Debt Agreement Is An Answer But No Solution? President Obama and congressional leaders reached an agreement Sunday to avoid a first-ever U.S. default. The plan raises the debt ceiling and cuts more than $2 trillion from government spending over a decade. To learn more about the deal, host Michel Martin speaks with U.S. News and World Report's Mary Kate Cary and The Washington Post's Jonathan Capehart.
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Debt Agreement Is An Answer But No Solution?

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Debt Agreement Is An Answer But No Solution?

Debt Agreement Is An Answer But No Solution?

Debt Agreement Is An Answer But No Solution?

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President Obama and congressional leaders reached an agreement Sunday to avoid a first-ever U.S. default. The plan raises the debt ceiling and cuts more than $2 trillion from government spending over a decade. To learn more about the deal, host Michel Martin speaks with U.S. News and World Report's Mary Kate Cary and The Washington Post's Jonathan Capehart.

Senate Minority Leader Mitch McConnell, R-Ky., is all smiles as he walks to the Senate floor to announce that a deal has been reached on the debt ceiling on Capitol Hill in Washington, Sunday, July 31, 2011. Harry Hamburg/AP hide caption

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Harry Hamburg/AP

Senate Minority Leader Mitch McConnell, R-Ky., is all smiles as he walks to the Senate floor to announce that a deal has been reached on the debt ceiling on Capitol Hill in Washington, Sunday, July 31, 2011.

Harry Hamburg/AP

MICHEL MARTIN, host: I'm Michel Martin, and this is TELL ME MORE from NPR News.

Coming up, how do you know when your inner voice is telling you some great and profound truth or when it's leading you down the wrong path? We explore O magazine's new issue. It's all about the power of intuition. We'll talk about that in just a few minutes.

But first, what a difference a weekend makes. President Obama and the Republican and Democratic leaders in Congress have agreed in principle to a deal that would end the crisis over the debt ceiling.

The plan would slice nearly $1 trillion from the deficit and allow the nation's borrowing limit to increase by at least $2.1 trillion, enough to keep the government operating past the 2012 elections.

Some Democrats are complaining that the president gave away too much. But the president says he's happy to have a deal at all.


President BARACK OBAMA: Now, this process has been messy. It's taken far too long. I've been concerned about the impact that it has had on business confidence and consumer confidence and the economy as a whole over the last month. Nevertheless, ultimately, the leaders of both parties have found their way toward compromise, and I want to thank them for that.

MARTIN: The Senate's Republican leader Mitch McConnell struck a similar tone in remarks yesterday.


MITCH MCCONNELL: I think I can say with a high degree of confidence that there is now a framework to review that will ensure significant cuts in Washington spending. And we can assure the American people tonight that the United States of America will not, for the first time in our history, default on it's obligations.

MARTIN: Joining us to talk about the compromise is Washington Post columnist Jonathan Capehart. He's here with us in our Washington, D.C. studio. Welcome, thank you for coming.

JONATHON CAPEHART: Thank you very much.

MARTIN: Also with us once again former presidential speechwriter for President George H.W. Bush and columnist and blogger for U.S. News and World Report, Mary Kate Cary. She's back with us also here in Washington. Thank you so much for joining us.

MARY KATE CARY: Great to be here.

MARTIN: So, Mary Kate, I'm going to ask you this set the table here. Could you just briefly tell us what's in the framework. And since you're both columnists, I'm going to ask each of you, would you sign it?

CARY: The - well, the answer I think is yes, I would sign it. We're, at this point, 24 hours away from default and I think the time is right to end this. The general framework is spending cuts, no taxes included at all, and an agreement to extend the debt ceiling through the election, which includes Obama's main thing that he wants and that's what he wanted.

And then there will be a bipartisan commission set up, yet another bipartisan commission, of twelve men and women from the House and Senate to come up with further spending cuts with a trigger enforcement mechanism attached to that. Correct me if I've got any of this wrong, Jonathan.

CAPEHART: So far, so good.


CARY: OK. It changed so much, you know, over the weekend.


CARY: And the triggering enforcement mechanism would include either drastic cuts to non-defense spending or drastic cuts to defense spending that could each party would not want, so therefore, they would have to compromise on the spending cuts together.

MARTIN: So, they were going to present a package. And it's one of those packages where you have to vote up or down on the whole thing. Is that the argument and that's how the cuts actually happen?

