Friday News Roundup - Hour 1

Transcript for: 
Friday News Roundup - Hour 1

MS. DIANE REHM

10:06:54
Thanks for joining us. I'm Diane Rehm. The August jobs report showed unemployment is refusing to budge. President Obama came under attack for the timing of his upcoming jobs address rather than its content. Rick Perry continued to outperform his rivals in the GOP presidential race. And the Northeast is still picking up the pieces after Hurricane Irene.

MS. DIANE REHM

10:07:29
Joining me for this week's top domestic stories on the Friday News Roundup, Michael Scherer of Time magazine, Jeanne Cummings of Bloomberg and David Welna of NPR. Do join us, 800-433-8850. Send us your email to drshow@wamu.org. Join us on Facebook or send us a tweet. Good morning to all of you.

MR. MICHAEL SCHERER

10:08:02
Good morning.

MS. JEANNE CUMMINGS

10:08:03
Good morning.

MR. DAVID WELNA

10:08:03
Good morning.

REHM

10:08:04
Boy, these job numbers look pretty bad, Michael Scherer.

SCHERER

10:08:08
And maybe the most surprising thing is that they're not that surprising. I mean, no one really has much optimism right now. The president put out a midyear review with economic projections yesterday that showed a scenario where we would still have 9 percent unemployment through next year.

SCHERER

10:08:23
And more -- you know, even the optimistics, their scenarios right now have us, on Election Day, with unemployment well above 8 percent. So there's not much short-term hope.

REHM

10:08:37
So on Thursday, the OMB released a mid-session review, Jeanne, saying that they're predicting unemployment won't fall below 6 percent until 2017.

CUMMINGS

10:08:56
Yes. The recoveries from recessions for the last couple of decades have been getting slower and slower and slower. And this is snail pace. Economists still don't think we're going into a second recession, a double-dip if you will. But there are reports around the country where communities feel as though that has actually happened to them, where they have unemployment -- in some areas of Georgia at 20 percent.

CUMMINGS

10:09:27
You know, the president is going to be going up into Michigan. Detroit is in 14, 15 percent. So there are pockets in the country where they just feel like it's laughable to say that a recovery ever began because it's been so slow, no one can detect it.

REHM

10:09:47
So, David Welna, the president is going to speak to a joint session of Congress next Thursday. Talk about the timing on that speech.

WELNA

10:10:01
Well, I first learned of the president's intention to address a joint session of Congress just before noon on -- I guess it was -- Tuesday. And this was a tweet from Dan Pfeiffer from the White House, saying that the president was going to do this. Then they released a letter, saying that he had respectfully requested eight o'clock p.m., Wednesday evening for the time to do that of Speaker John Boehner and House Majority Leader Eric Cantor.

WELNA

10:10:34
We all, right away, thought -- I was at the Senate Radio-TV Gallery. That's exactly when the GOP presidential hopefuls are supposed to be debating at the Reagan Library in Simi Valley, Calif. And, you know, whether this was an oversight, whether this was intentional, not clear -- but it seemed like there was right there the potential for a big flare-up. And indeed, that's what exactly happened.

REHM

10:11:00
It was shocking.

WELNA

10:11:02
Well, right. And, you know, the White House contends that Chief of Staff Bill Daley spoke with Speaker Boehner on that morning, and that the speaker did not raise any objections at the time to the time and date for that joint session. But, subsequently, Boehner put out a letter, saying that, in fact, this wouldn't work on Wednesday evening, and that he requested that instead the president speak on Thursday evening.

WELNA

10:11:31
Now, the White House backed down on this about 9:15 that Tuesday evening. I'm sorry. It was Wednesday evening. Yes, Wednesday evening. And I was looking at my email. I saw an email from Republican Sen. Jim DeMint from South Carolina at 8:24 on Wednesday evening, saying that if there were a request for the president to address a joint session on Wednesday evening, he would object.

WELNA

10:12:03
And if a senator objects to this -- and there has to be the concurrence of both chambers to have a joint session -- then you would get in a whole filibuster thing, and it wouldn't happen anyhow. And it was about 50 minutes later when the White House folded on this one. But in a sense, you know, this was almost predictable that this would happen. And it left the president looking both rebuffed and possibly even disrespected by Republicans.

