Transcript of Frist Interview on CNBC

Transcript of Frist Interview on CNBC
Published: January 10, 2003


In his first in-depth primetime interview, newly appointed Senate Majority Leader Bill Frist sat down with Alan Murray, CNBC Washington Bureau Chief and co-host of “Capital Report,” to discuss pushing President Bush’s tax proposal through the Senate, the possibility of going to war with Iraq and his thoughts regarding the current situation with North Korea. Murray also asked Frist about potential conflicts of interests regarding his holdings in HCA, the largest for-profit hospital chain in the country, which the Frist family founded.

The following is an advanced and official transcript of this evening’s program. All references must be sourced, “CNBC’s Capital Report with Alan Murray:”

DATE: January 10, 2003


PROGRAM: “Capital Report with Alan Murray” (Tues. – Fri. 9 – 10 p.m. ET)

ALAN MURRAY: Senator, it’s only been one week, but it’s already clear that you probably have the toughest job in Washington right now. There are no Democratic senators who’ve said anything particularly kind about the President’s plan, and you’ve got several Republican senators who have been critical of the President’s economic plan — Senate McCain. Senator Chafee had a press conference. Senator Snowe.

How much is this economic plan going to have to change for you to get it through the U.S. Senate?

SENATOR BILL FRIST: Alan, ultimately it’s going to be the American people, I think, who determine what is needed. And we know that the real challenge out there is growth of the economy and jobs. Most of the criticisms have been that this is not a quick enough stimulus to jump-start this economy.

The President clearly has put together a plan that looks at overall growth of the economy, and thereby the creation of jobs. Clearly, people can design plans to give more of a shock, more of a stimulus. But I think this plan does have the balance that the American people come to expect in terms of job creation, with some stimulus to the economy in the short term.

MURRAY: The criticisms that I have heard from some of the senators, Republican senators, who I mention again — we’re talking about three or four of them, but you need them all to get it passed — is too big, hurts the deficit; too tilted towards the affluent; need to do more for the middle class. What do you think, having had a few days to study this plan, about those two criticisms?

SENATOR FRIST: Well, you know, if you look at the plan itself — and, again, it’s easy to sit back and piecemeal the plan and be very critical of a component or a part of that plan. But if you look at what the President has delivered, it’s accelerating tax cuts, not just for the very rich, which the Democrats seem to say, but really across-the-board, accelerating those tax cuts two years, bringing them forward. To look at a small business investment incentive where we know that small businesses create 80% of the jobs, of new jobs that are created. So we know it directly impacts that. If we look at child care: is that a tax cut for the rich? Most people with children, I don’t think they’re very rich. But advancing that from 600 to 1,000 dollars.

The marriage penalty tax? Is that sort of a tax cut for the very wealthy?

MURRAY: No. But the big items are clearly — the big items — the biggest item, by far, is the tax cut on dividends. It’s more than half of the cost of the package.

SENATOR FRIST: Well, that is. But look at 674 — the figure is about 674. And the two I didn’t mention are exactly that, the dividend exclusion, which is about half of it, and then also the unemployment, reinvestment, reemployment accounts, which I believe will have a very positive impact. What you have to do is look at the balance of all of those. And if you look at something like the dividend exclusion, which seems to be a real focal point for many of the people who are criticizing it, I would argue that from just a moral standpoint, that you really shouldn’t tax once and then tax again. And I would argue the moral arguments strongly.

Secondly, it gets good corporate governance, the fact that these dividends should be paid out. If they’re already taxed once, they don’t tax them again instead of kept in to feed the pockets of either the CEOs.

And the third thing is that — and I really feel this, and we’ll debate it on the floor — is that it will grow the economy. It will allow — it will fuel the equity markets in a way that will benefit everybody listening to us who has a 401k or a pension, or an IRA, or a retirement account. And therefore, I am an advocate for the exclusion of that double taxation on dividends.

