Fiscal Battle A Senator's Last Challenge
RACHEL MARTIN, HOST:
Senator Kent Conrad is one of the players at the center of the budget negotiations. The Democrat of North Dakota is the outgoing chairman of the Senate Budget Committee and he joins me from Bismarck, North Dakota.
Welcome to the program, Senator.
SENATOR KENT CONRAD: You bet. Good to be with you.
MARTIN: Can you tell us where the negotiations stand now?
CONRAD: Well, I'm encouraged. I think progress is being made. You know, it's kind of interesting. If you would take the president's position on revenue and the Republican position on spending cuts, and put them together, you'd have a package is very close to what the Bowles-Simpson commission recommended.
MARTIN: Bowles-Simpson that's, of course, Erskine Bowles and Alan Simpson, who have been essentially out promoting their idea of a budget fix.
CONRAD: And, you know, we had an 18-person commission. Eleven of the 18 agreed with those recommendations - five Democrats, five Republicans and one Independent - about as bipartisan as you can get. And, you know, I think there is a way forward here that could reach conclusion and do so before the end of the year.
MARTIN: What's preventing the process from moving forward at this point?
CONRAD: You know, it's what always prevents progress - it's the extremes, the right and the left. The right doesn't want to have additional revenues. The left doesn't want to touch Medicare or the other health care accounts. And, you know, the hard reality is we're a borrowing 31 cents of every dollar, so we don't have much choice but to make some changes.
And most people who have looked at this have concluded, since revenue is near a 60-year low and spending is near a 60-year high, that you need to work both sides of the equation.
MARTIN: If spending is such an issue, you're saying, Democrats need to compromise on entitlements in some way. What would that specifically look like? Where are Democrats willing to cede ground when it comes to reforming entitlements?
CONRAD: Well, I can't speak for all Democrats because they're not like-minded. But I would say this: the notion that we could save $500 billion on the health care accounts - not just Medicare but Medicaid, other healthcare accounts as well - over the next 10 years sends some Democrats to their fighting corners saying, oh no, we can't possibly do that.
And I think we have to ask the question: $500 billion is a big number; sounds intimidating, but how much are we going to spend in our health care accounts over the next 10 years? And when you add all that up, the answer is $12 trillion. So, $500 billion of savings would be a 4 percent reduction. So, the notion that we can't save 4 percent I think it's probably not reality.
MARTIN: President Obama has essentially drawn a line in the sand. He has said that in order to fix the budget, that tax rates need to be raised on the top 2 percent of Americans. If that doesn't happen he's willing to go off of the fiscal cliff. What is your take on this? Is this something that's more public posturing? Or is the president more flexible on tax rates than he's letting on in public?
CONRAD: Well, I can't speak for the president. But I can say this, in the Group of Eight, in the Bowles-Simpson Commission's recommendations, we did raise tax rates. We raised it on capital gains and dividends because, as you know, capital gains and dividends are now taxed at very preferential rates.
The president is also saying we ought to raise rates on earned income from 35 percent to the rates that prevailed during the Clinton administration, which were 39.6 percent. And I think we should remember that history here. During the Clinton administration, with those rates in place, we had the longest period of uninterrupted economic growth in the nation's history and were actually paying down the debt.
MARTIN: As we mentioned, you are about to make a big change. You're about to leave Congress after a couple of decades, more than that.
CONRAD: Twenty-six years.
MARTIN: Twenty-six years. What are you reflecting on as they walk away now? Are you happy? Are you ready to be done? Is this bittersweet for you?
CONRAD: I'm entirely at peace.
CONRAD: If we could get this budget agreement, which I am reasonably confident we can do, that will be a great capstone to my 26 years. And I'm hoping for the best for the future.
MARTIN: Anything that you will miss in particular about Congress or Washington?
CONRAD: I'll miss the camaraderie with my colleagues. I have many friends on both sides of the aisle. I won't miss the endless travel. I won't miss living out of a suitcase. I won't miss missing 80 percent of my wife's birthdays and 80 percent of our anniversaries. But I will always hold in high regard those who serve in public office because they do tough jobs. And the vast majority of them are well-intentioned and well-meaning, and want to do the best for our country.
MARTIN: Senator Kent Conrad of North Dakota, he is retiring this year. He's been in the Senate since 1987.
Senator Conrad, thank you so much for taking the time.
You bet. Good to be with you.