World leaders react to a historic shift in U.S. policy toward Cuba. Pakistan buries victims of a school massacre by the Taliban. And U.S. officials say North Korea is behind the hacking of Sony Pictures. A panel of journalists joins Diane for analysis of the week's top international news stories.
President Barack Obama called it “productive” while Republican leaders said it was a “frank” discussion. The president met with congressional leaders from both sides of the aisle yesterday to find common ground on pressing issues over the lame duck session. Among the topics they discussed were extending the Bush tax cuts, whether to repeal “Don’t Ask Don’t Tell” and ratifying an arms agreement with Russia. Both sides pledged cooperation, but no concrete agreements were reached in the meeting. Republicans say they view the midterm election mandate differently than the president does. Diane and guests take a look at the efforts to bridge the partisan divide.
- Ron Elving Washington editor for NPR.
- Katrina vanden Heuvel Editor and Publisher of the Nation, writes a weekly column for The Washington Post.
- Byron York chief political correspondent, Washington Examiner
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Yesterday, President Obama met with congressional leaders from both sides of the aisle to work on pressing issues, including the Bush tax cuts, unemployment benefits and the START treaty with Russia. Joining me here in the studio to talk of prospects for bridging the partisan divide, Ron Elving of NPR and Byron York of The Washington Examiner. Joining us from the Argo Studios in New York City, Katrina vanden Heuvel of the Nation. We do invite your calls, comments. Join us on 800-433-8850. Send us your e-mail to email@example.com. Good morning to you, Katrina.
MS. KATRINA VANDEN HEUVELGood morning, Diane.
REHMByron, good to have you here.
MR. BYRON YORKGood morning, Diane.
REHMRon Elving, I'll start with you. President Obama called the meeting productive, very civil. How much do we really know about what went on?
MR. RON ELVINGI think we know more about the first hour or so than we know about the final 35 minutes when they went off -- or not off the record as it were -- but they dismissed the note takers -- the people who were in the room as staff -- and just got down to the elected officials and had some sort of tête-à-tête and went further in terms of trying to establish this bridge that the president and the Republican leaders and the Democratic leaders are all trying to bridge for at least a few issues, at least a short agenda of what the lame duck is going to do and perhaps establish some relationship for the 112th Congress beginning in January.
REHMAnd, of course, John Boehner called the meeting a frank discussion. So what does that mean?
ELVINGI think it sounded a lot like the terms that people use when they come out of diplomatic discussions with another country, where the Russians and the Chinese or the Indians and the Pakistanis come out afterwards and say they had a frank exchange of views. And they really haven't reached any sort of agreement...
ELVING...of any meaningful sort. But, you know, the meeting remained civil, and everyone remained in the room. And the meeting, as usual, runs a little longer than it's supposed to run. This was supposed to be an hour-long meeting. It ran a little shy of two hours. That shows that at least they were talking. There was some cordiality. And there are a few things on which these warring parties, these partisan sides, might agree. And certainly there are certain things that must be done, such as the funding of the government beyond Friday.
ELVINGWe need another continuing resolution -- looks like we're going to get one. The length of it is still in some negotiation. Everyone wants the tax cuts not to go away on Jan. 1, at least not for everyone. Everyone is agreed that they don't want to see every American's taxes increased on Jan. 1 because that would produce a firestorm. So I think there are some areas of agreement, and those were certainly dwelled on yesterday.
REHMHow much agreement, Byron?
YORKI think Ron pretty much covered it. First of all, a frank exchange of views could be anything from a nice civil conversation to, you know, pounding the table. I mean, it could mean anything. But I just found out that all 42 Senate Republicans have just sent a letter to Harry Reid. And they say that, you know, the unemployment level is high. President Obama wants to make our first priority, jobs. I'll quote a little bit, "For that reason, we write to inform you, Harry Reid, that we will not agree to invoke cloture on the motion to proceed to any legislative item until the Senate has acted to fund the government, and we have prevented the tax increase that is currently awaiting all American taxpayers."
YORKSo they are saying, we're going to do those things first, and we're not going to do anything else before or at the same time we're doing those things.
REHMHmm. Katrina, President Obama said there was some recognition that the focus ought to be on helping Americans and not on politics. Do you think he was being overly optimistic?
HEUVELYes. And, I mean, if what Byron reports is accurate, it's -- to follow the analogy Ron started -- it's like a declaration of war, that letter from the senators to Harry Reid. Because what I think President Obama came out of the meeting, speaking about is the hope of common ground, and it did -- the meeting did occur, let's remember, on a day when -- we did see the first bipartisan piece of legislation pass in many, many moons -- the food safety legislation. But I think President Obama -- if he believes in common ground -- and let's not forget, you know, we're talking about two warring parties, and there's a reason we have two political parties in this country.
