C-SPAN/NEWSMAKERS

Host: Steve Scully

Guest: Ray Lahood, Transportation Secretary

Reporters: Ken Thomas, Corey Boles

DAVID OBEY, APPROPRIATION COMMITTEE CHAIRMAN, D-WISCONSIN: Mr. Speaker, late yesterday, it came to our attention that the “Cash for Clunkers” Program, which went active just a few days ago, has proven even more wildly popular than its strongest supporters had predicted.

Just last month, Congress passed the program, which provided up to $4,500 if you trade in your old gas guzzler for a new car that gets better mileage. That was done in the hopes of spurring some new car sales and encouraging people to be a little more environmentally friendly.

We provided $1 billion in the supplemental to get it going, enough for about 250,000 sales.

The program kicked off Monday, and it’s already officially received 40,000 requests for a reimbursement, worth about $160 million in rebates.

A survey, done by the National Automobile Dealers Association this week, suggests that at least 200,000 deals have been completed but not yet officially submitted. If that’s true, and we’re being told it probably is, then the entire $1 billion is just about exhausted.

So we have before us a bill that provides stop-gap funding for “Cash for Clunkers” by allowing the Administration to transfer up to $2 billion from the Department of Energy’s Innovative Technology Loan Guarantee Program, which doesn’t expect to award funding until late next year.

Some would call this "letting the markets work. Consumers have spoken with their wallets, and they’re saying that they like this Program. And, clearly, it’s doing what it was intended to do – to spur car sales in this sluggish economy.

This action will keep it going, hopefully. And I would urge support for the bill and reserve the balance of…

UNIDENTIFIED PARTICIPANT: The gentleman reserves the balance of his time, the gentlemen from California.

JERRY LEWIS, APPROPRIATION COMMITTEE RANKING MEMBER, R-CALIFORNIA: Thank you, Mr. Speaker.

LEWIS: Mr. Chairman, I rise to point out the absurdity of the situation we find ourselves in today.

In the Majority’s haste to slam legislation through the floor, with almost no consideration at the Committee level, with no time for consideration by the House membership, in general, and with absolutely no ability for the members of this body to amend bills on the Floor, we are now seeing the effects of such shortsighted, martial law tactics.

Mr. Chairman, the “Cash for Clunkers” program was passed on the Suspension Calendar, so no members were able to offer amendments. The Senate had a comparable bill with some significant differences. The House and Senate bills should have gone to full and open conference so those differences could have been negotiated and a Conference report then brought for a vote.

Instead, the leadership of this body, without consultation or negotiation, struck the House version of “Cash for Clunkers” – they stuck it on what was supposed to be a clean war supplemental, a bill only for the purpose of funding and supporting our troops and our efforts overseas in the war on terror.

They had to do that because of the mess the Majority created of the conference bill. And I use that term loosely, as most of the funding levels and programs were determined not in a conference but by the House leadership and by my chairman.

But when it came to counting votes, the leadership and the Chairman had to do some dancing and started loading up the war supplemental with extraneous and unrelated items on all – all of which he needed to get more votes. “Cash for Clunkers” was one of those items.

My colleagues in the Senate – Senator Feinstein, in particular, and Senator Collins – had some serious concerns with the House bill. Senator Feinstein tried to negotiate some changes to improve the program but was rebuffed, as I understand it, by my chairman. Basically, they were told it was his way or the highway.

Here we are today. Not one hearing on the “Cash for Clunkers” program in the Appropriations Committee. Not one hearing on the needs of the program prior to receiving funds. Not one hearing on how the first billion dollars has been spent. Not one hearing on how much money the Program will need to get through the fiscal year.

Instead, we find ourselves on the suspension calendar for the second time in three days.

STEVE SCULLY, HOST OF NEWSMAKERS: Joining us on Newsmakers on this Sunday is the Secretary of Transportation Ray LaHood. Thanks for being with us on C-SPAN’s Newsmakers program.

RAY LaHOOD, U.S. TRANSPORTATION SECRETARY: Thank you, Steve.

SCULLY: And here with the questioning is Ken Thomas of the Associated Press, and Corey Boles of Dow Jones Newswires.