REHM

10:12:31
But doesn't it also leave the White House staff up in the air in the eyes of the public? Did they know what they were doing? Did they not know that this debate was scheduled? You know, it just doesn't make sense. Jeanne.

CUMMINGS

10:12:54
Well, it doesn't make a lot of sense. This is very much a self-inflicted wound by the White House. I mean, Speaker Boehner acknowledges the phone call took place with the Chief of Staff Daley, but says he didn't raise objections, but he didn't agree either, and that the White House then was -- took it upon itself to go ahead and announce it before an agreement had truly been reached.

CUMMINGS

10:13:18
The White House clearly knew there was a debate scheduled for that night. They knew exactly what they were doing. Jay Carney was in the briefing room later, and he defended the decision and said, move the debate. You know, it's just a coincidence. You know, so they knew that they had conflicted with that Republican event. And so it -- what -- let's start with tweeting the announcement.

CUMMINGS

10:13:48
This is one of the most important speeches he's going to give in the run-up to his re-election. This could be an opportunity for him to try to begin to reset the conversation, to rehabilitate his image, and it starts with a tweet. I mean, all around, it was odd.

SCHERER

10:14:08
The important thing to look at here is the context. In the month of August, President Obama's poll ratings, on whether the American people see him as a strong leader or someone who can get things done, fell about 10 points, a huge drop. And that was because of the debt limit debate.

SCHERER

10:14:20
The White House has been talking for weeks about how they're going to come back in September, and there's going to be a significant pivot in which the president is going to put forward a positive plan to create jobs. And if Republicans resist that plan, he's going to go after them. He's go on offense, which is something he didn't do much over the summer because of the debt limit debate. So that's their agenda. They come back.

SCHERER

10:14:42
And instead of going on offense, they show, once again, that they're willing and able to be pushed around by Republicans. And there's two problems here: one is the American public -- this perception that Obama is not the strong leader, the weak leader is going to really impact him, I don't think as much among Democrats who will rally to him next year, but among independents who want someone fighting for them right now, someone who's willing to sort of stick up for them as they are fearful about the economy.

SCHERER

10:15:10
And second, inside Washington, there's a perception that Republicans are still emboldened. And the coming months, no matter what the president puts in his speech next week, are really going to be a battle between two different visions of how to get the economy going again. And the president is going to really have to be able to assert himself, and he's already sort of, you know, stabbed himself in the leg...

CUMMINGS

10:15:32
The basic...

REHM

10:15:32
Michael Scherer, White House correspondent for Time magazine. The first comments from the White House on the jobs report, economic adviser Katharine Abraham says 9.1 unemployment is a level that remains unacceptably high, but says it's important not to read too much into any one monthly report.

REHM

10:15:59
She says the report underscores President Obama's call for Congress to quickly pass a transportation highway bill. How likely do you think that will happen, David Welna?

WELNA

10:16:17
Well, this surface transportation bill expires Sept. 30. It's the seventh extension of this bill since the House and the Senate can't agree on competing versions of a longer term reauthorization of this. And so President Obama wants a clean extension, a kind of a stopgap extension of this bill, to keep the highway and railroad projects going, that are in the works right now.

WELNA

10:16:47
There is a commitment on the part of John Mica, the Republican chairman of the House Transportation Committee, to go along with a short-term extension. It's not clear for how long. He said he would agree to one of them, so, I think, that is not going to be such a big fight. I think the bigger fight is going to be over the Federal Aviation Authorization, which lapsed at the end of July when members of the Congress went home without extending it.

REHM

10:17:18
Right.

WELNA

10:17:22
We had some of the FAA workers furloughed. They weren't collecting fees, and there was a human cry about this. They worked out a short-term deal that runs out Sept. 16, but the underlying conflict that has kept them from getting a long-term reauthorization -- I can't see getting resolved anytime soon.

REHM

10:17:43
Michael, what do you expect in President Obama's speech?

SCHERER

10:17:49
I think there's only -- the menu of options he has to re-stimulate the economy is not that big. There are not a lot of rabbits he can pull out of his hat. So we don't know the specifics of how he's going to do it, but the categories are pretty clear. He's going to push for a continuation of the payroll tax cut, which was given at the end of last year. Average family is getting about 1,000 bucks into their paychecks. They don't notice it happening.