HEUVELYou have very fundamental differences about the role of government, the need to address the jobless levels, and President Obama, I think, if he sticks to common ground in the sense that it's investing in people and the deteriorating infrastructure and really addressing what is so off the establishment debate in Washington, which is the hunger on the part of Americans for jobs, ahead of this short-term deficit reduction, then I think you see the possibility of a party defining itself. I don't see much hope based on the two key characters of the Republican party, Boehner and McConnell, laying down the view that, you know, the first priority Senator McConnell said was to ensure President Obama is a one-term president.
HEUVELI don't see much hope from a party over the -- which over these last many months has basically, you know, obstructed rather than worked with President Obama. And, you know, again, I come back to that letter Byron spoke of. President Obama has spoken of the START treaty as something he needs to move on, that is important to the security of this country. It's one that is something of many, many, many, many decades of bipartisan agreement, so it's not hopeful if that is the first response coming out of this meeting the other day -- that letter Byron invoked.
REHMKatrina vanden Heuvel, she is editor and publisher of the Nation. She writes a weekly column for The Washington Post. Do join us, 800-433-8850. I know you wanted to add something.
ELVINGThere may be one wiggle room word in the sentence that Byron read from this very important letter, and that's the word legislative. If they say legislative item, that leaves open the possibility that they can still talk about New START -- the treaty that Katrina was just talking about. That is not, strictly speaking, a legislative item. It's the approval of a treaty. It takes a special majority. It takes two-thirds. Obviously, that's seemingly impossible in a Senate where you have 42 Republicans saying, they're a no vote on virtually everything.
ELVINGBut there are exceptions to the -- virtually everything, and New START could be one if you have Dick Lugar in favor of it, the Senate minority leader with respect to foreign policy. He's the ranking member on the Foreign Relations Committee, and you have other Republicans who would like to see that treaty approved. They could wait, perhaps longer than some of these Democrats want to, but that is at least a possible exception to that roadblock.
REHMAnd Katrina also mentioned the food safety legislation that Senate passed yesterday. There is some indication that the House may simply accept the Senate version, not go to conference and come out with it. How do you see it, Byron?
YORKI think that could very well happen. I mean, some conservatives have a number of objections to it, but it passed the Senate. And that could happen. And the honest thing about getting things done, if you go to the White House website, they will list the president's legislative accomplishments for his first years in office -- there's a lot of them. And so a lot has gotten done. Now, whether it was a result of bipartisanship or majority Democrats just pushing things through, the fact is a fair amount has gotten done. Voters did what they did on Nov. 2. And the only reason we saw this meeting yesterday is that because Republicans now have a majority...
YORK...and the president has to deal with them.
REHMLet's talk about what did not get done, most importantly, the expiration of unemployment benefits, which happened at midnight last night. Katrina, what is that going to mean for the two million people who've been receiving benefits for 99 weeks?
HEUVELI think this is unprecedented, Diane, that you have for the first time with unemployment levels at the level they are at, that you did not have passage of the unemployment benefits. I think we're seeing a hypocrisy of unprecedented levels where there is talk, as Byron did, of increasing taxes on Americans. When, in fact, what we're looking at is a Republican Party that talks big about deficit reduction, but when push comes to shove, he's willing to shaft those who are unemployed -- hurting by the way -- the best stimulative measures, the demand this economy needs, in favor of tax cuts for the very richest.
HEUVELIf you look at the recession, the great recession we are still living through, it is the result of three things. It is the result of Bush tax cuts for the very richest, result of two wars which have not made us more secure and the recession. And we can have debates about President Obama's recovery program, but it did avert a free fall for our economy. And Byron is right. There are important legislative achievements on the White House website for good reason.
HEUVELBut it may be the first time -- again, unprecedented -- that you had the passage of a health care bill, for example. It's the first time in modern American history, a major social piece of legislation without Republican support. So I hope the Republican Party comes to its senses. And I hope President Obama, who's intensely intelligent, understands that he needs to find areas to work with -- if Republicans will find that common ground -- but also stand tall, stand hard, stand tough to say to the country and to the Republicans, come on. You know, you got to come part way and not just keep obstructing.
REHMByron, how do you reconcile that position of the Republicans pushing for deficit reduction, at the same time pushing for tax -- the maintenance of the current tax cuts?
YORKWell, first of all, everybody agrees -- it seems to me -- on tax cuts for all American taxpayers who make -- individuals making less than $200,000 and couples making less than $250,000. There seems to be a general consensus on that. There wasn't a consensus when they were originally passed, but there is now.
