A Few Things The Deficit Commission Agreed On
SCOTT SIMON, host:
We're joined by a member of the president's debt commission, Alice Rivlin. She's a senior fellow in the economics studies program at the Brookings Institution. We spoke with her yesterday from her office in Washington, D.C.
Dr. Rivlin, thanks very much for being with us.
Dr. ALICE RIVLIN (Brookings Institution): Delighted to be here.
SIMON: So can you tell us what the deal breakers were?
Dr. RIVLIN: Well, I don't know what the deal breakers were.
SIMON: Differences of opinion that prevented...
Dr. RIVLIN: There were negatives and positives. And most people thought that it was a very credible plan. Some people said they would support it, although they would have wished one thing or another - I was one of those. And some people said they can't support it but they thought the effort was very much worth it and they supported many things in it.
So it came out with 11 votes out of the 18 for the plan. But I read most of the others as somewhat supportive or at least not in denial that we have a huge debt problem and that we have to have a bipartisan solution.
SIMON: But it does raise the question - if you 18 people who share a sense of urgency and apprehension and much of the same information now and have been all over these issues, if you can't get more than 11 votes for a plan, how can squalid, sordid politicians do it?
Dr. RIVLIN: Well, first place, these were squalid, sordid politicians. Most...
SIMON: Well, but...
Dr. RIVLIN: Most of them. Not all. But remember, many of the people on this commission are sitting members of Congress with very significant leadership responsibilities. They don't want to tip their hand this early. For example, one of the major things that we talked about was a drastic reform of the income tax. Most people think that's a good idea, but the members - the chairmen of the tax writing committees are not going to have a tax bill written in a commission. They want it written in their committee.
So I don't think it necessarily means that there is no potential agreement.
SIMON: What would you urge the president to do now with this report?
Dr. RIVLIN: I would urge the president to take a look at this report and others. I've participated in another group that I co-chaired with former Senator Pete Domenici that also has a credible set of deficit-reduction actions. I'd urged him to look at all of these things and to craft his own plan and put it in his budget and then begin negotiating with the Congress over it.
I think there is a will in the Congress to come to some kind of agreement. As co-chairman Bowles put it, most people are not in denial about the deficit problem anymore. So the president's got to get into the leadership and work out a major deal with the leadership of the Congress. And it won't be easy and it probably won't be all done at once, but unless we get on top of this problem quite soon, we're going to have a catastrophic debt crisis that could sink our economy for a very long time.
SIMON: And is it hard to work on deficit reduction in a time of high unemployment?
Dr. RIVLIN: Yes. This is the worst time to be doing it, but it's the time we happen to be in. It would be much better if the economy were growing faster. For that reason, I believe we need a stimulus up front. A payroll tax holiday for one year would put a lot of money into people's pockets and provide some incentive for hiring. That could be done right away and paid back later.
But at the same time, you need to put in place a serious deficit reduction plan that gradually phases in over the next few years so that we can show our creditors that we're serious about living within our means and getting our rising debt under control. Because at the moment it's out of control.
SIMON: Alice Rivlin, member of the president's National Commission on Fiscal Responsibility and Reform, also a senior fellow at the Brookings Institution. Thanks so much for your time.
Dr. RIVLIN: Thank you.
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