Obama's 2012 Budget: What About The Deficit?

Political wrangling began almost immediately after President Obama released his 2012 budget. NPR's Scott Horsley explains what's in the plan, and The New America Foundation's Maya MacGuineas and Ezra Klein of The Washington Post offer their views on how to get the federal deficit under control.

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NEAL CONAN, host:

This is TALK OF THE NATION. I'm Neal Conan, in Washington.

Earlier today, President Obama defended his 2012 budget at a White House news conference. He claimed his plan would put the country back on track to balance income and spending by the middle of this decade, and then appealed for patience on critical negotiations on the tough issues, Medicare and Medicaid, Social Security and tax code reforms.

Congressional Republicans want to begin sooner and cut much more deeply than the president would like, and many critics - not just Republicans -accuse the president of a lack of leadership when he put forward no specifics on those big entitlement programs.

With government divided between Republicans, who control the House, and Democrats, who control the presidency and the Senate, both sides will likely to have to compromise. What would you compromise?

If, for example, you're a farmer, are agricultural subsidies on the table? Give us a call: 800-989-8255. Email us: talk@npr.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.

Later in the program, the "Jeopardy!" computer challenge: Human champion Ken Jennings will join us.

But first the budget, and we begin here in Studio 3A with NPR White House correspondent Scott Horsley.

Scott, nice to have you back on the program.

SCOTT HORSLEY: Good to be here with you.

CONAN: And let's set the table: a short, medium and longer term. The first argument I guess is over spending for this year, 2011. That's where House Republicans want to begin.

HORSLEY: That's right. You know, Congress never got around to actually passing a budget for the year that we're in right now. So we're operating on the sort of stop-gap measures. And the one that we're operating under right now, the government's operating under, runs out in early March. So they've got, you know, just a few weeks to figure out what to do about that.

And the Republicans want - the House Republicans, in particular, want pretty deep cuts for the current fiscal year.

CONAN: These are called rescissions. These are programs that, at least theoretically, the money's already been appropriated.

HORSLEY: Well, yes, but the, you know, the money runs out as of the end of March. So they have to kind of figure out what happens from that point on.

CONAN: Okay. Then the president's budget is for next year, or least next fiscal year, 2012.

HORSLEY: The fiscal year that starts in October. That's right.

CONAN: And so he's talking about freezing all non-defense discretionary spending. We're going to get involved in some terminology, here. But that's about 12 percent of the budget. He says you freeze that for five years, you're going to get the government back on track to balancing its income and its outgo, its spending.

HORSLEY: Well, and he acknowledges that this is a small sliver of the overall budget, and that more will need to be done over the longer term to deal with our fiscal issues. But this is the piece of the budget that everyone has the most discretion over. It's not mandatory spending like Medicare or Medicaid or Social Security. It's not defense, which is harder to deal with politically, although there are some defense cuts in the president's plan, as well.

But this is the piece of the budget where, every year, these things have to be appropriated. So it's the most flexible part of the budget. It's also the part of the budget that covers a lot of programs. And so a lot of those folks are going to be feeling the pinch if, in fact, the spending is frozen. Now, what the president wants to do is spend -freeze the bottom line, but spend more in some areas, less in others.

CONAN: So he wants to maneuver that money around a little bit - more on education, for example, and less on, well, some things that he says are very dear to him, for example, Community Block Grants.

HORSLEY: That's right. He, of course, started his career as a community organizer and wouldn't, in better times, be cutting funding for those kinds of programs. One that's drawn a lot of criticism from his fellow Democrats is a plan to cut in half spending on heating aid for low-income households. There are others that would take a hit.

He - the White House says, yeah, these are painful cuts. But if you don't like these, where would you cut instead?

CONAN: And then Republicans say: This is just trimmings, and it's not even beginning to address the real Magilla, the gorilla in the room, and that's the entitlement programs. If we're going to make real progress on cutting the debt, you're going to have to cut entitlements.

HORSLEY: Well, that's true, although in fairness, the Republicans are also, for the most part, playing on that small corner of the playing field, which is the discretionary, non-defense part of the budget.