REHMIsn't there some talk about raising that to one million?
YORKThere is some talk about it. First of all, there's a very good reason that this has to be done, is that these tax cuts expire at the end of the year. Millions of Americans who pay income taxes have it withheld from their checks. It will be withheld at different rates starting in January. Then two or three, four weeks later...
REHMSo is it going to get done?
YORK...the Congress actually will change them. Yes, I think, it will get done.
REHMAll right. Byron York, and we'll take a short break and be right back.
REHMAnd coming back to you, Ron Elving, Byron York, Katrina vanden Heuvel, here's an e-mail from Joanna on the very subject about which we were speaking before the break. She says, "I don't understand how some of the same people can oppose extending unemployment benefits on the grounds of deficit reduction and then support extending tax cuts on the very wealthy." Ron Elving.
ELVINGWe are in a particular world when we have this discussion. And I think we have to get away from looking at it in strictly economic terms and think of it more in terms of the beliefs. Now, it's interesting to see John Boehner come out of that meeting yesterday and say, there's a reason we have Republicans and Democrats. We believe in different things. And I thought that was an interesting choice of words because it strikes me that the debates in Washington recently -- in the last year, in particular -- have become increasingly of the language of religion, that people don't talk so much about agreed-upon facts.
ELVINGThey don't talk so much about evidence. They don't talk so much about some attempt to find some ground in the middle. It's more like a religious struggle, where there are two sides that have just fundamentally different beliefs.
ELVINGAnd Republicans, in this case, believe that if you cut taxes for the affluent, for the wealthy, for the wealthiest and for small businesses -- which they include in that category -- then that creates jobs. And it ultimately creates revenues, and that if you give unemployment benefits, on the other hand, using the deficit to pay for them, that those unemployment benefits are, in some sense or another, on the negative side. They simply cost money, and they don't create jobs. And in the long run, they disincentivize people from actually going out and looking for work.
ELVINGSo it's a question of what you believe.
REHMBut let's talk about beliefs, not economically, not politically, but how about morally, Katrina?
HEUVELMm hmm. That's a very important question, Diane. I think we've lost a sense of morality in our politics. But there is a -- I wrote a column the other day about a group just formed called Patriotic Millionaires for Fiscal Strength. And it's interesting, if you go back in our country's history, not so far back, but into the '40s and 1950s when there was more of a social compact between business, between society, labor -- different pillars of our country. And I would say there was a kind of economic patriotism, where someone like the founder of Johnson & Johnson urged his business colleagues in a 1947 speech to never ignore the plight of the working class.
HEUVELBut it's not just the plight. It's about how our country has been built -- the greatness of our institutions, our public sphere, the investments in our country which have made this a strong and secure country. And I think Ron is so right, that there is this kind of theological religious frame of the debate in Washington, where, in some terrible sense, facts -- verifiable facts have ceased to matter. And how you have a discourse and a political debate in that environment is very tough, but I come back to the point that there's a reason we have two parties and rapport, in some respects. Countries have multi-party systems.
HEUVELBut there is a very fundamental difference between views on the role of government, on the role of society, on whose side you represent and how you have a shared prosperity where you have one party -- and here I come back to my fundamental belief -- where the Republican Party has lost its moorings as a party that once was a big tent and that did have a respect for the role of working people. But 30 years in the making, we've seen working people, middle class shafted, and the income in this country has accrued to the very top 1, 2 percent in a way that, I think, inequality is both moral, Diane, but also very pragmatic if you want to have a stable, secure, healthy society.
YORKWell, unemployment benefits in this country -- when they've existed at all -- I think, have traditionally been temporary. They don't go forever. They have been extended in this current economic emergency. They have been extended to historic lengths -- 99 weeks -- and now we're debating extending them further, perhaps to 12 more weeks, three months, to 111 weeks. And the question is -- my guess is it's going to happen. They're going to pass that. But there is a question here, which is, do you believe that there should be a permanent dole in this country?
YORKAnd if you don't believe that, then you believe unemployment benefits should be temporary, and then the question is how long they should last. It's not a bad debate to be happening. There are questions. People tend to look harder for work as they approach the end of their unemployment benefits. It's an extremely difficult question, but it is not an off-limits question. And it is not immoral to believe that there should be limits to employment benefits.
REHMAnd what kind of tax legislation do you think is going to happen?
YORKAll the Bush tax cuts -- all of them -- are going to be extended for two or three years. Robert Gibbs, White House spokesman, was on ABC this morning and essentially said the president's line in the sand is against permanent extension of the Bush tax cuts, of all the Bush tax cuts. So if the president makes that line in the sand...