Mr. Secretary, let me begin with the editorial this morning from The Washington Post Editorial Page that is often supportive of this Administration. They write; “Clunk! Will the next $2 billion be the last? Or will car dealers and their customers demand even more when it runs out? Maybe the government should just buy everyone a new car. That would certain stimulate demand. The washing-machine industry could also use a boost…”

So you see where they’re going with this. Your reaction?

LAHOOD: Well, this has been a wildly popular program, Steve. And it has really given new life to automobile dealers all over the country.

Automobile dealers were closing their doors, laying off salesmen, laying off mechanics, and this has been a lifeline for the automobile manufacturers around America. It is probably the one real stimulus part that has worked very, very well, very seamlessly.

And I think the House of Representatives agreed with that because they put another $2 billion of money into the program with over 300 votes, Steve. This is not insignificant. And it was done in a very short period of time.

The people’s House – The people’s representatives get it because the people get it. This is a wildly popular program.

People love to buy cars. And this incentive – look, the American Government – our government is not buying cars for people. They’re providing an incentive for folks to go into these dealerships, trade in a car that gets very high gas mileage for a car that gets lower gas mileage.

This is a win-win. We’re cleaning up the environment. We’re taking CO₂ out of the environment. We’re getting cars that are very, very high fuel-burning automobiles off the road. This is a win-win for America. It really is.

SCULLY: But in the first week of the program, you’ve gone through $1 billion, another $2 billion allocated by the House. If that money runs dry, will there be more federal dollars?

LAHOOD: You know, Steve, that will be up to Congress to decide. We believe the $2 billion that we’re very hopeful the Senate will pass this week, the House has already passed, and will be signed by the President this week will take us through the time that Congress comes back after Labor Day.

SCULLY: Corey Boles is here from Dow Jones Newswires. But we’ll begin with Ken Thomas from the Associated Press.

KEN THOMAS, ASSOCIATED PRESS: Good morning, Mr. Secretary.

LAHOOD: Good morning.

THOMAS: Let’s start it with an accounting question. How much of the $1 billion has been spent? Are you already over that limit?

LAHOOD: No, we’re not over the limit. Actually, because of some processing issues, we had hired an outside group – Citigroup – to help us with the processing. This is being done where dealers send the information to a New Jersey site, and it’s processed there.

We have not spent the $1 billion. But by all of our estimates, with car dealers running out of automobiles and people in the showrooms, we believe that we would be out this weekend. And we wanted to alert Congress to that before the House went for their district work period.

THOMAS: There are a lot of questions, a lot of confusion. Is this Program going to extend into this week and beyond?

LAHOOD: The program is extended. The program is continuing. Automobile dealers are not open on Sundays. Our people are processing paper 24 hours up in New Jersey – or the group that we contracted with are. And we believe that the backlog of paperwork will be cleared up very soon. And so, as car dealers open up tomorrow, the program will continue, yes.

COREY BOLES, DOW JONES NEWSWIRES: Good morning, Mr. Secretary.

LAHOOD: Good morning.

BOLES: Does the program continue even if the Senate doesn’t act early this week? If the billion dollars is exhausted, and that’s all that is currently available to the Program, do dealers still get encouraged to offer these incentives?

LAHOOD: Any deal that has been made, that is in the pipeline, any deal where they file the paperwork and were evaluating it and making whatever adjustments – anything that is in the pipeline will be paid.

If the Senate does not pass the additional $2 billion, the program will be suspended.

The program doesn’t actually – it’s authorized through November 1. But if we don’t get the $2 billion from the Senate to match it up with what the House passed, we would have to suspend the program next week.

And I believe Congress will do this. Excuse me – I believe the Senate will do this because of how wildly popular this is. And I’m sure senators are hearing from their constituents all over America, particularly those who have already gone into the dealerships and purchased an automobile.

BOLES: So when you say “in the pipeline,” you mean those transactions already entered into before the dealers’ close yesterday, not new transactions entered into as of Monday?

LAHOOD: New transactions that will be transacted tomorrow – there is a good – there will be a good-faith effort that those people will be paid. So if somebody goes into a showroom tomorrow and buys a car, then the money will be available to remit to them – either $3,500 or $4,500.

We will continue to program until we see what the Senate does. And I believe the Senate will pass this. I have great faith in the Senate. And I have great faith in this program. Because it’s so wildly popular, the senators will see their way to pass $2 billion. I feel pretty good about that, really.

