the republican presidential candidates or in new hampshire for the first presidential forum on monday at 7:00 p.m. eastern and c-span is providing live coverage on c-span, c-span radio, and c-span.org. following the live for them, you can provide your input by joining our call-in program or add your comments on facebook or twitter. road to the white house 2016 on c-span c-span radio, and c-span.org. >> here on c-span, newsmakers is next with republican senator richard shelby of alabama. chris christie talks about national security at an event in new hampshire. 8:00, our conversation on q&a.

host: returning to "newsmakers" this week is senator richard shelby of alabama. senator, think you being our guest. sen. shelby: thank you. host: let me introduce our two reporters who will be questioning the center this week. susan ferrechio and victoria mcgrane. victoria: just this last week, the senate appropriations committee included in a spending bill and over 200 page spending overhaul package that you put together. democrats were very upset about this. they said it was inappropriate. what was your goal ?they said it

? what were you trying to achieve by attaching this bill to the appropriations committee? sen. shelby: first of all, we were not doing an end run. i think everything is kind of a frontal attack. it is not the first time the democrats have seen anything in the appropriations bill because they have done it for years and years themselves. why we are doing this is because we are trying to get the attention of the democrats, and i believe we have. we have two trains running now. we have the appropriations bill, where we have first of all penetrated the myth of dodd frank twice already through legislation there. i believe we have two avenues to run on. we will see what happens. we are open for business with the democrats.

they're back channels going. there is no formal negotiation yet, but it is early. it's a long time for this session. victoria: some people say it is getting late. congress will now be out of session after next week. you will be all gone until september 7. that leaves you with not a lot of time to settle some big issues, including government funding, your legislation, highway funding, you have the vote on the iran nuclear deal. do you really think all of that, including your legislation, then -- that anything can be accomplished in that timeframe? sen. shelby: it is a timely question that you are asking. we will come back after labor day, a week after labor day, and based on my history, until christmas. there will be starts and stops dealing with funding. the democrats, as you know, they want more money for their programs. a lot of us would like more money, if we had it, for national security, because this is a trouble world that we live

in. what will happen as far as negotiations down the road probably nothing for a while but there are already talks going on. we will see. i don't believe anybody wants to shut the government down. we will have some continuing resolutions, i believe. we will see what happens. victoria: so, past september 30, working on stopgap funding until then? sen. shelby: absolutely. veterans of this city and what is going on, people are jockeying for position, they always have. this has gone on, and will go on. probably not a lot will happen until probably thanksgiving, something like that, unless something breaks loose. host: when you talk about the overall mood of senators on capitol hill?

we all get the coverage, but what is it like? you say you are open for business. is that true among most people in most parties? sen. shelby: i wouldn't say everybody is. i think there is a lot of tension in the senate, and in the house too, and there is tension within our caucus too. it has manifested itself in recent days. we have a lot of people running for president of the united states out of the senate. that brings a different dimension to everything. and, i guess, a different perspective. victoria: you have been in the senate a longtime. can you hearken back to other points when there was a little bit of a disagreement within the republican conference and senate like we're seeing right now? sen. shelby: it is probably more

attention than i have seen in a long time. i go back to when senator dole was majority leader. he ran the senate well, i thought. people didn't surprise each other. i don't recall senators on either side attacking each other. this is a different game today. victoria: why do you think that is, what has changed? sen. shelby: that is a good question. i don't really know what has changed other than there are a lot of people trying to run for president. there are a lot of people that have got different issues. they want it now. they want it to happen immediately. they want to change things immediately. people come to the senate sometimes, and they want to run the senate. it doesn't work that way. there is a lot of tradition here. host: you said he don't think

anyone wants to shut the government out, but some republicans, including senator ted cruz, have raised the possibility of doing just that when it comes to this effort to defund planned parenthood. you think that is a scenario that could play out? sen. shelby: i would hope not. i would hope we never shut the government down. it is not good for the republicans. it is not good for the democrats. it is not good for the country. it sends a message that we are ineffective. i think there will be a lot of getting up to the line, there always is. it is in nobody's best interest to shut the government down. host: how do you think you will result that? on monday, there will be a vote on the senate floor about standalone legislation. there has been some controversy surrounding the organization. there have been videos of members of planned parenthood. it has brought this legislation in both the house and senate as big topics of discussion.