CARY: Correct. Yes, right.

MARTIN: And you say it's an answer, but not a solution really?

CARY: Yeah, my feeling is it's a deal and it got us over the finish line here, but it's not a solution in the long run. It still does not truly reign in the rate of growth for the government. The government's going to continue to expand. These are not true cuts. These are slowing the rate of growth of the government. And there will still be I think 7.5 trillion new spending over the next 10 years.

So, the government's going to continue to expand. And I think most Americans are not sure of that. Like, I don't think that's what we've been doing. Yes.

MARTIN: Well, I don't know about that. Well, I don't know about that. But that's why there are two people in this conversation.


CARY: Right, right.

MARTIN: Like what do most Americans think we should be doing, Jonathan? Jonathan, your thoughts about this. And would you encourage members to, those who are interested...


MARTIN: your take on this, would you say agree or not agree?

CAPEHART: Look, I think that Congress needs to vote for this. The president needs to sign it and we need to move on. We are, as Mary Kate said, we are a day away from default for the first time in American history. The full faith and credit of the United States is now in question, which was something that was unimaginable six months ago.

The key thing for me in all of this has been this needs to get beyond the 2012 elections not because it would help President Obama but because it would help the country.

Could you imagine having this ugly fight we just went through in the middle of a presidential campaign? You wouldn't be able to separate the substance from the political. I think that the president won this is enough for me to say go ahead and vote for it and sign it. Am I happy with everything that's in it? Absolutely not. But that's the nature of governing. You don't get everything that you want. It's about compromise.

MARTIN: And let's talk about those who are not happy with this. I mean, the progressives are furious.


MARTIN: Getting, you know, furious emails from progressive, you know, writers, bloggers, the Congressional Black Caucus had a phrase - what was it, Mary Kate?

CARY: Oh, I love it. It is - they called the deal a sugar-coated Satan sandwich.

MARTIN: A sugar-coated Satan sandwich.

CARY: Do you love that?


MARTIN: And why do they think that? I mean, you know, on the plus side of the deal, apparently - well, it doesn't touch Medicare beneficiaries. Medicare being the program that pays for health care for seniors and some disabled. Social Security, it doesn't touch Social Security. It doesn't even touch food stamps which are something that was on the chopping block for - so why are progressives as furious as they are?

CAPEHART: They are furious because there are no revenues. There are no tax increases. And, you know, that's just something the president, I think, decided that's a fight for another day. The thing that people need to keep in mind, that this is not the be all and end all. Once this is voted on and the president signs it, the fights aren't over. The fights...

CARY: Yes. It's only the beginning.

CAPEHART: It's only the beginning.

CARY: Yeah.

CAPEHART: The fights will continue.

MARTIN: But is the fight over revenue over?

CAPEHART: Oh, absolutely not. Remember, the Bush tax cuts expire December 2012. We are going to have this discussion again. And I actually think that because the president bent over backwards to meet the Republicans more than halfway, he has set himself up I think on a very strong foundation to make the case for why those Bush tax cuts should - for the upper income - should be allowed to expire.

MARTIN: If you're just joining us, you're listening to TELL ME MORE from NPR News. I'm Michel Martin.

Of course, we're talking about the compromise that both sides hope will end the debt ceiling crisis. Our guests are Jonathan Capehart of The Washington Post. That's who you just heard. Mary Kate Cary of U.S. News and World Report.

Mary Kate, despite the fact that the view from the side of the progressives or the center left is that the president bent way over backwards and has been doing so throughout these negotiations, there still, as I understand it, some people on the right who are saying it doesn't go far enough.

CARY: Right. There were - Michele Bachmann, for example, came out against it. And this morning, Connie Mack, the Senator from Florida, said he would not be supporting it. And (unintelligible) others...

CAPEHART: And also Mitt Romney.

CARY: Yeah, Mitt Romney.

CAPEHART: And Mitt Romney finally.

MARTIN: Well, Mitt Romney and Michele Bachmann are running for president, so that's that.


MARTIN: But Connie Mack, tell us why him and particularly given that he represents Florida, where there a lot of people who rely on these programs like Medicare and Social Security.

CARY: He had two points in the interview I heard. One was he doesn't think this really solves the crisis, as we were talking earlier. It solves the debt ceiling crisis. It doesn't solve the debt crisis. And by 2020, we will still be at $20 trillion in debt. And he thinks there needs to be a stronger package of not just slowing the rate of growth but, you know, cutting back.