REHMIs that a signal?
YORKOh, absolutely. It's a signal that you're going to have it for some period of time -- two or three. The president would like to decouple these, have different votes, have a...
YORKHave a vote on all the tax cuts below 250 and a vote on the tax cuts above 250 so he can say Republicans just voted for millionaires. That's probably not going to happen. In the end, I think, you're going to have extension of all the cuts for two to three years.
REHMDo you agree?
ELVINGThey'll have that vote in the House. In the House, they can...
ELVING...still control what they vote on, and they -- for a few more weeks. And the Democrats that still control the House will have a vote in which they cut it off at 250 and restore the 2001 rates on people making more than 200 as an individual, 250 as joint filing.
ELVINGOn the other hand, in the Senate, I don't think they will. I mean, this is why. Because they're going to have a package deal by which they continue the funding of the government. They extend these tax cuts for some period of time -- I don't know how many months or years it will be, but that will be the subject of the negotiation -- and they throw in an extension of the unemployment benefits. I don't know for exactly how long. That, too, will be a subject of negotiation. But all those things are going to get rolled into one big package -- I won't use an adjective to describe it -- and that package will be voted on. And then the Senate will go home.
REHMKatrina, that doesn't sound like what you're asking for, the president of the United States to stand tall and tough.
HEUVELYeah, I think that President Obama, if he had, you know -- again, intensely intelligent, reality-based, not faith-based -- looked back at these last months and understand that sometimes in politics you can't split the difference or round off sharp edges and push back aggressively and stand his ground on this core issue. It is both about morality, principle, good policy, good politics to stand tall on these Bush tax cuts, and I think -- you know, listen. What's going on in Washington is what's gone on in Washington for many years, which is, you lose sight of the alternative.
HEUVELIn these last days, there are alternatives presented by groups like Economic Policy Institute, the Institute for America's Future, about how to move forward effectively and not retreat into the conventional wisdom that we need to focus, short-term, on deficit reduction, deficit reduction. Grow the economy, long-term public investment, build demand and push the business community, Diane -- which is doing very well -- but push them to think hard again about being economic patriots as they sit on millions, billions of dollars, how to reinvest in this country and find that social compact.
HEUVELBut, I think, it's important to define what the Democratic Party is, and President Obama should be leading that and finding ways -- yes -- to cooperate on Republicans, find a START Treaty, say to them, come on. You got decades of Republicans. You see today McCain and Voinovich may join Lugar, but it's pathetic. You have only three when you've had treaties under Reagan, under Nixon, under Ford. So there are ways to find areas of agreement, but also to define sharply and have those fights that, I think, millions of Americans yearn for because they want to see a president stand tall against those who have not been there for job creation, for investment, for rebuilding this country.
YORKThese things always come down to votes, and the reason the president is not standing tall is that Democrats are divided on this. Even before the election, a number -- I think it was five members -- of the Senate had peeled off Democrats, had peeled off and supported extension of all the Bush tax cuts. I think 23 Democrats are up for -- in the Senate are up for re-election in 2012. A number of them in sort of purple or redder states can look at people like Blanche Lincoln and say, I don't think I want to go there.
YORKAnd the reason this is happening is because Democrats are simply divided about this. Now, I do think one idea for them that Sen. Schumer is pushing is this idea of raising taxes only on people who make more than a million dollars a year -- literally, $1 million a year -- which would allow them to say that Republicans are going to the mattresses to protect millionaires 'cause there's always been this kind of debate about if you're a couple and you make $250,000, are you really, really rich, as opposed to somebody who makes zillions of dollars a year? But Democrats can't unite around that one either.
YORKSo this is not going to happen for them.
ELVINGThis is the thing I think is most mysterious. And going back months on this program, we've had this discussion, and we have said, why don't they stick it at a million? Not for good reasons of policy, but just simply because that's so simple. And you can then say, it's millionaires against the unemployed. And when we say millionaires here, we don't mean people who may be worth $1 million with their 401 (k) and their home equity and all that thrown in...
ELVINGEarning $1 million per year or more in terms of their tax liability, which means they would be making more than that, and even that has not been enough to get a unified position for the Democrats' House and Senate. And, therefore, the president is stuck in a situation where he can go to the mat, but he'll be there alone.
REHMAll right. Let's talk about some other issues that came up yesterday. Don't Ask, Don't Tell with the military. Byron York, your thoughts.