SCHERER

10:18:12
But it's money in the economy. He wants that to continue through the end of next year at least. It's possible he pushes for an employer-side tax cut, which would add an incentive for people to hire -- for small businesses to hire more workers. There's going to be infrastructure spending, possibly on schools and probably something to deal with the housing market.

REHM

10:18:33
Michael Scherer, White House correspondent for Time magazine. We'll take a short break and be right back.

REHM

10:20:03
And welcome back to the domestic hour of our Friday News Roundup this week with David Welna of NPR, Jeanne Cummings of Bloomberg News, Michael Scherer of Time magazine. Do join us, 800-433-8850. Jeanne Cummings, on that last bit about speaking before the Congress to present his outline for a jobs plan, why did President Obama simply not choose to speak from the White House?

CUMMINGS

10:20:42
Well, I -- my thinking of the -- what you hear from them is that they wanted -- they want to send the big message. I mean, a joint -- a speech before a joint session of Congress is pretty serious. It generally gets picked up by the networks and is treated as a serious event. It's a signal to the public that he considers this an issue of such importance.

CUMMINGS

10:21:07
And it then also puts the Republicans in the chamber as his audience, and so he can directly challenge them to take this agenda and run with it or not.

REHM

10:21:19
And we've already heard from one Republican, who says, even though it's going to be on Thursday, he plans to stay at home.

SCHERER

10:21:30
Well, that may not be that big a deal. Often at these joint addresses, even State of the Unions, a number of people don't come. They don't -- you don't notice they're not there. But there's no doubt that this fall is going to be ugly.

SCHERER

10:21:42
The idea that President Obama can go and give a joint address and challenge them, and then they'll suddenly see the light -- I mean, Speaker Boehner is giving a speech today in which he says, you know, proposals for further stimulus spending are hurting jobs and holding back the economy. That's what they're talking about. The two sides are not even agreeing on the basic economic physics at work here.

REHM

10:22:04
What is Jon Huntsman talking about in his GOP plan?

SCHERER

10:22:10
It says Jon Huntsman went this week. Mitt Romney is going to go next week. All the candidates are coming out with their jobs plans. Huntsman's plan doesn't really include too much that specifically addresses jobs. He's in favor of big tax reform effort, including, you know, lowering rates for everybody in a revenue-neutral way. He would get rid of all deductions. So...

REHM

10:22:32
All.

SCHERER

10:22:33
All deductions, just wipe them out...

REHM

10:22:34
Mortgage...

SCHERER

10:22:35
That's right.

REHM

10:22:36
...child care, everything you can imagine.

SCHERER

10:22:39
A very bold plan that will never pass Congress because the American people are, you know, used to these deductions. It's going to take a long time to convince them that it's a good thing to phase this out. Huntsman's problem right now is that he came into the race saying, I'm going to be the rational, quiet speaker. And the economy has gone downhill since then. Nobody wants someone to speak quietly and reasonably right now.

SCHERER

10:23:04
And he's trying to find a new message, and it's not clear where that message is. What's interesting about that speech is that the things he's put forward are very similar to the things other Republicans have put forward, the things the House GOP has put forward, maybe a little more bold in that direction, but it doesn't really distinguish him in any way from the pack. And that's really what he needs to do right now.

CUMMINGS

10:23:22
Basically, an exchange for eliminating all of those deductions, he would have three flat rates: just 8 percent, 14 percent and 23 percent, so everyone's rates. And he would eliminate the capital gains taxes altogether, which even Warren Buffett says is a nonsensical thing to do because it would only increase the gap between the wealthy and the not wealthy. So it is, in a sense, the ideas Republicans have talked about, you know, 2.0.

CUMMINGS

10:23:54
But even the Bowles-Simpson debt commission, who toyed with these ideas as well, noted that there would be negotiations, that getting rid of the mortgage tax deduction is not within reach right now, given the way the public has become quite dependent upon it, and so has the housing industry, which is critical to our recovery as well.

REHM

10:24:20
David.

WELNA

10:24:21
Well, you look at these proposals coming from the Republican presidential contenders, and, really, kind of recycling the perennials of GOP economic policy -- cut taxes, cut regulations -- is going to be a big push in the House this fall to go after especially environmental regulations, EPA.

REHM

10:24:41
And before we get to that, I want to take a look at the recent surveys of who's on top in the Republican lineup. It would seem that Rick Perry has taken a big leap, Michael.

