit now, make sure we get it. Was there a moment in which the president said stop this talk? We’re going for — we’re going for the whole thing. We’re going for the vote. And this is it. And we’ll live or die by the results.

Rahm Emanuel:
Yeah, I mean –

Charlie Rose:
A moment?

Rahm Emanuel:
A moment, no, because it’s not a series of conversations. But as you know, Charlie, man, that’s as — I had advocated to the president at some point, and I said that, you know, you got to — which is what he wants out of a chief of staff — look at all your options, what you have to do, what you’re trying to do. What are the other things that, you know, you’re also trying to get done? And that said something about him that he wants a diversity of opinion. He looked at that. But know that if we didn’t do it now, you wouldn’t — this opportunity will never come again, and he was willing to put as much political capital as it took to see this through from beginning to end. It says something about his character, his fortitude, his determination because you could have done something different, gotten some of the accomplishment but not all of it, but he meant to get and lay a foundation. What does that mean? Getting Medicare costs under control? Getting healthcare reform so you have incentives where you pay for quality, not quantity? Giving people who don’t have access to the system coverage? Giving people who are being basically held hostage by insurance companies the opportunities just like I told you, United Health now for the first time will enable people — young kids to stay on their parents’ coverage, on plans until their age is 26, that comprehensive reform had been tried before, people have done different things, backed up to do Medicare or whatever –

Charlie Rose:
And when you –

Rahm Emanuel:
– but it says something about him. He wanted, A), an honest assessment, B), he took all that in, and said this is the once in a lifetime we have, if we don’t do it now, we can’t ever come back, and it says something about his character and his strength and determination to see something through from beginning to end.

Charlie Rose:
So when you look back on the process, what would be your own personal criticism of where we went wrong or where we went right?

Rahm Emanuel:
Where we — look, first of all, we beat it.

Charlie Rose:
You did, absolutely.

Rahm Emanuel:
There’s a lot of roads and a lot of bends in the road, so not only –

Charlie Rose:
But you learned from –

Rahm Emanuel:
Oh, sure.

Charlie Rose:
– success as well as failure, right?

Rahm Emanuel:
Right. And we also had great partners, Speaker Pelosi, Senate Majority Leader Harry Reid, and the committee chairmen. I think there are certain things you know you could say you would want to do different. You contrast as I have between ‘94 and here, there are certain things that were done different. I personally — I mean, unlike ‘94, in ‘94 Senator Chafee, a Republican from Rhode Island, had 32 Republicans on a bill that matched almost with President Clinton’s at that time, and the big debate was between an individual mandate versus an employer mandate. The irony of today, give you by example, Senator Chafee had an individual mandate. The Democrats at that point had a [sic] employer mandate, there was no compromise. This bill that President Obama just passed had the individual mandate which was the cornerstone of Senator Chafee’s bill, and the lawsuit that the Republicans or some are talking about today is about what divided people in ‘94 and which the Republicans had proposed. Now, I go back, I think, you know, we made certain things right. The president’s speech to the joint session happened towards the end –

Charlie Rose:
Rather than Clinton at the beginning.

Rahm Emanuel:
Rather than Clinton at the beginning.

Charlie Rose:
State of the Union.

Rahm Emanuel:
We brought certain constituency groups in from doctors, nurses, the AARP, as well as other providers in to be part of the process, the president met with them early on in the Roosevelt Room, to be part of this reform process. That had not happened in ‘94. Also the bipartisan meeting at the Blair House that the President organized was modeled after the successful one President Clinton did on welfare reform. Those are some of the things we’ve learned. We also gave Congress a bigger role to play in this than it was in ‘94, and in the end of the day, for all the things that people would say about the blemishes, it was the right thing to do because in the end of the day it proved that their buy-in was important to the success.

Charlie Rose:
So tell me what you think has happened politically in the country in which healthcare became a rallying cry for the Tea Party and other people who oppose the administration.

Rahm Emanuel:
Well, there is a bigger debate going on. I mean, healthcare, you can’t just take it away from –

[talking simultaneously]

Charlie Rose:
It has to do with government and the role of government.

