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Guest Host: Katty Kay
Republicans pulled out of debt reduction talks led by vice president biden. They cited an impass over taxes only President Obama and House Speaker Boehner could resolve. The Congressional Budge Office issued a dire warning of a debt explosion, and the Fed said the U.S. economy is weaker than previously forecast. Former Utah Governor Jon Huntsman officially joined the Republican presidential race. The Supreme Court threw out a massive class-action sex-discrimination lawsuit against Wal-mart. And the House is set to vote on resolutions regarding Libya.
- Sheryl Gay Stolberg Washington correspondent, The New York Times.
- Nia-Malika Henderson national politics reporter, The Washington Post.
- Greg Ip U.S. economics editor, The Economist, and author of "The Little Book of Economics: How the Economy Works in the Real World."
“So Long:” Michael Hirsh and Jamie Tarabay’s National Journal Article on Afghanistan
MS. KATTY KAYThanks for joining us. I'm Katty Kay of the BBC, sitting in for Diane Rehm. Diane will back on Tuesday. GOP negotiators pulled out of deficit reduction talks, leaving the impasse on the hands of President Obama and Republican Congressional leader John Boehner. The U.S. joined 27 other countries in releasing 60 million barrels of oil from strategic reserves. And there are new signs that the U.S. labor market is weakening.
MS. KATTY KAYJoining me to talk about these and other national news from the week are Sheryl Gay Stolberg of The New York Times, Greg Ip of The Economist and Nia-Malika of The Washington Post. The phone number here is 1-800-433-8850. The email address is email@example.com. You can find us on Facebook. Send us a tweet. We'd love to have your questions and comments. We'll be opening the phones in just a while. Thanks so much for joining me, all of you.
MS. NIA-MALIKA HENDERSONGood morning.
MR. GREG IPGood morning.
MS. SHERYL GAY STOLBERGGood morning.
KAYLet's start with the economy and with those debt reduction talks and the fact the Republicans pulled out. It looked pretty dramatic, Sheryl. What actually happened? And why did they pull out?
STOLBERGWell, Eric Cantor, the House Republican leader made a surprise decision to withdraw from the talks. These talks were being headed by Vice President Joseph Biden. They're trying to produce $2 trillion in savings. And Mr. Cantor decided that he simply could go no further since Democrats were demanding tax increases that his caucus can't support.
STOLBERGThe talks were supposed to last with Biden at the helm for another month. Now, they're kind of in disarray, and it looks like President Obama will have to step in at this point sooner than he had expected.
KAYNia, don't we see a pattern of this, of the president kind of being brought into congressional talks? Congress is thinking he's coming in too late. Some critics saying he's coming into these kinds of talks too late. And then the last minute, he comes in and is expected to kind of clean things up. But this time, it seems he's having to step in earlier.
HENDERSONAbsolutely. This is has a bit of pattern. If you look back to health care, to the Bush tax cuts, to the continuing resolution debate, he always comes in at the last minute. This time, they're putting the pressure on him to put some skin in the game early and really make a decision. You know, this thing -- obviously, we've got until Aug. 2. They want to move this along. They're looking at a summer recess. This is campaign season. So...
KAYHmm. It's going to be a great Aug. 1 for all of us then.
HENDERSONExactly. We might be there late at work in the way that were last time (unintelligible) decisions.
KAYGreg, can we just talk about the economics of this? Because, here, the Republicans are saying, okay, we're not going to actually have a discussion until you take tax increases off the table. I mean, are we at a risk that there is so much ideology in these negotiations -- I mean, you're the economist. You're the economic writer amongst us -- that we can't actually get to a sensible resolution on the debt ceiling because ideology is trumping economic policy here?
IPSure. I mean, I could sort of map out a couple ways this could happen, none of them are very positive. Now, the best case scenario is that they do come up with a package of $2 to $4 trillion and that the bulk of those cuts take place, not next year or the year after that, but somewhere in the back of that 10-year window. That gives us a little bit of breathing room for the economy and the credibility with the markets that we will, in fact, get our fiscal problems under control.
IPOne of the bad ways this could happen -- well, the absolute worst way is that we get to Aug. 2 with no sign of agreement. And the treasury is forced to default on its debt. And that would be, you know, catastrophic, you know, on the part of what happened when Lehman Brothers failed in the fall of 2008.
KAYInvestors lose confidence. The markets lose confidence.
KAYChina has wobbles.
IPIt's my view that that is such an awful outcome, the treasury won't let it happen. They're more likely to do something, try and find something else that they don't pay. We're not going to pay our Social Security checks. We're not going to pay, like, our vendors, that sort of thing. But even in that situation, you're sucking billions and billions of federal spending out of the economy virtually overnight. And that would be a severe blow to an economy that's very weak.
IPSo both of those outcomes are very negative. In some sense, I think what's going on here -- and I think both sides realize that. The Republicans will sometimes talk tough about how they'd rather have a default than not get spending cuts. If you get them off the record, they concede that that is not an acceptable outcome. But what we have seen, as we were sort of talking about a minute ago, is that nothing in this town seems to get done these days until you have a crisis atmosphere.
IPWe didn't pass the budget in April until a few minutes before the government was about to shut down. In fact, I think, perhaps a few minutes after the government was close to shut down.
KAYSheryl, between accepting that there may have to be some tax increases and going to the wall in the scenario that Greg has just pointed out and not having the debt ceiling heightened, which are the Republicans going to choose?
