Conversation with Hillary Clinton - Part 2

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former United States secretary of state; now Hillary Clinton is running for

president.>

and Agreements; Policies; Environment; Trade; Infrastructure; Taxes;

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HILLARY CLINTON: First of all, it`s important to remember that the Libyans themselves held two successful free and fair elections. You know how hard that is after conflict, after 42 years when every institution has been hollowed out? The Libyan people rose to the occasion. They voted for moderates. Then, unfortunately, there was a lot going on in the region that was not necessarily in the control of anybody but which had a big impact on Libya.

CHARLIE ROSE: So I have two questions about that. First question is I think you were going to -- I mean is there some lesson we need to learn and that may be applicable to Syria, don`t get rid of a strong man until you have somebody that can come in there because you do not want chaos and you do not want the kind of circumstance in Libya because what you have in Libya now is an increasing force of ISIS.

HILLARY CLINTON: Well, in one part of Libya. Yes, let me address that because it`s a totally fair question.

Gadhafi had American blood on his hands. Gadhafi was a threat to the broader region. Our European and Arab friends certainly saw him as that and as you say he was promising to track down his own people and kill them like cockroaches.

My point was that with his demise, there was a coalition that rose up. They did hold elections. They were prepared to begin forming a government and there was a lot of pressure coming at them from extremists in all directions. And some of the old attitudes like the split between Tripoli and Benghazi; between, you know, east and west began to assert themselves.

I believe that right now there is an ongoing effort by the U.N. and others the U.S. is supporting to try to form a unity government, to try to get people once again to get back to working together. The problem, is we see advances by ISIS -- they`re not the only terrorist group --

CHARLIE ROSE: Sure.

HILLARY CLINTON: -- but ISIS now claims that they have really taken control of Sirte, which happens to be Gadhafi`s hometown. I think one of the ways we need to approach this is continue the discussions about national unity but, as a pre-condition, say we need to join together right now before they get a stronghold and work to eliminate ISIS in Sirte, and it is something that is going to require a lot of cooperation.

There are armed groups that are fighting for power within Libya that are not in any way identified with or allied with ISIS. They need to form even a loose confederation to try to push ISIS literally into the sea before they get a stronghold. There are a lot of other bad actors, don`t get me wrong, bad actors who have taken up --

CHARLIE ROSE: But could this also be part of the way the President thinks about things now? I mean we go in with great intentions, we help participate in the Arab Spring. It was their revolt, not ours. And we end up with where it`s not successful, democracy does not emerge and you end up with, in some cases, failed states or states that seem to be on the verge of becoming failed states. And, so, it`s just not a place for America to be.

HILLARY CLINTON: Again, I think it`s dangerous to make these sweeping generalizations. Look at how valiantly the Tunisians are struggling.

CHARLIE ROSE: They`re the big exception.

HILLARY CLINTON: They`re the big exception because they`re a relatively small country and they`ve worked really hard to get everybody under a tent, so to speak, and get them organized.

Libya has pockets of functioning government, but they are not united, and it may well be very difficult to unite them because there has been historical rivalry between them. But we`re talking about four years. You know we have a very quick time table --

CHARLIE ROSE: I know. We didn`t create democracy overnight.

HILLARY CLINTON: We did not, no. And nobody that I know relay has. That`s not to say there is not dangers. And I do think if we could turn the clock back, if there had been a way, and we tried, to convince the Libyans to take more help, not just from Americans but from Europeans with whom they had preexisting relationships or even others that might have come to support them -- the Scandinavians, for example -- help them do more. They were so proud and they were so resistant to having security forces on their territory. They were even resistant to having foreigners come and help them figure out how better to run their oil industry.

They had a lot of really smart people who had been expats for decades, they came home and they wanted to do it themselves. If there had been a way that we could have better partnered with them, supported them, maybe it would have made a difference. But this is a long-term prospect that you have to be looking at.

CHARLIE ROSE: Speak to this. I mean we`re looking at a world that`s changing rapidly. I mean you`ve got China soon to become the biggest economy in the world and whatever their ambitions are. You have the Middle East which is close to exploding in some cases, some would suggest you have the Russians involved, you`ve got others involved.

How do we make our way in a sort of New World order and what is our role to do that?

HILLARY CLINTON: Well, I think our role is to lead. You know, the absence of American leadership is not somebody else`s leadership.

CHARLIE ROSE: But they say -- let me interrupt --

HILLARY CLINTON: Nothing.

CHARLIE ROSE: OK. But some argue that there has been a vacuum -- that America has not been leading.

HILLARY CLINTON: Well, then we should get about the business of leading. If that is a perception, we need to rid the perception.

