Analysis

Week In Politics: Debt Ceiling; Deficit

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Michele Norris speaks with our regular political commentators, E.J. Dionne of the Washington Post and Brookings Institution, and David Brooks of the New York Times.

NORRIS: And we're joined now by our regular political analysts, E.J. Dionne of the Washington Post and the Brookings Institution and David Brooks of the New York Times. Welcome to both of you. Lots to talk about this week.

Mr. E.J. DIONNE (Washington Post, Brookings Institution): Indeed. Good to be with you.

Mr. DAVID BROOKS (New York Times): (Unintelligible).

NORRIS: Well, there are various deals in the works, but the one that seems to be the most serious right now, as we just heard, is that accord between President Obama and Speaker Boehner that they are still working on. Even if the two of them were able to reach some sort of resolution, could they sell it to the members of their own parties? We just heard David Welna that's going to be a hard sell. And David, you sound like you're preparing to say, I told you so, knowing that Republicans might come to regret a missed opportunity.

Mr. BROOKS: Yeah, on the outside it looks like cataclysm. On the outside, they're pretending there's no deal, there's not even close to a deal, they're trying to show they're as unattractive, and unyielding as possible. On the inside, I still think that in the room with Boehner and Obama, they're not at a deal, but from what I'm hearing they're close to a deal. In the Senate, we have this Gang of Six meeting, now Gang of Eight, where they really did, on a bi-partisan basis, like 50 members came together to deal.

One Senator told me it was the best day he'd had on the job in a year. So on the inside there really is some sanity caucus that's trying to get us out of the cataclysm, but I don't think they know whether they can sell it to their members. And so they're walking forward, hoping they can do it, but they're extremely scared. People are scared.

NORRIS: And they're members, I mean, on the outside. The Republicans are not happy about the deal that Boehner is cutting. The Democrats, as we just heard, are, you know, chest-pounding anger, volcanic in their anger. Are the Democrats, for instance - we'll start there. Are they justified in their anger with the president? I spoke to someone on the Hill and he said Democrats all over the place are erupting in hissy fits.

Mr. DIONNE: Well, I think they were justified if the deal was in fact as it was described yesterday. And as it was described yesterday, it sounded like President Obama was ready to agree to big cuts now with revenues to come later and the notion that you could expect the House Republicans ever to support revenues once they pocketed the cuts was crazy. And Democrats were just extremely angry and they have been totally cut out of these talks. They have absolutely no idea - or had absolutely no idea.

I guess there was a meeting last night where they were brought up to speed. They had no idea what Boehner and Obama were doing. Boehner and Obama seem to have developed some kind of relationship. Obama looks at Boehner the way he sees other Midwestern Republicans he dealt with in the state legislature. He doesn't see him, Speaker Boehner, as being of the Tea Party. But you still have 60 to 80 members of the Republican caucus who don't even seem to believe we need to raise the debt ceiling at all. That makes it exceedingly difficult to reach a deal.

NORRIS: And 240 who have signed a no-tax pledge.

Mr. DIONNE: Right.

NORRIS: How do you get around that?

Mr. DIONNE: You pretend or maybe you just back away from it. But that's exactly right. And I am more pessimistic now than I have been throughout. I mean, I still find it so difficult to believe the leaders of our country are going to allow default to happen. But I think this mistrust on both sides makes it very difficult to reach any kind of agreement.

NORRIS: The McConnell-Reid fallback plan has been put on ice for now while these two men, the Speaker and the president, work on this. Is it possible that that plan might have to taken off ice as the only feasible way to get some sort of agreement by August 2nd?

Mr. DIONNE: It's the best - could I just say quickly, then go to David, the best line I've heard on that is, that is the in-emergency-break-glass plan. In other words, I think they're going to have something like this at the ready if everything else falls apart. Now, it's still going to be hard to get through the House, but I think in that case, Boehner may just have to go with passing something with mostly Democratic votes.

NORRIS: David?

Mr. BROOKS: Yeah, I think that's a cynical ploy that makes everybody feel ashamed of themselves. It's really designed to evade responsibility and force the other party to cast impossible votes. I think the fallback position is a $500 billion over 10 year series of cuts, which they have more or less already agreed to and nothing else. The problem with that is the markets may not buy it. They may say that's not enough to address your debt problem, and they'd be absolutely right about that, and therefore we're going to downgrade your debt in any case.

So that's the fallback position and that's probably the most likely thing that will come out of this. There's probably like a 50 percent chance of that, a 20 percent chance of a complete catastrophe and then a 30 percent chance of a grand bargain. But that 50 percent chance may still lead to a default.

Mr. DIONNE: Could I just say the other - there's another fallback, I think, which is the one Speaker Boehner and the majority leader Eric Cantor might put on the table, which is, say, a trillion in cuts, a trillion and a half, let's extend

Mr. BROOKS: 30 percent of a grand bargain. But that 50 percent chance may still lead to a default.

Mr. DIONNE: Could I just say there's another fallback, I think, which is the one speaker Boehner and the majority leader Eric Cantor might put on the table. Which is, say, a trillion in cuts - a trillion and a half - let's extend this another few months and try again. And I think that would put the president in a difficult position, because he doesn't really want to do that. I don't think anybody really wants to go this long. But again, he's not going to risk of default.

NORRIS: Yeah, if this were - and this is a really big if. But if they were to strike some sort of agreement, the President Obama could ostensibly strut on the other side of this and say, I took on the deficit; I took on the big entitlement programs like Medicare; I worked out some sort of concession on taxes.

Is there some sort of afterglow that could extend to members of either party?

Mr. BROOKS: Oh yeah, this is an incumbent protection plan, if they do it. President Obama would be in a great position to say I move to the center. Mitt Romney would be a giant loser. I think speaker Boehner and the House Republicans could go to independent voters and say we did this deal; we reduced the size of a government by $3 trillion. And then Nancy Pelosi would be the loser in that.

So if they cut a deal it's great for incumbents. I think it's great for the country. It's insane they haven't cut this deal.

NORRIS: You know

Mr. DIONNE: This depends on what's in the deal. And that's the thing is that I think, yes, if it had some revenue in it, it might work. But I think it's still dangerous for him.

NORRIS: You know, we're talking about cutting deals, some people suggest they should cut the air conditioning and that might actually speed them towards some sort of solution...

Mr. BROOKS: In the 19th century

NORRIS: ...like the Founding Father weekend.

Mr. BROOKS: no defaults.

(Soundbite of laughter)

Mr. BROOKS: No defaults.

NORRIS: Good to talk to both of you. Stay cool this weekend.

Mr. DIONNE: keep the air-conditioning on.

Mr. BROOKS: Thank you.

(Soundbite of laughter)

NORRIS: That's E.J. Dionne of The Washington Post and the Brookings Institution, and David Brooks of the New York Times.

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