STOLBERGWell, you know, it's hard to know. I think we can't forget that, while this is an economic debate, we're also in a political season, right? So every -- sometimes, in fact, the Democrats and the Republicans remind me of that old Dr. Dolittle character, you know, the push-me-pull-you, where they're each going in opposite directions, and neither can get anything done.
STOLBERGBut at the end the day, I do think that they will have to get something done because neither side can afford to look like it's throwing the country into economic chaos. This is why we've seen agreements in the past in April averting the federal budget, the federal government shut down. And prior to that, in December, Democrats and Republicans came together around extending the Bush tax cuts.
STOLBERGI think both sides kind of realized that they can't afford to go to the voters in November of 2012 and be blamed for the kind of economic disaster that the treasury asserts would occur if we default -- the government defaults on its obligations.
KAYNia, Sheryl speaks about the Democrats and the Republicans being this push-me-pull-me position, but one Democratic aid was quoted by Reuters, I think it was, yesterday saying that Cantor -- Eric Cantor just threw John Boehner onto the bush. And we'd seen tensions within the Republican Party over this as well.
HENDERSONWell, that's certainly part of the backdrop here, that they, you know, have a little power struggle going on there. And, apparently, Cantor went to The Wall Street Journal to say that he was going to pull out of these talks, and then I think later went to Boehner, so that was odd. But also, there's talk that Cantor was going to do this all along, that this was the plan to really kick it off to the big guy in the White House and Boehner all along.
HENDERSONAnd so there are sort of two different stories out there about how this happened. But, again, I think, one of the things that's really interesting about this is when I'm traveling on the road and, you know, talking to voters at Republican events, no one really mentions the debt ceiling. It's not clear that either party has really made the connection between the debt ceiling and in raising that and the importance of raising that and the economy and jobs.
KAYThat's really interesting because what the Republicans are saying at the moment is that any Republican who votes to the raise the debt ceiling is toast, Sheryl.
STOLBERGSee, well -- yeah, I do hear it from voters. Now, I just came back from Michele Bachman's district. She is running for the Republican nomination for president. She is the darling of the Tea Party. She's the ultimate fiscal conservative. And I did hear from a lot of voters in her district that they are very concerned about federal spending.
STOLBERGThey might not understand the nuances of the debt and what it means to, you know, not approve an increase in the debt ceiling. But they know that spending is important, and it's really an issue on their minds.
KAYOkay, Greg, you were at Fed chair Ben Bernanke's press conference Wednesday, I think it was. More on the economy there, and yet, again, not particularly good news.
IPRight. So not -- no big surprises from the Feds meeting. They have been undergoing what they call a quantitative easing program where they print money and use it to buy government bonds in an effort to get long-term interest rates down. That program will end in a few days' time. There is no sign that they'll be doing any more. The more interesting take away was that as they often -- as they do every few months, they put out a new forecast for the economy.
IPAnd they significantly downgraded their outlook for this year. No big surprise there. We knew that the rise in gasoline prices and the disruptions to supply chains from Japan were going to take a chunk out of the first half of this year. The bigger surprise is that they also lowered next year's economic outlook as well. And when we asked Bernanke about that, he said, look, there's something else going on here that we can't quite define.
IPThere's a more permanent drag on the economy. Maybe, all this bounce, damage and the housing problems are worse than we thought. And the market kind of sold off on that 'cause it was a very kind of dreary outlook. And it's doubly dreary because the chairman of the Fed is -- was basically telling us, yeah, things are worse than we expected. And we're not about to do anything about it.
KAYNia, are you hearing anything that can be done about this? Is there any more talk of job spills, stimulus money, anything that the government is proposing to do in response to what looks like a weak, medium-term outlook on the economy?
HENDERSONWell, it seems like all of the political capital that existed around the stimulus early on, $800 billion -- they were able to give that -- is gone. There's not a lot momentum behind that. It doesn't look like President Obama has the momentum to pass that. The House, of course, is in GOP control, and there's a slim majority for Democrats in the Senate.
HENDERSONSo it's really hard to see how they are able to pass any sort of stimulus package that gets the economy going in the way that they think it would. Part of the problem is there's not a lot of evidence. If you ask, you know, everyday voters, there's not a lot of confidence that a stimulus package would really work.
KAYOkay, in relation to that, we had -- or perhaps the government says the administration says it's definitely not in relation to that. But we did have the surprising decision this week, Sheryl, to release the U.S. and 27 (word?) countries agreed to release strategic oil reserves.
STOLBERGRight. It is a surprising decision because...
KAYI thought these were meant to be emergency reserves.
STOLBERGWell, I was going to say it's an emergency. Candidates are running for election.
IPHave you seen our poll numbers?
KAYThese cynical reporters.
STOLBERGYou know, look, when the price of oil goes above -- or the price of gasoline, rather, goes above $4 a gallon, especially in summer, the peak travel season -- families want to take vacations -- political candidates, including presidents, get very nervous. I'm not suggesting that that's the reason they're doing this, but I do think that it cannot be ignored, that, you know...
KAYBut, Greg, we've had gas prices actually coming down over the last few weeks. And we have gas inventories, which are higher than usual, so purely from a gas supply side argument, that doesn't seem to be a huge emergency here.
IPYeah, the timing is really the oddest part of this. Now, I don't doubt that politics played a part, at least, in the view of the administration. But, remember, a bunch of other countries who aren't, you know, having elections in November 2012 joined in, so part of the backdrop here...