YORKWell, a couple of things. One, this new position from the Republican leadership in the Senate tells me that it's not going to be considered by the end of the year because they think other things are more important. And I do think, you know, there was consensus at the meeting with the president yesterday, that the voters really were concerned mostly about jobs, number one, and, two, federal spending. And so the idea that the Democratic leadership would push Don't Ask, Don't Tell or the DREAM Act or other unrelated things in this limited time that they have, seems, to me, unwise. So I don't think you're going to see any action on it. I do think that there has been a little misrepresentation of the Pentagon's report.
YORKI was going through it. There are differences -- really striking differences between the service branches and especially between members of the armed forces who have been in combat and those who have not. And there is significant opposition to this -- 59 percent of Marines who have been in combat say it would have negative consequences, 45 percent of people in the Army who have been in combat say it would have negative consequences. I'm not saying it's not openly going to get done, but there are deep divisions inside the military about this.
REHMOkay. I want to go back to money for a moment because the president announced no raises for federal employees for two years. Was that a good move, Ron Elving?
ELVINGNot if you're a federal employee. I think that there's a negative signal that's being sent there. But at the same time, all federal employees have to realize that -- and by the way, let's just say this is not the world's most inflationary environment -- we're not looking at 4, 5, 6 percent a year inflation, or even 2 or 3 percent inflation. So for a pay freeze to be put in at this particular moment has more to do with symbolic respect, symbolic value, saying to federal employees, we see you as a place where we can go to get a little, you know, political benefit, a little political point. And I think federal employees will object to that. But you can see what the politics of it are from the president's point of view.
REHMRon Elving, Washington editor for NPR. You're listening to "The Diane Rehm Show." Katrina, considering the fact that you're debating tax cuts or tax benefits for millionaires, to begin by saying to federal employees, you're not going to get a raise for two years. What did you think of that?
HEUVELWell, I thought -- you know, I thought of a VA nurse getting her salary cut as she looks out across this country and sees a lot of people in the financial industry which, in many ways, plunged this country into the economic recession we're facing, wondering what she or he would think. And I think it also feeds the conservative narrative of government as a place of waste. You know, it's symbolic, as Ron said. But at this moment, there's other things one could do of symbolic value, fighting on job creation front or, you know, Obama going back to a very good speech he gave at Georgetown about building a new economic foundation. So I think it's bad politics.
HEUVELI would just say on the Don't Ask, Don't Tell and the DREAM Act, you know, I think -- to be semi-contrarian here for a moment -- listen, it's bracing to hear Defense Secretary Robert Gates call directly on the Senate to vote immediately to repeal the ban. I think he's been a voice of sanity. He was interesting, also, on WikiLeaks the other day, talking about, hey, get a grip. Let's take a long-term view, people. Countries work with the United States 'cause it's in their self-interest. But, you know, I think it's also a matter on these two pieces of legislation. It's symbolic in the sense of fighting on those because you want to reenergize a base that has been demoralized in these last months as the president has attacked here and there as has the Congress.
HEUVELSo, I think, there's both symbolic, moral and political value.
YORKBut we're in a very limited period of time. I just -- I don't see the Congress taking action on that because the Bush tax cuts are going to expire. The government is going to run out of money. After that, there will have to be an extension of the debt ceiling. There are a number of things that Congress simply has to do, and my guess is those will be done first.
REHMAll right. We're going to open the phones now, 800-433-8850. To Doug in Elkhart, Ind. Good morning. You're on the air. Go right ahead.
DOUGGood morning, Diane.
DOUGI wanted to talk about the tax cuts. And political aspirations aside, politics aside, I really believe that, fundamentally, if we're not trying to get re-elected or appease these people or the other people, they should all expire. They have not been effective at creating anything, except more debt and deficit. If they were so effective for the top few percent of the country's wealthiest people, why are we in the situation we're in? I don't understand that. And as a very fortunate employed man who does okay, I will tell you that I would be willing to pay more.
DOUGI make a heck of a lot less than $250,000 a year, but I'd like to be part of the solution rather than part of the problem. And if I am willing to do that -- Joe Lunchbucket (sp?) over here in Elkhart, Ind., which you've all heard of -- I think that, you know, the Warren Buffetts of the world and the corporate executives should be willing to pony up as well.
ELVINGIf the caller were representative across the board of American taxpayers, and if he were also willing to say that many of the benefits from the federal government that we've all become used to -- such as Medicare that takes care of, perhaps, our parents or grandparents or soon ourselves, and a number of other things that the federal government does that cost a great deal of money -- could also be restrained commensurately, then we wouldn't need a debt and deficit commission. And we wouldn't need a courageous Congress or a semi-suicidal president -- politically speaking -- to address our national debt. That attitude that the caller expresses would be sufficient.