Rahm Emanuel:
But it also has to do with what’s going on in people’s lives. I mean, Charlie, you shouldn’t forget this, in the last eight years prior to President Obama’s election, median household income in this country declined by $2,200, we haven’t had a decade like that — $2,500. Second, while median household was declining, the kind of price packages and income packages for certain people working in the financial sector and other sectors and CEOs grew exponentially. There was a real division. And yet when this crisis came, where they saw their government had failed, the financial industry in its role had failed, both had failed, leaders elected to do something either in the corporate side or in the regulatory side had not matched up, they were asked even though they saw their incomes drop, they were asked to bail out the financial sector and yet they were under tougher economic times. And the President did early on the right things it took to stabilize the financial industry, to put the economy on the right recovery, to stabilize the auto industry, all things that weren’t popular, and then you had healthcare on top of that. And people’s own sense was — and because the benefits of it — while the debate was going on, the economy hadn’t yet recovered. The benefits of health care kind of start to come online now as the American people, they had seen in government that had not lived up to its past with a philosophy of no regulation so therefore there was no oversight of what was going on, had failed to monitor and police Wall Street and the financial sector as a whole. Leaders in Wall Street had acted with a certain sense and performed that didn’t live up to their responsibilities.

Charlie Rose:
So you see this simply as the President had a whole bunch of problems.

Rahm Emanuel:
Right

Charlie Rose:
And he did.

[laughter]

Charlie Rose:
I agree.

Rahm Emanuel:
Whole set of problems and a set of policies that led to those problems.

Charlie Rose:
And had to do with the emergency that was necessary and therefore a perception of him developed and his administration developed so that people were hurting and they looked for someone to blame and they said it’s this administration rather than a previous administration.

Rahm Emanuel:
No, things have been on hold the previous administration harmless in what they think happened and they choose in the policies between the two administrations that clearly would choose the direction we’re on. But health care came on the end or in the middle of a series of actions that we had to take for resolving a set of crises, both financial and economic, and that involved the debate about the role of government. Now that debate has been going on since day one, okay? The accusation about President Obama: pretty similar to what they called President Roosevelt a Socialist. They said that President Kennedy was threatening America. They tried to de-legitimize President Clinton. All in periods of great economic anxiety. So those charges aren’t new, the role of government. That’s why the debate about health care, in a bizarre way, is — and on the public option, there was a debate. I understand why Democrats wanted it. It was in a period of time when people had skepticism of government and that’s a hard thing to have, you know, to basically manage your way through it. But remember, even farther back just to use Roosevelt, Kennedy and President Clinton, all these presidents faced similar accusations about their policies because it’s about their interpretation of what the proper role is government. Let me make one last other point, Charlie, if I can. There are two debates going on with both parties. It used to be a debate between Republicans who believed in small government and Democrats believed in big government. That was how the debate got framed, even though that really didn’t capture it all. Republicans have an ascending wing or descending wing; it’s a small government wing. A lot of those Senators have retired or leaders have retired. The ascending wing is a lot of people in their party don’t believe there’s a role for government. When it came to the financial scandal, we’re going to let it go. They don’t see a role for government in solving some of the problems. In our party, we have a debate between those that believe in big government, still have people that believe in that, and probably what I would describe President Obama’s view is effective government. It’s not big or small; it’s whether it does its job and does it well. And that is a debate about government that is happening in both parties at this point. So one is on the ascent and one is declining in both parties.

Charlie Rose:
The Democratic Party that gave him the nomination, where do you think they were in what they expected of him on the role of government?

Rahm Emanuel:
I don’t think they — I don’t think they went into the voting booth or decided to mail in their ballot with the sense of his vision of the role government. They went in with his sense of who he was as a leader, the set of policies that he brought to the table and what he wanted to do to change the policies that George Bush had put in place and with the consequence of those policies whether it was on the financial scandal, the financial meltdown, the economic recession or the fiscal crisis the country was left in. Also around the world, the position America was at. Remember, you inherited, because of a set of policies and decisions that were made, an economy that was in deep recession, the worst since the Great Depression, a financial meltdown — the financial sector was basically on its belly — a fiscal condition, the country was probably the worst it’s ever been, two hot wars going on, one in Iraq and Afghanistan, and a diminution of America’s power you hadn’t seen in a long time. Now I think America has restored its place in the world as seen last week, and its authority in the world, as seen both by how Russia and China now has agreed to work with us in the United Nations. The Start treaty that he’s negotiated with the Russians and the ability of America to put an issue on the table where 52 world leaders came here to work with the United States in its leadership role on nuclear terrorism and also we have — are in the middle of the process. We’ve stabilized the financial sector so we could start lending again to the economy. We have reversed the losses of jobs lost that was happening. And we’re now beginning to put our fiscal house in order. And we’re just in the beginning of each of those in turning the sections around. But nobody should underestimate the situation the country was in just 14 months ago that he inherited and the decisions he made with Congress that stepped up to the plate to do what was important.

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Charlie Rose:
And your argument is that we had to do everything that we tried to do because you’re never more popular than the moment that you are elected. And that’s the time to use your political currency.

