June 15 (Bloomberg) -- Democratic U.S. Senator Jack Reed of Rhode Island said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that the U.S. should pursue diplomacy over violence against Sunni Muslim civilians in Syria because the potential costs of military intervention are too great.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the show with Democratic Senator Jack Reed of Rhode Island, a senior member of both the Senate Banking and Armed Services Committee. Senator, thank you for being with us.
SENATOR JACK REED: Thanks, Al.
HUNT: Let’s start off with the committee hearings on Jamie Dimon. You were there. Most press accounts say he came through unscathed. Were all of your questions answered, or do you think there ought to be more inquiries?
REED: Well, I think there have to be very careful inquiries by the regulators. They have access to the documents, to the - all of the specific decisions. They can talk directly to the -
HUNT: How about the Senate? Should the Senate do more?
REED: Well, I think we should - we should wait, but not indefinitely, but wait until we get a good readout from the Office of the Comptroller of the Currency, from the Federal Reserve, from those who are charged with not only supervising, but analyzing what happened. I think also though one of the things in response to my question that Mr. Dimon indicated that there is room for a Volcker rule. It has to be drafted appropriately, and no one argues that. But if a good Volcker rule was in place, my argument would be that they wouldn’t have suffered $2 billion or more - maybe more of direct losses and a significant loss in their shareholder equity.
HUNT: The Republicans of course spent a lot of time talking about repealing Dodd-Frank at that hearing. Was what happened at the hearing and JPMorgan a setback of those efforts to repeal Dodd-Frank?
REED: I think to a degree it was. But also, to give Mr. Dimon credit, he was very clear. He said there are some parts of this bill that we supported and there were some that we didn’t. So if they were looking for a wholesale sort of throw it all out, that didn’t happen. And I think that’s - I think that was something that they didn’t quite expect, that he would be clear that there were parts of the bill that are very necessary.
HUNT: Right. Let’s turn to another one of your areas of expertise, foreign policy and Syria. John McCain and others have said the carnage is so bad the U.S. has no choice but to intervene. Is this Barack Obama’s Bosnia moment, and what’s the best option?
REED: Well, unfortunately this is a very difficult situation where there very well might not be any great options. The situation has deteriorated. The Assad regime has lost any legitimacy in terms of their attacks against their own people. But I think you have to look very carefully at the cost also of intervention. What does that mean? Is that taking down their air defense system, inserting troops on the ground? That is not without cost, both in terms of our personnel -
HUNT: At this stage, you would oppose both of those actions?
REED: I think that at this stage we still have to - as frustrating and as painful, given some of the scenes we’ve seen, we have to pursue diplomacy. The key - one of the key elements here is the Russians. They have long-time ties to the Syrian government, to the Assad family, not just the government. We - and I know we’re working very hard to get them to recognize that this regime no longer is legitimate in the eyes of the world.
HUNT: Senator - Secretary Clinton said this week not only are they not helping, but they’re actually helping Assad with - with - with weapons to kill people.
REED: They - apparently they have either - they have introduced, or at least they’re much more visible now, attack helicopters of Russian origin. It doesn’t help. But we have undertaken interventions in the past that have proved to be extraordinarily expensive, and in some cases counterproductive. I think - and so we have to be very, very careful. The issue in terms of is this Bosnia, et cetera, there was a long process of diplomacy, of pulling together the United Nations. It was a United Nations effort. We positioned military force. We did that, but when we went in, it was after exhausting every type of diplomatic approach.
HUNT: Do you think there’s any chance with diplomacy that Assad would go?
REED: There is a chance. Again, it oscillates from day to day. It looked - a few weeks ago it looked like it was a rejection of him. It’s very complicated. I’m stating the obvious. There’s another factor too about intervention in this case. There is no coherent, to the point, resistance force.
HUNT: You mean internally?
REED: Internally. There is this - there’s a free Syrian army, et cetera, but in terms -
HUNT: So we don’t know what would happen.
REED: - in terms of a coherent opposition. Also, it looks like in terms of current opposition that touches all of these sectarian groups, that has not yet emerged. And then if you’re going to conduct military operations, if it’s - if it’s the outside alone, the United Nations or a coalition of the willing, and you don’t have an internal force, that makes it all the more difficult.
HUNT: Many Democrats were very critical of Bush-Cheney for extralegal actions. Use of torture, warrantless monitoring. How is President Obama’s drone program, which they won’t - which the administration doesn’t even admit exists, why isn’t that a similar abuse of power?
REED: I think it is something that, first of all, again, it’s - no one seems to acknowledge this, but it’s obvious. It is targeted very - very particularly, very carefully against those individuals who have demonstrated a willingness to engage us, attack us, plan attacks against us. It’s a policy, and again, it’s a policy that the president continued from President Bush, who began really those operations, particularly in Pakistan. I think both presidents thought that - that given an enemy that is committed to attacking us, is not non-deterrable, can only be effectively countered by preemption, this is an appropriate way to preempt them.
HUNT: Okay. Final -
REED: It’s - I got to tell you though. It’s - the cumulative effect of these attacks, I don’t think we can be cavalier about it and just sort of say this is a - because in this world there’s a - what comes around goes around in terms of justification for doing things. So I think we have to be careful. But we’ve dealt a significant blow to terrorist networks by being able to deploy these weapons systems.
HUNT: Let me ask you a final question. Governor Romney has proposed to increase the defense budget $96 billion I think next year, over $2 trillion over 10 years, because he said the president’s put us on a course towards a hollow defense.
REED: I do not agree. Secretary Panetta does not agree. Chairman Dempsey, the chairman of the Joint Chiefs of Staff, does not agree. Bob Gates started a process of cutting roughly $500 billion over about a 10-year period after a significant increase in the defense budget because of the wars in Iraq and Afghanistan.
HUNT: So Governor Romney’s -
REED: First of all, I’d say ask him how he’s going to pay for it. Because frankly the other issue here - and I think there’s a growing realization that our - our strength as a nation rests upon our economy as well as our military prowess. So that’s the first question. But we are in a situation now where under the leadership of President Obama, but with the advice, and in fact the direction of Secretary Gates, now Secretary Panetta, the military leaders, they feel confident that the course we’re on is an appropriate one. It’ll leave us able to defend our interests and frankly over-match our opponent. The question they worry about is, and we all do, is sequestration. What does that do to this plan? That’s a whole different issue.
HUNT: We will come back to talk about that some time in the next six months. Senator Reed, thank you so much for being with us.
REED: Thanks, Al.
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