Week In News: Federal Budget

The House passed a federal budget proposal Saturday that President Obama has already vowed to veto. Host Linda Wertheimer speaks with James Fallows of The Atlantic about that story and others from the past week.

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LINDA WERTHEIMER, host:

We're joined now by James Fallows of The Atlantic. This week, he's in Beijing, China, working on a new book.

Hello, Jim.

Mr. JAMES FALLOWS (News Analyst, The Atlantic): Linda, nice to talk to you here from the other side of the world.

(Soundbite of laughter)

WERTHEIMER: We will get to China, but first, we just heard from Larry Abramson on the Wisconsin budget battle and the battle over the federal budget now moves to the Senate. Does anything about this year's negotiations strike you as different from years past?

Mr. FALLOWS: I think there is one way in which this is different. You know, you and I both know, and most of the listeners do, too, that since politics is largely about money and where it goes and where it comes from, it's not surprising that there are so often these big showdowns about taxes and budgets and all the rest. We - during the Reagan era, there were very bitter fights about his tax cuts. Certainly, in Bill Clinton's time, there was the one vote margin for passing his deficit reduction plan in 1993, and then again the government shut downs, of course, in '95 and '96.

I think what is distinctive this time, however, is how narrow the grounds of disagreement are. We know about the $60-some billion of cuts the House Republicans have just voted. Interestingly, they're only from about one-sixth of all federal spending, so-called non-defense discretionary spending, and not about, of course, taxes at all.

So when you have so much of the debate about such a small sheer of what the government takes and spends, it makes it a different kind of debate from what we've had before.

WERTHEIMER: And it seems to me not a particularly meaningful debate and just sort of a lot of bluster about something that may be completely unlikely to happen.

Mr. FALLOWS: Yes. I mean, there's the practical fact that with a still Democratic-controlled Senate and a Democratic White House, these cuts are very unlikely to go through in their current form. And also, I think in historical retrospect, we'll see an election campaign in 2010 that was largely dominated by talk about the deficit and this great fury of getting things passed of the House recently. But it is, again, most of what the federal government does is not touched by these proposals, and so it does seem a mismatch of energy and even vitriol and practical effects.

WERTHEIMER: Now, I'm changing the subject here to technology. I know there's one technology story, which obviously caught your eye this week, as a magazine person. Apple has decided to allow something called in-app subscriptions to newspapers and magazines from their mobile devices.

Mr. FALLOWS: This is so fascinating. It's part of the long saga of whether journalism is going to be able to fund itself in the long run. When the iPad appear a number of months ago, many publications thought this was kind of the Holy Grail, because it's the way you get revenue for having online distribution or digital distribution of your content. And Apple this week said they're going to allow publications to sell subscriptions via the iPad and similar devices, not just issue by issue sale.

The catch was that Apple was going to take 30 percent of all the revenue that came in this way and also control the information about the subscribers, which, for the publications, would be a real challenge. So almost immediately after Apple's announcement, Google came up with a plan where it was going to, like, charge 10 percent for subscriptions sold through its Android system and also let the publishers have control over the subscriber data. So there is an interesting battle going on with, I think, real implications for how, as I said, journalism is able to get revenue in the new online age.

WERTHEIMER: As I mentioned, you are in Beijing right now researching a new book. What's the news from China?

Mr. FALLOWS: There's a lot of domestic attention on the cashiering of the man who has been in charge of China's very, very ambitious high-speed rail program, which has just blanketed the nation with these very, very fast trains. And the accusations are that a lot of safety shortcuts have been taken. The trains are running much, much faster than the Japanese say they would run trains in those same kind of tracks. There apparently has not been enough of the right kind of solidifying agent for the number of the bridges and other things that have been built. And, of course, there are monetary questions.

And so, while it's been important for the U.S. to look to Chinese high-speed rail as an example of what can be done, there's a lot of doubts inside China now about what actually has been done.

WERTHEIMER: James Fallows is national correspondent for The Atlantic. You can read his blog at jamesfallows.theatlantic.com.

Jim, thank you very much.

Mr. FALLOWS: Thank you, Linda. My pleasure.

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