do you think the planned parenthood bill will move forward in the senate? if it doesn't, what is next for the issue? sen. shelby: we will have to see what happens monday. if tradition or history is a guide here, the democrats more than likely will vote against it, filibuster it. we need 60 votes to move forward. we will have to pick up some democrats. will we? that is always the question. if we don't, then we go perhaps to cyber security. that is what senator mcconnell has told us. host: do you think you can get cyber security done by next week? sen. shelby: that is a big ticket. it is very complicated. it is beginning to permeate businesses, government agencies, as we have seen, and there is no quick answer to it. it is a question of how do we attack it? do we fund it? host: you are not sure you will

get that done in a week plus time. -- week's time? victoria: i would like to ask you about nominations. you got a letter this week from the democrats on your committee, raising concern that you have not held any hearings on -- i think there are 11 nominees before your committee at this point. why haven't you scheduled -- i know you have one scheduled for september, but why have they not been other hearings? sen. shelby: several reasons. let's talk about the federal reserve board of governors nominees. they sent up one nominee in winter sometime. i said, look, you have another opening, send us another one. they dithered for months and months. they finally sent one up. we are investigating. once that is done, we will announce some hearings on that. i did announce, you alluded to the fact, the terrorist finance

stuff. it is an important job. i don't think we have missed a beat. we will announce a hearing and try to move that nomination forward. victoria: and the others? sen. shelby: some of the others, we will look at them. some of them are controversial some aren't. i think it is a relative thing. we have been busy. we have been very busy, as you know. a lot of you cover the banking committee. we have things, legislative priorities, or potentially ones bigger than nominees. nominees are important. the other thing, let's go back to the fed. i will talk to the fed chairman about fulfilling the statutory roles. victoria: supervision. sen. shelby: that has never been done. i think it ought to be done.

i think the fed needs all the help they can get. to sit around and not fulfill a statutory requirement of the fed -- so, this is a good time for us to talk when we get back. they want the nominees. we want them to follow the law. victoria: would you be talking to the white house as well? i think the fed answer to that question is up to the president. sen. shelby: we generally talk to the fed first. host: speaking of the fed, there has been a growing call over years for an audit of the federal reserve. i believe you are not a proponent of that route, but maybe something a little more moderate. can you talk about why that is. sen. shelby: a lot of people have called for an audit of the fed for years, but they already audit the fed. if that is what they are talking about, but i don't believe they are talking about just an audit. they are talking about monetary

policy. they are talking about probably 435 members of the house and 100 senators getting into the day-to-day business of the monetary policy of the fed. we created the fed, congress did, to get politics as far out of it as we could. i don't think we need politics back in it. i have been a big critic of the fed at times. i have asked those questions. i do believe we need more oversight of the fed. we have had testimonies from very smart people before the fed, that follow the fed, that know a lot more about the fed than most people in the country, that say the house and the senate need to do more oversight. they need to know what the fed is doing, and why they are doing it. host: how do you accomplish

oversight without an independent audit. sen. shelby: we have sent signals that we plan to do more oversight. we will see what happens. we will be busy. i think the house sees that too. going back to an audit -- an audit per se is politicizing the fed even more than it probably is. i don't think that is good. having said that, everybody here knows that i have raised some tough questions with the fed and will continue to do so. victoria: when asked about her bill, chairwoman yellen said that she did not know what the problem was, she did not know what actually needed to be fixed at the fed. what was your response? what did you think? sen. shelby: i didn't really respond to it because i was not at the press conference. victoria: sure, bottom-line. sen. shelby: obviously, she is the chairperson of the fed. they probably like what is going on. they also know that there are a

lot of people academics, , watchers of the fed, very smart economists, that have asked a lot of serious questions about the fed. especially in quantitative easing. i remember when that started. the fed still has a huge balance sheet, huge one, historically the highest ever. someday they will have to deleverage that balance sheet, and they don't know how yet. they will tell you that if you ask a series question. they know. she she knows they have knows they have problems. i think that she is careful. she's tried to be a conservator of the status quo. if we didn't have the federal reserve, i believe we would have to create the federal reserve, a central bank. but to turn the federal reserve lose and have no oversight of

them, and think -- they are not perfect is folly. host: we are halfway through. susan: your colleague in the house is one of the most dutch opponents of the export-import bank. what do you think is going to happen? it really does seem up in the air. it does not have a path to revival. do you see any way for the bank to come back? a lot of people are wondering about that right now. sen. shelby: you can kill something in here, or something can die and it reappears and is robust and alive. the export-import bank, i had two days of hearings on the merits -- do we need it, do we need to reform it? basically, the president didn't want any reform. they like the status quo.