THOMAS: If the Senate doesn’t act, though, what is Plan B here? Would the Administration need to tap the TARP or find some other funding?

LAHOOD: I think the conclusion is that the TARP money cannot be used for this, that it’s pretty clear in the legislation that this would not be allowed. That’s the reason that we went back to Congress.

There was a scramble on Thursday night when we announced to OMB and to the White House and others that we were going to run out of money if it continued at the stream of sales. And this was the best that – the best result that could happen was to use money from the Recovery Plan that was provided for some other programs, including energy programs. And when I spoke with Speaker Pelosi, she made it clear to me that that money will be put back into those energy programs.

But the TARP money, it was determined, could not be used, Steve.

BOLES: Mr. Secretary, as you are aware, there are some environmentally friendly senators – Senators Feinstein and Collins, for example – who are pushing for stricter environmental standards on the program before it is extended again. What is the Administration’s position on that?

LAHOOD: We think this is a good program. We think the standards that were set in the original authorization that takes the program through November are pretty good standards.

The truth is that, of all of the sales, the trade-ins – well, 62 percent have been trucks, which were taking an enormous number of higher-burning vehicles, in terms of trucks, off the road. And these people are buying cars that get much better gas mileage. So, in a way, we’re meeting the metric that Senator Feinstein, Senator Collins, and others have asked because of the kind of sales that are going on, with a lot of trucks being traded in and a lot of better fuel mileage automobiles being sold.

So, in a way, I think we’re really meeting that metric that they would like. We think the program really is working very well.

SCULLY: Mr. Secretary, let me go back, though, to Friday when this story was first breaking. As you know, it is a program that was planned to stay in effect until November 1. And some of your Republican colleagues in the House of Representatives were saying, “If they can’t get this program right, how are they going to run healthcare?” Can you respond to that argument?

LAHOOD: Steve, that is the silliest argument that I have ever heard! The Program is – we sold about 250,000 cars in three days. Something must be working!

The paperwork is in the works. We’re reimbursing dealers. There have been a few glitches with some paperwork, but the idea that – we ran out of money! Something must have worked.

This is one part of stimulus that really has worked! The money is going out the door. People are buying new cars. We’re taking higher gas-guzzlers off the road, particularly trucks. People are buying cars that get very good gas mileage.

This has met all of the metrics that were established by Congress when they enacted this. And to say it’s not – if we hadn’t sold any cars, if we had not run out of money, I would agree with Congress. We ran out of money.

Two hundred and fifty thousand cars will have been sold with the billion dollars. We had to get an additional $2 billion to keep the program going. Hey, the program’s working!

THOMAS: You mentioned the glitches. And you mentioned the amount of money that has been spent. There are a lot of dealers out there, who are concerned that they could be on the hook for any money that goes beyond the billion dollars.

This program could continue late in the week. You know, the Senate is a very deliberative body. Is the Administration willing to commit that, if the funding goes beyond the billion dollars, that dealers will not be on the hook?

LAHOOD: What I’m committed to saying this morning is that for any deal that is made tomorrow or the next day, and that is in the pipeline, the dealer will be reimbursed, and the car buyer will also be reimbursed either the $3,500 or $4,500. We’ve made that commitment.

THOMAS: So Tuesday is the cutoff point? As we sit here this morning…

LAHOOD: No, no…

THOMAS: …Any deals made Wednesday, you…?

LAHOOD: No, I didn’t say Tuesday was the cutoff point. We’re waiting to see what the Senate does. The Senate is going to be in all week. They meet again tomorrow, and they meet through the remainder of the week.

And our hope – and we believe that the Senate will pass another $2 billion. We’re going to work very hard with the Senate on this, to get this done. And we’ll see what the Senate does. But our commitment is to make sure that car buyers and dealers are reimbursed.

SCULLY: We should point out that, if our viewers go to cars.gov, they will find out which vehicles qualify. But can you spell out, for those who may have just heard about this program, how they can apply and what cars are applicable?