SCHERER

10:24:58
Yeah, he's leading most of the national polls right now. It's early, so it's not clear if this is a bump. It's also not clear whether this translates into those early states as cleanly as he wants. But I think another month of this polling, people are going to stop talking about -- they've already stopped talking about Mitt Romney as the frontrunner. And it becomes a real tight race between those two people.

SCHERER

10:25:19
Mitt Romney's message from the beginning of this cycle has been, I am the one who can take on President Obama the best. I am the electable one. People don't -- the -- and the Republican Party don't necessarily -- they're not really attracted to him, but they're attracted to that message. Now, here comes Rick Perry. He's got, in many ways, better conservative credentials.

SCHERER

10:25:38
He comes from the traditional religious base of the Republican Party. And if he can make the electability argument, Mitt Romney is in big trouble.

CUMMINGS

10:25:49
I think Perry does have several tests ahead of him. It's very clear that he can energize the base. Can he get beyond the base? We don't know. He's out raising money as fast as he can. He's well-known in Texas as a brilliant fundraiser, but in Texas there are unlimited donations. And so I did a little math.

CUMMINGS

10:26:13
And if you take all the people who donated to him in Texas, where they've donated close to $200 million -- a lot of money -- he's been in office, by the way, for a long time, so that's his lifetime donations. But you put them all together, and they could raise about a million bucks, if you put them underneath of the limitations and the cap of the federal donation of maximum of $2,600. So he's got to build a national operation.

CUMMINGS

10:26:38
He's got Haley Barbour's nephew behind him now, the Mississippi governor. That's a powerful machine if he can bring that machine on. So he's got that to prove because Romney is a proven fundraiser. And I think -- we haven't mentioned her yet -- but Michele Bachmann lies out there as the surprise in the wings. Winning the straw poll gave her a bump in Iowa, and Michele Bachmann is also a prolific fundraiser.

CUMMINGS

10:27:05
And so, I think, when we get to the end of this month, the next round of reports come out, we're going to see that those three are really dominating in that way as well, making them all very viable for the future.

REHM

10:27:17
David.

WELNA

10:27:18
Now, there's a problem, too, with Bachmann and Perry because they're both going after the Tea Party base, competing for the same voters. Perry is a divisive figure in the Republican Party. The George W. Bush team does not like him at all and has not been saying good things about him. Moderates in the Republican Party are not attracted to him.

WELNA

10:27:39
And there's a real question about what would independents think. And this is going to be a presidential race battling for the votes of independents. And I think that's -- the electability question is going to loom really large in this.

REHM

10:27:52
I want to ask you all about Hurricane Irene and the aftermath. We had many people who lost their lives in this. But it -- in the political sense, it has become a big deal with some on the Republican side calling for the dissolution of FEMA. A curious time to do it, Michael.

SCHERER

10:28:26
Yeah, and I think they'll probably be backing away from that. I mean, FEMA's an incredibly important and popular program. I mean, what the Republicans are calling for is not necessarily getting rid of the federal money, but devolving control of the money back to the states.

SCHERER

10:28:38
In practice, you probably want more coordination, not less. I think what Irene showed is that when Obama and his government is able to actually do stuff by itself, which includes a lot of the foreign policy successes he's had recently, he actually performs very well. It's when he needs partners in Congress to do stuff that he really struggles.

REHM

10:29:00
Interesting that you had Gov. Chris Christie of New Jersey taking on these folks.

CUMMINGS

10:29:11
Well, Gov. Christie has got some issues of is own at home, political issues. He was away during the big storms in the winter and took a lot of criticism for that. So he, you know, tried to -- was looking to improve his image by handling this one better.

CUMMINGS

10:29:30
And, you know, there was a lot of criticism initially after the storm, of the federal government and the media for overhyping the storm, because it didn't hit New York City and some other big locations in the way people thought it might.

REHM

10:29:44
But look at what it did to Vermont.

CUMMINGS

10:29:45
As it turned out -- right. As it turned out, it was a very significant storm, and FEMA was ready. And they had to move their things pretty quickly, but they at least were out there moving around. Now, New Jersey got hit really hard in ways that -- you know, they were expecting the shoreline. It went inside. The damage is done in different ways than people thought.

CUMMINGS

10:30:05
Christie, you know, comes under some criticism for not being prepared for that, but, you know, these storms are unpredictable.

