What follows below is an unofficial transcript of my interview last night with Senate Republican Whip Jon Kyl of Arizona.
Kudlow: All right, drill, drill, drill. Or not? So we welcome back Senate Republican Whip Jon Kyl of Arizona. Hopefully, he's going to give us the inside scoop. Senator, before I get started, I just want to play a quick sound of President Bush on this topic today.
[President Bush: “The need for congressional action is urgent. So I’ve lifted the executive restrictions on offshore exploration. I’ve done my part. And that means the only thing now standing between the American people and these vast oil resources is the United States Congress.”]
Kudlow: All right, since President Bush started to aggressively go for this drill, drill, drill, oil prices have come down a lot from near $150 to about $125 bucks. Senator Kyl it’s great to see you again sir.
Sen. Kyl: Thank you.
Kudlow: Now this thing has gone back and forth. It is a huge issue. It’s a political issue. It’s an economic issue. It’s a stock market issue, as I’m sure you know. Let me just ask you, late in the day, here’s what we got. Senator Harry Reid calls on [Republican Senate Leader Mitch] McConnell to work with him to organize a bipartisan energy summit. Mr. Kyl, can you tell us what that means?
Kyl: [Laughter] Well it’s Harry Reid’s way of trying to pass the blame to somebody else, when in fact, for the last two weeks, he has prevented us from getting amendments that would permit us to drill offshore.
You’re right about the President’s announcement. It immediately began to drive prices down. And if we were able to pass legislation that opened up some of the off coast and deep waters of the Gulf areas to exploration, you’d see those long prices go down even more. The reality is the American people understand we need more drilling. And certainly it would help the economy if we were to do that. But we’ve got to get by this congressional impasse that has prevented Republicans from being able to drill for more.
What Harry Reid also said, if I could Larry, is that while Democrats favor a lot of other things, the one thing they will not vote for is more drilling off our coasts.
Kudlow: How does Mr. Reid unequivocally rule out amendments regarding drill, drill, drill? Some kind of rollback of the moratorium? Or for example, some kind of compromise—we’ve had [Democratic] Senator Mary Landrieu of Louisiana on a couple times, she’s working with a group of five Democrats and five Republicans. She wants to include offshore drilling. She wants to include shale drilling, not ANWR. And she says some kind of CFTC regulation of speculators has to be part of it. Has Reid ruled out that gang of ten compromise?
Kyl: Well for right now. But I think there’s no doubt that if we’re not able to do anything before Congress recesses for August, that when we come back, this so-called gang of ten that is a bipartisan group that’s worked on a proposal, will get a vote on their proposal. And my guess is, having talked to some of their members, it’s something which could get pretty broad support on both sides of the aisle.
Kudlow: But when you say they’ll be a vote, look, this is Wednesday evening sir, you’ve got Thursday and Friday, you all go out Friday, would that vote come in the next 48 hours? Or do we have to wait for Godot to appear?
Kyl: Well the latter unfortunately. I think we’re talking about no votes on energy for the next two days. So this bipartisan bill would have to be proposed first part of September. But Larry, here’s the good news I think. Even though we haven’t been able to get amendments for drilling this week, when it should have happened, I think public opinion is now building behind this to such an extent, and it will continue to crescendo during the month of August, that it will be irresistible in September. And while it may not be quite strong enough now, by September it will be strong enough to have a good result.
Kudlow: Even tougher against drilling, House Speaker Nancy Pelosi. I mean, she just flatly again today said no way she’s gonna vote. Let me ask you. It’s a tactical question. I just want your judgment and your forecast. If the Senate got the kind of votes you’re talking about, a compromise vote, even though it might have to wait until after the recess to get it in September—might a Senate bill influence action on the floor of the House and stop the stonewalling in the House?
Kyl: It would have a significant influence. Whether or not it could break the hold that the far left has with Nancy Pelosi as Speaker would remain to be seen. But there are a bunch of Democrat Blue Dogs, and other Democrats, that I think would really like to drill. And combined with Republicans, I think we can get it done.
Kudlow: All right, Senator John Kyl. All the best sir. Thanks for coming back on. Appreciate it.
Kyl: Thank you Larry.