LAHOOD: On our website, Steve, there is a listing of the mileages that automobiles get. I own a 1997 Buick Regal. And, on the chart that has been put together by the EPA, in collaboration with our folks, it gets 19 miles per gallon. It doesn’t qualify. It has to be 18 miles per gallon or less. And in order to get $3,500, you have to take it four miles per gallon above that. In order to get $4,500, it has to be a little bit higher. So it’s about 18 miles per gallon.

If your car gets 18 miles per gallon or less, you qualify. It qualifies as a clunker. If you get 19, like in my case, I don’t qualify.

SCULLY: And was there any consideration to make this for just U.S. vehicles as opposed to any type of car?

LAHOOD: Not at all, Steve. And I’ve heard that criticism that it ought to be just for GM, Ford, and Chrysler. But there are – Honda is made in the U.S., by American workers. Toyota – their products are manufactured in the U.S., by American workers. And there are a number of foreign cars that are manufactured here in the U.S. And they shouldn’t be disadvantaged because they have a name on them that doesn’t quite look like “GM,” “Ford,” or “Chrysler.”

And we’re not going to disadvantage car manufacturers that way. And Congress didn’t want to do that, either.

Many of these – all of these – a lot of these cars – there may be a couple foreign car manufacturers that are not made in America, but almost all of them are now, and all by American workers who obviously benefit. When cars are sold, they have a manufacture more automobiles.

SCULLY: Corey Boles of Dow Jones Newswires…

BOLES: Moving away from the clunkers issue for a moment, but still on auto dealers – as you are aware, Mr. Secretary, there are efforts in the House -- and in the Senate for that matter, as well, but mainly focused on the House – that do more for the dealers, those who are affected by the GM and Chrysler bankruptcies. What is your position on that? Should GM and Chrysler be forced to come back to the table, to offer more assistance to these folks?

LAHOOD: Look, there’s an auto task force that works within the White House. And I’ve said this many times – nobody has taken more of an interest in the American car manufacturer than President Obama. He has devoted a lot of time and energy, and has really put together a plan that I think has been a lifeline to the American car manufacturers.

I have been in meetings with these car manufacturers, with their CEOs. They are very grateful to the President for what he has been able to do, to be helpful to them. And so it looks like we’re beyond the point of having to do much more. But we’ll see how things are going.

Look-it, the CARS program has been very, very helpful. As I said, it’s one of those stimuli that has been an additional lifeline to car manufacturers.

SCULLY: Ken Thomas of the AP…

THOMAS: Let’s go back to last Thursday. You and others in the Administration made some calls to members, to tell them that there were plans to suspend the program. The Administration then changed course.

Why did you and others make those calls? And why was the decision made then to not suspend the program?

LAHOOD: Well, we made the calls because we have an obligation, as the people that are running the program, to alert everybody that we were going to be out of money.

If the stream of sales would continue, which it has through the weekend -- there’s a car dealer in Chicago, whom we read about in the Chicago Tribune today, who is out of automobiles. So we know, again, it’s a wildly popular program: lots of people in the showrooms, lots of cars being sold. We felt an obligation to alert everyone that we were going to be out of money if this kind of trend continued. And it seems to have continued through the weekend.

If a car dealer in Chicago is running out of cars, then I assume that others are, too. And so we spoke with the White House about this.

Look, I come from the Congress. I spent 14 years in the U.S. House. I was a staffer for 17 years before that. My point is that I have lots of relationships in that House and in the Senate. And these are the folks that went on the line to enact this program. And I felt an obligation, obviously, to notify the White House and folks in the Congress so that they could figure out what the do.

THOMAS: Did the DOT, though, underestimate the response here? It seems like there were a lot of stories of a chaotic process – computer servers crashing, people having difficulty getting their processes through. Do you think the DOT underestimated this? And was this poorly handled?

LAHOOD: Well, look-it, when we got two million hits on our – before the program started, we had 30 days to do a rule, which is a procedural thing. But, anyway, while we were in the process of standing up the program – that’s the best way to put it – we had two million hits on this website of just people trying to inquire what was going on. We knew it was going to be very popular. We didn’t know it was going to be as wildly popular as it was.

And so, look, there were some bureaucratic problems in processing, in making sure that we had enough people contracted with to do the paperwork. You don’t want to have these kinds of problems. But it’s the kind of problem that really says that the program has been very successful and has worked!

