Support Grows For 'Gang Of Six' Deficit Proposal
STEVE INSKEEP, host:
It's MORNING EDITION from NPR News. Im Steve Inskeep.
MARY LOUISE KELLY, host:
And Im Mary Louise Kelly.
Generations of American schoolchildren learned the story about Alexander Hamilton, the first Treasury Secretary pushed to pay public debts left over from the Revolutionary War. He affirmed the federal government's power and also affirmed the credit of the United States.
INSKEEP: Centuries later, we may be close to finding out if American credit is really that important after all. In August 2nd deadline approaches to raise the federal debt ceiling.
KELLY: Many Republicans have said they won't raise the debt ceiling without big spending cuts. Some don't want to raise it under any terms at all. President Obama is still pushing for a deal to avoid default.
President BARACK OBAMA: The decisions we've got to make right now are tough ones, and nobody likes them. I mean, it's always easier to give people more benefits and cut their taxes then it is to raise more revenue and reduce benefits.
INSKEEP: The president spoke in an interview with NPR's TELL ME MORE, to be broadcast today.
House Speaker John Boehner called into Rush Limbaugh, amid reports that he was close to a deal with the president.
Mr. RUSH LIMBAUGH (Talk Show Host): People are confused, with all of these leaks, as to what's going on.
Representative JOHN BOEHNER (Republican, Ohio, Speaker of the House): Well, Rush, there is no deal - no deal publicly, no deal privately. There is absolutely no deal.
KELLY: And Democrats are also skeptical. Their leaders visited the White House yesterday.
NPR's Andrea Seabrook is following this week's talks.
ANDREA SEABROOK: It appears that negotiators are still trying to thread the needle between the Democrats, who say there must be revenue raised in the final deal, and the Republicans, who say it must be revenue-neutral.
INSKEEP: Half a dozen senators, the so-called Gang of Six, tried to thread the needle, this week, by announcing a bipartisan plan. It shaves spending and also reworks the tax code to bring in more money.
One senator is Georgia Republican, Saxby Chambliss, who's a friend of John Boehner.
Senator SAXBY CHAMBLISS (Republican, Georgia): I don't know that John says this is the proposal that I'm willing to wrap my arms around and jump off the building for. But I do know that it's pretty obvious that John has wanted a grand bargain from day one. I think he and the president both would like to develop a plan around the debt ceiling, that addresses the long-term debt issue also.
INSKEEP: We sat down with Chambliss and a Democratic counterpart of the Gang of Six, Mark Warner of Virginia.
Senator MARK WARNER (Democrat, Virginia): Some level you're going to decide whether you trust each other or not. I think that's what we achieved, a level of trust, even if we disagreed with each other. I don't think I fully appreciated some of my Republican senators' concerns that perhaps in the past there has been times when revenues have increased, and there's been spending caps for example. And those caps then get put away when the economy recovers.
So trying to kind of get that in your head would not have happened if we hadn't spent months and months together, trying to understand the person's position.
INSKEEP: I want to underline that to make sure that people follow it. Because the one of the central Republican arguments against what you're doing and against any revenue increase is that whenever there's a tax increase coupled with spending cuts, the spending cuts, it will be argued, never happen. They don't trust you.
They don't trust the president. They don't trust the Democratic Party on much of the Republican side. Are you saying they actually were right not to trust you?
Sen. WARNER: I'm not saying they were right.
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Sen. WARNER: I'm saying that I didn't fully appreciate how much of a pillar of faith that was amongst so many of our Republican colleagues. And I think that's why we went the extra mile, to make sure that there was enforcement mechanisms. So that if, through our tax reform effort, revenues are generated and then the economy grows, that the spending caps we have in place are enforced. And that additional revenue would then go to further deficit reduction or further rate reduction.
It's just one example, when you've spent months with each other, you kind of earned that level of trust.
INSKEEP: I wonder, since it is by its nature, a compromise, if each of you could name something in this proposal that you hate, but that you're going to support because it's part of the package.
Sen. CHAMBLISS: Well, I have been none too keen on the income tax credit, for example. You know, earning income tax credit.
INSKEEP: But that's for lower income people who get
Sen. CHAMBLISS: It is
INSKEEP: payments from the IRS.