KAYUnder pressure from the states, perhaps at the IAEA in Vienna, or not necessarily?
IPWe're not picking that up. The bigger issue was that every since Libyan supply was taken off the market earlier this year, there had been an expectation that OPEC would increase it's output to make up for that. But OPEC's last meeting earlier this month broke up with no such agreement. And so since that time, the administration, in fact, even before that time, has been negotiating with other countries to deal with this.
IPIn the meantime, the Saudis had said that they alone would increase output to make up for some of this disruption. The interesting question is, now that the United States and other countries have unilaterally decided to take matters into their own hands -- whether Saudis will now decide, hey, you don't need us after all -- and as a result, you actually don't get much improvement in the supply balance or price at all.
KAYWhen I go and fill up my car tomorrow, is this going to make any difference? 'Cause I've been getting sticker shock when I have to pay that credit card bill.
IPLook, the price of oil dropped about five bucks as a result of this announcement. You know, that might be 10 to 15 cents off of a gallon of gasoline against a run up of a dollar since late last year and subsequent drops of 20 cents. Not a lot of people are going to notice it. On the economy, if that $5 drop will sustain, maybe 0.1 percent of GDP, and that's kind of rounding error.
KAYOkay. Greg Ip, economics editor of The Economist and U.S. Economics editor and Nia-Malika Henderson of The Washington Post. Sheryl Gay Stolberg from The New York Times is also here. The phone number is 1-800-433-8850. The email address is firstname.lastname@example.org. Still a lot to get to. It's been a very busy week. Do phone in with your questions and comments and stay listening.
KAYWelcome back. I'm Katty Kay of the BBC, and you've joined the domestic hour of the Friday News Roundup. I'm in the studio with Sheryl Gay Stolberg from New York Times. Greg Ip is here from the Economist. Nia-Malika Henderson from The Washington Post is also here. We've been talking about those oil reserves, why exactly the administration decided to release some of that strategic oil reserves along with, of course, 27 other countries, about the economy, about the debt ceiling.
KAYLet's move on to Libya because the House is voting -- I think we get this vote in a couple of hours, Sheryl, if I'm right. But the House is going to vote on three bills on Libya. What are they voting on?
STOLBERGThe House is voting on several bills. First, they're voting on a bill that is put forth by John Kerry and John McCain of the Senate. And that would authorize the Libyan mission to continue without changes for a year. That bill is not going to pass. There's a lot of disenchantment within the House over President Obama's Libya policy. The other measure sponsored by Rep. Tom Rooney of Florida would bar the administration from using money for military operations in Libya beyond support activities, like search and rescue, aerial refueling, et cetera.
STOLBERGThat will probably pass the House but won't fail the Senate. And what's happening here, really, is Republicans are doing kind of a delicate balancing act. They are upset, as are some Democrats, with the way the president has pursued his Libya policy without congressional authorization. So they want to send a message to him. It's really a rebuke of the president saying, you should have consulted us first.
STOLBERGBut at the same time, they don't really want to throw the NATO mission into disarray. They don't want to rattle things, the progress that's been made over there too much. So they're sending sort of a rebuke message to the president while still allowing the NATO mission to continue.
KAYNia, what's the law behind this? Should the president have gone to Congress before authorizing U.S. involvement in the NATO mission in Libya?
HENDERSONWell, they say no. And, of course, there...
KAYThe White House, isn't it?
HENDERSONThe White House says no. This is about the War Powers Act and whether or not you have to go to Congress and get approval. They say no because these aren't actually hostilities -- whatever that means. There's certainly, you know, active missions over there, an active mission to try to depose Qaddafi. So -- but they are hanging their argument on saying that, essentially, this isn't really a war, which, I think, some Republicans and Democrats are scratching their head over that sort of dancing on the head of a pin over whether or not this is a war or this actually constitute hostilities.
HENDERSONI think it also speaks to this just discontent among Republicans and Democrats about Obama's relationship to Congress. And I think that's why you see some Democrats who are not willing to go along with this president. They finally had to get Clinton to come in there -- Hillary Clinton come in there and say, hey, you know, are you going to side with the president? Or are you going to side with Qaddafi?
KAYDiscontent because they feel he rides rough shot over Congress?
HENDERSONIt is -- I don't even know if it's rough shot or not really going to them and having conversations with them and consulting with them. I think that's more of the problem. And this is across party lines, that this discontent about his relationship with Congress exists.
KAYBut is this also showing a reflection of general U.S. public opinion being confused, dissatisfied with what seems to be an ongoing mission in Libya not achieving very much?
HENDERSONHere's what I think. I think that we are a war-weary public. We saw the president this week address the country about Afghanistan. That war is almost at the 10-year point. We're at war in Iraq. Libya is a third front. The public can -- has only so much appetite for committing the American military to expensive, lengthy -- in the case of Libya, many people fear -- feel unclear missions at a time when people at home are hurting.
HENDERSONYou even saw the president saying his Afghanistan speech, you know, it's time to focus on nation building here at home. So a lot of folks out there are scratching their head. They thought this engaging in Libya would be short-lived. You'd get rid of Qaddafi, you know, boom, boom. We'd be done with it and out of there. It doesn't seem that way anymore, and people are concerned that this is going to drag on.
KAYIt doesn't seem that way because it isn't that way.
KAYBecause it has been going on for weeks.
HENDERSONAnd people are worried that it'll drag on and on and on. And let's face it, that you might say the past is the best predictor of the future. They can just look around -- look, 10 years ago at Afghanistan, which we thought was going to be a quick war. And we're still there.