REHM

10:30:12
Absolutely.

CUMMINGS

10:30:12
And so, you know, I think, he's more just trying to lay the blame elsewhere.

REHM

10:30:15
And another one on the way, David Welna.

WELNA

10:30:18
House Majority Leader Eric Cantor's district was hit by Irene. It was also hit by the recent earthquake, and yet he's going out saying, no relief money should be released unless we find other money to cut to compensate for that. And in many ways, I think, this is an argument that we've been hearing since, really, President Obama was inaugurated.

WELNA

10:30:40
He'd inherited pretty much an economic disaster, and the fight was over the role of the federal government in trying to do something about that. The stimulus package that he was pushing was dismissed by Republicans as wasted money. And I think that, in many ways, this parallels that argument. Republicans are saying that the role of the federal government in this should be curtailed.

WELNA

10:31:02
And if anything is done, it should be paid for, not going against decades of tradition of there being exceptions made for disasters.

REHM

10:31:12
And what Gov. Christie is saying is, I hope we're not going to have the same kind of argument -- prolonged argument with cutting dollar for dollar that we spend on FEMA, you know, when people are so in need. Michael.

SCHERER

10:31:32
You know, really, what this is about is that Republican candidates and members of Congress play in to this Tea Party idea that it's spending that's the problem. We have to control spending.

SCHERER

10:31:42
If you look at the records of Gov. Romney when he was governor of Massachusetts or Gov. Perry in Texas, they have both been very aggressive in going after FEMA funds when they have disasters in their state, of boasting, you know, in press releases when they get the FEMA funds for those disasters, of pushing for appropriations from the appropriation committee to help their states after disasters.

SCHERER

10:32:02
And none of that money was ever paid for. I mean, all of that money was added to the deficit. I don't -- they don't really have much credibility when it comes to this. And I don't expect that if either one of them became president, they would actually follow through with it. They're just trying to look intellectually consistent with their rhetoric, which is that spending is the real issue here. And we have to cut it, and we can't keep spending.

REHM

10:32:23
And tell me, Michael, why President Obama chose Alan Krueger to replace Austan Goolsbee.

SCHERER

10:32:33
I think it's someone he knows. He's a labor economist who has worked with not just other people in the White House, but the issues of jobs and job creation. I don't think it really signals anything big in any direction of a new tact that the president is taking. I mean, this is someone who worked in the Treasury Department for the first couple of years of the Obama administration, knows the team.

SCHERER

10:32:56
He's very well respected as an academic. It's -- and he's probably someone who, you know, can talk to Republicans, which is something they want. But it's not the kind of choice that says, ah, now, we're going in this direction.

REHM

10:33:09
Michael Scherer, White House correspondent for Time magazine.

REHM

10:40:02
And during the domestic hour of our Friday News Roundup this week with Jeanne Cummings, David Welna and Michael Scherer, here's a tweet from Kevin in Michigan. "Which Republican members of Congress said they won't show? Such disrespectful behavior should be noted. I'm making a call." David Welna.

WELNA

10:40:29
Well, it was Joe Walsh, who is a freshman Republican from Illinois, Tea Party-backed, kind of a rabble-rouser in his own right. He voted against the debt ceiling package that his leader had endorsed, and he said that -- the House is actually going to be meeting, starting Wednesday evening. He's going to turn around and fly back to Illinois on Thursday evening rather than attend the joint session.

WELNA

10:40:53
Now, it's not unprecedented for members not to attend a joint session. Some of them hardly ever do -- Ron Paul, one of them. But to make a big show of it and announce it to everybody, that's something else.

REHM

10:41:07
Here's a comment from Phil on Facebook. He says, "President Obama may offer tangible ideas in his job speech, but his biggest problem has been an amorphous presidency. Something akin to a ship without a rudder, its propellers are turning, but the craft is moving in whatever direction the wind seemed to push him, which ends up being nowhere." Michael Scherer.

SCHERER

10:41:39
I agree that that is one of Obama's biggest problems right now. He has to be able to make the case in the re-election next year that he is the guy to move the country forward. And the extent that people don't see him as either a strong leader or someone who has a clear vision for doing that, pushing the country forward, he's going to have a much harder time making that sale.

REHM

10:42:00
Jeanne.

