Hope For Life After Deficit Plan's Death President Obama's deficit commission couldn't garner enough support to send its plan to Congress. But the plan could generate more debate and actual progress on the deficit. Illinois Democrat Jan Schakowsky, who voted against the plan, and Republican Rep. Jeff Flake of Arizona discuss why they think the plan fell short and how to move forward.
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Hope For Life After Deficit Plan's Death

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Hope For Life After Deficit Plan's Death

Hope For Life After Deficit Plan's Death

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This is ALL THINGS CONSIDERED from NPR News. Guy Raz is away. I'm Audie Cornish.

The president's bipartisan deficit commission hit the finish line this week. And the reaction from Capitol Hill was, well, let commission co-chair Alan Simpson describe it.

Mr. ALAN SIMPSON (Co-Chair, National Commission on Fiscal Responsibility and Reform): We took a big banana and threw it into the gorilla cage, and the gorilla has picked it up like they do. They peel it, mash it, play with it, but they will eat some.

CORNISH: Just how big a bite lawmakers want to take right now is unclear, but it's our cover story today, the so-called adult conversation over deficit and the debt.

First, we'll go to Capitol Hill, where Senate Democrats forced two votes today on extending the Bush-era tax cuts for everyone, but the wealthy. NPR's David Welna joins us with the details.

DAVID WELNA: It was entirely expected that these votes would fail. One of them would have capped the amount of income eligible for tax cuts at a quarter million dollars a household; the other would have raised that cap to a million dollars per household. But they both fell seven votes shy of the 60 they would have needed to advance.

A few Democrats joined every single Republican who voted in voting against the measures. And Republican leader Mitch McConnell was pretty scornful of the whole exercise today.

Senator MITCH McCONNELL (Republican, Kentucky; Senate Minority Leader) Meaningless showboats and anti-business rhetoric won't do anything to make the situation better. This Saturday's session is a total waste of the American people's time.

WELNA: Yes, but New York Democrat Charles Schumer made it clear that these votes had another purpose. They were also meant to portray Republicans as catering to the millionaires whose taxes would have gone up had these measures passed.

Senator CHARLES SCHUMER (Democrat, New York): And over the next year when they come to the floor and talk about deficit reduction, they will be reminded that they chose $300 billion in tax breaks for the very wealthy, not paid for, increasing the deficit over any other priority.

CORNISH: Okay, David, but these tax cuts are scheduled to expire on December 31st. So, what are the chances of this being dealt with before then?

WELNA: Well, I don't think there's much of a chance that either Democrats or Republicans would allow them to expire at the end of the year. Neither party wants to take the blame for taxes going up on January 1st.

And, in fact, today, President Obama called on lawmakers to work out a deal on taxes, as he said, in the next few days. So it's looking highly likely that there will be probably a temporary extension of all the Bush-era tax cuts, and along with that an extension of lapsed unemployment benefits and probably a green light to go ahead with ratification of the START treaty as part of the deal.

CORNISH: NPR's David Welna on Capitol Hill.

Thanks, David.

WELNA: You're welcome, Audie.

CORNISH: The tax cut debate is dwarfed by a bigger conversation about the deficit and the national debt. And there's one thing members of Congress agree on: it's time to talk.

Unidentified Man #1: There's going to have to be a real - now, the term is an adult conversation.

Unidentified Man #2: Have an adult conversation.

Representative KRISTI NOEM (Republican, South Dakota): Sit down and have a real discussion, an adult conversation.

Representative JOHN BOEHNER (Republican, Ohio): Time for us as Americans to have an adult conversation with each other.

Unidentified Man #3: No yelling, no screaming.

Unidentified Man #4: We need to have an adult discussion.

Unidentified Man #5: Really an adult conversation.

Unidentified Man #6: An adult conversation about a very serious subject.

CORNISH: When the commission voted yesterday on its new proposal to reduce the deficit, only 11 members said yes. Fourteen were needed to send a fast track plan to Congress.

Representative Jan Schakowsky, an Illinois Democrat, was one of the holdouts.

Representative JAN SCHAKOWSKY (Democrat, Illinois): What I felt was that the way that we achieve deficit and debt reduction just gave too big a hit to the middle class. I had offered my own proposal that would achieve primary budget balance, one of our assignments from the president, by 2015. But I did it without further eroding the middle class in America.

CORNISH: So give us two recommendations that you disagreed with and why.

Rep. SCHAKOWSKY: Well, I certainly felt that the charging out-of-pocket costs for Medicare and adding additional out-of-pocket costs to the elderly is a very bad idea.

CORNISH: And this is a part of the proposal that says that people need to share more of the costs with the government for the Medicare benefits that they're using.

Rep. SCHAKOWSKY: Except that the reality is that older Americans are spending about 30 percent out-of-pocket already for their health care costs. And to ask them now to pay even more costs, I think, is absolutely the wrong way to go. We can have a public option in our health care system, which would reduce about $10 billion in costs. And as far as Medicare goes, why not have negotiations with the drug companies for lower drug prices, just like the Veterans Administration does?

In other words, there are ways to do it without sacking the middle class. Now I may...