KAYBut it doesn't seem, Greg, that there is any chance that the U.S. will pull out of the NATO mission. The U.S. is committed, right, at this point?
IPIt is and...
KAYAnd not only committed, but it does seem that, actually, from what I hear from people in Europe that the U.S. is definitely taking the lead in a lot of these missions.
IPI think that's right. And also, in fairness, there have been developments on the ground that do suggest this thing might actually be entering its end stages. I mean, there were reports in the last 24 hours that Qaddafi is thinking of leaving Tripoli. You know, he's running out of fuel. He's running out of a lot of resources and so forth. It may be that, you know, within a few months, this thing will actually be, you know, entering its final stage in the way the alliance had hoped for in the first place.
KAYAlthough a few months is a lot longer than the few weeks that we were initially told that this would take. Let's talk about -- more about the GOP race and domestic politics. Of course, we had this week, Nia, Jon Huntsman entering the race. He entered the race, gave his speech at the same place that Ronald Reagan had given his announcement speech back in 1980. Does he have a chance of following in Reagan's footsteps?
HENDERSONWell, you know, he definitely set himself up there with a high bar, with a comparison to Reagan announcing there in the same place that Reagan did in 1980 when he kicked off his general election campaign against Carter, a very different speech. I think the take-away from his speech there was that he's going to fight a campaign that is on the high road, he says. The question is whether or not the GOP primary voters really want a campaign that is on the high road.
HENDERSONThey seem to want real red meat politics, real going up against the president. We'll see, on Monday, Michelle Bachman will launch her campaign for the presidency, and I think she's going to bring some of this red meat fire that the base is really looking for in this campaign. I think in looking for the next couple of weeks, we'll have to see how Huntsman does in terms of donors. He's been going around the country, obviously, fundraising, so we'll have to see how he does there.
HENDERSONMitt Romney, a much stronger frontrunner, I think, than people think, he's going to bring in a boatload of money. He was able to raise about $10 million last month in a single day just based on phone calls out of Las Vegas. So we'll see. And I think, you know, also on the horizon is whether or not Rick Perry gets in. That's some talk. But it does look like this thing -- for a while we were saying this thing is really off to a slow start. It does seem like it's got some steam and some momentum.
KAYAnd Jon Huntsman, Sheryl, is already having to answer to some of his past policies. He has supported cap and trade in the past. He has supported civil unions for gay couples. And, of course, he did happen to be the ambassador to China for President Obama.
STOLBERGThat's right. So Jon Huntsman is really the kind of candidate who President Obama would be very, very nervous about if he had to face him in the general election. And the reason is, as you stated, he -- he's got some rather liberal positions for the Republican Party. So he is the kind of candidate that Democrats could vote for. But as Nia suggested, he's got to make it through the Republican primary season first.
STOLBERGThere's -- it seems like he would be -- it would be very difficult for him to win the approval of Republican primary voters for all the reasons that you outlined. He's in -- at odds with the party on environmental policies, favoring cap and trade. He's certainly at odds over same sex marriage. And, for crying out loud, he worked for the man that they all want to get rid of.
KAYWhich the White House, of course, loves and is saying he's been a fabulous ambassador to China and how well they (unintelligible).
STOLBERGIn fact, I was actually in the East Room of the White House when President Hu Jintao of China came. And there was this odd moment when Jon Huntsman still worked for the administration, was still the ambassador and was there in the front row, and a reporter asked the president, President Obama, what do you have to say about reports that your ambassador sitting in the front row here will run against you in 2012?
STOLBERGAnd the president just cocked his head and smiled and said, well, I'm sure his working for me will stand him in good stead with the Republican voters.
KAYYeah, I'm sure that you can see the White House releasing all the photographs of them shaking hands or...
KAY...you know, like, hugging or something.
STOLBERGExactly. And all of the love letters that he sent. You know, he's a great leader and a fabulous leader.
HENDERSONThat's right. He's written -- that's right. He's written very favorably (unintelligible).
KAYIt's going to be a Gov. Charlie Crist moment.
KAYBut one thing, Greg, on the economy -- and this is clearly -- I mean, increasingly, the signs are that unemployment rates, the state of the economy, general dissatisfaction with the direction the country is taking economically are going to be the driving factors in the 2012 campaign. As you look at the field so far, and including Huntsman who's just joined it, is there a candidate who clearly would be able to make a strong economic message to the American public to counter that being performed by the White House?
IPWell, I think, first of all, where we stand today, it certainly looks like the economy will be the number one issue. It's still not out of the question that the forecasters will finally get it right and that this time next year we will actually have a pretty strong economy and that people's concerns may have moved on to something else.
KAYAlthough that doesn't seem to what Ben Bernanke was suggesting this week.
IPNo, it isn't, no. And all the people who are calling for that have had to eat a lot of crow lately. But that said, no, absolutely. I think, in fact, I take the fact that Huntsman made the move and made a splash as exactly that, evidence that economic credentials are going to pretty darn important because, for the all the negatives against Huntsman that we were just talking about on the various, you know, red meat Republican issues, he's very strong on economy.
IPYou know, he ran a very tight ship in Utah. He's got a, you know, as a governor, he's got a very strong business background. And I might add there is another candidate in the race who has all that as well. And Mitt Romney is now leading in the polls. And it seems to me that it's precisely because of that sense that people now want somebody who's good on the economy, that that's happening.
