Transcript: House Speaker Nancy Pelosi on 'FNS'

WASHINGTON – The following is a partial transcript of the Jan. 18, 2009, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: And hello again from FOX News in Washington. Well, with the inauguration of Barack Obama now just two days away, this city is buzzing about the kind of change he will bring.

We plan to cover it all today — the celebration of a new team in the White House and hard questions about how they will tackle the nation's problems.

On Friday we sat down with Speaker Nancy Pelosi. We talked about House Democrats' $825 billion economic stimulus plan, and we got her sense of what Washington will be like under the new president.

(BEGIN VIDEOTAPE)

WALLACE: Speaker Pelosi, welcome back to "FOX News Sunday."

HOUSE SPEAKER NANCY PELOSI: My pleasure to be here.

WALLACE: In the weeks after the election, there was a lot of talk about all sides coming together in the economic crisis to get a stimulus package on the president's desk by Inauguration Day.

Now that has slipped to mid-February. There's more and more talk about an old politics party-line vote. Whatever happened to the new bipartisan spirit under Barack Obama?

PELOSI: Well, what you say is one interpretation. I see it quite differently.

WALLACE: Well, I mean, we just had this vote on the TARP, the...

PELOSI: Right.

WALLACE: ... and it only got six Republican votes in the Senate.

PELOSI: Well, it's amazing, because they had voted for it in much more — in stronger numbers when President Bush was president.

WALLACE: So what happened to the bipartisan spirit?

PELOSI: To the point of — I can only speak to what's happening in the House of Representatives. Yes, we are going to work together to have a recovery package for the American people. It's essential that that happen.

To that end, the president-elect came to Capitol Hill on the 5th of January, the day we were sworn in, met in a bipartisan way, Democrats and Republicans, House and Senate, said he was open to ideas that any of us had and that he would be making some suggestion that — suggestions that talked about what he believed would create three to — or save 3 to 4 million jobs, to do so in a timely fashion, and that we had to act now.

We were — we will lose half a million jobs a month the longer we go without a package. So we have taken some of his suggestions, listened to others, put together a package which we announced on Thursday.

The Republican leader, Mr. Boehner, has said to me what I want is a markup. We could go faster without a markup, but he wants a markup, and so we certainly agreed to that, which will happen next week, this coming week, in the Congress following the inauguration.

WALLACE: But if I may — if I may cut through the process, Speaker, I mean, we're...

PELOSI: Well, that process is the bipartisanship. That's where people...

WALLACE: But the fact is, as I say, in the Senate all but six Republicans voted against it. The Republicans have come out against your new economic stimulus package.

Is the president making — the new president-elect — making a mistake chasing Republican votes by putting in, for instance, more business tax cuts...

PELOSI: No.

WALLACE: ... instead of pursuing a Republican agenda?

PELOSI: No, I think that the president-elect is doing what he believes will create jobs for our country.

He knows very much what the urgency is of the matter. And some of the issues, like net operating loss, carry-back, bonus depreciation, are suggestions that have come from the Republicans. And to the extent that they will create jobs, they are in the package that we put forth.

But we're talking about listening to ideas. We also have to listen outside the Congress to — for example, the economic adviser to John McCain, Mark Zandi, has suggested to us that investments create more jobs than tax cuts.

We are committed to a middle-income tax cut in addition to the business tax cuts, and that is in the proposal. But we also have a strong element of investments.

When our package came out, Mr. Zandi said that this was needed, that it will create jobs, without it we will lose jobs, and it was a good stimulus. And others have said this will create — this will create over 3 million jobs.

WALLACE: But let's talk about this $825 billion...

PELOSI: Right.

WALLACE: ... economic stimulus package you're talking about. You barely got it out of your mouth before House Republicans, starting with John Boehner, started criticizing it.

They said there's $650 million in there to help people convert to digital television. There's money to re-sod the National Mall.

PELOSI: Right, yeah.

WALLACE: There's money in there for increasing college aid grants.

PELOSI: But that doesn't mean that...

WALLACE: And — well, let — if I may just finish. So the point they were saying was this is just more government spending. It's not economic stimulus.

PELOSI: No. No, no, no. Actually, the fact is that, again, the economists have told us you must make these investments which will be job-creating.

Now, we have a strong — this is not an old-time public works investment package. This is about the future. We have major investments for rebuilding the infrastructure of America in a very forward-looking way that reduces our dependence on foreign oil.

Secondly, it is a commitment to innovation, to science, to keep America number one and competitive and grow our manufacturing base.

Third, it is — and all of that depends on investment in education. And in addition to that, it's aid to the states so that they do not have to fire people or reduce meeting the needs of their people.

And again, I come back to the science that is in it to reduce our dependence on foreign oil and climate change. It's about science, science, science and science, innovation, as we rebuild America, create jobs, invest in our people and turn this economy around.

WALLACE: And — and so...

PELOSI: Now, if someone wants to take a little initiative here or there, which are responsibilities of the government, and describe the package that way, I don't think that that is quite fair.