REHMRon Elving of NPR, Byron York of the Washington Examiner, Katrina vanden Heuvel, editor and publisher of the Nation, she writes a weekly column for The Washington Post. Short break. More of your calls when we come back. I look forward to hearing from you.
REHMHere's a comment from Facebook. Oso says "When they set the tax cuts three years ago, all knew there would be a final date. Why does no one want to honor their agreement on the initial part? If I have three years to prepare, then I have plenty of time to make the best use and stand behind my word. This particular tax cut served its purpose, now onto better work." Byron.
YORKWell, she brings up a really interesting topic, which is the history of these tax cuts. If you remember in the 2000 presidential election, the driving issue was what are we going to do with our fantastic, incredible surplus?
YORKAnd Al Gore wanted to do one thing with it, put it away in a lockbox or something. And George W. Bush wanted to cut taxes. So the election happens, Bush wins, and then, later, the economy begins to deteriorate. And the argument for cutting taxes changes from, this is a surplus, we need to return this money to the taxpayers, they've overpaid -- changes to, well, we can't raise somebody's taxes, we need to cut their taxes in a weakening economy.
YORKSo that's what's happened. Now -- and, now, you have nine years later -- I don't know why Democrats don't talk about preventing the Bush tax increases, but they don't. You have these things set to increase or set to expire, which will increase taxes. And then the argument is being made -- and a lot of Democrats have signed onto it -- that it's simply bad idea to raise anybody's taxes in such a weak economy.
HEUVELThey're not going to -- but I have to take issue with Byron. They're not going to raise taxes. I come back again -- you talked about the gorgeous surplus we used to have. Well, there's a reason that we no longer have it. And there are three reasons. And one was the passage of the first Bush tax cuts and then accelerated with Iraq and Afghanistan -- Afghanistan now costing $190 million a day -- and peaked with the economic collapse of 2008. You would think, in those circumstances, if we had wise representatives -- and there is one party that has wiser representatives on this issue.
HEUVELTax cuts for the rich, the richest, don't work. And one of the reasons that the Obama recovery plan wasn't as successful is not only because state and city budgets are being slashed, but also it was larded with tax cuts. But if you -- tax cuts for the rich have not had a stimulative effect over time and in evidence-based reasoning. But you do find that people -- middle class, working-class people -- do contribute to the demand that is required for an economic recovery.
REHMAll right, Byron.
YORKWell, just a little correction on that. The reason the Clinton surpluses went away were three reasons. It was the Bush tax cuts, cost in the aftermath of Sept. 11 and the collapse of the tech bubble. A lot of government revenues went down a significant amount. And even with all those things, and even with the Bush tax cuts, the government federal deficit began to decrease, 2004, 2005, 2006. In 2007, the federal government deficit was $160 billion, which is virtually a rounding error today. And now the economy obviously rolled off the edge of the table -- in Larry Summers' horrible phrase -- in late 2008. But the deficits...
HEUVELI'll say it rolled off the table, yeah.
YORK...were actually decreasing in '05, 06' and '07.
REHMAll right. I'm going to go now to Tom who's in Johnson City, Tenn. Good morning to you.
TOMGood morning, Diane. Yes. As a registered voter and a graduate student here at East Tennessee State University, I have to agree with Katrina 1,000 percent. She's right about the START treaty. A friend of mine, Dr. Lucer, (sp?) told me that the world is hanging by a thread. The Soviet Union has over 50,000 nukes. The United States has over 50,000 nukes. And at any time, anything can happen. Byron, on the other hand, I feel is dead wrong on all counts. The Republicans are dead wrong on not extending the unemployment benefits for two million Americans who desperately need this money, while on the other hand, they want to give the top 2 percent wealthiest Americans $700 billion in tax cuts that they don't need and can't use.
REHMNow, Ron, there is the argument from an individual who is a student, who sees the tax cuts being aimed or the maintenance of the tax cuts being aimed toward the wealthiest, the most fortunate in our country. It's troubling.
ELVINGIt is interesting to note that something like 70 percent of the people you ask about the kind of cuts proposed by the debt and deficit commission -- Medicare, Social Security, raising the eligibility age over time, et cetera, et cetera-- seventy percent of the people are deep concerned. They say, I have deep concern about those cuts. And 70 percent is a pretty impressive number to a politician looking to be reelected. Fifty-nine percent say they have deep concerns about tax increases.
ELVINGAnd I do think the average American has come -- not this particular caller because this particular caller has obviously looked into a lot of these issues much more deeply and has a lot of detail and knows a great deal. But, I think, the average American taxpayer has come to the attitude that if you're talking about taxes and you're talking about tax increases or the expiration of tax cuts, which means taxes would go up, that it's going to affect them and that no matter what they're told, no matter what they hear, they believe that it's going to affect them, that it's going to affect them in some sort of negative way.