STOLBERGOne small point we haven't mentioned. Both Mitt Romney and John Huntsman are Mormons and, in fact, are very, very distant cousins. And some have suggested that their religious faith actually could also play an issue in the race. And there are questions about that.
KAYWell, I mean, obviously, that came up the last time around me when Mitt Romney ran in 2008. And I was wondering whether you feel that he -- in the speech he gave in the 2008 campaign, he kind of put a lid on the Mormon issue or whether that -- I mean, you look at some voters, perhaps, in South Carolina or the Southern Baptist contingent and whether we're over that or whether we're not over that, how big a factor this is going to be.
HENDERSONWell, it's not only in South Carolina, not only among really conservative Evangelical voters. If you look at the polling, there's a recent poll that came out this week that said something like 22 percent of people asked in the survey would not vote for a Mormon. And that statistic had remained unchanged since 1967, which is when George Romney, Mitt Romney's father, was actually seeking the White House.
HENDERSONSo, I mean, they are actually -- Romney and Huntsman are really, I think, dealing with their Mormonism in different ways. Huntsman, I think, people think as more of a cultural Mormon. He has said that he has a background as a Mormon, whereas Romney is more embracing his Mormonism and not running away from it. If you ask Huntsman about his Mormonism and the effects that has on his candidacy, he almost always ignores the question.
HENDERSONI think the question for them will be, you know, in states like Utah and states like in Nevada where there is a real Mormon vote, who gets the Mormon vote? Who gets that donor base of money? Twenty million, $30 million could be up for grabs in terms of donations from Mormons. But I think they really have a question as to whether or not one of these guys can emerge as a JFK sort of figure and really put their religion issue aside or really -- it hangs around even after these elections.
STOLBERGI have to say it is kind of striking to me that we're a country that, in 2008, elected the first African-American to the presidency and that someone's faith should be an issue in a campaign half a century after -- as Nia said, John F. Kennedy was able, successfully, to put Catholicism aside, I guess I just think is worth remarking on it. I find it very striking and kind of sad in a way.
KAYI'm Katty Kay of the BBC. You're listening to "The Diane Rehm Show." And if you'd like to join us, do call 1-800-433-8850 or send an email to email@example.com. I completely agree, Sheryl. It's worth remarking on. I do take some part almost from the fact that, during the course of this campaign, it's been less of an issue of their faith than it was at this stage in the 2008 primary campaign, that you feel like he gave -- Mitt Romney gave the speech and maybe...
STOLBERGThat's true, but still an issue. You know, when Jon Huntsman...
KAYIt's still an issue, yeah. Yeah, it's still an issue.
STOLBERG...decided to skip Iowa, he was called the task for it. And people said is he not coming to the Iowa caucuses because he's afraid about -- that his religion will be an issue?
KAYLet's move on to another issue, to the Walmart decision. On Monday, the Supreme Court ruled 5-4. I think the decision was that Walmart's female employees cannot sue the retailer for pay discrimination as a nationwide class unless we be accused of discrimination ourselves. Greg, I'm going to ask you what this was about.
IPBecause I'm such a legal scholar.
IPBut this is primarily important for its business implications. This was a huge victory for the business community, many of whom sent in, you know, briefs to the court asking the court not to certify this as a class action. It's been going on for about 10 years. Why is this so important? Because the majority of the court -- there was actually kind of two decisions involved. The full court said the decision should be returned to the circuit court because of certain flaws in the way the case was filed.
IPBut five of the justices -- the conservative majority went further. And they said that the sort of implication was fundamentally flawed because they had not identified the common sort of glue -- I think it was the word that the justice used -- that united all of the 1 1/2 million plaintiffs together. And in effect, he has created a pretty high bar for people in the future who do want to form a class and sue a large company.
IPEssentially, they have to not just sort of say there's a pattern of discrimination here. Look, we were -- we're all women, and we can see that across all these states and stores. We're in the same tough situation. They have to actually identify something that went on, a policy, a fact that explains their common experience.
KAYAlthough what Justice Ginsburg said was -- she pointed out that salary gap widens over time at Walmart, even for men and women who are hired in to the same job at the same time. She seemed to be suggesting that there might be some sort of implicit policy even if it wasn't an explicit policy.
IPExcept that she was on the losing end of that part of the decision.
KAYShe was on the losing end, yeah.
IPAnd it's the majority vote that will be the precedent.
KAYAnd women are still getting 77 cents on the dollar for every male job. Let's go to Robert in Portsmouth, Va. Robert, you've joined "The Diane Rehm Show." Robert, can I hear you? Robert? No. He doesn't seem to be there. Let's go to Marcus in Greenville, N.C. Marcus. No. It seems to me we've got a problem with our phones, so we won't go to the phones quite yet. But I do have an email here that's coming to me from Matt in St. Louis, Mo.
KAYMatt writes to us: "Is the GOP really interested in job creation? Their only hope to win the White House in 2012 is to ensure the unemployment numbers stay where they are. Their position is to cut spending and cut taxes, and jobs will be created. Will someone from the Democratic Party, please, stand up, preferably the president, and call the Republicans' bluff? They voted nearly unanimously in the House and Senate for the Paul Ryan budget plan, which was scored by the Congressional Budget Offices, adding $5.4 trillion over the next 10 years to the federal deficit." Sheryl, is that too cynical?
STOLBERGWell, I was going to say that's a bit of a Machiavellian point of view. I think, in fairness to the GOP, they would simply say that they have a philosophical disagreement with the president about how to spur the economy. Democrats tend toward a stimulus, and they would, you know, want to inject money into the economy. The GOP is all about cutting the spending and...