BOLES: And if these deluge of car sales continue early into the week, Mr. Secretary, are the computer glitches fixed? Are the processing problems resolved?

LAHOOD: The processing is actually being handled through Citigroup, in New Jersey. Our people are there with the top people of Citigroup today, making sure that they have enough people to do this processing; making sure they hire additional people if they don’t; and making sure that any of the glitches in the program can be fixed. We are fixing it today so we can really begin to move this through.

SCULLY: And what happens to all those clunkers? Where do they go? How are they recycled?

LAHOOD: The way it works, Steve, is, if you went into a showroom and filed all the paperwork – and we have fixed something. They were actually killing the engines before the dealer got reimbursed. We’ve changed that now. The dealer gets their reimbursement before they kill the engine, just because we’ve had some complaints about that.

We also fixed a problem in Wisconsin and New Hampshire that don’t really require insurance. And so we fixed that part. Most people have insurance – the lion’s share of people in both those states have it, so we figured out a way to make sure that we could verify that so they wouldn’t be disadvantaged.

But what happens is the car goes into the dealership. The dealer is reimbursed. They drain the oil out of the engine. They put a chemical in the engine. They start the car. And, in seven minutes, the engine is killed. That is what was required in the law – “kill the engine.”

Then it goes to a scrap yard. And the scrap yard can sell off like the water pump or the other parts on the automobile. The engine that gets very high gas mileage – or I guess the better way to put it is “not very good gas mileage” – is killed. But the other parts of the car can be used for scrap or salvage.

THOMAS: Will the DOT pledge to make public some of the records involved here, the electronic documents that the dealers had to provide?

LAHOOD: Well, I can’t think of any reason why we wouldn’t do that. I don’t know exactly – what are you getting at here? I don’t know what you mean.

THOMAS: Just so the public can have a better understanding of what actually took place…

LAHOOD: You mean in terms of how things were filed and why things got delayed or whatever?

THOMAS: Yes, electronic records and the data that comes with it.

LAHOOD: I can’t think of any reason why we wouldn’t do it.

BOLES: And how soon will we know, from an environmental point of view, whether this has been a success? You mentioned some figures earlier. Sixty-two percent, I think that you said, were trucks that have been traded in. But how soon will we have some sort of publicly available data to be able to analyze, to see exactly how many clunkers that were trucks and large old cars were taken off the road? And how…?

LAHOOD: Once we get the backlog fixed up here over the next couple of days, I think we’ll have some pretty good statistics to put out. Our people pretty much know on a day-to-day basis what types of cars are being traded in, what types of cars are being purchased.

I think by, certainly, mid- to later this week, we’ll have a much better idea because I think that we will have a lot of this paperwork through the pipeline.

SCULLY: For our radio audience, our guest is the Secretary of Transportation Ray LaHood on this Newsmakers Program this Sunday morning.

Mr. Secretary, let me turn to the stimulus and first ask you how much money has been allocated for transportation projects in the Stimulus Program? And how much has actually been spent?

LAHOOD: Forty-eight billion dollars: $28 billion for roads; $8 billion for transit, which means buses, light rail, and other programs like that; $8 billion for what we call a high-speed rail, which none of that money has gone out; $1 billion for airports; and $1.5 billion in discretionary.

We have about 7,000 projects being funded. We have many more in the pipeline, that we have actually approved, and now it is up to the states to hire a contractor.

One of the issues here is that, once we approve something, the state has to hire a contractor to do the work. But there are over 7,000 projects underway. Hundreds of people are working all over America.

I have been to 25 states and 42 cities. Everywhere I go, I see orange cones. I meet with workers that were on unemployment. These are people that were on unemployment in January, February, and March, and now they’re out building roads and resurfacing.

We have all the airport money is out the door – a billion dollars. Almost half of our transit money – about $3.2 billion – out the door. Twenty-two billion dollars out the door.

So we’ve made great progress. And we beat every deadline that Congress asked us to meet in terms of getting the money obligated and getting the money out the door. And the states are now hiring contractors. Infrastructure all over America is being rebuilt. And people are going to work.

And as unemployment is the lagging indicator, as most people know, I think by September/October, that you’re going to see people in the building trades, people who build roads and bridges – those unemployment numbers are going to come down.