And I don't — I don't think that — I think we will get Republican votes on this because it has, again, tax cuts for the middle class. Ninety-five percent of the American people will get a tax cut.

There are business initiatives that are job-creating, and there are investments to address the needs for jobs but also addressing the consequences of a severe downturn in our economy.

WALLACE: Simple question: Do you see any signs that the House Republican leadership is willing to meet you in the middle?

PELOSI: Well, I certainly hope so. We will have a markup, which is what they asked for. You call that process.

WALLACE: Writing the bill.

PELOSI: We call that bipartisanship. But it is — we are reflecting what the American people want us to do.

Their priorities are children's health, job creation. You know, the American people want results that are relevant to their lives, and that is what this package does, at the same time, as I say, creating three to — or saving 3 to 4 million jobs. And it's essential that we pass it soon.

Now, you make the point that it was going to be by inauguration. That would have been my hope. But the worse the economy got, and the later we do — the bigger the package got, the more time we needed to have the markups that the Republicans have suggested.

WALLACE: Let's talk about the agenda for the first 100 days, because there seem to be some differences between the Obama administration that's incoming and congressional Democrats.

PELOSI: Right.

WALLACE: Case in point — the president-elect says with the economic crisis, he's in no hurry for what's called union card check...

PELOSI: Right.

WALLACE: ... and while he wants to make it easier for workers to unionize, he'd like to see if there's a way to do it without taking away the secret ballot.

PELOSI: Well, you're talking about the first 100 days. The first 100 days we have to turn this economy around. Our commitment is to our economic recovery package, and that is what our focus is.

We also have to deal with the housing crisis, which is central to the financial crisis in our country. So that is where our focus is in the first 100 days.

WALLACE: So you agree union card check later rather than sooner, and maybe not taking away the secret ballot?

PELOSI: Well, I believe that — I know that President-elect Obama is a strong supporter of America's workers. I myself am a strong supporter of that legislation. We passed it with a strong vote in the House in the last Congress, and I continue to be supportive of it.

But in terms of what we have to do in the first 100 days, we must address the needs of this country. Five hundred million people will lose their jobs each month until we have an economic package.

WALLACE: No, 500,000.

PELOSI: What did I say, million?

WALLACE: Yes, 500 million. That would really be a recession.

PELOSI: Oh, no. Excuse me. Thank you for correcting me.

WALLACE: Yes.

PELOSI: It feels like 500 million. Five hundred thousand Americans will lose their jobs each month until we have a recovery package.

That's why I said we will have this package by Presidents' Day recess, and if we don't have it signed into law by then, we will not have a recess.

WALLACE: Mr. Obama has not committed on whether to raise taxes on people making more than $250,000 a year or just to let the Bush tax cuts expire in 2010.

PELOSI: Right.

WALLACE: You say you want to do it now. Is it...

PELOSI: Well, I say now, but I — what we're saying is that's not part of this discussion for...

WALLACE: I understand that, but...

PELOSI: ... this economic package.

WALLACE: ... my point is this: Isn't it a mistake to raise taxes on anyone during a recession?

PELOSI: Well, first of all, I don't know that a decision has been made by the Obama administration.

But I will tell you this, that in '04, '06 and '08, we had campaigned in saying what the Republican Congressional Budget Office told us. Nothing contributed more to the budget deficit than the tax cuts for the wealthiest people in America.

Fiscal discipline is central to what we do, and we can't...

WALLACE: You're about to pass a $1 trillion spending program. That's not — that's not fiscal discipline.

PELOSI: No, no. It is discipline.

WALLACE: You want to do this in the middle of a recession?

PELOSI: First of all, we are not proposing a $1 trillion...

WALLACE: Stimulus.

PELOSI: It's eight hundred and a quarter...

WALLACE: OK.

PELOSI: ... recovery package that will grow the economy to bring more revenue into the — into the Treasury so that we can reduce the deficit.

Investments in education, which are strong elements...

WALLACE: But tax increases in the middle of a recession?

PELOSI: Well, the point is it's not tax — it's a drain on the economy, which has done nothing to grow our economy. Mind you, we're in pretty bad shape. It has contributed enormously to the deficit. But it's not time to be talking about that now.

Now we're talking about how we do an economic package. When we get to the next stage of this — recovery package. When we get to the next stage, we'll have that debate. We'll listen to experts and the...

WALLACE: But you want to do it now.

PELOSI: No, I didn't say now.

WALLACE: I mean — I don't mean...

PELOSI: I don't want them to wait two years to expire...

WALLACE: OK.

PELOSI: ... Because they have to prove their worth to me as to how they grow the economy, how they create jobs, how they do not — justification for being the biggest increase in the budget deficit than any element that you can name.

Don't take that from me. That's a Congressional Budget Office — under the Republicans.

WALLACE: Mr. Obama says he wants to start tackling entitlement reform of Social Security and Medicaid beginning with a summit next month. Do you think it's a mistake for him to take on that subject so early in his administration?