CHARLIE ROSE: Who knows better than that than you? I mean there is a perception that we were not prepared to lead.

HILLARY CLINTON: Well, look, I think it is a very --

CHARLIE ROSE: And a vacuum was created.

HILLARY CLINTON: Well, I think it`s a very complex set of circumstances, and it`s important to look short-term, medium-term, long-term, right? I remember in some of the arguments I had in the White House over Mubarak. And you know, there was a lot of excitement about Mubarak falling. I was one of the skeptics, right, because what was going to replace him? Yes, had he been a heavy-handed authoritarian? He had. But what was the alternative? And I remember saying, you know, this may look great in 25 years, but between now and then, there is a lot of trouble for the Egyptians, the region and us.

And so I think you have to be constantly balancing what is the best decision you can make today, how do you think about what comes next, what are the consequences you`re either trying to promote or prevent, and then what are the long-term challenges and how do we get prepared for those? I mean it sounds easy to say. It`s very difficult to do.

And I think, look, when I became Secretary of State, Osama bin laden was alive and with his lieutenants plotting against us. Iran was on a fast track to a nuclear weapon. We had hundreds of thousands of American troops in the battlefields of Iraq and Afghanistan and our alliances were incredibly frayed, Charlie. You know, it`s important to remember that, in 2009, our big challenges were seemingly as difficult as the ones we`re talking about now.

So all these years later --

CHARLIE ROSE: Compounded by economic problems.

HILLARY CLINTON: -- compounded by a terrible great recession that could have become a great depression. And so we worked our way out of that. I don`t think President Obama gets the credit he deserves for literally saving the economy from a much worse fate.

Bin laden is dead. Al Qaeda is still alive. It`s on, you know, maybe life support, but it`s still alive. It`s still kicking. It still is inspirational. We have to keep our eye on it. We can`t just focus on ISIS. We have to be aware of al Qaeda`s continue maneuvering.

We did reach an agreement that put a lid on Iran`s nuclear weapon program which could have led to a conflagration in the Persian Gulf. Not maybe started by us but in which we might very well have --

CHARLIE ROSE: OK, but that did not speak to Iranian behavior.

HILLARY CLINTON: No but -- it wasn`t meant to.

CHARLIE ROSE: I understand that. I understood that. I am not suggesting it should have been.

HILLARY CLINTON: Yes, right.

CHARLIE ROSE: I am suggesting that Iranian behavior is going to be an issue for the next president.

HILLARY CLINTON: Absolutely. And I`ve been saying this -- again, I gave a big speech about what I will do as president and to deal with enforcing the agreement, because there are a lot of important details, and the Iranians have to know right from the beginning that they will pay a price, that there will be consequences for any misbehavior or breaches. And that we have to now turn our attention to dealing with their other bad behavior -- still exporting terrorism, destabilizing other regimes.

So, yes, there is a bucket of problems that we have to deal with that the Iranians are posing.

CHARLIE ROSE: But how do we deal with those problems because they are part of --

HILLARY CLINTON: Charlie, I would rather deal with those with the nuclear program.

CHARLIE ROSE: I`m not arguing about the nuclear --

HILLARY CLINTON: No, but this is a big deal because what the nuclear program literally under lid, so to speak --

CHARLIE ROSE: Right.

HILLARY CLINTON: Now, it`s not so, you know, important that we stay as focused. We have to enforce the agreement but we`re not spending all our time and effort dealing with their nuclear program which they really got under fast track when Bush was president and we had to deal with it.

Now we have to look at all their other bad behavior and we have to have the same kind of patient, strategic planning that went in to the agreement. You know, I started putting together the coalition to impose the sanctions within the first month of being in the secretary of state`s office. It takes time.

I had to convince the Russians and the Chinese. I had to convince the Europeans, especially the southern Europeans to give up oil and gas from Iran.

This was a long struggle, basically, but it was diplomacy that was day by day which reached results. Now we`ve got to take a look and say, OK, what is it we have to do? Well, clearly, we`ve got to keep forces in the Persian Gulf. We`ve got to do a better job dealing with our Gulf partners who I think are very short-sighted in failing to cooperate with one another, to deal with some of the threats.

CHARLIE ROSE: Yes, but I mean for many of our gulf partners, Iran is the biggest enemy there is. I mean it`s part of the Sunni-Shia split in the region.

HILLARY CLINTON: Of course it is. Of course it is.

CHARLIE ROSE: And that`s why they want to get rid of Assad who is supported by the Iranians as you know.