CONAN: And that includes things that, for example, foreign aid, everybody on one side wants to cut that. On the other side, it includes agricultural subsidies. We mentioned farmers before. It includes spending on things like - well, like what for example?

HORSLEY: Well, yeah. Foreign aid is everyone's favorite punching bag. That's the one thing that is least popular in the federal budget. It's also a very tiny sliver of the budget. So even if you wiped out that account altogether, you wouldn't save a lot of money.

You mentioned farm subsidies, education, the FAA, all sorts of things -transportation projects. All sorts of things fall in that category.

CONAN: And we want to hear from you. Your particular ox, would you be willing to have it gored? Give us a call: 800-989-8255. Email us: talk@npr.org. What compromises would you make in areas where you see some federal subsidies or federal support for things that you deem important?

And we're going to add two voices to the conversation. We'll begin with Ezra Klein, who joins us from his home here in Washington, D.C. He's a columnist for the Washington Post and writes about economic and domestic policy.

Nice to have you back on the program.

Mr. EZRA KLEIN (Columnist, Washington Post): Good to be here.

CONAN: And also with us is Maya MacGuineas, president of the Committee for a Responsible Federal Budget and director of the Fiscal Policy Program at the New America Foundation, and joins us from the studios at the foundation here in Washington, D.C.

And nice to have you with us today.

Ms. MAYA MacGUINEAS (President, Committee for a Responsible Federal Budget; Director, Fiscal Policy Program, New America Foundation): Thanks for having me.

CONAN: And I want to begin with you, Ezra Klein. You pointed out recently, yes, this is a very tiny little corner - well, 12 percent, maybe not tiny. But you said if you're looking at it as a diet plan, it's like talking about cutting back on your canapes.

Mr. KLEIN: It isn't that much. And more to the point, the reason they do it - and I think this is very, very important to understand - is because a lot of parts of so-called non-defense discretionary spending are politically weak.

So the education system, you know, not that politically weak, and that's mainly getting protected. But food safety? How many people are standing up for food safety? Definitely not as many as are standing up for Medicare.

But what that means is that this corner of the budget - because it's always the one we're looking at for cuts - ends up getting run over quite a bit. And so it ends up being, actually, in many ways, one of the cleaner parts of the budget.

There's a lot of, you know, what I think many policy experts would say is waste, fraud and abuse in the Defense Department, in Medicare, in the tax code, because those don't actually get picked over quite as often, although Medicare came in for a lot of reform in the recent health care bill.

But in non-defense discretionary, there actually isn't as much as people like to think. It's getting attacked because it is politically weaker, but it actually means it is a place where you're making cuts in a lot of programs that are already pretty lean or already pretty high-value, which is not really a great way to organize your deficit-cutting strategy.

CONAN: And Maya MacGuineas, in a recent piece that you wrote, you suggested that by concentrating on that area, Republicans might have that blow up in their faces. Meanwhile, the president is derelict in not addressing the real issue, those entitlement programs.

Ms. MacGUINEAS: Well, I think that both of them are not addressing the real issue right now. So the focus on domestic discretionary, not only is it sort of the part of the budget that, as Ezra points out, goes under more scrutiny on a regular basis. It's not the part of the budget that's growing so fast as to cause the pressures. It's not growing faster than the economy.

It did grow very fast under the Bush administration, due to some policy choices they made, but it isn't doing so on automatic pilot. The problems we have are the parts of the budget that are automatically growing so fast as to squeeze out other priorities, and those include retirement programs, health care programs and a lot of the spending programs that are run through the tax code, known as tax expenditures.

And so I think the over-focus on this part of the budget by both the White House in their budget and the House Republicans, it's not as bad as just focusing on earmarks. But once again, we're having a national discussion and battle, and we're missing the big picture here and we're losing important time, because time is sort of working against us in that you want to reform entitlements in a way that's thoughtful and gradual. With each year that goes by, that becomes a little bit more difficult to do.

CONAN: But doesn't - isn't symbology sometimes very important, that if you're talking about making painful cuts and compromises in one area, maybe that same spirit will then move you on to compromises and deals in other, more difficult areas?