Rahm Emanuel:
I think — the president’s view, and one I a hundred percent agree, that you have a moment in time to put in place what you think is important to do. He didn’t want to have a presidency that rested on elite, and/or a majority, or popularity for a better way of putting it. And he was willing to spend his political capital to get something done, as was shown, not only in the healthcare. Let’s just take the auto industry. That wasn’t a popular decision; not one he wanted to do, Charlie, but he got a set of concessions out of General Motors, its suppliers and labor and its bankers that people only dreamed of. We did that last year. The public was not happy about it. If it was up to them, they would have seen GM gone. The president made a decision with his economic team that wasn’t good for the country. This week, they’re going to pay back their debt. And we believe they’re — and they’re going to file for an IPO. And we think pretty good over a period of time, we’re going to get every penny back. And people have their jobs to boot. And that’s good for the –

Charlie Rose:
And some of the rescue money will make a profit for the government.

Rahm Emanuel:
Yeah. And those were tough decisions. You wouldn’t do them based on popularity. But they were good for the country.

Charlie Rose:
All right. Just help us all. You talk about effective government. Help us all understand where you think the president’s political philosophy is because you hear, on the one hand, you hear from people all of the things you referred to in terms of a big government guy. On the other hand, you hear everybody who — many people who work with him, one word they use is pragmatic. How would you describe his philosophy about government and the role of government beyond simply effective?

Rahm Emanuel:
Well, he is a pragmatist. He is not wedded to a philosophical or ideological bend. He sees government as a tool for affirmative force, but mainly to setting kind of the rules and then letting the private sector operate within these rules that. Would be like how you see the financial sector. Without proper regulation, without proper oversight and without appointing good people, a marketplace can’t work. It’s not to dominate. It’s not to control. Set the rules of the road and let people operate within that. I think — I mean, his philosophy — I mean, I see him fundamentally as a pragmatist. I don’t think it’s one that’s ideological in the sense of left, center or right. He has adopted ideas and policies from Republicans. He has done that from Democrats. His question isn’t about left or right. It’s whether it moves us forward or not. No other — I don’t think a Republican president could have done what the president did in demanding any of the changes he demanded from the auto industry in the sense of a workup. And yet what do you call that?

Charlie Rose:
Because you needed the unions to be involved.

Rahm Emanuel:
Yeah. You needed the unions to agree to certain of the concessions and these suppliers. Now, would you call that left, right? No. I would say he made a fundamental decision about what’s good for the country and pursued –

Charlie Rose:
But where do you think this perception in the country came from that is fueling the Tea Party?

Rahm Emanuel:
Well, there’s — because there’s a –

Charlie Rose:
Is it just that, that he did these things? Because George Bush did some of the same things.

Rahm Emanuel:
No.

Charlie Rose:
Well, in terms of the bailouts and –

Rahm Emanuel:
But he — classic example. Let’s just take the auto industry. The president demanded concessions if they’re going to get money. George Bush wrote a $20 billion check with no concessions. There is a fundamental difference. There is a fundamental difference. On healthcare, President Bush said everybody has healthcare: there’s emergency rooms. President Clinton said that’s not good enough. And it’s borrowed a set of ideas. Let me just walk through this because I think this illustrative in a sense of philosophy.

Charlie Rose:
Right.

Rahm Emanuel:
The idea of the med pack with recisionist authority as it relates to Medicare and Medicaid was an idea proposed by the Republicans in 1997, dropped in the balanced budget agreement, required by this president. And trust me a lot of people didn’t want to do it. Demanded, otherwise there wouldn’t be a bill. The exchange came out of — the notion came out of Mitt Romney’s healthcare legislation in Massachusetts. The idea of the individual mandate was the idea first proposed by Republicans going back to Senator Chafee in the 1994 bill. The idea of these kind of game changers of paying for quality rather than quantity, now it doesn’t have a philosophical bent, but it’s something that Republicans did, now that to me is one of the great ironies of this debate. And it will be something I will mentally debate among myself how that happened. But the core ideas that made up this healthcare bill, because it is fundamentally based on the healthcare system we have today and private delivery and private insurance companies, how that got described as socialist when the core ideas were all ideas advanced by Republicans over the last 20 years.

Charlie Rose:
How deep do you think the anger is in the country?

Rahm Emanuel:
Well, I think it’s deep because I think that there’s a lot of factors that go into that, Charlie, principally on the areas of the economic anxiety that’s out there and the — we’re in the middle of a severe economic transition.

Charlie Rose:
Can anyone make an argument that if you’d just focused on the economy, we would have a better economy today?

Rahm Emanuel:
I don’t think that’s — I don’t think we’d have a better –

Charlie Rose:
And less unemployment.

Rahm Emanuel:
I don’t think the — if there’s a bit to the recovery right now or turnaround, I don’t think it would be in a stronger position. And the president’s reason for doing healthcare reform — access to higher education in the sense of all the changes –

Charlie Rose:
Right, right.