ELVINGAnd there is a much more positive response to this other anti-tax message, even when that anti-tax message would seem to be demonstrably in defense of only the wealthiest, it still doesn't have the populist effect that you would expect it to have. That's a mystery in our politics.
REHMAll right. To Lapeer, Mich. Good morning, Joe.
JOEGood morning. I guess my question is not really a question, but -- okay. If you have all these people's unemployment benefits that are getting ready to run out and children that are probably going to go without a home, food, you know, whatever the case may turn out, how exactly can the moral majority -- I mean, it sounds like this -- the whole unemployment thing is hinged on the fact that -- of these tax cuts for the wealthy. How can they call themselves the moral majority and go through with this the way it sounds?
YORKJoe, I wonder if I could ask you a question simply 'cause I just -- I said this a little earlier. Do you believe that unemployment benefits should be permanent as opposed to temporary?
JOEYou know, I think that has to be a kind of a case-by-case basis. If in the situation where the economy is as it is now -- which is a huge slump -- in that case, I think you need to keep people in their homes. Permanent, like, as in having someone live on it for 20 years, no, absolutely not.
REHMThat's a good answer. Byron.
YORKMy guess is, is that most people agree with him. I mean earlier...
YORK...I said, I think you'll see these things extended. On the other hand, people are uncomfortable with the idea of it being permanent. And now if they're extended 12 weeks to 111 weeks, at some point, this argument will have to be had.
REHMAt some point, but as Joe points out, we are in a terrible economy right now. And finding a job has become so much more difficult.
YORKBut if you have unemployment at 5 percent...
HEUVELI mean, there's a morality...
YORK...you have people who are suffering. I mean, you're always going to be able to find that.
HEUVELThere's a morality and pragmatism here, Byron. I mean, there is -- you may disagree. I mean, there is a morality and a pragmatism. The pragmatism is to have people losing homes, to have had $11 trillion of wealth wiped out due to the economic crisis, you got to think about keeping people in their homes. You got to think about the poverty levels increasing. But I think you should -- in the larger macrosphere, any plan to substantially reduce the federal deficit should be deferred until employment has dropped to some acceptable level.
HEUVELI would say, like, 5.5 percent -- we're at 9.6 percent. Where are people -- what are people going to do and what will -- how will the economy recover if people don't have work, don't have jobs, don't have homes, don't have income? That is a pragmatic question. Put aside the morality of this issue of the dole, and I think the question or the caller had it right.
YORKBut there's an equally pragmatic question, which is federal expenditures, total federal expenditures went from $2.7 trillion in 2007 to $3.7 trillion in 2010. And Obama administration officials -- everybody across the board says the kind of spending and the kind of deficits that the country are running are simply not sustainable. In other words, after about a decade of that, we're in serious, serious trouble. So there are balancing priorities here.
HEUVELIn the short-term...
HEUVELIn the short-term, Byron, those deficits are sustainable. They have been over time, historically, in our country. We are a rich country. Essentially, it comes down to what Ron, I think, said at the beginning. I'm not sure it's religious, but there is a fundamental philosophical divide in this country about what kind of country we want to be. And that comes down to things like these tax cuts for the richest. Or do you try and build a shared prosperity at a time of unprecedented inequality?
HEUVELAnd I think these are the issues that we're grappling with in a political system that is not working for a lot of reasons we can talk about, whether it's the money that's flooding into our system or the arcane process and procedures in our Congress. But there are fundamental issues which we need to cope with at a moment when the world is in -- you know, think -- look at China. You got a lot of problems, but you have an industrial policy, you have investments. We're dithering around in their issues like Birthers. I mean, this is insane.
REHMKatrina, I have a question for you from Lauren. She says, "I've always admired your reasoned approach. Can you speculate why the people in this society, with the least, consistently vote against their own interests and fall for right-wing propaganda? Why are progressives and other Democrats so poor at communicating to those who have the least fortune in our society?"
HEUVELThank you, Loren, for your words about my reason. You know, I think politics that blames people is dead on arrival. But I would argue that, yes, progressives have not forged a message and a strategy, which I think we're fully capable of. There are a lot of issues. But there are many in this country who have very little, who have been part of this new coalition, one that elected Obama in 2008. It's -- some people call it a kind of rising American electorate of African-Americans, Latinos, young people, single women, working people, so...
REHMBut where were they in 2010?