Second of all, he had questions about this 12-person commission and exactly who those people are going to be and what they're tasked with. On paper, I believe, entitlement reform and tax reform are part of their job, but he's still a little anxious about what that all means and whether they really have any teeth.

MARTIN: Well, what about the defense spending side of it there? There are those - one of those - that is also one of the other big elements.

CARY: Mm-hmm.

MARTIN: Is defense spending on the table at all? In fact, I have to tell you that we're getting a lot of listeners writing in on Facebook and have been writing in all night and all morning are talking about. This one listener writes that she wonders if the military cuts - she says: I can't seem to get any straight answers on any news station. All I heard was military cuts. Hopefully that just means cut nonessential employees that play Solitaire all day at the Pentagon and give some contractors the boot...


MARTIN: ...for nonessential work practices. And, well, it gives you the flavor of...


MARTIN: But what about that? Is defense spending still a part of this conversation?

CARY: Yes, I believe it is. As with the last version, I thought - well, Jonathan's actually read the bill.

CAPEHART: Well, I've read the bill very, very quickly, all 74 pages of it. Look, they're still going to have to talk about the - about this bill in the conferences. They still have to figure out whether there are things that need to be tweaked or modified or what have you. And when this super committee gets put together, and they start focusing on other cuts, yes, everything is on the table.

And you know what? All those - everything has to be on the table. People keep talking about kicking the can down the road. We've run out of road. And so, if there's one silver lining in this whole ugly affair, it's that the conversation has now changed to what can we do to change the fiscal trajectory of the country for the better.

MARTIN: Final thought from you, Jonathan. So that's the point that President Obama made last week in his conversation with us here at NPR, and of course in interviews he's been having all along. What his argument is to his base is these are things that we need to do anyway, even if we controlled every branch of government, things are things we have to do anyway.

How, then, does he go back to his base and say, but we didn't address, you know, the fact that hedge fund managers have an upper tax rate that is less than a high school principal or a police chief. You know how does he go back and defend that?

CAPEHART: He goes back and he says, this isn't the end. This is the beginning. We have a lot of serious decisions that have to be made. We're coming back at the Bush tax cuts in December 2012. And you know what? Hang with me. I'm going to need your help.

MARTIN: And, Mary Kate, how do the Republicans address the fact that even though the polls show that voters are mad at everybody, they are more angry at Republicans who see particularly the fiscal conservatives or the Tea Party, who they view - voters on the whole, independents are obviously particularly important here - who they view as being obstructionists and in some ways unreasonable. How do the Republicans address that?

CARY: Well, say what you want about the Tea Partiers, but they did get the president to go from a clean vote to no taxes, entitlement reform, tax reform, all this stuff that's on the table now, and they were only one half of one branch of government. They accomplished a tremendous amount and they said they were going to do it and they did it. And he might not have liked the process and how messy it was, but the Tea Partiers did deliver. And I think that that...

MARTIN: But their argument is going to be, we changed the conversation from spending to cutting.

CARY: Right. Most Americans now understand exactly how big the problem is and exactly what crisis we're facing and what needs to be done. And you have to give a lot of credit for that. Six months ago, I don't think most Americans understood the consequences of what was going on.

MARTIN: Jonathan, very briefly, what's next? What's the next step in this process? Jonathan, what's the next step?

CAPEHART: Well, the next step is that a vote will have to be held in the Senate and then in the House. And quite frankly, given what happened last Thursday and how the first iteration of the Boehner bill went down in defeat, I'm very curious to see how the vote goes in Congress.

MARTIN: So you're not taking the afternoon off,

CAPEHART: Oh, absolutely not.

CARY: Nobody's taking - we're on. Yeah, we're on.

MARTIN: No long martini-filled lunches for anybody.

CARY: I do think it sets it up nicely for 2012 in terms of competing visions for the country. I think it's going to make the presidential race fascinating.

MARTIN: Mary Kate Cary writes for U.S. News and World Report. She's also a former White House speechwriter for President George H.W. Bush. Jonathan Capehart is a columnist and editorial writer for The Washington Post. They were both kind enough to join us in our Washington, D.C. studios. Thank you both.

CAPEHART: Thank you.

CARY: Thank you.

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