Ms. MacGUINEAS: Well, you know, that's a great point. And in past years, I sort of made the same point of that, the symbolism of making cuts. We could not afford to have any more bridges to nowhere, because that undermined people's confidence that their tax dollars were being spent well, and they weren't willing to make the real sacrifices in the budget.

But as a result of the terrible economic recession that we've gone through and the high sort of cost that that takes on the economy, we now don't have as much time to sort of go through symbolic cuts and then pay freezes and then gradually, ever-so-gradually, get to the real parts of the budget.

And what we have right now, I think, is a missed opportunity in that we had this fiscal commission that the president set up and came out and made recommendations to all parts of the budget. And it saved a very impressive $4 trillion over a decade. It had bipartisan support. It showed the parameters of all the things that would have to be part of a solution.

And I feel that the president probably lost an opportunity by not putting that in his budget and using it as a starting point, because we have to move past symbolism now. We have to move towards real, comprehensive, dramatic solutions as soon as we can, because we just don't have the luxury of time.

We don't know at what point credit markets start to get nervous: Hey, when is the U.S. actually going to fix this fiscal problem? So we'd like to make sure we get out ahead of that risk.

CONAN: I'll get to Ezra Klein in just a minute. But Scott Horsley, the president pointed out in his news conference today, Maya MacGuineas pointed out, yes, bipartisan support, but well, not across the board. People like Paul Ryan, the chairman of the House Budget Committee, well, he didn't sign onto that.

HORSLEY: Well, that's right. And just yesterday, we had Congressman Ryan complaining that the president was showing a lack of leadership here by failing to push the deficit commission's recommendations. And as the president pointed out, well, Ryan himself was on the commission, voted against those recommendations, and he pulls a lot of weight as chairman of the House Budget Committee.

CONAN: Ezra Klein, as you look for the prospect of compromises - not just on this little corner of the playing field that you've been talking about, as difficult as that's going to be. Then you get on to these big areas - Social Security, well, usually identified as the third rail of American politics.

Mr. KLEIN: That's it. That's a toughie. But I want to go - absolutely. And the entitlements are always, when you come to growth, the key. But we need to, I think, put these in a couple different buckets, here. One is a question of what time period we're talking.

Over the next 10 years, nothing you do to Social Security, nothing you do to Medicare is going to save you much money, because you're not to affect current beneficiaries. Nobody would do that. We're not going to tell somebody who's 72 and living off of Social Security we're cutting their checks. It isn't how we work in this country. We're more decent than that.

So I do think one thing that does get forgotten in this is that the easiest way to fix our budget problem in the short term - not in the long term, but in the medium term - would just be to let the Bush tax cuts expire in 2012. And that should, when we're talking about these things, be on the table.

But then you go into these questions of what do we do about the longer-term programs that, as Maya says, are on autopilot? And this is particularly health care.

And the one thing that I do think people should consider - and I don't know if it's true or not - is that this is the first step in an ongoing negotiation. As I see the politics of this playing out, you have the -the Obama administration basically said: We are not going to be the first to stick our head out. We are not going to be the first to say we want these Medicare cuts, these Social Security cuts.

They got hammered for Medicare cuts in the health care reform bill. That was one of the most unpopular parts of the bill, and the Republicans were gleeful in using it against them. So they decided to not take a further step.

Now, Paul Ryan, at that press conference yesterday, got hammered by reporters. They said: What is your plan on entitlements? And he kept saying: I don't have one yet. We are going to make one. My budget isn't done. You have to give me time.

Well, given what he's argued, he's got to come up with one. And at that point, the administration has got to say yeah, we can get on board with that and negotiate over it, or they can hammer him with it. But it's got to be a two-sided negotiation now.

CONAN: All right, well, we want you to stick your head above the parapet. Callers: What ox that you have from the federal budget would you like to see gored? Well, you'd accept, anyway.

Stay with us. It's the TALK OF THE NATION, from NPR News.

(Soundbite of music)

CONAN: This is TALK OF THE NATION. I'm Neal Conan in Washington.

And President Obama has released his budget for 2012. It's the opening bid in what's sure to be a long and highly political negotiation and one that's not likely to be over soon. What would you compromise on?