HILLARY CLINTON: And he`s an Alawites which is, you know, an off shoot of Shiism. Yes, we get all of that. But the good news out of the Iran agreement, as far as we know, they are not pursuing their own nuclear weapons right now. And that was a very real threat.

They understood that the agreement was better than they thought it would be, so they, too, can turn their attention to the rest of this bad behavior because what our big fear was, not only that we`d get a war over trying to prevent Iran from going forward with this program even if it was only two or three years, but that we would see a wicked race to proliferation in the Gulf.

CHARLIE ROSE: And this deal should stop that?

HILLARY CLINTON: At least for the years that it`s in effect, as long as we enforce it.

CHARLIE ROSE: This conversation part is about American leadership.

HILLARY CLINTON: Right.

CHARLIE ROSE: You suggested over the weekend I think that America should lead at the climate conference in Paris.

HILLARY CLINTON: Yes.

CHARLIE ROSE: How should America lead there and what are your expectations?

HILLARY CLINTON: Well, I give kudos to the President. I think given the hand he was dealt by this congress and the difficulty in trying to come up with a credible plan to reduce greenhouse gas emissions in our own country, he has played that hand very well. I mean a lot of the EPA moves, a lot of the Department of Transportation on greater mileage from cars and trucks and vehicles, I think he goes to Paris in a strong position to be able to say, look, we all have to come and agree.

CHARLIE ROSE: Right.

HILLARY CLINTON: He also comes with a commitment for the United States to do more on innovation and moving more quickly toward clean energy, and he comes with the great philanthropic commitment of Bill Gates.

CHARLIE ROSE: Do you think he`ll be successful? Yes, $100 million.

HILLARY CLINTON: Yes, yes.

CHARLIE ROSE: You think so. You think we`ll find some progress because there is a sense of almost the urgency that we are talking about with respect to the Middle East?

HILLARY CLINTON: Well, in many ways, Charlie, I mean the Middle East is a terrible, complex human problem. And it drives you crazy because you keep saying to yourself, if these people would only stop this, they could build economies, they could have so much to contribute to the world. So you rack your brain about this.

Climate change is such a consequential crisis to everybody in the world. And it is a great shame to the entire human race, but particularly to the advanced economies such as ours, that we haven`t made common cause to try to reverse or at least stabilize the temperature increase. And I`m really hoping that we get a good result out of Paris, and I think what the Chinese have done is really smart. You know, when President Obama and I crashed into their meeting in `09 in Copenhagen, they were not happy to see us.

CHARLIE ROSE: Where are the Chinese? Where are the Chinese?

HILLARY CLINTON: Yes. But they did agree to begin voluntary recording and accountability. Now they`ve come with I think a 900-page report and they`ve said look, we have a lot of work to do, because they can`t breathe the air, their water is polluted. Their land is polluted. They have said, OK, we`re going to deal with this.

But you know what the real trick here is? They`re going to be the clean energy superpower of the 21st century.

CHARLIE ROSE: Unless?

HILLARY CLINTON: Unless we get there first or unless we are partners.

CHARLIE ROSE: It takes money as well does it not?

HILLARY CLINTON: It takes money but they`re going to -- they`re going to make big investments --

CHARLIE ROSE: Innovation and creativity.

HILLARY CLINTON: -- in solar, in wind, and everything else. And then they`re going to be exporting and they`re going to be controlling that market unless we understand there is a huge economic opportunity that goes hand in hand with climate change.

CHARLIE ROSE: Let me ask you about trade, too.

HILLARY CLINTON: Yes.

CHARLIE ROSE: I mean how important -- we have a vote coming up in Congress.

HILLARY CLINTON: Right.

CHARLIE ROSE: Would you encourage -- I mean trade is an important aspect. You were very strongly in favor of the trade agreement.

HILLARY CLINTON: Well, I was in favor of the high hopes and standards for it. Right.

CHARLIE ROSE: That`s fair enough.

HILLARY CLINTON: You understand the importance of trade.

HILLARY CLINTON: Yes, of course I do. We`re 5 percent of the world`s population. If we`re going to grow, we have to sell to the other 95 percent. I absolutely understand that.

But here are two problems. One, I`ve had the same criteria for judging trade agreements for years. I voted for some and I voted against a big multi-national one when I was in the senate.

CHARLIE ROSE: But you were really in favor of this one?

HILLARY CLINTON: No. It hadn`t even been negotiated.

CHARLIE ROSE: That`s the impression though as you know.

HILLARY CLINTON: Well, I can`t help what impressions are. What I said from the beginning is it has to produce more good paying jobs for Americans. It has to raise Americans` wages and it has to be in furtherance of our national security. So when it came out, you know, none of us saw the details until it was actually produced some few months ago.