Rahm Emanuel:
– the financial reform of Wall Street that we’re talking about now and then energy were all part of a speech he gave on a new foundation at –

Charlie Rose:
At Georgetown.

Rahm Emanuel:
Yeah, at Georgetown.

Charlie Rose:
Right.

Rahm Emanuel:
And so that question he said, and the goal he set out was, we can go from every bubble you want to every bust you want, or we can lay a new foundation down that has a — the level of economy where you’re not on healthcare spotting the opposition a $1 trillion of over-expense. We don’t have doubts about the marketplace and the way it works here in the financial system. We don’t have an education system that prices out the middle class from the American dream. And we don’t have an energy policy that — our dependence on the Mideast. And we don’t create a new industry here of green technology and green jobs. Those are the challenges that he’s met head on. And I believe when this year is up, you’ll see he’s made progress on all four of them.

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Charlie Rose:
Is the Democratic party in trouble in the election coming up?

Rahm Emanuel:
Yeah, it’s got challenges, but you know, I think it’s –

Charlie Rose:
Will it lose the Congress?

Rahm Emanuel:
Anybody that tells you that they’re going to say that doesn’t know what they’re talking about because you couldn’t answer that with this time in April. I couldn’t — when I was chair of the DCCC, I would never have –

Charlie Rose:
And unemployment is at 9.5 or 10 percent.

Rahm Emanuel:
Right. I think, look, the key factor — while unemployment’s important. It’s also about what people think about the economic future. If they think the economy in the future is getting better, and we make this a choice about what led us into the worst recession and the set of policy changes we made to help us lead us out of it, I think we have a chance of turning this election around.

Charlie Rose:
And can he turn the anger around that’s out there? People who don’t think that they’ve been listened to –

Rahm Emanuel:
Sure.

Charlie Rose:
– think that their sense of America is being changed and all that?

Rahm Emanuel:
Sure. Look, there are legitimate reasons for people — for the anger out there. Nobody’s going to kind of look at it and — there is a — when the middle class in this country has seen their incomes lost and their costs of living go up, and the sense of those who are at the top act with a sense of irresponsibility that led to the worst economic crisis and yet it is the hard-working middle class that are required to bail it out, there’s a reason for that frustration, and it’s totally legit. And anybody who thinks it’s just kind of being pumped up, they don’t get it. They don’t understand that type of anger.

Charlie Rose:
You’ve got to be listening to the people –

Rahm Emanuel:
Yeah. Representative democracy, they’ve a voice, and they have to be heard too and shouldn’t be dismissed. There’s a legitimacy there. That doesn’t take elected leaders off the hook. When you have that role of leadership, you have a responsibility to make sure that we have a proper debate and don’t encourage that anger to drift off into something that’s ugly as we saw on this year, 15-year anniversary in Oklahoma.

Charlie Rose:
You’re talking –

Rahm Emanuel:
Everybody in elected positions, regardless of party, has a responsibility. Now there’s a legitimacy of people’s frustrations, legitimacy to people’s anger. But those who are in elected office or in public office, regardless of party and articles of position have a responsibility to let that — let disagreements flourish and let them go without letting that disagreement become something and touch something on the darker side.

Charlie Rose:
Let me turn to foreign policy. Suppose –

Rahm Emanuel:
Everybody is accountable.

Charlie Rose:
Everybody.

[talking simultaneously]

Rahm Emanuel:
Everybody’s accountable.

Charlie Rose:
Everybody.

Rahm Emanuel:
Everybody, including the media.

Charlie Rose:
And how do you think the media’s done?

Rahm Emanuel:
How much time we got here?

Charlie Rose:
Are you angry about the media?

Rahm Emanuel:
No.

Charlie Rose:
Did they fuel the fire whether it’s talk –

Rahm Emanuel:
Well, first of all –

Charlie Rose:
– was it talk radio on the one hand or –

Rahm Emanuel:
Charlie, I don’t think the media’s monolithic so I couldn’t have a conversation that says “the media.” It’s not a monolithic thing. I think there’s a level of I think sometimes the media doesn’t act with the full responsibility that comes with their position, but that’s a different show, a different time, a different talk. On the other hand, a lot of individuals try to do a good job, but I don’t think all the time given what’s out there they are really telling you the whole truth and giving you a sense. They play a role in exacerbating the sense that America’s pulled apart, and it’s not as pulled apart as being reported.

Charlie Rose:
And do you think Rush Limbaugh or Glenn Beck are part of the process of pulling them apart?

Rahm Emanuel:
I wouldn’t limit it to them, but I think they play that role. They have their differences; that’s clear, that’s okay, but they do play a role in exacerbating tensions. And that problem could be also said about some on the left, but there’s no doubt they do.

