Bailout Will Dominate New President's Agenda
ANDREA SEABROOK, host:
Last night's presidential matchup was billed as a foreign policy debate, but the first half focused almost completely on the economy and the proposed Wall Street rescue plan. One question that host Jim Lehrer of PBS just couldn't get the candidates to answer fully...
Mr. JIM LEHRER (PBS News; Host, Presidential Debate): As president, as a result of whatever financial rescue plan comes about and the billion, 700 billion, whatever it is going to cost, what are you going to have to give up in terms of the priorities that you would bring as president of the United States as a result of having to pay for the financial rescue plan?
SEABROOK: On the line now is Robert Bixby, the executive director of the Concord Coalition, a nonpartisan economic think tank. And Mr. Bixby, the candidates said last night two different things. McCain called for a partial spending freeze and the end of ear marks. Obama said he'd delay his energy plans. But neither of those come anywhere near the kind of cash we're talking about, do they?
Mr. ROBERT BIXBY (Director, Concord Coalition): No. The $700 billion outlay is going to be huge in the context of the total federal budget. If it were a program, it would instantly be the biggest program in the budget. We spend about $600 billion on defense and about 600 billion on social security, and I think that the first thing any new president is going to have to do is figure out how this rescue plan works and how all the 700 billion is going to be spent and what the government might recoup from it in the long term.
SEABROOK: But aside from how that would work, how does just its price tag change the rest of the calculation for an incoming president?
Mr. BIXBY: Well, it's going to dominate the agenda. Whether they wanted it to be or not, this is now their agenda for the first year of their term, anyway. So the big, expensive plans that both of them may have had, whether it's healthcare or tax cuts, are going to have to be put on hold until we see how this plays out.
SEABROOK: So what would they have to do? What would a president, either one, have to do to cut that much money from their proposals?
Mr. BIXBY: With Obama, I think you'd have to look at the healthcare initiative, which is the biggest part of his agenda. McCain has a big tax cutting agenda, cutting corporate taxes. I think that would be a very difficult thing to do in this environment.
SEABROOK: What advice do you have for these candidates going into the last 30 or so days of this election?
Mr. BIXBY: Well, I think that they really need to be honest about the hard choices facing the budget and get the American people involved in the discussion because, as we're seeing here with this, when the public feels like they've been left out or something, and all of a sudden, it's like, well, we've got to come up with $700 billion to, you know, as they perceive it, bailing out Wall Street, they get angry.
And I think we've got some very, very fundamental problems in the federal budget. Forget about Wall Street. Our long-term federal budget has got problems. And I think both candidates need to use this as an opportunity to say hey, look, see what happened with Wall Street. We need to learn some lessons here, you know. Here is my plan for the long term, and we're all in this together, and let's make some tough choices together.
SEABROOK: Do you think we'll get that?
Mr. BIXBY: I wouldn't bet on it.
(Soundbite of laughter)
Mr. BIXBY: I think that, but I remain hopeful. I mean, if there's any silver lining for this, it might be that Washington and the public begin to take seriously the fact that, if you're over leveraged, you can get into problems, and clearly, the federal budget is itself over leveraged.
SEABROOK: Robert Bixby, the executive director of the Concord Coalition, a nonpartisan economic think tank. Thanks very much.
Mr. BIXBY: OK.