nearly 99% of all exports in the united states have nothing to do with the export-import bank. so something is wrong. boeing, ge, and a few others they will throw a lot of small business suppliers in, but for the most part they can buy banks. they are so big. ge had a non-bank bank. it is a government supported relic, new deal. i would like to get rid of it. susan: boeing is now saying, if we do not see a revival of the export-import bank, we will move our business overseas. how do you feel about that? sen. shelby: they will do that anyways. there are no different from any company in the world. they are multinational, in a sense. they have suppliers all over the world. i think that is a bluff.

the real question you asked, will it be revived -- i don't know that. the longer it is dead, the harder it will be to resuscitate. susan: you have 64 or 65 senators who want to see a come back to life. sen. shelby: it could. it could come back to life. they have spent millions and millions of dollars to lobby for it here. it's not good for the country in my judgment. susan: just to clarify, you support completely abolishing it? sen. shelby: there is no way to reform it because the big users did not want to reform it. i think it needs to go. victoria: a little bit of a different subject. everybody is talking about the ability to obtain a mortgage here in the united states. new homebuyers, i can't get a mortgage, much tougher, and now you have the banking association saying, we need to make some changes here so people who are

new homebuyers don't have to jump through so many hoops to get a mortgage. how do you feel about those requests coming from the baking industry -- banking industry and people trying to get a home? sen. shelby: i have always thought that people who borrowed money for houses or buildings ought to have some skin in the game. they should put something down in the housing equity, so to speak. one of the problems with our housing crisis, not the only one, was nothing down, basically. subprime stuff. look where we got. i promoted homeownership in this country. i thought it would be good. i don't think it is a panacea for everybody. europe, they don't have

the homeownership that we have. i don't know what it is. we are about 67% or 68% at one time. that is probably pushing the envelope. i would go back to -- we want sound banks. if you want sound banks, you need a mortgage system where people have skin in the game. victoria: you wouldn't be in favor of letting up on those at all? sen. shelby: i would see what they are, but in terms of making loans to bad credit people, you know what the result will be. it is common sense. susan: on the senate bill passed just this week, you raise concerns about the measure to reduce dividends for banks on the shares that they own. how concerned are you that that is going to stay in a final bill once it conferences in the house ?

sen. shelby: you never know will stay in or out, but i believe that will be out. the house has sent signals on this but nothing is definitive. if you look at that, it would weaken the baking system. we always want to strengthen the banking system. in addition, one of the funding bill had to do with mortgages from fannie mae too. take money out of that. i believe, and i told the leader this, i have told my colleagues this. i said, that is no way to fund the highway system. there is no nexus, no connection between that. we have funded the highways through gas or diesel fuel tax for years. there is a connection. everybody knows that. is there a connection between all of this other stuff? they were trying to back in some revenue. i believe the house will look at it differently. i don't know what will happen, some kind of conference. will we get a highway bill? i hope so.

we need one. we need some certainty there but we need to fund it the right way. victoria: an increase on the gas tax? is that something you might -- sen. shelby: i would not propose that, but i'm saying that is what we have historically done. there are other ways that would -- that we could raise it short of destroying or weakening our banking system. i believe in the house there are some suggestions that we can repatriate some of the money back here and use some of that money for highways, which would be a good way to rebuild our infrastructure. susan: that is a proposal in the senate as well. would you be in favor of that plan? sen. shelby: i would like to look at it closely, but it sounds much better than what we have today. host: we have five minutes left. victoria: to get into some presidential candidates, rick perry was the latest candidate

to suggest separating retail banking from investment banking. what do you think about these efforts to reimpose glass-steagall today? also, do you think it is good politics for republicans to be talking about wall street and financial reform? it seems like it is coming up quite a bit this year. sen. shelby: wall street will take care of themselves. i have followed them for years and have friends there. at the same time, wall street will be with us because of our capital markets. we need them. glass-steagall -- under glass-steagall, when we separated commercial banking and investment banking, we had very few bank failures. remember that. but that is history now. it was 1999. the question is can you reinvent the wheel? can you put the toothpaste back in the two? that is hard to do.