Charlie Rose:
Okay. Foreign policy. You mentioned Iran and you mentioned China and Russia, what are they onboard for in terms of sanctions? What are they saying we’re prepared to do?

Rahm Emanuel:
I know you would like to break the news on this show –

Charlie Rose:
Very much.

Rahm Emanuel:
– but I’m sorry, I’m not going to do that for you.

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Charlie Rose:
Yeah, but are you really getting a serious look from the Chinese who are saying, “We understand, this is important, and we are prepared to be onboard to a certain degree,” is that the message?

Rahm Emanuel:
Ambassador Rice is working through the issues right now with — as they’ve all part of the P5+1, we’re all working on the sanctions and on the document in the United Nations at this point. I’m not going to have — you know, sensitive discussions and negotiations are going on and we feel confident that we’re going to have a real credible level of sanctions –

Charlie Rose:
That will get through the Security Council –

Rahm Emanuel:
– that will get through the Security Council, and that Iran — and more importantly than just that, because the P5+1 made an offer to Iran as it dealt with the uranium. They have a choice. Iran’s at a crossroads. They can face a set of sanctions or can they deal with what has been offered them. And they have a choice. And when we got into office, Iran was in a — the international community was divided, Iran was sitting among — in the Middle East as kind of a power on the role, and the world has become united, it has this level of resolve and determination to see through that Iran does not get a nuclear weapon. And it also has — Iran I think is — over the last year you’ve probably done a number of shows on this, Charlie, is not the country it was a year ago, not perceived in the world as it was a year ago, it is divided among itself. Where the world community before on the issue of Iran was divided –

[talking simultaneously]

Charlie Rose:
But can you fashion sanctions that will –

Rahm Emanuel:
That will be the key, tough sanctions that –

Charlie Rose:
– against the Revolutionary Guard or against –

Rahm Emanuel:
– that deal with the Iranian regime and doesn’t target the people but it’s a clear sense that the pressure would that — and then the Iranian regime has to make a choice about whether they want to face tougher sanctions — comprehensive and tough sanctions, that’s our goal, and that is our commitment to get done.

Charlie Rose:
And you believe that sanctions can stop them from approaching the capacity to make nuclear weapons.

Rahm Emanuel:
We think sanctions is one of the tools you have.

Charlie Rose:
But you believe they can be successful is my question.

Rahm Emanuel:
Well, obviously we’re going to pursue them and they’re going to be an important piece of it.

Charlie Rose:
And why not go ahead even and get Europeans and others who may be prepared to agree with you and start sanctions now and not necessarily wait to take it through the Security Council?

Rahm Emanuel:
Because the U.N. is a part of where you lay a foundation for the sanctions, and that’s the process where we have with the Russians, Chinese participation with also the Germans, the British, the French, the United States all working in unison to develop that resolution.

Charlie Rose:
And what do you make of Secretary Gates’ memo that was on the front page of the “New York Times”?

Rahm Emanuel:
I think you could also look at what Secretary Gates said this morning, that memo was mischaracterized and it’s you know it’s part of any orderly process in the sense of developing policy –

[talking simultaneously]

Charlie Rose:
And it was not meant as a wake-up call –

Rahm Emanuel:
Not at all.

Charlie Rose:
– to the administration to say, “Look, we are too far down the road and we do not have a strategy,” it was not meant to do that?

Rahm Emanuel:
I have nothing more to say than what Secretary Gates said today in the paper, and he couldn’t have been clearer, that, that was not the characterization, it was not what was written in there, it was not the characterization or the sense of it, and the person that was reporting that to the “New York Times” obviously didn’t understand what that memo was about. My view is, as Secretary Gates said unambiguously today in the paper, they got it wrong. Is it fair to say the administration is upset about that characterization?

Rahm Emanuel:
It is fair to say that the administration thought the story was wrong.

Charlie Rose:
What’s the relationship between the United States and Israel beyond what you always say which is that we have the same values, we very much support the State of Israel and we very much are committed to the security of the State of Israel?

Rahm Emanuel:
Everybody in the region, it’s important to know, it’s important for the Israeli public to know, it’s important for Americans to know, our bond with Israel is unshakable and unbreakable both as it relates to security, as it relates to a common set of values and also as a common strategic vision because the threats to Israel are similar to some of the threats the United States faces. So I wouldn’t skip that.

Charlie Rose:
Okay.

Rahm Emanuel:
Two, the relationship is solid. It is a solid relationship. It goes beyond what I just said in the sense that we have a real working relationship as a sense of partnership.

Charlie Rose:
It may be solid but there’ve been people saying, a lot of people saying it’s a troubling time between the United States and Israel and even the defense minister said that yesterday, probably true.