This is an email we have from Dee(ph) in Tallahassee: I've made several trips to various Senate and House offices, both locally and in D.C. I've been amazed at the office space and the number of staff. How much funding does each representative and senator receive to cover their expenses? How much of that could be cut?

And this from Lydia(ph) in Los Angeles: I'm a 63-year-old woman with no pension, no health insurance and no savings. I'd be willing to take a cut in my own future Medicare and Social Security benefits if people with incomes over $250,000 would do the same and if we pulled out of Afghanistan and spent the money on education in underserved neighborhoods. Tough negotiator, Lydia is. I ask other baby boomers what would you give up for the sake of the country's future.

All right, give us a call, 800-989-8255. Email us, talk@npr.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.

What part of the federal subsidies that you have a part of - if you're a farmer, for example, agricultural subsidies - would you be willing to give up as part of your compromise?

Our guests: Scott Horsley, NPR White House correspondent here in Studio 3A; Ezra Klein, a columnist for the Washington Post; and Maya MacGuineas, who is president for the Committee for a Responsible Federal Budget and director of the Fiscal Policy Program at the New America Foundation.

And let's see if we can get a caller on the line. Let's go to Mark(ph), Mark with us from Philadelphia. Mark, are...?

MARK (Caller): Yes, I'm here, hello. Can you hear me?

CONAN: Yes, you're on the air, go ahead, please.

MARK: My recommendation was - I'm on Medicare, and I get Social Security, I'm retired. However, I, you know, have a decent pension and so forth, and I believe that people could contribute after the $150 deductible, per office visit, instead of having it be fully paid. And I have a wrap around insurance policy, and there ought to be a means test.

If you can afford it, you ought to pay a basic $15, $20, $25 fee to your physician so that the people who can't afford it, you know, can keep their (unintelligible) program.

CONAN: Let me ask Scott Horsley. This is an idea that has come up in various conversations, certainly during the health care debate last year, and again this time: means testing those who receive government benefits, not just Medicare but sometimes Social Security, as well.

HORSLEY: Well, that's right. It's interesting. We've heard now from a couple of very public-spirited public radio listeners who say they are willing to give up a little bit of that. That may not be representative of the country as a whole.

Ezra mentioned in his column today this Pew Research Center study that came out last week, where people were asked: Where would you cut? And there was almost - there was no government program where a majority of people wanted to see spending cut.

Even foreign aid, which we talked about as being the political punching bag, less than 50 percent said cut foreign aid.

When it came to programs like Medicare, it was in the single digits who favored a cut. So it's encouraging to hear that some of your listeners are willing to make those kinds of sacrifices, but they may not be representative of the public as a whole, and that's what has got the politicians so scared.

CONAN: Maya MacGuineas, though, is means testing for programs like Social Security, in other words, if you're making over a certain amount of money, should it be taxed, or Medicare benefits, are those the kinds of things that are going to be on the table?

Ms. MacGUINEAS: I certainly think so, and I certainly think that they are the kinds of things that should be. I recently sort of wrote a column about how I think that both Republicans and Democrats have many of the right priorities in their agendas.

In the State of the Union, the president talked about the need for more, additional investments in this country. And I couldn't agree more. We've been under-investing not just for years but for decades, and it really has a dangerous, long-term effect on our economy.

And I also share more conservative sentiments that if we overtaxed at too much of an extent - I'm certainly not worried about where taxes are now, but if we sort of try to tax our way out of this whole problem, we'll really stifle off innovation and growth.

And I also obviously come at this from a point of view that we should pay for what we spend. So when I look about the budget, and I think about where we should be cutting, I really think refocusing our consumption-oriented programs towards investment and to help reduce the deficit by means testing, pulling back on benefits for people who don't need them, is one of the most sensible and sort of modern approaches to budgeting that we could make.

Now, I will say that when I wrote that this week, I got an awful lot of hate mail. So I will say it's not necessarily the most popular idea. A lot of people feel that they've paid into all these programs, and they deserve everything they're getting.