And I think part of it was reflected Friday in the economic news that came out, that we’re turning the corner on the recession. And I wouldn’t mind taking part of the credit for that. But I think that we can take more credit for it in the fall when some of these other numbers come in.

THOMAS: Some states have said that the deadlines are pretty tight, and it’s prevented them from pursuing the most ambitious bridge projects. Do you see that as a problem? And have states been forced to, perhaps, repair bridges that aren’t crumbling as much?

LAHOOD: Oh, I don’t think so. We had a conference call with – there are about 52 state DOTs, if you count the territories and so forth, we had a conference call and 38 of them phoned in. And we just had this, maybe, about two weeks ago, just to hear, “What are your complaints? What can we do better?” And the call lasted about 12 minutes because every one of these folks is saying, “Hey, we’re very busy. We’re getting contracts. People are going to work.” And we’ve had very few complaints from state DOT folks.

BOLES: When the Highway Trust Fund appeared to be heading toward red tape, or essentially going into the red, why did the Administration not support using stimulus money as a stop-gap solution, as opposed to new money from the Treasury?

LAHOOD: Well, because the law doesn’t allow us to do that. If you look at our portion of economic recovery – the $48 billion – or, you know, look at other aspects of economic recovery, which is an over $700-billion bill, there are really no provisions in there to do that.

And, look-it – as a former lawmaker and somebody who is part of the team on President Obama’s Administration, we have to obey the law. And the law really didn’t allow us to do that.

BOLES: And yet there are efforts by Republican senators to amend the law to allow just that. And I presume, had the Administration signaled its support for such an attempt, the law could have been changed pretty easily.

LAHOOD: You know, there really wasn’t much activity along those lines. I mean, I heard some members of Congress trying to talk about changing the law, but not really. There’s not much support for really doing that.

THOMAS: Mr. Secretary, changing subjects, there has been a lot of concern lately about texting and driving. There are four Democrats in the Senate, who would like to push states to ban texting and driving. They would like to withhold about 25 percent of the states’ highway funds. What is your position on that?

LAHOOD: I am for eliminating texting while driving, so I’ve already reached my conclusion on that.

My home is in Peoria, which is – we kept our home there, even though, obviously, I’m working here fulltime now. And the reason I mention that is, when I was home a couple of months ago on a weekend, there was a story in our local newspaper about a young girl – 16 years old – who ran off the road while texting and was killed. And we can save a lot of lives by just absolutely saying that texting while driving – no more. We shouldn’t allow it.

Our Department will be announcing, on Tuesday of this week, a meeting that we are going to convene of safety people from around the country and here in Washington, to make some recommendations around this.

Safety is our number one important thing that we do at DOT. It’s the thing we think about every day. Texting while driving is not safe. It causes accidents. It takes people’s lives.

And as the Secretary of Transportation, I am for saying that we should not allow people to text while they are driving. I would probably go even further than that. But, for now, I’m going to let our group that we are going to convene to address this issue.

But I’ve reached my conclusion on this. And I just think that we can save lives and save a lot of injuries by just saying, no more texting while you’re driving.

BOLES: And then back to the Highway Trust Fund, the fund which obviously pays for states’ efforts to repave and rebuild bridges and roads across the country – what is the Administration’s position?

Obviously, this fund is facing a major cash crunch. The action taken by Congress last week was simply a stopgap measure to get it through to the end of the fiscal year. What is your position on whether it should be an 18-month, more short-term fix; or, as in the House, they support a longer – five- or six-year – several hundred billion-dollar solution?

LAHOOD: We support working on a very robust, comprehensive bill. We think that 18 months gives us the time to do that.

Look, Congress wasn’t going to pass a – the current bill expires at the end of September. Congress was in no way going to be able to pass a comprehensive bill. We want a comprehensive bill. And we want to find a way to pay for all of the things that all of us want to do.

Look-it, we’re not against building roads, bridges, and all of the things that we do at DOT. Trains, planes, and automobiles – that’s what we’re interested in, and the safety aspect of it. And we want a robust bill. But we think it takes some time to do that.

And Congress is really wrapped up in so many big issues that we think that 18 months is the best way to proceed. And that’s the reason we recommended that. That’s the reason that the Senate went along with it. And, in the end, the Senate passed that; but then the House passed something – as you said, the stopgap measure. And now the Senate has done that.