KAYAnd the Republicans would point to the stimulus bill and say, look, we already injected a huge stimulus bill, and we are still at 9 percent unemployment.
STOLBERGThat's right. So I think that is, frankly, why we have this push-me-pull-you effect that I talked about before, that both sides agree that they would like to cut the federal deficit. Both sides agree that they want to get the economy rolling. They can't agree on how to do it.
HENDERSONYes. And I think it speaks to the fact that neither Republicans or Democrats really have a good narrative in terms of how to create jobs. You saw two or three years ago Boehner used to go around talking about where are the jobs, where are the jobs, where are the jobs, which is a really good bumper sticker slogan, and really put the Democrats in a position to having to explain how their policies were actually creating jobs.
HENDERSONAnd I think, you know, looking forward, it's a real -- it's going to be a real challenge for this president to really figure out how to talk about the economy. Is it in recovery? Are we just recovering? Is this like -- are we headed for a double-dip recession? Where are we? So that's what we're going to have to look forward these next days.
KAYWe are going to hear a lot of that. Nia-Malika Henderson of The Washington Post joining our domestic news hour. We're going to take a quick break here. 1-800-433-8850 is the phone number. And we will try to fix those phone lines.
KAYWelcome back. I'm Katty Kay of the BBC, sitting in for Diane Rehm. You are listening to our domestic news hour. And we will go to the phones. I think they're all fixed now. It was entirely my fault. Let's go to Thomas in Dallas, Texas. Thomas, you've joined "The Diane Rehm Show."
THOMASHi. Thank you for taking my call.
THOMASI would just like to hear the comments of your panels with regard to Cantor withdrawing from the negotiation, and his reason was that the tax cut -- I mean, the tax increase should be off the table. First is, if you're going to negotiate, I think your -- all issues have to be on the table. And my second question is, why is not the media addressing this issue when the Republicans were there to go for two wars that were not funded?
THOMASAnd the tax cut that was given by the Bush administration and now with the Obama administration has not brought any change, and the (unintelligible) They're sitting on over a trillion dollars. I would like to hear the comment of them, please.
KAYOkay. Thomas, actually, I think there has been a lot of coverage of the fact that we went into two wars and didn't have tax increases to pay for them. But, Greg, the idea that everything should be on the table is a little bit of what we were talking about earlier, whether this is ideology or economics that we're talking about.
IPYeah, and in fairness -- although the timing of Cantor's withdrawal was a surprise, I think the fact that something like this could happen over taxes was not a surprise. We always knew this was the key break point. The Republicans had really drawn a line in the sand there. And it was going to be a tough issue for the administration to decide whether they were going to hold their ground on this or accept that line in the sand and try and negotiate taxes some other way.
IPFor example, in the so-called debt failsafe mechanism, you know, if we don't meet our debt or targets, we'll have automatic tax increases and spending cuts.
KAYLet's go to Pat who joins us from Holly. Pat, you joined "The Diane Rehm Show."
PATThank you for taking my call.
KAYYou are very welcome.
PATI have two great points.
PATYou were just talking about jobs. Well, a lot of the jobs were saved by the stimulus, and their cuts were postponed in the states. When the states received money, it helped them to keep workers on the payroll. And now that the subsidies have ended, we're seeing all these layoffs that are adding to the number of unemployed.
PATBut the reason I called was I agree with Speaker Boehner about wasteful government spending, that we need to end it. But I don't agree with him on what we need to end. As far as I'm concerned, oil subsidies, farm subsidies and ethanol subsidies are wasteful government spending that we give to those who don't need them.
IPWell, oddly enough, just last week, it turns out a bunch of Republicans agreed with the caller, and they voted in the surprising numbers to end the ethanol subsidy as did some Democrats. This was significant because, even though the amount of money at stake, $6 billion, is trivial, it's almost unheard of to have Republicans voting to end a tax preference without some offsetting tax cut.
IPThat, I think, has given the administration a little bit of hope that maybe there's a break in the united front among the Republicans on taxes. Unfortunately, Cantor's withdrawal yesterday kind of, I think, blew up that hope.
KAYNia, Susan writes to us on this discussion of taxes and tax hikes and makes a very good point. "I noticed most of the comment this morning refers to Cantor walking at tax hikes. My understanding is that most of the items on the table are really closing tax cuts and tax loopholes rather than hikes. Could your panel, please, clarify what's on the table for discussion? If we're really talking more about the latter reducing tax cuts, why does the discussion seem to fall for Cantor's spin rather than speaking plainly?"
HENDERSONWell, I don't know that we're falling for Cantor's spin. But she's exactly right, that it is about closing these tax loopholes. But in, you know, when Republicans hear that, they think raising taxes and tax hikes. So that's, you know, obviously the spin that Cantor is talking about when he says that they're tax hikes. One of the things about these discussions is that they have been good because there haven't been a lot of leaks out of these in terms of what's been on the table.
HENDERSONSo in terms of what sort of corporate tax loopholes they're considering closing, I know there's something around mortgages, you know. I think Greg might be able to speak to this a little bit more than I can. But I think the caller is exactly right in saying that there is a difference between corporate loopholes and closing those.
KAYI mean, part of this is that, so far, as far as I understand, it's certainly in the Paul Ryan plan, Greg. They were fairly carefully not saying which were the tax loopholes...
KAY...and the breaks, for example mortgages, that might be cut, right?