HEUVELIn 2010, there was a demoralization of this community, of this base. I think the White House, which came in with great mobilization and great hope, made the mistake of demobilizing. And you -- traditionally, in midterms -- and I think there's been too much kind of hype and hysteria around this midterm -- the party in power loses seats. There was a lot of enthusiasm, Tea Party and others on the conservative right-wing side of the aisle. So -- but I think that the -- you know, this is -- the Republicans, if they're wise, understand that, you know, this election was, you know, an unearned win in many ways for the Republican Party and that this idea of a big mandate is not one that they have.
HEUVELBut there is work to be done and work to be done around these core issues of taxes, of what the role of government is in order to bring those who don't see the Democratic or progressive groups on their side. And I think we need to talk about a government that is not on their backs, but is on their side, and that has a lot to do with issues like corporate power, about corruption of government and retrieving a government that is on people's side.
REHMKatrina vanden Heuvel, and you're listening to "The Diane Rehm Show." Here's a tweet from M.D., who says, "The money should go to jobs, not unemployment. The government should not take care of the people. The people should take care of the people." Ron Elving.
ELVINGIt would certainly be an area for consensus. And there is some possibility for consensus in all of this that we've talked about, if there were some way that we could all agree that money could be mobilized to create jobs. Now, Republicans will tell you, cut taxes and that will do the job. Some Democrats will argue we should have more direct spending to create jobs directly by the government, that the stimulus plan was too much reliant on the private sector. The private sector hoarded a lot of its cash, didn't create jobs...
REHMAnd still is.
ELVING...and still is doing so. And the spending that was done by the tax cuts that Katrina mentioned that were part of the stimulus, that spending was not sufficient -- at least, it doesn't seem to have been sufficient -- to turn around the economy enough. People probably spent it, some people probably saved it. It wasn't very big. Most people never knew they got it. The tax cuts portion of the stimulus plan is a big secret, really. If you ask people what was in the stimulus, they won't mention tax cuts very high.
ELVINGSo we haven't got yet a mechanism by which money -- whether it's being sent out in unemployment benefits, whether it's being sent out in tax cuts -- can be mobilized to create jobs visibly...
ELVING...that we can all agree were created by this policy.
YORKBut, Ron, that is the most that our system could do. I mean, you had an extremely popular president just in office. You had 255 Democrats in the House. You had 60 in the Senate. I mean, that is as far as the political system could actually go. And I think everybody agrees that either it was the wrong thing to do or didn't go far enough 'cause you have 9.6 percent unemployment. But it is not -- I don't think it's possible to think that it could have gone any farther.
REHMTell me what you each expect from the president's deficit commission, which has now delayed its vote until the leaders feel they can get a consensus. Is that possible, Ron?
ELVINGThey need 14 votes out of 18.
ELVINGTwelve of the members of the 18 members are elected officials -- six senators, six members from the House. It's very hard to couple together 14 votes. You have to assume the two chairmen, the four non-elected members -- that's six. You might be able, with a real miracle, to get the six senators, all right? That just gets you to 10. To get to 14, you're going to need at least four House members. The three Republican members have said, no way, just no way. They have...
REHMThey've already said no way.
ELVINGThat's right. And one of the Democrats, Jan Schakowsky, has also said there's no way she's going along with these cuts to Medicare and Social Security. So that leaves you down to two more Democratic representatives from the House, Xavier Becerra from California, John Spratt from South Carolina, former budget -- well, he's still the budget chairman, but he has just been deselected. He lost in November, so he won't be back as budget chairman. He could decide to be the person who says, I'm out of politics now...
REHMI can do whatever I want.
ELVING...so I'm going to do whatever I want. But he -- it would seem to me -- would be absolutely essential to getting to 14. So if you can get those two Democrats, and you've got all 12 senators and all -- excuse me -- all the six senators, then you can possibly get to 14. But they don't have any senators yet. I'm just imagining that possibly this cast of six senators might conceivably go along. None of them has said he or she would.
REHMWhat do you think is going to happen, Byron?
YORKI think they're going to have a lot of good recommendations. I think a lot of the things that they say are going to make sense, and it will have no force of the law. And it's not going to happen because the Congress has to do this stuff. (unintelligible) you can't.
REHMSo while Europe has been debating, raising the retirement age...
REHM...with protests in the street...
REHM...we cannot do that here?
YORKI think that's very unlikely. Look, the reason this has not happened, is there is such incredible distrust between the two sides. And the people who might even agree to raise taxes won't do it because they don't think the cuts will actually be made.
REHMByron York of the Washington Examiner, Ron Elving of NPR, Katrina vanden Heuvel of the Nation, thank you all so much.
ELVINGThank you, Diane.
REHMThanks for listening, all. I'm Diane Rehm.
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