In my opinion, it didn`t meet those standards. And so I said I`m against it. Now, I`m not against all trade, but I am against certain provisions of this, including the failure to integrate currency manipulation into the enforceable body of the agreement.

But there is another point I just want to quickly make which is, you know, the Republicans are always for every trade agreement. Trade if it`s going to be successful for the American worker, the American business, has to be more than just special deals for giant multi-national corporations who have some linkage to America.

And the Republicans have blocked every effort to raise the minimum wage, better training, apprenticeship programs, make education more affordable. They have blocked every effort to try to make sure American workers were as prepared as possible to compete and win in the global economy.

So, for me, the trade agreement on the merits is not one I can support and the failure to kind of make the other side of the equation fair so that more Americans will get the skills they need to be able to compete, you know, just makes it a decision that I`m not ready to take now.

CHARLIE ROSE: Would you encourage Democratic members of the Congress to vote against it?

HILLARY CLINTON: I have stated my position, you know. If anybody wants to talk to me, they`re welcome to call me but I have stated my position and I will let the Congress work its will.

CHARLIE ROSE: You announced a significant idea about infrastructure.

HILLARY CLINTON: Right.

CHARLIE ROSE: Why has it taken this country so long to deal with infrastructure? What`s the problem?

HILLARY CLINTON: Well, the problem Charlie is that the Republicans don`t want to pay for anything. You know, when I was in the Senate, I was on the committee that was responsible for writing the bill, the Highway Transportation Bill. It was hard because we had a lot of back and forth, but we came out with a bill, we got it done.

There has not been a bill that has actually come out for years now. And, so the congress is in the middle of arguing about whether or not they can get a highway bill. But they don`t want anybody to pay anything for it. And so, they don`t want to use user fees. They don`t want any kind of fee that could be construed as a tax, OK.

(CROSSTALK)

HILLARY CLINTON: At some point, you know, we are crumbling. I mean every independent assessment says the same thing. We have a failing grade or maybe at the most a D-minus --

CHARLIE ROSE: And putting our citizens at risk.

HILLARY CLINTON: Well, and costing the money. You know, in a lot of places in this country, people pay a lot to fix axles and wheels and other things that are damaged by potted and deteriorating roads. We have a lot of bridges that if you had a choice you wouldn`t cross because they`re not in good shape.

Our airports -- we don`t have a single airport in the top 20 airports in the entire world. The closest we get is Cincinnati at 30. I mean we have watched over deterioration, to say nothing of what you can`t see. Under the ground, you know, in New York we have water mains and sewer mains and gas lines -- some of them are blowing up and some of them are cracking.

CHARLIE ROSE: So did we miss an opportunity during the first four years of the Obama administration to do more?

HILLARY CLINTON: Well, we did as much as the Congress would let the administration do. The Recovery Act had "Build America" bonds. They had money going in to all kinds of construction. We could have done a lot more and we would be better off if we had.

CHARLIE ROSE: This campaign is about middle class economic future.

HILLARY CLINTON: Right, right.

CHARLIE ROSE: Do you recommend cutting middle class taxes?

HILLARY CLINTON: Well, not raising them, certainly.

CHARLIE ROSE: No, but didn`t you say you`re in favor of cutting them?

HILLARY CLINTON: Well, I`m in favor of giving specific tax credits and breaks so that middle class families can meet some of their obligations. So for example, you know, more help on childcare, more help on care giving like taking care of an elderly relative with Alzheimer`s. Making sure we keep tax credits for education.

So in effect those are cutting taxes -- not an across-the-board cut. They are tied to certain activities, you know, activities or services that middle class people need.

CHARLIE ROSE: But do you also urge raising income taxes on wealthy individuals?

HILLARY CLINTON: On you and me? Yes.

CHARLIE ROSE: Yes. You and I`m included. True

HILLARY CLINTON: Sorry.

CHARLIE ROSE: And I`m willing.

HILLARY CLINTON: Yes. No, really.

I mean it is -- the tax system truly is stacked for those on the top, and it is something that breeds so much resentment and grievance on the part of small businesses, on the part of hard-working people and, you know, the wealthy pay too little and middle class people pay too much and we`ve got to get a better balance.

We do need revenues. I`m not somebody who says we don`t. I just want to start with the people who actually can contribute more and make the tax system fair in the process.

CHARLIE ROSE: And what about corporate tax?

HILLARY CLINTON: We`re going to have to take a hard look at it because right now we have a very high rate but the effective rate hardly ever reaches that.