Rahm Emanuel:
Well, first of all, the defense minister also said a lot of the relationship, the friendship of the United States and the cooperation as it deals with Israel on its strategic challenges and we will be there for Israel on those strategic challenges be they dealing with, obviously, Iran in the sense of understanding that challenge as it deals with making sure it has a credible deterrent threat and also as the United States has been clear that whether it’s on the deterrent side of the threat and dealing with Israel’s security to also dealing with making sure it’s able to take the courageous steps it needs to take to make peace. We will be its partner and by its side every step that it takes for that courageous step to make peace.

Charlie Rose:
Is it time for this administration to step forward with its own plan?

Rahm Emanuel:
A number of people have advocated that as you know and I know, Charlie. That time is not now. The time now is to get back to the proximity talks, have those conversations that eventually will lead to direct negotiations, to start to make the hard decisions to bring a balance between the aspirations of the Israelis for security and make that blend with the aspirations of the Palestinian people for their sovereignty. People understand the basic contours of that. We’ve got to get back to the table to negotiate on bringing those two aspirations in balance. They can be done. It will take courageous leadership by all the parties. As the President has said and other presidents have said, we can’t want this more than the parties but we can help create an atmosphere and environment to help those talks be conducive.

Charlie Rose:
There’s also the argument that the United States is now talking in a different tone about how the absence of a Palestinian-Israeli agreement and the creation of a Palestinian state is in some way hurts America’s interest in the Mid-East and therefore threatens America’s national interests: the failure to find for Israel and the Palestinians hurts America’s interests — from General Petraeus to others have said that.

Rahm Emanuel:
Let me just say, other presidents and other administrations have always described the peace process in Israel’s security interests, national security interests, in the interests of the Palestinian people and in the interests of the United States. That’s not new. That’s what –

[talking simultaneously]

Charlie Rose:
But it seems to me that this administration, based on that interpretation, has put a new twist on it.

Rahm Emanuel:
No, it hasn’t.

Charlie Rose:
Okay, so nothing has changed in terms of how we perceive the absence of –

Rahm Emanuel:
No. I mean, I’ve been — I’ve been, you know, I’ve been in the White House that has dealt with prime ministers from Rabin, Ehud Barak, Shimon Perez, Bibi Netanyahu. I’ve been a member of Congress with Prime Minister Olmert and Prime Minister Sharon. Every president in our administration has described an agreement or peace process in America’s interest, but primarily it’s whether it’s in Israel’s interest. It is not — and Ehud Barak who you just quoted, the defense minister has noted that without an agreement on the Palestinian front, it is not in Israel’s strategic interest because both on demographics and technologically, the status quo is not sustainable. Therefore, you’re going to have to seize the moment because of where Israel is, where the parties are and the Palestinian authority. This is an opportunity to make peace and deal with core strategic threats as it relates to Israel. And I don’t believe that this is any different. Now, we can’t want it, as I have said, more than the parties. But I also — let me go to the core issue, really, what you’re dancing around. And that is, you know, the prime minister — I don’t think there’s another world leader that has had as much private time with this president as Prime Minister Netanyahu. He’s had two private meetings. One lasted about two hours. Another one lasted about an hour and 15 minutes. No other world leader has had that much private time with the president working through this set of issues. I think that’s a tempt to –

Charlie Rose:
Define the relationship today between those two leaders. Just define it for me.

Rahm Emanuel:
It is a very good relationship.

Charlie Rose:
Is it cordial? They are constructive? They believe they can trust each other, and they think that together they can achieve the goals they want.

Rahm Emanuel:
It’s a constructive, honest relationship amongst not only friends, but two people who also have responsibilities to their respective countries: total honest, very constructive working relationship.

Charlie Rose:
And how important is a coordinate policy on Iran as a factor in the relationship?

Rahm Emanuel:
Well, I mean, it’s a — Iran, as Israel describes, is an existential threat to them. The United States has seen Iran’s desire to get a nuclear weapon as its own sense of threat, which is why it’s organized the P5+1.

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Charlie Rose:
You’ve now been in this job 14 months. Why did Barack Obama want you?

Rahm Emanuel:
I think on the fundamental core, he had a robust legislative agenda and no liability on both sides of Pennsylvania Avenue. Second, he knew I was going to always have his back as his chief of staff and that I will go through walls to help get what the president wants done. And somebody that had been in politics as both a member of Congress but also been in the White House and knows the kind of rhythm of the White House. And fundamentally, that I was going to be loyal to him and give him unvarnished assessment of what I think the tradeoffs and the equities that you’re constantly wading. Remember, in the White House, Charlie, as I always describe it, there are only two types of decisions, bad and worse and immediate and emergency. And that’s the grid they’re on.