IPCorrect. In fact, the key take-away from the Ryan plan was that to the extent that we closed tax loopholes, there must be offsetting reductions in tax rates so that you do not take more money. In other words, if there is going to be deficit reduction, it must all come from the spending side. That's where these talks are running aground.
IPBoth Republicans and Democrats are kind of simpatico on the idea that we can make the tax code better by eliminating some of these loopholes and holding down marginal rates. The big question where they're falling -- breaking apart on is whether closing those loopholes should, on net, raise money to reduce the deficit.
KAYOkay. Let's go to labor relations 'cause there was an important union ruling this week. On Tuesday, the federal labor relations board called for change to the rules, which have been -- on labor unions which have been called the most sweeping, I think, since 1947. Sheryl, is that right? What are the changes? And what implication do they have?
STOLBERGI think -- I'm going to have to defer to Greg on that one. The NLRB has been going after Boeing. And that was much in the news this week and put President Obama on the spot because his commerce secretary actually -- his commerce secretary nominee basically is at odds with the labor relations board. The nominee Bryson testified that he thought the National Labor Relations Board had, in essence, overstepped in trying to go after Boeing.
STOLBERGAnd, I think, what we're seeing is sort of a general tension over how aggressively the labor relations board can pursue violations. I'm going to let Greg speak to the specifics on the new rules.
IPOh, sure. So the other rules are basically new rules about the holding of certification elections for new unions. Currently, it takes roughly 40 to 50 days between when the campaign begins and when the vote is held. And the rules promulgated by the board for comment this week would shorten that period which would tilt the playing field in favor of the union 'cause it gives the employer less time to sort of try and persuade workers to vote against the union. So as you can imagine, business is up in arms about this. But...
KAYBut, Nia, we still -- basically, unions are still having pretty tough times, right?
HENDERSONYes, definitely. And this fight over Boeing and the labor relations board really centered in South Carolina and over a dispute about them moving a plant from Washington to South Carolina. One of the reasons they wanted to move it, according to the president of Boeing, was because there had been a number of strikes in the plant in Washington. Nikki Haley, the governor of South Carolina, is very much wanting to make this an issue in the campaign.
HENDERSONAnd you've had some of the candidates so far -- Newt Gingrich, Mitt Romney and Tim Pawlenty -- really come out and say this battle over Boeing and the labor board really shows that labor unions have a stranglehold on the economy and job creation. This particular plan is supposed to open in August in North Charleston, S.C. I'm from South Carolina, which is why I'm really interested in this.
HENDERSONAnd, you know, it's going to bring about 1,000 jobs there, but it could be on hold because of this dispute that has really put the president on a tough spot because Bryson was actually on the board of Boeing, as was William Daley, his chief of staff. Yeah.
STOLBERGThe chief of staff. And, you know, you're seeing a president who wants to court business. He's trying to make amends with the business community after a very rough campaign a few...
KAYWhich is why -- partly why he brought Daley in in the first place, right?
STOLBERGThat's exactly right, in 2010. And he needs support of the business community to run for re-election. But also, he has always had strong support from labor. And so he is maybe trying to court both those constituencies, and it's hard to do that when his labor relations board is taking these kinds of actions.
KAYOkay. Let's go back to the phones. To Daniel in Tampa, Fla. Daniel, you have a question which relates to Mitt Romney and Jon Huntsman.
DANIELYes. I've been thinking about the Republican presidential candidate field, and it seems that both of them are Mormons, but not in the sense that they're saying their campaign is dictated by any of their ideologies. And as a liberal and atheist, I would still consider voting for someone like that, whereas some other candidates will say that their policies and their campaign is dictated by God or at least their religion.
DANIELAnd they're saying it out loud, rather than, say, Kennedy who, obviously, was just falsely accused of listening to the Pope. So I would say that it is very important in the sense that some candidates are saying they're, you know, going to vote based on their religion, whereas even Jon Huntsman and Mitt Romney do not.
KAYDaniel, can I ask you briefly, so you think it's legitimate that religion should be raised generally as an issue when we are discussing candidates or not? Or do you think it should be off the table?
DANIELOnly as far as it dictates their ideas and policies, so, of course, if someone is against gay marriage or is saying that, you know, anything of that nature, they're saying that it affects them. And so I think that's fair game.
KAYOkay, Daniel, good point. I'm jut going to repeat the phone number 'cause somebody said that I said it far too fast. So here we go. 1-800-433-8850 is the phone number. 1-800-433-8850. Do give us a call. Sheryl?
STOLBERGI think the caller raises an interesting point. And where we're going to see faith really emerge as part of the public discussion is when Michele Bachmann really gets underway with her campaign. She is a person of deep evangelical Christian faith. I've just come back from doing a lot of reporting. I was at her church this past weekend. And this is really a part of who she is. It's a core part of who she is.
STOLBERGOne of her neighbors told me she feels led of the Lord. She is -- her Christian beliefs are sort of infused throughout her politics with her support for -- or her opposition to abortion, her opposition to same-sex marriage. And so I think we're going to see that really come into the public discussion around this presidential race when she runs, much more so, interestingly, than, I think, we'll see it around Mitt Romney and Jon Huntsman, precisely for the reasons that the caller stated, which is that they aren't making their faith a central component of their political lives.