MURRAY: A hundred percent. Exclude the whole thing.

SENATOR FRIST: Oh, I think so, for the moral reasons. Again, it’s a great history in our country that you’re not going to be taxing once, twice, again the same income. And therefore, absolutely, we should do away with it.

MURRAY: Well, but your job now is to get the votes to get that through the Senate. Now there’re two ways you can go. If you go the normal route, you probably need 60 votes to get it through the Senate because of the filibuster rules. Or you can use the budget rules and maybe get through with 51, but it’s going to take a little longer. Which way are you planning to go?

SENATOR FRIST: I don’t know how many votes we’re going to end up getting. I can say, if you look at the President’s 2001 tax plan, when it was first presented, the reaction was very similar to this: it’s going to be a partisan plan; you’re never going to be able to sell it. The President was underestimated; the administration was underestimated. He’s presented a plan earlier this week which we will continue to debate. And I’m sure it’ll be modified some as we come forward. But I think at the end of the day, we’re going to have strong, overwhelming majority, bipartisan support —

MURRAY: Really?

SENATOR FRIST: — because the cause is to the benefit of every American, and I would argue to every American by growing this economy.

MURRAY: So you’re still determined to get bipartisan support for this. And I ask that because — I ask that because Wednesday night Senator McCain was on our show, and what he said was that Republicans know they can’t get 60 votes, and so they’re going to go the budget route, 51 votes, largely partisan.

SENATOR FRIST: You know, again — again, I would — and there’s — we can’t predict. I mean, you know, if you look into a crystal ball, you might be eating crushed glass. But I am confident, I’m very hopeful that if we work together as a Congress, again, Democrat and Republican, that we’ll be able to accept the plan, to debate the plan, possibly modify it, but keep it essentially the same and pass it with an overwhelming majority, just like we did, had a bipartisan support for the President’s tax cuts in 2001.

MURRAY: Let’s turn to health care. You said this week that you were deeply concerned about the fact that African-Americans, on average, don’t live as long as white Americans. What are you, as Senate Majority Leader, going to do about that?

SENATOR FRIST: Well, this is called health care disparities, which, in part, is minority/non-minority, but also regional, the Appalachian Mountains —

MURRAY: Right.

SENATOR FRIST: — back in Tennessee versus the non-Appalachian Mountains. So health care disparities are broad, not just racial. But from a race standpoint, we know of a black male who has prostate cancer has twice the chance, twice the chance of dying from that same prostate cancer as a non-African American. The question we’ve got to ask is why. And we really don’t know the answer yet. But just, for example, in the year 2000, or two years ago, 2 1/2 years ago, I wrote a bill, I sponsored a bill. It was passed with bipartisan support called the Health Care Disparities Act. And it looked at the sort of research and education that is needed to figure out what the problem is and then to educate broadly. And I used prostate example — the prostate cancer as an example because it’s so dramatic. HIV-AIDS is something I feel passionately about today. Right now, about 49% of HIV-AIDS cases are in the African-American community, yet they’re only 13%, 13, 14% of the population. Why is that? We don’t really know. We need to identify it, respond to it, put in education and therapeutic program — programs to reverse that. And that’s the sort of thing that hopefully I bring to the table and, by being Majority Leader, will elevate to the attention of the United States of America.

MURRAY: Race is obviously a sensitive issue for you, in part because of the way you came to this office of Senate Majority Leader. Your predecessor, Trent Lott, made some comments at Strom Thurmond’s birthday party which got the whole ball rolling.

How much has it hurt what you’re trying to do in this area to have the White House come back now with these judicial nominations? Judge Pickering, the district court judge who has been criticized by civil rights groups. Priscilla Owen. Leaving aside their merits, the fact that this is going to prolong the racial controversy, doesn’t that make it more difficult for you to do what you’ve set out to do?