CUMMINGS

10:42:00
And certainly, the public opinion polls in the last month have began to document not just the decline of Congress, which has got an approval rating of about 12 percent, which, I think, ranks them somewhere near us, journalists. But the president is now around the low 40s. The leadership number had held up for him for a while, and that has dropped -- I -- you know, I think, about 10 points. And Michael is right.

CUMMINGS

10:42:27
That's a really important number when you're running for re-election. And that sense of drifting is very prevalent among Democrats, in particular. And they've been disappointed by his performance, and they do feel like he's been pushed around by the Republicans. So there, again, you know, you just start -- layer upon layer, it all goes to leadership.

CUMMINGS

10:42:50
And that, I think, is why the self-inflicted wound over the speech this week just sticks and adds another ding that they certainly didn't need to bring on.

REHM

10:43:05
All right. To Plymouth, Mass., Rod.

ROD

10:43:10
Hi, Diane, and hi, Mr. Scherer. I read your Time article on how the Obama team is looking to history for some guidance here. And I -- you know, I could see that they are somewhat optimistic after learning some lessons from the 1936 election with FDR. I teach AP U.S. history. We cover that period pretty closely, and I think they're missing a really important point.

ROD

10:43:31
And FDR had to deal with a very aggressive opposition from the right, just like Obama, but FDR had the hearts and minds of American people on his side. And that seemed to immunize him from, you know, these vicious attacks. And Obama -- not all his fault, but for a variety of reasons -- he just doesn't enjoy that same support. And that's why I don't think that this jobs proposal is going to get much traction at all either.

SCHERER

10:43:54
Just a recap for the other listeners, I have a story this week in Time magazine about a unannounced retreat that Chief of Staff Bill Daley had at Fort McNair in June in which he invited the historian Michael Beschloss to come in and talk about how presidents in the past have won re-election with unacceptably high levels of unemployment.

SCHERER

10:44:13
And Beschloss' message was, there are two presidents who have pulled this off in the last century: FDR in 1936, Ronald Reagan in 1984, and that both followed very similar strategies. They argued convincingly enough that the economy, though bad, was improving, and they argued that their Republican opponents would actually make things worse.

SCHERER

10:44:36
You're absolutely right, that there are enormous differences between what Obama faces now, what FDR faced and what Reagan faced. One of the biggest ones is that both Reagan and FDR had economies that, even though they were bad, were actually improving at far quicker rates than Obama's going to have. And the White House's lesson is not to say, oh, we can just do what FDR did. It's a little more distant. It's that those are our two priorities.

SCHERER

10:44:59
We have to figure out a way to make the case by -- in the next spring, that the economy is not stuck in neutral, and we have to define our Republican opponents as people who aren't going to move forward. But you're absolutely right. And I didn't mean to suggest in that article the White House is just saying we are just like FDR.

REHM

10:45:16
And the listeners can actually read Michael Scherer's Time magazine story on our website. Go to drshow.org. Let's go to Denise in San Francisco, Calif. Good morning.

DENISE

10:45:36
Good morning. What I'm hearing is really distressing to me because it's not just your show. I mean, this 10-minute focus on some obvious (unintelligible) with the scheduling of the speech isn't important.

DENISE

10:45:48
But during the debt ceiling debate, I didn't hear the focus on what the Republicans were obviously doing as a political maneuver. When you've got Mitch McConnell in January saying that his only priority is to make sure that Barack Obama is a one-term president, you've got to look at this debt ceiling debate in a different light. You know, there is politics going on of a Machiavellian nature.

DENISE

10:46:10
And if the idea that the Democrats can't stand up and fight, somebody up on Obama's team has to realize that Donna Brazile can't be a part of the mix. You know, look how she screwed the Gore campaign. This is serious stuff. We can't lose to Republicans because they want a Mad Max free economy, free market economy where there's no regulation.

REHM

10:46:31
David.

WELNA

10:46:32
Yes. Senate Minority Leader Mitch McConnell actually made that remark right after the election in November. And it's really colored everything that's happened since. You can look at virtually everything that happens on the Hill through the prism of him saying that his top priority is to make sure that President Obama is a one-term president.

WELNA

10:46:53
And, you know, I think that the fact that the White House did sort of buy into the argument, that there is a deficit crisis right now, is one that has sort of left them checkmated in a way in this argument with Republicans because, in fact, there was no deficit crisis because borrowing was very easy. Interest rates are extremely low. I've been in countries where there definitely was a debt crisis, and they couldn't borrow any money.