Charlie Rose:
One question about bipartisanship: you had a reputation as a very partisan congressional figure. And you also deserve enormous amount of credit for the Democrats winning the House as Nancy Pelosi would be the first to say. Two, the president came to Washington talking about change and bipartisanship and yet he chooses the most partisan figure as the guy he wants to back him up as his –

Rahm Emanuel:
Well, I would slightly –

Charlie Rose:
And therefore — go ahead.

Rahm Emanuel:
No, I will — since you remember the family, I interrupted you already. Finish your question.

Charlie Rose:
People may not get that reference but –

Rahm Emanuel:
No. It’s okay. My mother adopted you years ago. First of all, I mean, I know people think because I won the House I’m partisan. As you know, you’ve had — and you can talk to Senator Lindsay Graham, Senator Collins, other Republican members of the House who I work well with. I’m a fierce fighter for what I believe in. I’m a fierce fighter when the president lays out his agenda to get his agenda done. That doesn’t mean I’m partisan. It means I’m very loyal to the set of ideas. I’ve worked with — putting bipartisan coalitions together when I was in the White House under President Clinton. When I was in Congress, I did that and also for President Obama. Remember, in the — when we passed the recovery act, by way of example, I was the person in the room with a couple aides, sitting negotiating with the three Republicans who signed on. Having worked through NAFTA for President Clinton or welfare reform, did that in a bipartisan fashion. The real — the president’s view is he still has an open hand to find bipartisanship. I will say what’s happened, which is different this time around than other times, is there has been an absolute determination, as reported by the New York Times when they did a big story on Senator McConnell, that even before the president was sworn in that they were going to try to oppose his policies and to slow him down.

Charlie Rose:
It’s not about –

Rahm Emanuel:
Not about China alter, not about China improve, not about China, work with, but try to oppose to slow it down because since the Democrats were in control of the House and the Senate, if points were put on the board, that came to their detriment. Now –

Charlie Rose:
Do you think that’s their point of view today, that they are not interested in terms of achievement. They’re interested in stopping this president?

Rahm Emanuel:
I think that’s part of their — part of their leadership view it that way. I think that individuals in the House and Senate don’t. But there’s a — there is a — what’s the word I’m looking for, a premium for party loyalty to that. I give credit to individual senators. I don’t want to put them into jeopardy, but individual senators from like Senator Snow, Senator Collins, Senator Graham with others in the House who want to — individually — on individual items, across the board wanted to try to reach bipartisan agreements. Part of what happens in the media is accentuating those fights so that polarization in attempt as well as among party activists reaching compromise is hard. You should know my job and the job of the people in the White House is to work hard to seek the president’s objectives. Some of those — and a lot of those are in a bipartisan fashion. The door is always open. Just yesterday, without mentioning names, I was talking to a Republican senator about a different policy. They all have my phone number, have my email. And we talk on a regular basis.

Charlie Rose:
Is bipartisanship alive then?

Rahm Emanuel:
It has its good days and bad days. But I think rather than root –

Charlie Rose:
So it’s not dead then.

Rahm Emanuel:
No, of course it’s not dead. You have to rise to the challenge. You have to come on a — come over a party that — a base of a party that’s opposing candidates, incumbent senators who have tried to achieve bipartisanship. So there’s a lot of political courage that goes for that. Now, the president’s own view is bipartisanship is good. It doesn’t trump principle. But you try to strike deals. As I went through on the healthcare bill and I’ll go other sections of the legislation, there’s a lot of Republican ideas in the bills that are passed. The Republicans will choose whether they’ll support those with their vote. But those ideas are in the body of the language of the legislation.

Charlie Rose:
Let me read you a quote from Peter Baker. This is from the “New York Times” wrote a page piece for you — about you in the “Sunday Times” magazine. “In this season of discontent for Obama –” so this was, what, six months ago — “Emanuel has emerged as a leading foil and the easy and most popular target for missiles flowing at the White House from all sides. He’s a [unintelligible] of conservatives who see him as a chief architect of Obama’s big government propping and of liberals who consider him an accommodationist who undermines the very same agenda. The criticism has been searing and conflicting. He didn’t work enough across party lines. He pushed far too much. He didn’t push far enough. The crossfire underscores his contradictions. How can Emanuel be so intensely partisan without being all that liberal and so relentlessly pragmatic without being bipartisan? And just as salient these days, how can he be so independent minded and still remain loyal to a team operation?”

Rahm Emanuel:
Man’s inhumanity of man.

[laughter]

Charlie Rose:
There it is.

Rahm Emanuel:
I think the kids always when I come home and you know you see some movie, the kid goes, “What’s it about?” I go, “It’s about man’s inhumanity to man.”