CHARLIE ROSE: I know. There is over 35 percent. At the same time, I think the average is about 18 or 20 percent.

HILLARY CLINTON: Yes. And some get away with nothing.

CHARLIE ROSE: Yes.

HILLARY CLINTON: And so -- look, I don`t want to stifle American entrepreneurialism. I don`t want to stifle American business, but I want to change the incentives. That`s why when I rolled out my economic plans I said, look, I want strong growth, fair growth and long-term growth. And the long-term growth may be the most important piece.

I`ll tell you just a very quick story. There was a survey done where CEOs of major American corporations were asked this question. If you knew an investment you could make today would pay off down the road by investing in plant and equipment, research and experimentation or worker training, but it would knock a penny off your share price, would you do it? And to a person, they said, no, we can`t, we can`t do it.

I actually called up someone we both know to say, seriously? Absolutely. It makes me sick to say was the response, but, no, we can`t, we will get hammered, we will be putting a big target on our chest for the activist shareholders. We can`t do it. Now, we must change those incentives. We need more patient capital. We need more investments at home.

CHARLIE ROSE: How about payroll tax.

HILLARY CLINTON: Well, you know, the payroll taxes --

CHARLIE ROSE: I don`t know -- what?

HILLARY CLINTON: I don`t think it`s that big a deal.

CHARLIE ROSE: Is that right?

HILLARY CLINTON: No because, you know, President Obama suspended it, nobody even noticed because we have to fund social security. That`s a different issue.

CHARLIE ROSE: Wouldn`t that put money in the pockets right away of the middle class?

HILLARY CLINTON: It did but it wasn`t -- it was not something that people really valued if you -- from what I --

CHARLIE ROSE: Politically or economically?

HILLARY CLINTON: Apparently both from the research that I`ve seen.

CHARLIE ROSE: Speaking of corporations.

Pfizer, Allergan -- merger, move to Ireland, reduce your tax rate.

HILLARY CLINTON: Right. Right.

CHARLIE ROSE: They say, meaning they will be able to have more money to spend because they`re not paying big taxes to develop new drugs. They say it`s in the interest of the public.

HILLARY CLINTON: I never know what to make of these kinds of comments. Personally, I was deeply distressed by the Pfizer decision. And I know, for instance, that drug companies spend more money on advertising than they do on research in our country. And so when they say, oh, we`re going to be able to spend more money on research, I would love to know the numbers. I find that hard to buy.

I think there is a certain gamesmanship associated with it which I find really regrettable, you know. It`s, like, OK, if we can beat the system -- and Ireland has had this big welcome sign, you know, we`re going to go down as low as we can --

CHARLIE ROSE: Right.

HILLARY CLINTON: -- I mean the rest of Europe is annoyed, the United States is annoyed, but I don`t think inversions should be legal and I know that the Justice Department and Treasury Department have looked at those. I don`t think they should be.

CHARLIE ROSE: The President said they`re unpatriotic.

HILLARY CLINTON: Well, they are. I mean truly, when you think about it, I mean Pfizer is a New York company. That`s where its roots have been. And obviously, as time went by, it employed fewer people but it`s always been an American flagship company.

And for them to say, you know, this is just really a game -- because if you listen to it, you know, how many executives are actually going to move to Dublin? No, they`re going to move virtually. They`re going to move, you know, the button you press on your computer to say this is where intellectual property now lives, you know, apparently in a castle outside of Dublin.

CHARLIE ROSE: They`re not going to pick up their factories and go --

HILLARY CLINTON: Well no. They don`t have that many left and I`m sure they have a global reach on that. But it`s really a kick in the teeth. I mean this country has done more to inspire this kind of innovation than any place in the world.

CHARLIE ROSE: OK. But you have a lot of companies like Apple, for example, have a lot of money overseas.

HILLARY CLINTON: Right.

CHARLIE ROSE: And they say, you know, make it more -- give us some amnesty, do something, and we`ll bring that money home. What would you say?

HILLARY CLINTON: We`ll have to look at all of that. I mean yes. But let me tell you -- we did repatriate when I was in the Senate, OK, under George W. Bush. We repatriated, they said the same thing to us. And I know I had a parade of people coming in -- CEOs and CFOs saying we really need to do this and when we get the money back, we`re going to do x, y, z. And what did they do? They bought back shares. They increased the dividends --

CHARLIE ROSE: And stock price -- stock prices were up.

HILLARY CLINTON: -- and they put more money into CEO pay and bonus. George W. Bush is on record as saying he would never have supported at the end because they all lied us to. So if we`re going to do a repatriation, it`s going to have to be rock solid and very clear about where that money goes and what it`s used for.

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