WELNA

10:47:20
But that is not the case in the United States right now. And I think that instead of making the argument that we have not gotten out of -- we haven't had a recovery that's adequate enough and that requires further government stimulus, Democrats sort of bought into this anxiety about the debt looming larger and larger.

REHM

10:47:41
So you're saying that Republicans succeeded in making the case for an artificial debt crisis?

WELNA

10:47:51
They really set the narrative that we are broke when, in fact, right now, this is the best time the government has actually had to borrow money and to do something about getting people back to work, which is the real crisis that most people think is out there.

REHM

10:48:07
Jeanne.

CUMMINGS

10:48:08
I agree, definitely, with what David said, that one of the frustrations in the public's eye is that they're worried about jobs. And they're not worried about the deficit right now, except for the one that's in their own bank account.

CUMMINGS

10:48:19
So -- but in regards to McConnell, he has to be viewed in a more complex way because McConnell was, indeed, the person who probably played one of the most pivotal roles in resolving the debt crisis stalemate that we had in Congress in April. And if he wanted to tank the presidency, that might have been an opportunity to do so. And so he is a shrewd player, no doubt about that. And there are politics, as the caller said, going on on all sides.

CUMMINGS

10:48:56
Both sides are playing plenty of it. But the risk, I think, to the president in the way that they have built up the speech for next week is, I think, it's written, baked in the cake, that the Republicans are not going to agree to do half of what he says up there.

REHM

10:49:11
Or perhaps anything.

CUMMINGS

10:49:13
Any of it. That's right. And even the White House seems to be coming in with that assumption. And the real issue here is that our economy just has to recover on its own. And he just -- there isn't a whole lot he can do or that the government can do to try to speed this up. The consumer confidence has to come back. Consumers have to get back out and buying.

CUMMINGS

10:49:37
And until that really starts to happen, creating demand for businesses, then we're not going to see the recovery pick up and start moving at a more rapid pace.

REHM

10:49:46
All right.

CUMMINGS

10:49:47
And the president can't make people go shop.

REHM

10:49:50
To Orlando, Fla. Good morning, Melissa.

MELISSA

10:49:54
Yes. Good morning. Corporations are sitting on $2.5 trillion profit, yet they say they're afraid of investing in jobs unless they and the Republicans are assured that they will pay less taxes and make more profit. But the poor and the middle class, they have a justified fear of spending. And they have fears of the choices they're going to take on what they have to spend on -- whether on food, gas, rent or medicine.

MELISSA

10:50:25
Also, I'm not surprised the Republicans are opposed to the president's job program. I truly believe that the Republicans are encouraging many corporations to hold back jobs, so it might weaken President Obama's re-election.

REHM

10:50:40
Michael.

SCHERER

10:50:40
I think -- I mean, corporations and lobbyists have been making that argument, that we need more incentives and then we'll invest. They're actually trying to get billions of dollars brought from overseas profits to the U.S. that attacks discounts, saying they're going to invest that money. I think you're absolutely right to be very skeptical of those arguments.

SCHERER

10:50:56
The reason corporations are holding on to this cash is because they don't feel there's enough demand to spend it. And if there's not a demand -- if the marketplace is not demanding more widgets or more services, they're not going to go out and build more factories to build those widgets.

REHM

10:51:09
But it's a catch-22.

CUMMINGS

10:51:11
It's a cycle. We are caught in this cycle where the consumers are afraid. They won't go out and buy. That makes demand fall off, and then businesses won't invest until there's demand.

WELNA

10:51:23
But I don't agree that there's nothing the government can do. I mean, for example, with infrastructure projects, they can...

REHM

10:51:29
Of course.

WELNA

10:51:30
...streamline things.

CUMMINGS

10:51:31
Yes. Yes.

WELNA

10:51:32
And, in fact, I think President Obama is going to say that he's going to instruct agencies to approve projects much faster, something such as unemployment insurance, which is going to expire at the end of the year. Economists know that the money that goes to people for unemployment insurance is spent immediately. It has much more of a multiplier effect than tax breaks have.

REHM

10:51:50
But how much cooperation does he have to have from Congress to speed those things up?

SCHERER

10:51:57
Well, he can actually -- that's one of the executive actions that he can take without the consent of Congress, to tell his agencies to make these projects move ahead faster. The money is already there for them.

