House Cuts Face Hurdle In Senate
LINDA WERTHEIMER, host:
This is ALL THINGS CONSIDERED from NPR News. I'm Linda Wertheimer. Guy Raz is away.
It's been a long week of budget debates. The president presented his 2012 budget. He has cuts, but he wants spending on innovation and education.
President BARACK OBAMA: We're going to be making some key investments in places like education and science and technology, research and development, that the American people understand is required to win the future. So what we've done is we've taken a scalpel to the discretionary budget, rather than a machete.
WERTHEIMER: That got a mixed reception. In the wee small hours of this morning, the House passed the controversial $60 billion slash on the current budget, as the speaker promised they would.
Representative JOHN BOEHNER (Republican, Ohio; Speaker of the House): Read my lips: we're going to cut spending.
WERTHEIMER: Speaker John Boehner emerged victorious. The Senate takes its turn on the budget when they return from the President's Day break. And in Wisconsin, it looks like a Cairo-style demo against the GOP governor's new budget. We'll check in with Madison in a few minutes.
But first, let's take a longer view. Maya MacGuineas, president of the Committee for a Responsible Budget at the New America Foundation, has been following all this closely, so I asked her thoughts on where we're headed.
Ms. MAYA MacGUINEAS (President, Committee for a Responsible Federal Budget, New America Foundation): Well, there's no question that all attention is on the budget now. It's been sort of a remarkable week in that there's two major focuses.
First, there was the president's budget, which came out and pretty much everybody, I would have to say, panned it as not doing enough on deficit reduction or putting in place a fiscal plan.
And then, meanwhile, what you're seeing in the House is this movement for some very aggressive cuts on spending concentrated on a very short amount of time, the rest of the fiscal year.
WERTHEIMER: Seven months basically.
Ms. MacGUINEAS: Yeah. And so we're talking about big cuts compared to what we're used to doing in this very small area of the budget as well. It's just about 12 percent of the budget we're focused on when really the biggest parts of the problem are in the rest of the budget - mandatory spending or entitlements - that nobody's talking about.
WERTHEIMER: And that, it seems to me, that's the biggest deal, isn't it? That not even the very excited budget cutters in the House have got to Social Security, Medicare, Medicaid.
Ms. MacGUINEAS: That's the elephant in the room. I suppose that the reasons that some of these programs have been growing faster than other parts of the budget and faster than the economy is that they are politically popular.
WERTHEIMER: But politically popular would seriously understate it, I think.
(Soundbite of laughter)
Ms. MacGUINEAS: They are very beloved and people look forward to their checks. But bottom line, they are unsustainable. They will bust the budget. I fear that if Democrats hold back and don't make the changes to Social Security and Medicare that we need to, we may have to reduce the programs and change them in a way that actually harms the safety net instead of preserves it.
Right now, for instance, the Fiscal Commission's Social Security plan recommended increasing the minimum benefit. That's something we can only do if we have the luxury of time on our side.
Likewise, the Republicans, who are allergic to taxes, if they wait too long, which seems to be everybody's favorite political strategy, the problem becomes so large that you end up dropping in a big new tax, like a VAT. So I look at this...
WERTHEIMER: Value-added tax, I should say - national sales tax.
Ms. MacGUINEAS: That's right. And Republicans in particular worry about it because it makes it so easy to continue to raise taxes and take the pressure off of spending cuts.
As an independent who sees both points of view, I keep thinking, if you both make the changes now, you don't risk the worst scenario that you're both worried about.
WERTHEIMER: Now, the president, in talking about what he - the kinds of things he would like to do, he has said it various times that if he comes out for something, if he says something should happen, that it immediately poisons the possibility that it can happen. That, I assume, means that what has to happen is that Republicans who are inclined to reach some sort of agreement and Democrats who are similarly inclined would have to have meetings that would have to be a secret, that would have to be closed. They would have to come out with an agreement.
Ms. MacGUINEAS: Yeah, that's certainly one of the models of thought that the only way this is going to get done is if, very quietly, people start talking in a constructive way and then come out sort of holding hands and saying, here's what we've come up with.
The one thing is that the president has made the point that he couldn't come up with specific reforms in his budget because it would have made them sort of toxic in the political environment. The problem is that the White House made a similar case a year ago. And now, a year has gone by and the Fiscal Commission has come out with plans and we haven't done anything to move that forward.
The president does at least have to set the environment where these discussions can take place and they can't be just behind closed doors, because the American public has to be involved as well at some point. But we also have to be straightforward and stop telling voters, hey, we can have tax cuts. We can have spending increases and start preparing expectations that the choices we're going to have to make, they're not easy. They're going to take real shared sacrifice in all parts of the budget.
