Reagan's Budget Director Taking No Sides

This week, as President Obama presented his budget plan and criticized Congressman Ryan's plan, he invoked the name of David Stockman, the first budget director under former President Ronald Reagan. Stockman also found faults in the Republican proposal, but he has criticism for Obama, too. Host Scott Simon talks with Stockman about the debate over the nation's fiscal future and the latest budget proposals from the White House and House Republicans.

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SCOTT SIMON, host:

This week as President Obama presented his budget plan and criticized Congressman Ryan's plan, he invoked the name of David Stockman, the first budget director under former President Ronald Reagan. Mr. Stockman also found faults in the Republican proposal. Here's how the president put it:

President BARACK OBAMA: Ronald Reagan's own budget director said there's nothing serious or courageous about this plan. There's nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don't think there's anything courageous about asking for sacrifice from those who can least afford it and don't have any clout on Capitol Hill.

SIMON: David Stockman joins us from his offices in Greenwich, Connecticut. Mr. Stockman, thanks for coming back on our show.

Mr. DAVID STOCKMAN (Former Budget Director for President Ronald Reagan): Glad to be on with you.

SIMON: How do you feel about being quoted by President Obama?

Mr. STOCKMAN: Well, it's a little surprising. You know, this is getting to be an issue where a lot more clarity is needed. I think the president made some headway. But I would be critical of one thing he said as well, and that is that we're going to let the tax cuts expire for the top 2 percent but the rest of the country is going to get an extension of the Bush tax cuts apparently for the indefinite future.

Well, I disagree with that. We can't afford that. In other words, the problem with the Ryan plan is it tries to balance the budget on the back of the poor -and you can't do that. The president's talking about reducing the deficit entirely on the top 2 percent of the population, and that won't work either. And neither side is being honest with the middle class, and that is that we're going to have to have tax increases to pay for this huge amount of government we seem to want, and that middle-class entitlements, like Medicare and Social Security are going to have to be trimmed right now if we're really going to address this problem.

SIMON: Seems like both parties say we have to get this entitlement monster by the neck, the throat, the head, whatever, and wrestle it to the ground -various proposals as to how to do that. The president suggested that people that wanted to change the basic nature of a program like Medicare are upsetting the basic social compact in America. How do you feel?

Mr. STOCKMAN: I disagree with him on that. What we have to do is look at means testing. And that is there are 40 million people receiving these programs who probably can't afford to pay any more or to have benefits reduced because it's their main source of support, you know, in retirement. But there are 10 or 15 million people at the upper end of the income spectrum who are retired, who do have substantial private assets, who do have substantial pension and other sources of income. And given the fiscal circumstances we face, they're going to have to share in the sacrifice. They're going to have to have their benefits cut back.

SIMON: A lot of people have noted that the very nature of the conversation in Washington, D.C. seems to have changed, where it's no longer about whether or not to rein in spending but how much. It doesn't sound as if you are impressed by the debate on either side.

Mr. STOCKMAN: Well, look, the rhetoric, I guess, has changed to some degree, although people have been denouncing the deficit for the last 30 years and we have 14 trillion of debt today, when in 1980, when I joined the Reagan administration, we had one trillion of debt as a country. So, this $39 billion cut to the fiscal 2011 current fiscal year was a total phony. It was an outright swindle.

My calculation is that it would save less than a billion dollars in actual cash outlays in lower borrowing requirements between now and the end of the fiscal year. And, you know, if you think about it, if a private business in this country said the number's 39 billion and actually it was one billion, they would have the SEC, the Justice Department and every prosecutor in the country on their case for misrepresentation and fraud, right?

Any honest, you know, appraisal would say if this is what they're going to do, we've got some pretty serious problems ahead.

SIMON: David Stockman, former Michigan Republican congressman and budget director under President Ronald Reagan speaking with us from Greenwich, Connecticut. Thanks very much, Mr. Stockman.

Mr. STOCKMAN: OK. Thank you.

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