Not necessarily true. Recipients in Social Security and Medicare tend to get a great deal more benefits back compared to what they actually contributed. So I think if there were a sense of understanding that, to many ways, these programs subsidize the well-off, understanding that if we get ahead of these fiscal problems, we'll actually be strengthening the economy and leaving a better standard of living for future generations.

And, if went hand-in-hand with a sense sort of that your previous caller Lydia was saying, or your emailer, that it was part of shared sacrifice, that everybody was contributing, then I think a means test could be a very sensible path forward.

We have to tread delicately. People need to feel like they're not the only ones giving up something. We need to do this in a way that is shared and also that paints a better path, that the fiscal improvements will actually make our economy stronger for it.

CONAN: Ezra Klein, you talked about the unwillingness of either side to stick their head above the parapet, given the emotional nature and the passionate nature of people's support for some of these programs.

Nevertheless, isn't some sort of a compromise deal - the president talked about hey, you know, we've all got to talk about getting in the boat together so that it doesn't tip over.

Mr. KLEIN: Well, that's the question, right? I mean, can the Republicans come and say: Listen, revenues are going to be a part of this. We understand that we can't do this without some tax increases of some sort. We can't have taxes here and pay for the sort of state that, you know, the voters appear to want, given the support of Medicare and Social Security, and the Democrats, you know, come and make some similar concessions on the spending side.

I've not seen a ton of evidence of it right now. There is definitely work being done in the Senate, centered around Senators Mark Warner from Virginia and Saxby Chambliss from Georgia, where they're trying to bring those Simpson-Bowles recommendations, you know, into some legislative language.

And they've had a number of their colleagues, up to 45 of them at one meeting, come and express if not support, interest in this path. And that'll be really the place to look because I think what we've seen here is the president is not going to be the first one to make the big, grand-bargain move on this.

And I think we can look at what's going on in the House and say the Republicans are not going to be the first ones to make a grand-bargain move on this. They'll come out with pretty heavy cuts, but I've seen very little evidence they'll come out with anything even approaching a dime in new revenues.

And so it'll sort of be up to the Senate to demonstrate that there is some appetite at some power center in the political system for something more. But as of now, we don't have any evidence that there will be a majority, much less the needed supermajority to make that work.

So I'm not wildly optimistic, but if you want to watch somewhere, I would watch that project.

CONAN: You mentioned Simpson-Bowles. That's the same fiscal responsibility commission of the president's that Maya MacGuineas was talking about earlier.

Let's go to Dan(ph), Dan with us from Kalamazoo.

DAN (Caller): Hi.

CONAN: Hi, Dan.

DAN: I am absolutely of the opinion that taxes need to be increased for the majority of citizens in this country, and I think that we also need to cut defense spending. That is by far our largest expense.

And, I mean, personally, I would be willing to see my taxes raised if it meant greater benefits for the rest of the citizens of this country.

CONAN: But lower defense spending? How much lower?

DAN: You know, I don't really know the numbers on defense spending, but I think that it's ridiculous the amount that we spend on defense now.

CONAN: Ezra Klein, he calls it the largest ticket item. I'm not sure that's quite true.

Mr. KLEIN: Social Security is at the moment, and Medicare is bigger. But he is right about part of this. Defense spending is quite big. It's much bigger than non-defense discretionary. So that's - non-defense discretionary is about 12 percent, and Maya will correct me if I'm wrong, but defense is around 23. It's about double as big.

Now in the fiscal commission, they wanted to cut the two sides, defense and non-defense discretionary, by the same amount. So that would have meant something like $800 billion in defense cuts.

There was another group, called the Sustainable Defense Task Force, formed by Congressman Ron Paul and Barney Frank, that also had about -they recommended - and it was a panel of defense experts, really good people from both sides of the aisle - $950 billion in defense cuts.

The administration came in at $78 billion, and the reason they came in at $78 billion, which is pathetically small given what they're asking of other parts of the budget, is because essentially Robert Gates said I'm not going higher than that, and they weren't willing to risk or begin a fight with the Defense Department.

But yes, I mean, most experts on this issue believe there's quite a bit of room for savings there, for one of the reasons I pointed out before: Because we look at the defense budget so rarely, it is a place where a lot of waste and a lot of unnecessary projects can build up.