[laughter]

So there you have it, I don’t — you know?

[laughter]

So, I mean, how do you want me to — what do you want me to do with that? I don’t know.

Charlie Rose:
Well, that, I mean, it pretty much describes the situation, doesn’t it? I mean, you’re getting it from all sides at the same time, you know, whether it’s from the left or the right, it’s a little bit like if you look –

Rahm Emanuel:
Well, but I mean it — I think what Peter, at least the way I read that is he does show that you can’t — you can be — how is it that you’re the fiercely partisan guy that’s the theorist of big government yet attacked by liberals of the left and are my party and being –

[talking simultaneously]

Charlie Rose:
An accomodationist.

Rahm Emanuel:
Not only an accomodationist; always trying to seek bipartisanship, and is also a new Democrat. You know?

Charlie Rose:
How long do you think you’ll be in this job?

Rahm Emanuel:
Well, as long as the President wants me to be.

Charlie Rose:
Really? So if the President wants you for eight — four years or eight years, you’re there?

Rahm Emanuel:
Well, I was being generous there a minute ago.

[laughter]

Charlie Rose:
Is there any other job in government you’d like to have?

Rahm Emanuel:
In government?

Charlie Rose:
In government.

Rahm Emanuel:
Yeah.

Charlie Rose:
What?

Rahm Emanuel:
Well, I mean, it’s no secret –

Charlie Rose:
That you want to be speaker of the house.

Rahm Emanuel:
Well, that’s over. No, I would one day — first of all, let me say it this way, I hope Mayor Daley seeks reelection. I will work and support him if he seeks reelection. But if Mayor Daley doesn’t, one day I would like to run for mayor of the City of Chicago. That’s always been an aspiration of mine even when I was in the House of Representatives.

Charlie Rose:
Mayor of Chicago.

Rahm Emanuel:
Yeah, fact I said the one thing if you ask me what I miss, I miss the contact with constituents. You know, I miss being in the — when you were running the office, that touch with people. I used to do as you know I developed this thing called Congress on Your Corner where I used to stand in the grocery stores with a table of constituent service, and just greet people. And you learned a lot. And one of the best pieces of legislation I introduced was the Elderly Justice Act, came from a lady who talked to me at a grocery store about what happened to her father in a nursing home, and the way I found out that the law on the books was no real federal bill that dealt with seniors. And that’s a — you know, not all stories are like that. I helped a small business get a loan that expanded a tubing company. I miss that. I mean, I love what I’m doing. I find great passion in it because I work for a great president with a breadth of issues that has — if you’re in public policy at a period of time in history that’s important, one day I’ll go back to elected office and say I’ve enjoyed it, I enjoyed that process.

Charlie Rose:
So rather than being a member of the Cabinet, if you left the chief of staff job you’d more likely want to go –

[talking simultaneously]

Rahm Emanuel:
One day I’ll — I mean, you asked me if I was thinking of it that term, I mean, right now I’m a Chief of Staff — I’m in the Cabinet, President put the Chief of Staff in the Cabinet, but one day I want to run again for office and if I get a — but again I want to repeat because the Mayor’s a dear friend of mine, and I support him, I hope he seeks reelection as you know, Charlie, you’ve been out to Chicago, he’s done a fabulous job, and one day I would like to — but if he doesn’t at some point that will be something I’ll do.

Charlie Rose:
When might we have a Supreme Court nominee?

Rahm Emanuel:
I think it’s important that you — the President nominated Sonia Sotomayor at the end of May towards that period of time, and the Senate confirmed her the first week in August, so that’s kind of your timeframe. The President within the timeframe, we think we can get earlier than that but without a doubt by then we’ll have a nominee for the Supreme Court.

Charlie Rose:
You’d expect because of the nature of politics in April of 2010 that it’s going to be a huge, huge battle in the Senate confirmation?

Rahm Emanuel:
I think that there’ll be a huge, huge battle. That’s up to whether people think that, that’s what they have to do. I think the President will obviously appoint a person that he thinks is appropriate and right for the Supreme Court, as he laid out the kind of criteria in the Justice Stevens model. I think if people took a fresh look at that, I don’t think it has to be that type of battle. But we may be at a system and a time in which we have that type of battle.

Charlie Rose:
And he may be looking at somebody who has not had judicial experience.

Rahm Emanuel:
He may, or additional experience beyond judicial.

Charlie Rose:
Ah. Thank you for coming.

Rahm Emanuel:
Thank you, Charlie.

Charlie Rose:
Pleasure.

Rahm Emanuel:
Thank you.

Charlie Rose:
Rahm Emanuel, Chief of Staff to President Obama for the hour. Thank you for joining us. See you next time.

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