So we have a stopgap measure. But we’re still pushing for a longer extension and the money to pay for it.

SCULLY: Mr. Secretary, before we let you go, you had a dinner Friday evening at the White House, and a meeting on Saturday morning at Blair House with your colleagues in the Cabinet, the President, and Senior Staff. Can you give us some color of what came out of that session?

LAHOOD: I think a great opportunity for our Cabinet to really bond. I mean, we have all been so, so busy in the first six months of this Administration with the implementation of stimulus, all the legislative activity around climate change, and all the activity around healthcare, and what we’ve been doing at DOT. It was a great opportunity for the Cabinet to really bond with the President, and really form the kind of team that we have all been doing but without the kind of relationship building.

I think that, if anything came out of it, it’s the kind of relationships that had a chance to really form, getting to know one another, and to really understand what the President’s priorities are.

On Friday night, the President spent a lot of time with us. There was a lot of good interaction. And we know where the President wants to take his agenda. And I think – what I said is that I feel privileged to have a front-row seat in history, with a very historic administration, as a Republican.

And it’s a great privilege to serve with the President and his entire team, some of the smartest people, some of the brightest people, and some of the hardest working people I have ever met in my 30 years of public service, people who are making great sacrifice to serve America.

And I want all Americans to know that. There are people in this Cabinet, who are making huge sacrifices because they believe in America, they believe in the President, and they believe in the agenda. And we really are a team.

SCULLY: Ray LaHood -- former congressman from Peoria, Illinois, six months into his job as the Transportation Secretary -- thanks for joining us on Newsmakers.

LAHOOD: Thank you, Steve.

SCULLY: We continue the conversation with Corey Boles and Ken Thomas.

Corey Boles, let me begin with you. Again, the editorial this morning – The Washington Post saying that this program is bribing car buyers. Your reaction?

BOLES: Well, I think this is a pretty novel attempt to stimulate car sales. The only other attempt that I’m aware of was in Germany, where there was a very short-term spike in car sales. But that was followed by a corresponding drop in car sales the next quarter. And it seemed there, at least, that all it did was move people up who were going to buy cars anyway, as opposed to stimulating overall new demand.

So, yes, they are selling a lot of cars, as this whole episode illustrates. But I think there remain questions out there as to whether or not this is doing anything more than taking car purchases from later on down the year and moving them up into the third quarter.

SCULLY: And to both of you -- Ken Thomas, what came out of today’s conversation?

THOMAS: I think it’s clear that they have leverage now. They can tell the Congress that, if they don’t approve the additional $2 billion, they’re going to have to suspend the popular program.

Ray LaHood is from Peoria. It’s playing in Peoria. It’s playing in a lot of places right now. So the Congress will be pressured.

BOLES: I think that’s very true. I think it shouldn’t be taken for granted that the Senate will act -- as Ken very wisely said earlier, the Senate is a deliberative body. And I know that there are environmentalists in the Senate who aren’t happy with this. There are Republican fiscal conservatives who are unhappy about this. And even some of the energy folks are unhappy because they see it as kind of stepping on their turf, somewhat.

Added to that is the fact that you’ve got the Senate taking up Judge Sonia Sotomayor’s nomination this week. You’ve got spending bill action in the Senate. There’s not a lot of time to get this done.

SCULLY: And, finally, for both of you on the question of stimulus – and you questioned a little bit about where this is all heading? What did you hear?

THOMAS: I think the Democrats can make the argument that this was actually timely and targeted. And this could actually – this CARS program could be helpful, so they can make the case that another $2 billion will continue to prime the pump.

SCULLY: Corey Boles, last word…

BOLES: I think that’s a fair observation. I think that they like this program. It’s an example.

They can point and say, “Look at this stimulus thing, which a lot of people have been criticizing as money slow going out the door. This is working. Look at the demand.” Yes, it led to chaos, but “chaos” being that people were actually buying cars.

SCULLY: Corey Boles is political reporter for Dow Jones Newswires. And Ken Thomas, Washington correspondent for the Associated Press.

Our thanks to the Secretary of Transportation Ray LaHood for joining us on this Sunday Newsmakers Program.

Have a good day.

END