On Fox Your World with Neil Cavuto

May 2, 2003

NEIL CAVUTO, HOST: Market's up, the war all but declared officially over, and a leading outspoken critic of our getting involved in Iraq in the first place joins us right now. Howard Dean, the former governor of Vermont. Governor, thanks for joining us.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: Thanks for having me on, Neil.

CAVUTO: Let me ask you about your position on the war. You were very clear you were against this, you criticized your fellow Democratic candidates for being kind of wishy-washy on this. Some of those were declared almost too militaristic. Do you think now you're in a bad position?

DEAN: I don't think so. I think the principal component of being a good commander in chief is to have the guts to stand up against the popular positions. The war's at 70 percent popularity right now, but we have got a long way to go in this war. The principal objection I had to the war was not that I object to using military force. Of course I do. In fact, I'm here in South Carolina and have been to Parris Island. I've seen the kids who are going to go to these kinds of wars. What I think, though, is that we need to cooperate with other countries. This doctrine of preemption, which gives us the right to go into more or less any country that we want to is in the long term going to hurt us.

We have got a lot to bite off, as the president said. The job is not done, and if a Shi'ite theocracy, a fundamentalist Islamic regime arise in the south, we're going to have a worse problem than we did when Saddam Hussein was running Iraq. So there are a lot of things here that I disagree with the president on, that I disagree with my fellow Democrats on, and we'll see which one is right in the long run.

CAVUTO: Do you fear, though, given the president's sky-high approval ratings and the good press he received yesterday that you might be seen as a McGovern-like (ph), that your role of whatever -- and however admirably thought out -- is putting you sort of at a disconnect with Americans?

DEAN: Well, there will be those. As you know, I'm doing pretty well in the campaign right now, and a lot of people are threatened by that from Washington, but I'm not from Washington. I think that's why the Democrats have had a hard time winning, is because they keep compromising in Washington, doing things like having this enormous deficit. You know, the biggest threat to our defense is the deficit. Eventually if you keep running deficits like this, not only is it going to undermine Medicare and Social Security, it will undermine our ability to defend ourselves, just like overspending and bad fiscal policy undermined the Soviet Union's ability to defend themselves.

CAVUTO: Let's stop on that issue, governor. The deficits, you argue the deficits are a problem, and many economists agree with that, but if they were such a national security threat, why were they not a threat in the 1980s when we've had them, and why clearly when we've had them for the last couple of years have they proven a threat now?

DEAN: I think they are an enormous threat to the economy. We've lost $2.7 billion -- excuse me, 2.7 million private sector jobs in the last two years. You can't run an economy like that. If you want a strong military, you have got to have a balanced budget over the long run.

CAVUTO: All right, but we did not have that -- but governor, we didn't have balanced budgets during the Reagan administration, yet we had arguably a very strong economy, we had very strong markets and we clearly had a strong military.

DEAN: Neil, I was a governor during the last part of George Bush I's regime, and I can tell you that the economy was very weak, and it is because of chronic budget deficits that went on and on and on. This -- the next president balanced the budget, the first one that had done so in 34 years. And no Republican has balanced the budget in this country in 34 years. This president has returned us to the largest deficit in history, the country. If this goes on, believe me, it is not only going to be our social programs that are in jeopardy. You cannot use Argentina as your fiscal model, and that's what this administration has done, borrow and spend, borrow and spend, borrow and spend.

CAVUTO: All right, now, how would you, if you are against the tax cuts that the president has proposed, how would you stimulate an economy that you claimed is weak. What would you do? You would be against giving Americans money back?

DEAN: I would do three things. First giving the Americans the money back, it only went to a very small percentage of Americans. Here in South Carolina, 35 percent of the people didn't get anything, and another 36 on top of that only got $100. Most people would rather have a descent health insurance program.

If you put in the health insurance program that I advocate, it stimulates the small-business community of this country to the tune of $100 billion. They don't have to pay for as much health insurance as they did. They get to use that money to help -- either hire more people or buy capital equipment.

Secondly, I want something like Sally Mae or Fannie Mae to consolidate small-business loans so small businesses can actually borrow. The key to this economy is stimulating small business, because they create many more jobs than large businesses.

And third of all, if we need to, we ought to invest in infrastructure, like schools, like broadband in the rural areas, like transportation, which this president is cutting back on because he can't balance the budget.

CAVUTO: Let me ask you, governor, we can pick apart a lot of those positions, but I want to focus right now on the race this year, or for next year, more to the point, and that there are some differences between this president and his father, and that is the economy, weak as it is, is a lot stronger than it was for the first President Bush back then, and what's more, the president seems, or this president seems to be pouncing on economic issues a lot sooner than his dad did. Do you worry that the economy, which any Democrat hopes will be their trump card, will turn out not to be?

DEAN: I hope the economy gets better. You know, there are a lot of people suffering right now because their living standards are going down, they don't have jobs, they don't have health insurance. But the economy is not going to get better as long as this president's philosophy prevails. Supply side economics does not work. Milton Friedman got a Nobel Prize for it. There's no evidence whatsoever that giving enormous tax cuts to people who won't spend the money, because they already have loss of discretionary income, does anything to stimulate the economy.


CAVUTO: But let me ask you this, governor, if next year, early next year, if the government is growing at a 3 percent clip or better, you'll be proven wrong, right?

DEAN: I don't worry about polls. I think that's one of the problems with this country and it is one of the problems with my party is everybody is very timid. I was governor for almost 12 years, and the way I got reelected five times was to say what I thought and do what I thought was right.

My policy in Iraq is based on what I thought was right. I supported the president's invasion of Afghanistan, because I thought he was right, I thought we ought to say that. I don't believe in partisan politics, but I do believe in criticizing policies that I don't think work, and this president's economic policies are a disaster. The unemployment rate just hit 6 percent today. I can't remember when the last time that was, but it certainly wasn't when Bill Clinton was in office.

CAVUTO: Governor Howard Dean, thank you very much. Appreciate it.

DEAN: Thank you.

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