Transcript: Chris Wallace and Vice President Dick Cheney

Sunday, December 21, 2008; 12:33 PM

Q Mr. Vice President, welcome back to FOX News Sunday.

THE VICE PRESIDENT: It's good to be back, Chris.

Q The President has announced a $13 billion short-term loan to the U.S. automakers without binding conditions on the unions or the bond holders. Haven't you, in effect, kicked this problem down the road to the Obama administration?

THE VICE PRESIDENT: Well, I wouldn't describe it quite the way you did, Chris. I think what he's tried to do is manage a difficult problem.

And obviously an important consideration is the fact that we're in the middle of a transition, and that it will shortly become a problem that the next administration is going to have to deal with.

But the President's package basically extends a line of credit to the companies for a specified period of time, and also at the same time, tries to encourage the kind of changes and restructuring that we think is going to be essential if the companies are ever going to become viable. So you've got clear references in the announcement that he's made this week about the conditions, for example, that were part of the bill that passed the House of Representatives, but didn't pass the Senate, as well as some other suggestions and recommendations from people like Senator Corker from Tennessee.

Q But some of the specific measures -- for instance, getting the auto workers union to have competitive wages and work rules - that's a target, that's not a restriction. If the bond holders are taking equity instead of debt, that's a target, not a restriction. When you met with Senate Republicans last week, you were quoted as saying: "If you let the Big Three collapse, the GOP will be remembered for years, again, as the party of Herbert Hoover." Once you made that argument, didn't you in fact give up your leverage to force concessions on the auto workers?

THE VICE PRESIDENT: I want to come back to the first part of your question, in terms of those conditions that we talked about with respect to the package. And a key consideration here is this notion of economic viability. And if they have not produced economically viable plans, that is if they haven't put together a program that will take them to viability, then those loans will be withdrawn, or recalled, in effect. So there's a strong incentive here for them to address these issues.

Now, you can only go so far. The Obama administration ultimately is going to be the one who is going to have to resolve this issue. We've got about a month to go here, and then it will be a problem they have to deal with. But what the President tried to do, and I think did successfully, is to make certain that companies are able to stay in business for a period of time here, as well as encourage them to move in the right direction in terms of restructuring.

Q But it isn't just me, there are a lot of top Republicans -- infact, Republican leaders of the House and the Senate have sent out notes blasting the administration's solution. They say it isn't tough enough, it is too encouraging, and not with enough teeth in it. And they also criticize you for opening up the so-called "TARP money," the $700 billion that was supposed to go simply for financial relief. And they say, look, if you bail out one industry that's in trouble, what happens the time the next industry comes up, the retail industry, and says, we need a bailout?

THE VICE PRESIDENT: Right, but remember that you're dealing here with the automobile industry. It's a massive industry. It's got millions of jobs connected with it. There are all the suppliers that are affected by whatever happens to the companies. And those same suppliers, frankly, supply a lot of parts to the rest of the automobile industry that's not in trouble. It's a very big, complicated problem. And the President decided specifically that he wanted to try to deal with it, and not preside over the collapse of the automobile industry just as he goes out of office. I don't think that's an unreasonable position for him to take. And I do think we did -- obviously I can't speak for the Obama administration, but we did keep them apprised of what we were doing as we went forward.

So I think the situation is made doubly difficult -- it would be tough enough to have to deal with this question of whether or not the companies can survive under normal circumstances. These aren't normal circumstances.

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