Karl Rove: "Bush does not get the credit he deserves..."

http://www.politico.com/news/stories/0310/34248_Page4.html

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MR. ALLEN: An expansion of government that would make LBJ blush.

MR. ROVE: I disagree with that. President Bush, when he came into office, faced a budget in 2001 that had discretionary domestic spending growing at 16 percent. Page 414, read it. First year we cut that growth rate to 6.2. Then we cut it to 4 percent, then 3 percent, then to 2.2 percent, and we essentially flat-lined it for the last three years at less than inflation. President Obama comes in, and one of the first things he does in February of 2009, in the middle of the fiscal year, is increase discretionary non-security domestic spending by nearly 10 percent in the middle of the year. And then having bumped it up by nearly 10 percent, for the FY11 budget, grows it another 12 percent, which means we have increased the size of discretionary domestic spending since President Obama came into office by nearly a quarter. Don't be lecturing me about the grow—the expansion of government. This is a president who came in and said, "I criticized the Bush deficits which were 3 percent of GDP," about the outer limits of what economists think are sustainable and said "I'm going to raise that to 5.1" using rosy economic projections; they're actually going to be worse, "and I will double the size of the national debt in five years and nearly triple it in ten." So, no, President Bush does not get the credit he deserves for slamming on the brakes on discretionary domestic spending. And you will remember, those budget resolutions received a handful of Democratic votes in 2001 and one vote in 2002 and none thereafter.

MR. ALLEN: Not increasing regulation of an out-of-control financial sector.

MR. ROVE: President Bush courageously in 2001 listened to the advice left him by the—given him by the—the regulator of Fannie and Freddie appointed by President Clinton, Armanda Falcon, who said, "These institutions are out of control. I do not have the regulatory authority that we apply to a bank, a savings and loan, or a credit union." We spent four years fighting to get a bill through the Congress to regulate them. I talk about it in the book in detail, and I quote name—I quote quotes and I name names of Democrats who stood in stride the process of—of reform. And in 2005, we passed it through the Senate Banking Committee and Chris Dodd says to Richard Shelby, "You bring that bill to the floor and we're going to filibuster it." And back in the filibuster was the newly elected Senator from the State of Illinois, who'd been the third largest recipient of Fannie and Freddie contributions in 2004. Bust was pro-regulation and pro-reform. He said we cannot take these two huge financial institutions, two largest financial institutions in America, holding $5.4 trillion worth of mortgage-backed paper and not have them subjected to the same kind of regulation and scrutiny that we give banks, savings and loans, and credit unions.

MR. ALLEN: In retrospect, should you have done more to regulate Wall Street?

MR. ROVE: Look, Fannie and Freddie, these government-sponsored enterprises, were what—what turned a moderate turn-down—down in the business cycle into a worldwide financial crisis. Should we have gotten that bill through Congress earlier? You bet. But that was the problem of the opposition of two—the two villains in this drama: In the House his name is Barney Frank. In the Senate his name is Chris Dodd.