REHM

10:52:08
The money is there.

SCHERER

10:52:08
So it would be revenue-neutral. But with other things, such as extending unemployment insurance, extending this payroll tax break, which also puts money in people's pockets -- they go out and spend it -- that requires the consent of Congress.

REHM

10:52:22
You know, George McGovern was on this program last week. And one of the things he'd written in his letter to President Obama in Harper's Magazine was to actually criticize the Congress and to say that lawmakers need to remember that they are there for the nation and to remember that that is their job. You're listening to "The Diane Rehm Show." To Pittsburgh, Pa. Good morning, Linda. You're on the air.

LINDA

10:53:03
Oh, thank you, Diane. I'm an appraiser in Michigan. And I believe that the housing crisis is what got us into this problem, and I think the housing can get us out of a lot of the economic problems we have. There's a huge stock of houses, most in bad conditions, being held by Fannie, Freddie, HUD. And they're being offered up at a speed cash, discounted, super low pricing, which is driving properties at an appraiser.

LINDA

10:53:28
I know they're driving property values lower and lower. But I think there's a very small tweak in the system requiring that every house being offered, single-family homes being offered for sale, be required to be offered at an improved price, that it be offered at a safe and mortgageable condition. HUD standards already exist, so it's not a mystery what that condition would be. It's pretty simple.

LINDA

10:53:53
So rather -- so that every house that would be required to be sold would be there. That would allow, at a time of super low interest rates and low property values, everyday Americans to be able to pick up these houses rather than having just investors jumping in and trying to get them for cash and renting them out and turning us into, like, rental America.

WELNA

10:54:14
I was asked earlier, what would be in the president's speech next week? And, I think, the biggest mystery is what he's going to do around housing because there is actually a lot of executive action he could take. He has the ability to try and put pressure on banks to take action here. And there are a lot of very creative proposals for improving the market, one of which the caller just mentioned.

WELNA

10:54:33
I mean, there are parts of the country now where banks are bulldozing houses to improve the market. I mean, there -- Fannie and Freddie controls a huge part of this. They can make a lot of tweaks, and, I think, that will be the real question I'm looking forward to be answered next week.

REHM

10:54:45
CBS News is reporting that President Obama has ordered a delay and reconsideration of new EPA smog standards "particularly as our economy continues to recover." In the written statement, President Obama cited the importance of reducing regulatory burdens and regulatory uncertainty. You're smiling, David.

SCHERER

10:55:19
Well, this is actually a preemptive move on the part of President Obama, since Eric Cantor earlier this week sent out a memo to all House Republicans saying, we are going to have a week-by-week assault really on government regulations. Listed 10 of them, seven of them were environmentally-related. And their contention is that these regulations are inhibiting hiring by the private sector.

REHM

10:55:51
But you say it's preemptive, and yet it looks as though the White House is capitulating even before the fight begins.

SCHERER

10:56:02
Again, this is -- you know, you have it. You have a -- President Obama's disposition, his natural disposition, the place he is most happy with in the world is to feel like he is the bridge builder, taking the conversation to a more rational conclusion. He's a very academic guy in that way. So that's his natural disposition.

SCHERER

10:56:20
Then you have David Plouffe, who's his new message guy in the White House, and Bill Daley, who are incredibly focused on convincing independents that he is the guy who is pushing the country to the most rational conclusion. As a result, he is playing on the Republican field. And like we've talked about already on this show, there is a real risk that people don't feel like he's tough enough.

REHM

10:56:41
Very briefly, David.

WELNA

10:56:42
I think there's a real concern, also, about the Senate races next year, that there are many Democrats from sort of purple states who are facing tough re-election bids. They don't want to take those tough votes on those environmental issues, and if the White House acts now, maybe they won't have to.

REHM

10:56:56
David Welna of NPR, Jeanne Cummings of Bloomberg News, Michael Scherer of Time magazine, we didn't even talk about the new lawsuit against the big banks. And that comes next week. Thank you all so much. Have a great and safe Labor Day weekend.

SCHERER

10:57:19
Thank you.

CUMMINGS

10:57:19
Thank you, Diane.

REHM

10:57:20
And thanks for listening, all. Back with you on Tuesday after rebroadcast on Monday. I'm Diane Rehm.
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