there have been a lot of movement to separate the investment. i don't know if we will ever go back to where we were. it is hard to go back to where you were. i do believe that if we have strong banks with strong capital, well-regulated, well managed banks with strong capital, whether commercial or investment banks that's right. susan: i can't avoid presidential politics. do any of the now 17 contenders interest you? anyone stand out? and what do you think of donald trump? sen. shelby: donald trump is an interesting guy right now. i guess the polls reflect that he is probably saying what some people are thinking. how long he will last and so on nobody knows. , he has the attention of the news media and everybody else for the moment.

we will see. it is a long time until january. it is going to be a tremendous shakeout. i guess there will be some more people who will announce for president. we just had another one. susan: we are at 17 now. sen. shelby: governor gilmore, and others. there will be a shakeout. i wish them all well. it will only come down to one or two. victoria: and one that you like so far? anyone you would like to mention ? i am running for reelection myself. i like them all. i'm not endorsing anybody. susan: i wanted to go back to the strength of the banking system. maybe we can in inend there

today. what can you tell americans about the state of their banking? sen. shelby: overall, i believe the fed chairman would say, i believe it is stronger than it was 80 years ago. it is still not perfect. we have not eliminated the specter of too big to fail. we played around with it. i like what dr. holter used to say, if it is too big to fail, maybe it is too big to exist. nobody wants to visit the taxpayers to bail out. i think the market ought to work. if you make it in the market fine. some people don't believe that. the regulators have some huge challenges that are still there. they keep improving. they could have more capital and not enough liquidity. we have seen that in the bond market. you have to have liquidity. otherwise, you will have chaos.

maybe that is something. i'm not trying to be the regulator, but these are things we talk about and suggest. susan: is there anything for congress to do when it comes to getting rid of too big to fail? sen. shelby: i think congress could have been more explicit. rather than going through living wills and everything that goes with it. i know what they were trying to do. the question is will the regulators with the fed let them fail in the end? i remember i was on the banking committee when chrysler, ford, general motors, these industrial companies, came before the banking committee. chrysler and ford wanted a huge bailout. ford said, we don't want any money. we will live or die in the marketplace. and they flourished. some of the banks will flourish, i think, if they have strong capital, good management, good regulations.

susan: on that we will say thank you. we appreciate you being here on the final week before the senate adjourns. we wish you a good recess. sen. shelby: thank you. host: "newsmakers" this week spoke with richard shelby of the senate banking committee. we are back with our two reporters who questioned him. the discussion is over. where is it going? -- where is this discussion going? victoria: interestingly senator shelby's bill did not include

provisions. it had been read by some that he was really trying to find something that he could pass that he could get some democratic support for. what happened was he got that bill attached to an appropriations bill. also included in that bill were some measures to suggest the tspb to the appropriations process, to replace the director with a board. these are nonstarters for democrats. the question is -- we saw the last time that congress did a n omnibus to pass bill at the end of the year. those became bargaining chips because the administration is so opposed to anything like that happening, they were able to -- republicans were able to get other things they wanted in exchange for dropping things out of there. that might be what that's about. i really think that president obama would veto anything, maybe

even if it ends in shutting down the government because that is so essential to dodd frank. susan: and as long as elizabeth warren is in the senate, where does this -- susan: the consumer financial board was put in place to protect consumers. they want the board in place to be watching over the banking industry to make sure that we are not charged excessive fees that we are getting a fair shot at mortgages. republicans think they go too far and are over regulating and stifling industry. that is where the clash is. i don't think it is the end of the fight of the cfpb. republicans in many ways are biding their time, looking for

bipartisan legislation now that they can show they are able to accomplish a lot on behalf of the american people so they can maybe a peel to voters who are looking ahead to the presidential election. they feel like if they can get the white house, and keep hold on to the house and senate, they will be able to move their agenda forward, rather than looking like they are just fighting right now with the administration. that is not a picture they want to portray for the public. it does not do well at the polls. people look at the republican party as getting in the way and being obstructionist. they are trying to shed that image. that is why you see big legislation like shelby financial reform legislation move forward and looking more bipartisan than you might expect from the republican party. susan: his expression was "open for business." host: there are two major leverage points coming out in the fall.