WERTHEIMER: Do you think, looking at the president's budget, are these the budget cuts of a first-term president? Would we see these kinds of cuts if this were his second term?
Ms. MacGUINEAS: I think that this is a budget that reflects what's going on politically right now. So House Republicans are really focused on domestic discretionary spending. I think the president is focusing on the same piece of the budget, but trying to draw a distinction. He wouldn't go nearly as far as cuts.
And so, I also tend to think that the whole notion of we can continue to kick this down past the next election never really works. What we have to do is make - addressing the fiscal problems politically a good thing. And, frankly, I think voters are way ahead of politicians here. I think voters would really appreciate some sort of direct talk about how we're going to fix this problem. So I think it could be turned into a political winner.
WERTHEIMER: Maya MacGuineas is the president of the Committee for a Responsible Federal Budget at the New American Foundation.
Thanks very much.
Ms. MacGUINEAS: Thanks for having me.
WERTHEIMER: Republican Senator Tom Coburn of Oklahoma is part of a bipartisan group of senators considering ways the Congress might reach agreement on paring down deficits and debt into the future.
Senator TOM COBURN (Republican, Oklahoma): We cannot continue to have trillion-dollar deficits, because what's going to happen is our interest cost is going to approach a trillion dollars in the next couple of years as interest rates rise.
Our historical average interest rate is three times greater than what we're paying right now. And we've seen long-term interest rates starting to creep up in spite of what Chairman Bernanke is doing, in terms of pumping $600 billion into the bond market trying to raise the price of (unintelligible) the interest rates. So we've not gone near far enough.
WERTHEIMER: Senator, I think there's sort of general agreement that not enough has been done. But what there is not agreement on is what to do. And let me ask you about the big entitlements. Do you think that Congress is anywhere near contemplating addressing those portions of federal spending or is that just going to have to be left aside?
Sen. COBURN: Well, I think what we lack is, number one, the knowledge of the severity and urgency of the problem; number two is we lack courage within Congress to address what is our obligation and we confuse being popular or getting re-elected with fixing the future of our country.
And to me, if we don't rise up in the next year or two to address this issue, the members of Congress will have the biggest black mark you could imagine in the two or three years that follow, because the economic consequences for our country are going to be disastrous.
WERTHEIMER: So, what to do?
Sen. COBURN: Well, what to do is it's not hard, is we have to get the fraud out of Medicare, that's 60 to $80 billion a year. We need to drive down health care cost, and you're not going to do that with a centralized government operation on that. Everybody in the country is going to have to sacrifice, and that means the wealthiest and those experiencing the safety net. Everybody's going to get less.
WERTHEIMER: Dr. Coburn, you were a member of the president's bipartisan debt commission last year.
Sen. COBURN: I was.
WERTHEIMER: And your group did try to address the big entitlement programs, the elephants in the room. Are there some big ideas there that you think that Congress should be seriously considering in the current debate?
Sen. COBURN: Yeah. They should be considering the Ryan-Rivlin plan, which basically takes care of the poor. But as you come up on your income, if you're very high income, then your benefits decline in terms of Medicare and Social Security. It's a dual track system.
WERTHEIMER: Senator, I want to ask you something about - I just want to ask you to think back to when you were first elected. You're a fiscal conservative. You came to Washington convinced that debt and deficit could and should come down. You're a crusader on that issue. You must be remembering those days as you watched the House Republicans, the freshman Republicans in action. I'm wondering if you're thinking, you know, they're - do they understand what they're doing?
Sen. COBURN: Oh, I think so. I don't think they're much different than 75 percent of American people. If you poll the Democratic constituent base, you're going to get about 70 percent say we need to cut the government.
It's no longer a conservative, liberal, Democrat, Republican. People have a lot more common sense outside of Washington, and that is displayed inside Washington. And they look at what our financial picture is and they look at trillion-dollar deficits for the next 10 years, and they're saying, that's impossible. It's like saying that you can just keep borrowing on your credit card and never have to pay the interest, and you can't. And everybody knows that.
So, hard choices are going to come. It's nothing we have in front of us, Linda, is unsolvable. But what we need is leadership to make sure Americans understand the degree and certainty and urgency of the problems in front of us, and they call for shared sacrifice at every level across this country.
WERTHEIMER: Senator, thank you very much.
Sen. COBURN: Linda, it's good to be with you.
WERTHEIMER: Senator Tom Coburn represents the state of Oklahoma. We reached him at home in Muskogee.
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