SENATOR FRIST: No, Alan, I don’t think so. And you’re right. The issues that brought me to Majority Leader in large part stemmed from problems that are very real in this country in terms of race, reconciliation over time, the health care disparities that we talked about. I don’t think the agenda needs to really change at all in terms of where we’re going. I would be probably offended if all of a sudden somebody who was qualified was not nominated by the President for allegations that weren’t either true or weren’t fully debated here in the United States Senate.

So those 31 nominations that came over, they’ll be referred to the Judiciary Committee. There’ll be debate. There’ll be hearings forward. And I want, under a fair and equitable process, for them to come forward, and we can talk about whatever allegations have been made.

MURRAY: But you do get to this issue. You have said from the moment you assumed this job that you want to be a majority leader in a bipartisan manner, and you want to work in a cooperative spirit.

SENATOR FRIST: It’s terribly important that we pull people together as we address the nation’s problems.

MURRAY: But Democrats look at this economic plan, big, bold, but clearly the President’s kind of plan, the way it deals with dividend payers, the affluent. They look at the Pickering renomination. This is — and Priscilla Owens, who had been rejected by the Judiciary Committee. And they say this isn’t bipartisan government. This is “We run the place; stick it in your face government.”

SENATOR FRIST: Well, if you look at the economic plan — we talked about it. I will argue that we will take what the President has recommended, using what the legislative process of the United States Senate is all about, debate, possibly amend, put it before —

MURRAY: So it will change?

SENATOR FRIST: I don’t know if it’ll change it or not. But I can guarantee you it’ll be debated and talked about and discussed in a fair way, a principled way. That I can assure you as Majority Leader, as far as it’s under my control to go forward. The nominations themselves — again, I think we want to make sure that we look at it in a fair, principled and qualified way, to look at the facts and not have either rhetoric flowing, and we have that opportunity, because the 108th Congress began, Alan, just earlier this week, and what happens in one Congress is not binding to the next Congress. And we’re going to start in with an agenda that the President has presented that we will actually massage and digest as we go forward. And relying on that actual determination, we’ll make our decision.

MURRAY: You know, the tough problem that your predecessors have had, whether you’re talking about Trent Lott or Howard Baker, who’s here on the wall, or Bob Dole, who’s right next to him on the wall — the tough problem that all of them have had is if they attempt to govern the way you’re talking about in a bipartisan spirit, build coalitions, make things happen, they end up getting chewed apart by the conservatives in the Republican Party. How much are you worried about that? How can you keep the conservatives happy and build bipartisan coalitions?

SENATOR FRIST: We’ll have to see. We’ll have to see. I do not come as a career politician to this position, and, as so many people have noted, my whole life has not been spent in the United States Congress or the United States Senate. I’ve committed my life to public service through the practice of medicine for 20 years, and for a period of time to the political arena.

So I can’t predict. I can tell you that I’m going to start and hopefully continue to capture the very best out of the 100 senators that are out of here. Agreed. I can be partisan. I’m conservative. And I can negotiate tough. But at the end of the day, all 100 United States senators come here for a reason, and that is to make the world a little bit better for others. As Majority Leader, really representing all 100, that is my goal, and I think it can be accomplished. And we’ll see.

MURRAY: Your hope, as I understand what you said in the past, is to get not just a prescription drug benefit, but a reform of Medicare enacted in the next two years. You really think that can be done?

SENATOR FRIST: Yes. Yes, I think it can be done. It’s been a dream of mine, and it’s not the reason I came to the United States Senate, but for the last four years. I began with a plan working with John Breaux, a bipartisan plan called Breaux-Frist. It came out of the Medicare Commission. We studied it. We looked at health care. We identified the problem that seniors simply aren’t getting the health care that other people get today. They don’t have the plans, even that a federal employee has a much better plan than Medicare recipients. We have an opportunity now. Again, I’m not going to try to over-promise. I can tell you that, as a physician, as somebody who’s taken care of patients, I see the need, whether it’s prescription drugs, or health care disparities, or the uninsured. And therefore, I, as Majority Leader, who in part sets the schedule, want to address these one by one so that we can improve the health care security for all Americans.