KAYI'm Katty Kay. You're listening to "The Diane Rehm Show." And do join us. If you'd like to call, 1-800-433-8850 is the phone number. You can send us an email as well to firstname.lastname@example.org. Find us on Facebook or send us a tweet. I wanted to get to another piece of news that I found interesting. Nia, I know you and I were talking about this earlier, which was the former Vice President Al Gore who blasted President Obama this week for a lack of leadership on climate change. What did he accuse Obama of? And how significant was the fact that he made these accusations?
HENDERSONIt's pretty significant. In a seven-page article in Rolling Stone Magazine, he accused the president of not being bold enough on the climate change front and not really setting the discussion about climate change and really pushing back against some of the climate change deniers. I think one of the things this speaks to is that there is discontent among liberals about President Obama.
HENDERSONAnd Gore has been out front now this week in leading that charge and speaking to some of the discontent and some of the upset over these last years over President Obama not following through on cap and trade. This is a bill that was -- passed the House. It failed in the Senate. Now, I think it will be up to the EPA in terms of what they're going to do, in terms of setting regulations.
HENDERSONAnd I think you're going to see Republicans really balk at some of the regulations they want to put forth in terms of greenhouse emissions. But the president has said that whatever Congress tries to do in curbing the EPA's power to restrict some of these greenhouse gases, that he would really be strong and veto anything that came out of Congress.
KAYEnvironmentalists, Sheryl, particularly from the anti-coal wing of the left of the Democratic Party or from the environmental wing, have often -- haven't they raised questions about President Obama's commitment to reducing coal output in the country?
STOLBERGYes. I mean, I think they're very concerned generally about his environmental record. He ran for office vowing to do something about greenhouse gas emissions. His cap and trade bill died in the -- in his first -- the first half of his first term. And, you know, I think Al Gore's comments signified a real turning point, in a way, where environmentalist on the left are really increasingly willing to speak up.
STOLBERGAnd in a way, if Al Gore, the former Democratic vice president of the United States, would speak out against President Obama, this is going to give other environmental advocates license, really, to speak up and to become increasingly vocal.
HENDERSONSo I think he has kind of given people within President Obama's base permission now to criticize on this issue, which they have been silently seething over for a long time.
KAYHmm. Must have made very interesting reading in the White House, that particular edition of Rolling Stone magazine. Let's go to Adam in Chicago. We've got a couple of minutes, Adam, if you have a quick question for our panel. Adam?
ADAMMy question is it seems like with the debt ceiling talks and the default, that a default is very abstract and very vague. And so I was wondering if Greece defaults before the debt ceiling would have to be raised, politically, is this concrete example of a default going to have any role in the debt negotiation?
IPThat's a good...
KAYInteresting question. Greg.
IPThat is a great question. And I would -- sort of just thinking off the top of my head, I think the answer would be yes. It would depend, of course...
KAYYou know what? I'm just going to quickly recap the question 'cause the line wasn't great. What Adam was asking was whether -- if Greece defaults before the debt ceiling negotiation deadline, would that have an impact on what happened here? Greg, go ahead.
IPIt would depend, of course, on what the consequences would be. But the presumption is that if Greece defaults, we would have two very broad effects. First of all, you would have contagion effects to countries like Portugal, Spain and Ireland on the assumption that they, too, would default. And there would be turmoil in their markets. And, secondly, many of the banks that hold the Greek bonds and the bonds of these other countries would get into trouble.
IPAnd there are American money market mutual funds which have lent money to those banks. And so you would have a system of contagion that would be very negative for the economy and the markets. And I think anybody who, up until that moment, was pooh-poohing the consequences of the U.S. default would seriously have to reconsider.
KAYBut you're also seeing, more generally, what's happening in Greece and what's happening in Europe having, Sheryl, kind of just negative effect on the market and on confidence here more broadly rather than particular exposure, aren't we?
STOLBERGThat's right. And I think it's the psyche of it that plays so much of a role in what...
KAYWhich is exactly (unintelligible) Lehman brothers.
STOLBERGRight. Exactly. Which is -- what happens, you know, in the economy and just among voters, it plays -- you know, psychology has a huge factor here. And I think, as Greg said, if we saw this kind of turmoil in Greece, people could easily make the leap and say, oh, my God, you know, we can't have that happen here, whereas now it does seem like an abstraction. The vote on the debt ceiling seems like a number. Some Republicans have said, well, it doesn't really matter.
STOLBERGThe government can move money around and pay its obligations in other ways. The Treasury says, no, we can't. We've done all we can. So I do think a concrete example of it would maybe serve to, what, focus the mind.
KAYOkay, very briefly, we have just a few seconds. I'm going to ask each of you if you think the debt ceiling will be raised near.
HENDERSONIt's unanimous. I do.
KAYIt's going to be a very busy summer...
STOLBERGIt'll happen on midnight.
KAY...and I'm sure -- I think it's going to go -- it will happen on midnight. It's going to be a -- that few days, Aug. 1, don't plan -- apart from me who will be taking vacation, none of you plan to take any vacation at all. Sheryl Gay Stolberg of The New York Times, Greg Ip of the Economist, Nia-Malika Henderson of The Washington Post, it's been a very busy hour. It's been a very busy week. Thank you all so much for joining me here.
KAYI'm Katty Kay of the BBC. I've been sitting in for Diane Rehm. Thank you so much for listening. Have a great weekend.
ANNOUNCERThe Diane Rehm Show is produced by Sandra Pinkard, Nancy Robertson, Susan Nabors, Denise Couture, Monique Nazareth and Sara Ashworth. The engineer is Erin Stamper. Dorie Anisman answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information.
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