CORNISH: At the same time, Congresswoman, take something like the public option. I'm pretty sure this country just spent all of last year having this debate, and the public option did not end up in the health care law. It was deemed politically unfeasible.

Rep. SCHAKOWSKY: Actually, though...

CORNISH: I mean, how can that be what you're putting on the table to move forward?

Rep. SCHAKOWSKY: Because actually the public was wildly supportive of a public option. So I'm willing to subject my plan to public scrutiny anytime because we know from polling data that people don't want to see Social Security, another thing - they suggest cutting Social Security benefits. Most Americans...

CORNISH: Well, they suggest cutting future increases in benefits and they suggest increasing the age that you qualify over the next few years.

Rep. SCHAKOWSKY: No. Actually, it would affect current beneficiaries, because one of the things that they suggest is recalculating the cost of living adjustment, the COLA, recalculating it down. So these are the wrong ways to go.

CORNISH: But were there any parts of the commission's report that you did agree with?

Rep. SCHAKOWSKY: Yes, absolutely. The military budget was on the table. The Simpson-Bowles plan cuts $100 billion from the military budget. I'd do slightly more, 110 billion. But I do not do it by freezing military pay or cutting military health care. You know, these military families aren't getting rich serving the country, and I don't think they should be the target of deficit reduction.

CORNISH: One talking point that our listeners have heard repeatedly is that it's time to have the, quote, "adult conversation" about the deficit, that everybody's favorite things need to be on the table. But, you know, the commission couldn't even agree on this report. So, are you guys ready to have this conversation?

Rep. SCHAKOWSKY: Well, I do think that bottom line, the commission has proven that fixing our nation's fiscal challenges is not mission impossible. I had a plan that...

CORNISH: Just getting votes for it is, it sounds like.

Rep. SCHAKOWSKY: Well, except that - you know, we're talking about an adult conversation that we need to put this on the table. I think the fact, by the way, that military budget is on the table is not necessarily - wasn't a given when we began our commission. So I think a lot of the things that came up in the commission proposal will be useful and will be on the table. But you're right, there's still going to be, you know, partisan debates.

CORNISH: That's Illinois Congresswoman Jan Schakowsky.

Congresswoman Schakowsky, thanks for talking with us.

Rep. SCHAKOWSKY: My pleasure.

CORNISH: Next, we turn to Arizona Republican Jeff Flake. He's long been one of the House's strongest advocates for reducing federal spending.

Representative JEFF FLAKE (Republican, Arizona): Republicans need to recognize that we need - if we want lower tax rates, then we've got to look at some of these tax expenditures, some of the deductions that we currently give. You know, that's heresy in some circles, but we've got to do it. And I think Democrats have to recognize we've got to make far deeper cuts than we've been willing to over the past several years.

CORNISH: Is there anything that the commission suggested that you agree with?

Rep. FLAKE: Oh, yes. Their discussion of recalculating Social Security benefits, retirement age. I think it's just a little too tepid and we need to go a little stronger and sooner. On the revenue side, home mortgage interest and phasing that out, particularly for homes priced more than a million dollars, you've got to do things like that.

CORNISH: Congressman, we're basically hearing that things are really bad, something needs to be done, and finally, when someone sits down and figures out what could be done, lawmakers reject it. I mean what is to look forward to here?

Rep. FLAKE: When you look at our unfunded obligations over the next several decades, you know, about 85 percent of it is health care-related. And when you have a commission report that really doesn't touch on that topic, then I think you need to go back to the drawing boards and be more forceful.

CORNISH: But I mean, overall - I mean, essentially to you, if that's the case, is this essentially a failed experiment?

Rep. FLAKE: No. Whenever you're talking about it and whenever you have more people recognize the problem, simply having people see the commissioners stand and say this is something that has to be addressed now rather than later, perhaps that will help.

But what we can do as members of Congress, you know, we have discretionary budgets that we'll deal with this year, and if we can't deal with the entitlements politically, then at least we can deal with discretionary spending. And that's something we can control and should control. And I hope we do.

And if we Republicans don't, then we'll probably be in the minority in a couple of years, because I think the country, by and large, is waking up to this. And the commission report - I think the major value is having the discussion out there, where more people see it.

But it's frustrating. I mean, I go to, you know, Tea Party gatherings and some will talk about spending and then say, you're going to give me a Social Security COLA this year even though there wasn't inflation to justify it. And so, there's cognitive dissonance out there with all of us. And we just got to get serious about this.

CORNISH: So are people going to get what we're hearing, the quote, "adult conversation" that they've been promised? It's kind of tough to see given that the commission barely got their report out the door.

Rep. FLAKE: I hope so. I mean, we're going to have to. We are headed toward a fiscal cliff. We're going to be Greece before too long. I think Congress seems to have the political courage only when we are right at that cliff. The difficulty is we don't know where that cliff really is. It's, you know, the next time we have a Treasury auction and have no buyers, or something else will precipitate a crisis.

And that, I think, is what moves us to move forcefully very soon so that we don't hit that cliff while we're wandering about in the dark. And I hope all of us will recognize we need to move further and faster than the people have proposed so far.

CORNISH: That's Republican Congressman Jeff Flake.

Congressman Flake, thank you so much for speaking with us.

Rep. FLAKE: Thank you for having me.

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