Sen. CHAMBLISS: and its kind of a bur among the saddle of a lot of conservatives, that you have the federal government paying money to people who don't pay any taxes. That's one of the issues that still is - I don't particularly like in the compromise. But, when you're on the other side, we were able to obtain other measures - particularly the tax reform measures - and reductions in spending that offset that.
INSKEEP: Senator Warner, something you hate in this bill - in this proposal, it's not even a bill.
Sen. WARNER: I would've rather seen a balance that was closer to 50 percent revenues, 50 percent spending cuts. The fact that the cuts are - depending on how you count interest savings - between two and three times more than the revenues, I would've preferred something different. But end of the day, we've got to get something done.
INSKEEP: I want to ask each of you about one of the hardest questions that you may face from within your own party. Senator Tom Coburn, one of your colleagues in this group of six, has been very frank and saying, yes, this is a revenue increase - I think it's right but it's a revenue increase, call it what you want.
He is not trying to duck around that issue. Is that something you can say flat out, Senator Chambliss
Sen. CHAMBLISS: Oh, without question.
INSKEEP: you go here to get more revenue?
Sen. CHAMBLISS: Without question, we got to have more revenue. The question is how you do it. And we need to reduce spending. We need to reduce it in a big way. But Tom's exactly right, you can't ignore the revenue side.
INSKEEP: Senator Warner, let me ask you about Social Security, the AARP, just to name a group, and we could name quite a few, essentially said this plan reduces Social Security benefits for millions of seniors including people who are over 55 today. Are you willing to say flat out, yes, that's true, and that's what I support?
Senator WARNER: We've got them, reform our entitlement programs, including Social Security. So if we raise some more revenues around Social Security, or slightly cut back, for example, the change CPI that we've put in, which is the way the government...
INSKEEP: Consumer Price Index.
Senator WARNER: ...measures Consumer Price Index...
INSKEEP: Allowance for inflation.
Senator WARNER: ...would lower the benefit increase by .3 percent. Now is that technically a cutback in benefits? Yes. But if those dollars go back in to make sure the Social Security System is solvent for the next 75 years, I think the overwhelming majority of Social Security recipients and folks who are wanting to have Social Security a decade or two decades from now will say, you know, that's reasonable.
INSKEEP: One last thing and I'll let you go, Senators. One of the reasons that you were called together, a special group of Senators like this, was because the regular order isn't working. Do you agree with those that say there are quite a few senior people in each party, no matter what they say publicly, aren't really interested in a deal?
Senator WARNER: I'll let my senior colleague Senator Chambliss answer that.
Senator CHAMBLISS: The one thing you learn about the Senate when you are elected and sworn in, is that it is 100 people whose heart is in the right place. It is a pretty partisan atmosphere up here, right now, and that's why our group has been so unique and that's why our group, I think in part, has been so warmly received, and our proposal warmly received. On whole it moves us in the direction of solving a problem in a bipartisan way.
INSKEEP: But this is what I'm asking. It will take me one minute of searching on Google to find Republicans who are saying if we sign onto a tax increase, revenue increase, whatever you call it, we're going to lose the election 2012. While I can easily find Democrats who say if we sign on to entitlement cuts or changes, or whatever you want to call them, we will lose a huge issue and maybe lose the election in 2012. Arent some of the leading figures of your party thinking that way right now?
Senator WARNER: Yes, on both parties. But I guess what somebody said to me the other day, something that I thought - struck me, was that, you know, for the last 50 years we've had such a strong economy that for the most part we could tinker around the edges, and the machine of our economy kept moving forward. Well, as we've seen in Europe and now we have to recognize here, we've got to do more than tinker around the edges. And that scares folks. Change always scares folks.
INSKEEP: Senator Warner said yes, some of the leaders of both parties I think is how you phrased it, are thinking that way, thinking of the politics of the next election rather than of solving the problem.
Senator CHAMBLISS: Sure, leadership on both sides would like to be in the majority, and that means trying to develop issues and look into the next election, they're going to favor them. I think that's a natural reaction though.
INSKEEP: Senator Warner, I'll give you the last word.
Senator WARNER: Hey, we've got to get something done.
INSKEEP: Democrat Mark Warner of Virginia and Republican Saxby Chambliss of Georgia spoke with us yesterday at the Capitol. As the deadline for default approaches, it is not clear yet if their plan can pass.
KELLY: The satirical newspaper The Onion seemed to capture this week's mood with the headline, quote, "Congress Continues Debate Over Whether or Not Nations Should Be Economically Ruined."
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