PELOSI: No, I think it's very important. I think it's very important, and I support what he wants to do, to have a summit of that kind, and we will have our own initiatives in the Congress to work with him on that, because we do — again, fiscal discipline. Fiscal discipline.

We are committed to pay as you go, not heaping mountains of debt on our children, and the investments that we make have to be job- creating and bring money into the economy. So of course, the entitlements are an important part of how we make...

WALLACE: Speaker, you talk about fiscal discipline. Are you willing to accept in this discussion, at the very beginning, benefit cuts as well as tax increases?

PELOSI: I'd say you put everything on the table.

WALLACE: Everything.

PELOSI: You put everything on the table.

WALLACE: Including benefit cuts.

PELOSI: You put everything on the table. The only thing we didn't want to put on the table is eliminating Social Security, Medicare and Medicaid.

WALLACE: Well, we're not talking about that.

PELOSI: Well, President Bush was talking about...

WALLACE: I understand that.

PELOSI: ... eliminating parts of it. And that was not something we wanted on the table.

But I think on any of these things, they have enormous impact on people's lives. They have enormous costs to our budget and also to our economy, and so this has to be done in a bipartisan way.

Put everything on the table, let it prove its worth, and compare it to other options that we have, similar to what President Reagan did with Speaker Tip O'NEILL over 20 years ago when they were very successful in how they went forward on Social Security.

WALLACE: The president-elect is now talking about it possibly taking as long as the end of his first term to close the prison at Guantanamo Bay. Would you be disappointed if it took that long?

PELOSI: I don't think it will. But he — you know, if somebody gives an outside date, it doesn't mean you can't do it sooner. But I'm pleased that he has said he will close Guantanamo.

And we have some ideas about how it could be done, and we'll compare notes as to what the timing of that would be. But I think it's very important that the message go out to the world that Guantanamo will be closed.

WALLACE: Mr. Obama says that he's not particularly interested in investigating whatever went on in the past with the Bush anti-terror programs.

You've got John Conyers, head of your Judiciary Committee, who wants to set up a commission to do exactly that.

PELOSI: Right.

WALLACE: Mr. Obama says that at this point we've got to be looking forward, not backward.

PELOSI: I think that we have to learn from the past, and we cannot let the politicizing of the — for example, the Justice Department, to go unreviewed. Past is prologue. We learn from it.

And my views on the subject — I don't think that Mr. Obama and Mr. Conyers are that far apart. I think that...

WALLACE: But you want to see investigations.

PELOSI: Well, I want to see — I want to see the truth come forth. Now, how that is done — I'm really not completely familiar with what Mr. Conyers is putting forth or the...

WALLACE: But on the Justice Department and the politicization of that, on...

PELOSI: Well, I think that's a matter of — that's not up to us to say that doesn't matter anymore. I think they're different subjects, and you treat the differently.

We have a contempt of Congress against members of the executive branch who withheld information from us on that subject, and that was reinforced the first day of this new Congress.

So I think you look at each item and see what is a violation of the law, and do we even have a right to ignore it, and other things that are — maybe time spent better looking to the future rather than to the past.

WALLACE: I get the sense from this conversation — presidents often have more problems with their own party, especially when they enjoy big majorities, than they do with the opposition.

I get the sense — you shake your head immediately that he's not going to have problems — you don't intend to kowtow to this new president.

PELOSI: Well, the point is we're very excited about the election of this new president. Much of his campaign agenda is what we have been working on for a very long time — the creation of jobs in an innovative way that takes us into the future, reduce our dependence on foreign oil and reverse global warming, to meet the needs of our children by investing in education.

All of these things are part of an agenda. That's why in the first week of Congress, of our legislative work, we passed the children's health insurance program. It's first on the agenda of the American people, the health of our children, and it was early on the agenda for us, probably among the first bills to be signed by the president.

So we have — again, we are two independent branches of government. Within our own party, we have a range of thinking. We built consensus. We will, by March, come to the middle on it.

We want to have as much bipartisanship, especially on issues that relate to, again, recovery and turning around this economy, how we deal with the housing crisis and the rest.

So we'll take — you know, we have to respect every voice and every view in the White House, in the Congress, Democrats and Republicans, and it is — it is — and this is a president who is committed to that. I wish President Bush had been more bipartisan. We reached out.

This president is reaching out, and we will look forward to working with him. And again, we have a wealth of knowledge and experience here. We all draw upon expertise from outside. We make judgments about it.

But I didn't want to rubber stamp Congress when President Bush was president and the Republicans were here, and I don't want any rubber stamp members of Congress rubber-stamping what I think. We want to hear their views, convey them respectfully to the president, from both sides of the aisle.

WALLACE: Speaker Pelosi, big job, lot of work ahead. Thank you for talking with us.

PELOSI: Thank you. My pleasure. Thank you very much, Chris.

(END VIDEOTAPE)

WALLACE: Speaker of the House Nancy Pelosi.

Up next, we get a preview of the new president's plans when we're joined by one of Mr. Obama's closest advisers, incoming White House Press Secretary Robert Gibbs. Back after the break.