CONAN: And Maya MacGuineas, yet we see that even Republicans in their program for this fiscal year continue spending for something called the Alternative J-35 Jet Engine. A lot of the defense spending involves jobs programs for a lot of congressional districts.

Ms. MacGUINEAS: You've got it. I mean, that's one of the things that this - this loses the first principle of what are our security needs and how best to meet them, and moves on to economic and jobs and regional issues in a way that makes pulling back from defense spending even when the experts and those who are closest to the program say we should pull back, members of Congress oftentimes aren't willing to go there.

Again, I think one of the - I mean, I think there is a big question whether the political environment right now could possibly absorb a grand bargain. And it seems very, very difficult because it's so painfully polarized right now, with no signs of letting up.

But one of the interesting lessons that I think was learned from watching the fiscal commission and the work that was done and the fact that you had a bipartisan group of senators - very conservative and very liberal senators - in fact, signing on to it, was somethings that seemed incredibly difficult actually become easier when they're part of a whole package.

So defense and isolation creates a whole fight between Republicans and Democrats, and in fact, within the Republican Party. But if it's part of an overall package where you see that basically the bottom line is to get this fiscal situation under control, every part of the budget -defense, non-defense, Social Security, health care, taxes, everything is going to have to be part of the solution. And then, it starts to make it a little bit easier to go after what have generally been considered third rail.

Social Security feels easier to fix if it's not treated in isolation, and people feel that it's unfairly being beaten up on. So, yeah, defense gets a lot of defenders, but if it's part of a package maybe that would help to neutralize it.

CONAN: Scott Horsley, interestingly, the president said, today, he didn't think a deal on Social Security was going to be all that difficult or at least as difficult as a deal on Medicare spending, for example, where he said the issues are much more difficult - health care. But he said on Social Security, this is fixable within the margins. It's not, he says, one of the drivers of the deficit.

HORSLEY: It really is the simplest problem to fix, both mathematically and emotionally. I mean, we're not talking about, you know, changing health care for granny when we're talking about Social Security, the way you might be talking about if you're talking about reining in health care spending.

Yeah, Social Security really - when you look at the adjustments that would be needed in either taxes or benefits or both to make that sustainable in the long term, it's almost comical that we haven't fixed it already.

CONAN: So some of the proposals would include, for example, raising the retirement age for those who are now, for example, below 40?

HORSLEY: But, of course, I mean, any time you talk about any of these possibilities, you have partisans on either side screaming bloody murder. It really does create an environment where you can see why politicians are reluctant to go there.

But, yeah, we're - I mean - and if you do it all in the benefit side, it's a little bit harder. If you do it all on the tax side, it's a little harder. If you can compromise, you can make it less painful for everybody.

CONAN: And it's interesting. We mentioned the president and the Democrats being beaten up for changes in Medicare, in the health proposal, in the last election. Well, they beat up on the Republicans for even talking about changes for Social Security. So what goes around comes around.

HORSLEY: Yeah.

CONAN: It's on both sides. We're talking about the budget and the difficult cuts yet to come. You're listening to TALK OF THE NATION from NPR News.

And let me reintroduce our guests. You just heard from Scott Horsley, NPR White House correspondent. Also with us, Maya MacGuineas of the New America Foundation and Ezra Klein, a columnist for The Washington Post.

Let's see if we can go next to - this is Avery. Avery is with from Florence in South Carolina.

AVERY (Caller): Hey. Ms. MacGuineas actually mentioned, earlier, the means testing, and I think that's a wonderful idea because one of my biggest problems is, I'm actually a small orchard farmer in South Carolina, and we've got - farmers I know (unintelligible) friends who don't own an ounce of land but still get hundreds of thousands of dollars each year in farm subsidies for cotton and corn they're not growing, but they can show on their books because friends of theirs are growing it. And I just feel like, if you don't own a tractor, you don't deserve the money, you know? If you're not doing any actual labor. And these cotton farmers are promised 50 cents a pound on their cotton. And if it - the price of cotton drops below that, you know, the government is going to pay them that.

CONAN: Those are called price supports.

