What Do We Know About The Budget Talks?

What do we know about what President Obama is discussing with top leaders from both parties in Congress Thursday and through the weekend? What is their game plan for raising the debt ceiling and bending down the deficit curve? Mara Liasson discusses the debt ceiling talks with Melissa Block.

Copyright © 2011 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

BLOCK: And for more on the debt ceiling talks, we're joined by NPR national political correspondent Mara Liasson. Mara, hi.

MARA LIASSON: Hi, Melissa.

BLOCK: And I think we can hear there from what Congressman Price told us that selling any deal with the White House is going to be a tough sell, at least on the Republican side and then probably on the Democratic side as well. How difficult do you expect this to be?

LIASSON: Well, it depends on the deal. But no matter what, I expect it to be very difficult and you could see a revolt of both bases of both parties. That's very possible, but it hasn't happened yet. And what I thought was really interesting today is how few Democrats and Republican members of Congress were willing to come forward and talk. There weren't dueling press conferences. That's a very good sign.

Silence is golden, at this point. It seems like they really want to see what the leaders are talking about and take a look at it before they start throwing rocks at it. Now, democrats are worried that the president will throw them under the bus, make big cuts in Medicare, depriving them of the issue that they had planned to use in the 2012 elections. Republicans are clearly worried that, you know, John Boehner might agree to some kind of tax increases.

But for now, it seems like they want to see what the deal could be.

BLOCK: And the political stakes, Mara, for both Speaker Boehner and President Obama in these talks?

LIASSON: Well, they decided that they needed a big deal. They both decided that because the small one was proving so hard to get. Sometimes when a problem is tough to solve, it's better to make it bigger. President Obama certainly needs the deal. He needs to raise the debt ceiling. He also needs to do something to improve the economy and also to prove to Americans that he is the same person as he campaigned on - that he's the guy who can bring both sides together, bridge differences.

And for Speaker Boehner, he runs part of the government. He's responsible now. He's not just in opposition. He has to prove that he also can do the things he campaigned on, like cutting spending.

BLOCK: Speaker Boehner has said that everything is on the table but tax hikes. We heard the president and Democrats say that any deal has to include new revenue or it just won't add up. How do you get to yes between those two positions?

LIASSON: Well, the way you square that circle is by tax reform, by lowering rates across the board and broadening the base, which means getting rid of all these tax expenditures, special interest tax breaks. There's been a real sea change in the way these tax loopholes are viewed. Conservative economists, like Martin Feldstein, have really led the charge on this. They call them spending through the tax code. They're spending. They're not just lower taxes.

So if you do that, if you get rid of a lot of tax breaks and lower income tax rates or corporate tax breaks across the board, that way you collect more tax revenue without raising tax rates. Now, the big battle is going to be if you do do that, what do you do with that extra revenue? The Democrats want it applied to the deficit, to bring the deficit down, and Republicans are going to want it used to bring tax rates down even further.

BLOCK: Mara, you're not a odds maker, but we're gonna make you one for today. What do you think the odds are that what they're talking about now, what's under negotiation, gets through Congress by the deadline that they've set in advance of August 2nd?

LIASSON: Well, this is so big and so complicated, it's really hard to see how they pass something like this. But on the other hand, a lot of experts can't see any other way out of our fiscal crisis and it seems like the leaders of both parties are beginning to agree with that view, too. So, selling it to the country might be easier than selling it to members, but that's why you're going to have the Boehner and Obama show.

They're gonna have to, together, convince the country and the Congress that this is the only path to reducing the deficit and, more immediately, to avoiding a default on the debt.

BLOCK: Okay. NPR's Mara Liasson. Thank you.

LIASSON: Thank you.

Copyright © 2011 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.