STEVE INSKEEP, host:
Having had that fun, the president is holding a fiscal responsibility summit on Monday at the White House. He'll be talking about how to shrink the budget deficit, which might seem like an unusual conversation to have just now when the new administration has been busy expanding the deficit.
Here's NPR national political correspondent Mara Liasson.
MARA LIASSON: By the time all the stimulus bills and bailouts are counted up, the deficit will likely top 10 percent of the entire domestic economy. That's the biggest deficit since World War II. Couple that with the government's obligations when the baby boomers retire and you've got a fiscally unsustainable problem and one that's very hard to fix. Still, in almost every speech, President Obama insists something has to be done.
President BARACK OBAMA: We will need to do everything in the short term to get our economy moving again, while at the same time recognizing that we have inherited a trillion dollar deficit and we need to begin restoring fiscal discipline and taming our exploding deficits over the long term.
LIASSON: There are really two trillion dollar deficits. One is a short-term problem caused by the recession, then there's a long-term structural deficit caused by budget-breaking healthcare costs and the baby boomers' retirement. In an interview at the White House this week, the president's budget director Peter Orszag says that's why the administration wanted to hold the summit now.
Mr. PETER ORSZAG (Budget Director): I think it is noteworthy that in the midst of all the other short-term crises that we face, we are not letting the urgent get in the way of the important and we are sitting down to talk about this important issue even though we all face various firefighting exercises that are required to address the immediate crises that we face.
LIASSON: A big part of Monday's meeting, says Orszag, is letting a lot of different voices be heard. One of those voices will belong to Republican Senator Judd Gregg, the same Judd Gregg who recently withdrew his nomination as commerce secretary. But he's also a leader on budget issues and he calls the deficit problem a long-term fiscal tsunami.
Senator JUDD GREGG (Republican, New Hampshire): Our kids are suddenly going to get a country that's not affordable unless we do something substantive about the cost of entitlements. We're looking at spending under the entitlement programs jumping to almost 30 percent of GDP, which would basically absorb almost all the savings that most Americans would have. Nobody would be able to afford a house or buy a car or send their kid to college.
LIASSON: Solving the problem will certainly require difficult choices, including, says Gregg, raising taxes and cutting spending. Although Gregg had what he called irreconcilable differences with the president on the stimulus bill, on entitlement reform he's ready to join hands with willing Democrats and jump off the cliff together. And he thinks on this issue the president will find surprising levels of bipartisanship.
Senator GREGG: I don't think there's any question, we're ready to cooperate. The Republican leader, Mitch McConnell, has said very openly that he's ready to go. All we need is for the president to continue the leadership he's already shown, which I congratulate him for.
LIASSON: About 90 people from both ends of the political spectrum are being invited to the Monday summit. Besides Congressional committee chairman and ranking Republicans, there will be liberal economists, labor leaders, and well-known fiscal hawks, and that makes some on the left very nervous. They're worried that the summit could lead to deep cuts in Medicare and Social Security benefits. Here's economist James Galbraith on a conference call yesterday set up by the group Campaign for America's Future.
Mr. JAMES GALBRAITH (Economist): It's unfortunate that the White House chose to frame the issues of Monday's meeting in the way that they have. Threatening or appearing to threaten the stability of Social Security benefits is not a constructive contribution. Its effect is to raise the anxiety of the working population for whom Social Security and Medicare represent an increasingly important part of their long-term future.
LIASSON: The politics of this are daunting because the solution inevitably requires someone to pay more and someone to get less, and interest groups will line up to fight every change. Former Congressional Budget Office director Robert Reischauer is pessimistic.
Mr. ROBERT REISCHAUER (Former Congressional Budget Office Director): This is going to be the hardest thing we have ever tried to do, and it probably won't be successful unless there's some convincing external force, a gun in our hand; interest rates rising rather significantly because foreigners won't lend us the resources we need. I'm skeptical that our political system right now is frightened enough about the long-run consequences of our current fiscal path that it can galvanize itself into action.
LIASSON: Right now long-term interest rates, the price foreign investors demand in return for financing our debt, are rising fast. But they are still relatively low, and that's why, says Peter Orszag, it's important to address this now while we still have room to maneuver.
Mr. ORSZAG: If we roll forward five or 10 or 15 or 20 years and we fail to address these underlying structural deficits, we won't have that maneuvering room, because creditors will not be willing to buy our debt at reasonable or at low interest rates.
LIASSON: And that's just part of the argument President Obama is likely to make on Monday as he turns his attention to dealing with this next crisis on his very long list.
Mara Liasson, NPR News, Washington.