AVERY: Right. And that's ridiculous. I mean, we really ought to have market concerns and kind of laissez-faire feel about this sort of commodities.

CONAN: Maya MacGuineas, I think Avery might be, from a lot of people's sense, talking a lot of commonsense. On the other hand, he's probably not running for the Senate from a farm state.

Ms. MacGUINEAS: Well, I couldn't agree with his points more, and exactly, as you say, these things seems just incredibly sensible to anybody who's not steeped in politics, I suppose, kind of break down the political system too often. And so something like agricultural subsidies becomes, again, a regional issue when those on the outside would say, obviously, those who aren't real farmers shouldn't get price supports. And I'd go a little farther where Avery...

HORSLEY: That's right.

Ms. MacGUINEAS: ...might not be as comfortable saying maybe price supports across the board are something that had become more outdated.

HORSLEY: Even if you do have a tractor, maybe you should (unintelligible).

AVERY: I agree.

(Soundbite of laughter)

CONAN: Avery, thanks very much for the phone call. Appreciate it.

Ms. MacGUINEAS: But you know what I really appreciate is all the people who are calling up with these productive ideas. And I think one of the things that it shows is the public is so far ahead of the political system on this issue. It's not as though the fiscal challenges that we face are unknown or unrecognized to most people right now.

And I think they also realize that it's not going to be, you know, just magic fairy dust that makes it all go away, that we're actually going to have to make some policy changes. And listen to how many people are saying that they're willing to be part of the solution.

And yet you have two parties that are so consumed with beating up on each other, like you just pointed out about Medicare and Social Security. Both of which, obviously, have to be reformed, and it's standing in the way of making changes that are at the best things that we could do for the country, getting ahead of this fiscal problem. And, you know, politics is really standing in the way right now.

CONAN: Ezra Klein, a lot of people listen to the president's remarks this morning, saying: Wait a minute. We have to have patient negotiations. Yes, you people in the news business are always expecting everything to happen today. None of this is going to happen today. And what they heard was a message to say let's settle this after the next election. If I have a second term and I'm not able to run again, at that point, we might be able to address some of these big issues.

Mr. KLEIN: I don't know what they heard exactly. I can't speak for them, but I wouldn't totally discount the first interpretation. Again, I'm struggling with this a little bit, because I look at this budget, I'm a policy wonk guy, and, you know, we policy wonks I think Maya would agree with this. There's a tendency to want to see the big bold solution. It's all laid out here and makes sense to me. Here are 10 graphs, you know, maybe here are the votes, maybe they're not here, but I'll fight for them if they're not. And then, the problem is solved.

But the way this administration has approached its major reforms - and this is true for health care reform - to be infuriation of Washington. It just infuriates a lot of us who are involved in it, and the stimulus and other things was, you know, they come out with a principle, yes, we believe in reducing the long-term debt, and they sort of say to Congress we'd love to work with you on this if you're all going to work together on it.

And then, as things develop in Congress, they weigh in or they don't weigh in, and they actually wait a lot longer than you think they would. I mean, the public option fight drag out forever, in part because the president never said I will veto this if it comes without a public option or drop the public option. Let's get the bill done.

And this has been their MO, but in many cases, it's worked. And it was true to some degree on the tax deal. You know, that ended up being not the deal that people wanted, but it sort of a grand bargain that happened behind closed doors.

So what we don't know is where Barack Obama is in this heart of hearts. But if you look at his administration's strategy over time, and what he is saying publicly right now, what he's saying is I'd like to get this done. I'm not going to propose it if the votes aren't there, so I want to work with Congress to see if we can reach a deal. Me releasing a budget is not, in and of itself, producing any votes in Congress.

So maybe he'll be right, and maybe he'll be wrong on that, but I wouldn't totally discount it. It has been what they've done on everything major they've attempted so far.

CONAN: Ezra Klein of The Washington Post. We thank him very much for his time. Maya MacGuineas also of the New America Foundation. We appreciate her time today. Scott Horsley was with us here in Studio 3-A.

Coming up, the biggest man versus machine match up since Gary Kasparov played Deep Blue. It's on Jeopardy!. This is TALK OF THE NATION from NPR News.

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