MURRAY: Your family, of course, has been deeply involved in the health care business, started a private hospital chain, HCA. You own a good bit of HCA stock, which you put in a blind trust, but you know that some of that HCA stock is still there. Is that going to make it difficult for you to do this job when critics can say, oh, you know, this is working to your private benefit —


MURRAY: — private profit? Or should you sell the HCA stock?

SENATOR FRIST: Well, I think really for our viewers it should be understood that I put this into a blind trust. So as far as I know, I own no HCA stock.

MURRAY: If you own no HCA stock, they’re supposed — if they have — as I understand the rules —

SENATOR FRIST: They can. They can notify me.

MURRAY: — if they’ve gotten rid of all of it, they have to notify you.

SENATOR FRIST: They can notify me. No, that’s incorrect. They can. As far as I know, they can.


SENATOR FRIST: But this is — first of all, I am a practicing physician until I became a United States senator. I’ve never worked at the HCA —

MURRAY: Sure. Sure.

SENATOR FRIST: — I’ve never been on the board. I have invested in the past there. It’s in a blind trust. Totally fine. I have no control. It is illegal right now for me to know what the composition of those trusts are. So I have no idea. And I —

MURRAY: But you —

SENATOR FRIST: So as far as I know, I don’t have any. And if I do, I may. People say, will that change? No, because you know, and America knows, and I was elected to the United States Senate as everything being fully transparent. I am what I am. I’m not hiding anything, and people know that.

MURRAY: But you could dissolve the trust, say let’s get rid of all the HCA stock, start clean, give me a diversified portfolio, and I don’t want to know about it.

SENATOR FRIST: Well, I better — I hope, as a prudent investor, that I have a diversified portfolio. I have no earthly idea. I could do that if one says that that gives a potential conflict of some sort. I just don’t believe that it is, and it hasn’t been, and my colleagues don’t view it that way, either Democrat or Republican. It could be used for partisan purposes, but people just don’t believe it.

MURRAY: Another health care issue that’s been raised. Senator Lott said at the end of the last Congress that he would revisit some of those proposals that were tacked onto the Homeland Security Bill, including one that you, as I understand it, authored, providing Eli Lilly some protection from class action lawsuits for a chemical that goes into vaccines.

SENATOR FRIST: Yes, Thimerosal. First of all, that’s an incorrect statement, so I really need to correct it.


SENATOR FRIST: I designed a vaccine bill, which I predict will pass in this Congress. In that, it basically says for both national security as well as childhood vaccines, we do need to have a manufacturing base to produce vaccines in this country, which we don’t have. People had gone out of business, had gone out of the vaccine business. Out of that bill, three of my ten provisions were placed in the Homeland Security Bill. And I didn’t do that. It came from the House of Representatives —

MURRAY: Right.

SENATOR FRIST: — to make that very clear.

Secondly, it’s a good bill. Those three provisions are good, but you need the other seven in there to the total of ten for it to really make sense. Thus, we will fix that. And that’s your question, I think.

MURRAY: But you’ll fix it by making it broader, not by taking away the protection from Eli Lilly.

SENATOR FRIST: I haven’t made — I haven’t made the decision. What we’ll do is — you say “fix it.” You know, the question is exactly how. In the next several days, groups of — groups of people have come together and made recommendations. So I’m confident we’re going to fix it to the satisfaction of the American people. We do absolutely have to come back and address vaccines. Just this week, people were talking about botulism toxin, the most powerful poison known to mankind. We don’t have enough of the antidote, you know, a potential vaccine. We just don’t have it. And without a manufacturing base –and we’ve got to address this —

MURRAY: Is this part of a broader effort to get tort reform, to do something about trial lawyers and their influence in today’s society?

SENATOR FRIST: Well, in this particular case, in 1986, the federal government decided, because nobody was making — not enough people were making vaccines, to say if there are a huge number of lawsuits, that you channel them through a program called the Vaccine Injury Compensation Program. And if you’re not satisfied with that program, you can opt out and actually sue.

Well, basically what my bill does is modernize that system to 2003. The 1986 program has worked fairly well, but needs to be updated. I’m confident that we will — we will do that in this Congress and thereby increase the production of vaccines in this country.

MURRAY: Let’s turn to Iraq. Hans Blix, the head of the weapons inspection team, said today there — he has found no smoking gun. Do you think — we’ve been talking about these other topics. But do you think that your first few months in this job are going to be a time of war, war against Iraq? What are the odds?

SENATOR FRIST: Oh, boy. It’s impossible for me to say or to predict. I do — even if you just look at biological weapons, which I happen to have studied —

MURRAY: Uh-huh. Wrote a book about.

SENATOR FRIST: — And wrote a book about, numerous briefings on, I am absolutely convinced, based on the information that’s been given to me, that the weapon of mass destruction which can kill more people than an atomic bomb — that is, biological weapons — is in the hands of the leadership of Iraq.

Now, I’m convinced. How do we demonstrate that? That’s where the problem we get with these inspections. But if we’re wrong, in the hands of a man who’s attacked his own people and killed them with chemical weapons, his own people, plus invaded two surrounding nations, if we leave these weapons of mass destruction in his hand, it is a potential — potential detriment, I believe, to not just America broadly, but American people right here on our soil.

MURRAY: Yeah. Howard Baker, your predecessor in this job, referred to the job as similar to herding cats. So I want to — just to end here, I want to go back to the question about the economic plan. What is the — be realistic with us. What is the timetable for herding these cats, who are right now making a lot of noises, into an economic plan for this country? I mean, aren’t we really talking about something that’ll probably happen in the summer?

SENATOR FRIST: I don’t know exactly when. But I — and I think the President earlier this week, for getting a plan that is out there — our recovery now is sort of a jobless recovery that we have. Interest rates are low, mortgage rates are low, productivity is up, but unemployment is still high. And what I think the President was trying to do and will do once we further examine the plan is address the fact that this is a jobless recovery, and the one thing we need to aim is increasing growth in jobs over time. If we were saying this is just a stimulus package and we just need a shot in the arm right now, jump things up for a few months to make people feel well, then we say, well, the timing means we’ve got to do it right now in two weeks, or four weeks. All I can say is, systematically, it’s been presented early before we even came in session, but now about seven days ago. The debate has begun, as you know, on both Republican and Democrat sides. So I look forward to it coming, coming through committee and getting it before the —

MURRAY: It sounds like you’re more interested in doing it right than doing it fast.

SENATOR FRIST: Right. I want to do it right. And I think to do it right, it’s going to take some debate and some discussion. But it doesn’t mean put it off for six months or five months. I mean I think we need to address this directly, and I think the President, under his leadership, sent that signal that he wants it done as soon as possible.

MURRAY: And just one last question, because on Capital Report, we’ve been focusing over the last few days on lobbyists and how lobbyists operate in Washington. And the other night we showed a number of your — six or seven of your former staffers who are now out there in the lobbying world.

Does it help a client, a company, anyone who wants to get to you, to have some influence on you, to hire one of your former staffers?

SENATOR FRIST: That’s a good question, and I honestly haven’t thought about that. I have tremendous respect for my staffers, current as well as past staffers. If they call, I will respond. I don’t think it gives any preference to any particular clients as you go forward. But, I mean, human nature is such that if you’ve got friends and former employees —

MURRAY: You take their calls.

SENATOR FRIST: — you take their calls. But hopefully — and I’ll do my best; it may be hard as majority leader — I’ll be able to take most people’s calls as they come in.

MURRAY: All right. Senator, thank you very much for joining us on “Capital Report.”

SENATOR FRIST: Thank you, Alan.


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