Ten years after Hurricane Katrina devastated New Orleans, we look at the struggle to rebuild and why recovery efforts aren't spread equitably across the city.
The president of the Council on Foreign Relations says the biggest threat to the United States comes not from abroad but from within. He says that only by getting our own house in order — fixing our crumbling infrastructure, second-class schools and outdated immigration system — will we be able to lead a world that will otherwise be overwhelmed by global challenges, regional conflicts and failed states. Diane and her guest discuss why he believes foreign policy begins at home.
- Amb. Richard Haass president of Council on Foreign Relations; author of "A War of Necessity, War of Choice: A Memoir of Two Iraq Wars"; and former director of policy planning for the Department of State, where he was a principal adviser to Secretary of State Colin Powell.
Read An Excerpt
Excerpt from “Foreign Policy Begins at Home: The Case for Putting America’s House in Order” by Richard Haass. Copyright 2013. Reprinted here by permission of Basic Books. All rights reserved.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Richard Haas is president of the Council on Foreign Relations. He says our global security depends not on how we handle challenges abroad, but how we address critical issues here at home. In a new book, he explains how domestic issues like debt, failing schools, and lack of a coherent immigration policy all threaten national security. His book is titled "Foreign Policy Begins at Home." Ambassador Haass joins me from a studio in New York.
MS. DIANE REHMYou're welcome to be part of the program. Give us a call, 800-433-8850, send us your email to firstname.lastname@example.org, follow us on Facebook or send us a tweet. Good morning to you. It's good to have you with us.
AMB. RICHARD HAASSIt's good to be back, Diane.
REHMThank you. You say in this book that you never imagined writing this book. How come?
HAASSLook, as you said in the introduction, here I am, I'm the president of the Council on Foreign Relations. I've now spent, what, 35, 40 years toiling in the foreign policy vineyards, and here I'm basically saying that we've got the balance wrong, and essentially we're doing a little bit too much foreign policy, particularly when it comes to remaking other countries, and we're not doing nearly enough of the right kind of domestic policy. It's simply never a place I thought I would come out.
REHMBut isn't the balance always a political one, and not so much in the hands of people like you or, indeed, members of Congress?
HAASSOn one level, sure, it's obviously political. But a lot of what we do in the world in foreign policy isn't political in the sense that the president, for example, has tremendous discretion. The previous president, George W. Bush, elected to take -- to go to war with Iraq. This president, Barack Obama, elected to triple U.S. force levels in Afghanistan. The balance, if you will, between foreign and defense policy which are two sides of the national security coin, to some extent that's in the purview of the president and the executive branch to decide where the Constitution as you know gives a lot more latitude to the president.
REHMDo you think that because of our lack of emphasis on domestic issues, that this county is moving into decline?
HAASSI don't think we're moving into decline, but I do think we're under performing, and I worry about the future. I worry about the train wreck that's lying out there a decade or so from now if we don't begin to address out entitlement obligations, the combination of the obligations against the backdrop of our demographics. A lot more Americans are obviously going to be above the age of 60 or 65. We simply can't meet those obligations, but I see no evidence whatsoever that we're beginning, in any meaningful way, to address those obligations.
REHMWhat else is at the top of your list in regard to paying attention to our own needs?
HAASSDomestically I'd mention a few things. You cited a few. One is immigration. I not only want to see comprehensive immigration reform, but I'd actually like to see strategic immigration reform, where we thought not simply about questions of family unification, but we thought really hard about the skill sets and education of the people who might be allowed to come and stay in this country. I'd like to see the creation of a national infrastructure rank to fund a modern American infrastructure, and the good news about a bank is it would take very little public money.
HAASSNinety percent of the money would come from the private sector. I would like to see an improvement in our K-12 schools. Kids all around the world and their parents line up outside American consulates so they can go to Harvard, Yale, or Princeton. I don't think there's all that many kids lining up around the world to go to P.S. this or that in New York or Washington D.C. So those are just some of the things. More broadly, we've got to get an American growth much higher.
HAASSAs you know, we're growing, what, half or two-thirds the historic rate, the post-WW II rate. So there are many things we can do to get economic growth back where it could and should be.
REHMBut didn't 9/11 change everything? Didn't it change our focus on who we are, where we stand in the world and how we react to it?
HAASSThat's interesting. It obviously changed things. It put counter-terrorism at the center of the agenda. Before 9/11, people in my businesses tended to see terrorism, if you will, as a nuisance, not as a real strategic threat. So 9/11 changed that, but also, I think that it didn't change the world in a sense. There's many other things we need to worry about, but it may have changed American foreign policy too much. And again, that's where the remaking of places like Iraq and Afghanistan seems to me strategically really uncalled for.
REHMDo you see the American interest in what's happening in the rest of world waning?
HAASSAbsolutely. And that's dangerous. In no way am I calling for that. Globalizations are fact, and Americans may choose not to concern themselves with the world, but that doesn't mean the world doesn't concern themselves with what happens with the United States. We can't become a giant gated community. So I worry about the fact that we're not teaching about the world in our schools. With the exception of shows like this on radio and television we don't really talk about it in any sustained way. So to me we need to be involved in the world heavily.
HAASSThe real question is how, and there I think we need to be somewhat more discriminating and selective in where we're involved and how we're involved.
REHMNow, for example, the president is meeting today with the leader of China, so the question becomes how do you engage China in both foreign policy interest and interest in domestic policy for the U.S.?
HAASSAnd I welcome the fact that the president is having these two days of relatively unscripted conversation with his Chinese counterpart. Think about it. The U.S.-Chinese relationship was forged in a fundamentally differently era in two ways. One, it was during the Cold War, and the only thing the United States and China had in common was a shared antipathy towards the Soviet Union. Well, the Berlin Wall came down 24 years ago, so we need a new basis if you will when it comes to how to deal with all sorts of regional and global challenges, because the world has changed so much over the last 24 years.
HAASSSecondly, look how much China has changed because of the three decades of economic growth. Look how the U.S.-Chinese economic relationship has fundamentally changed. This relationship needs to be modernized, so I welcome the fact that we're have these talks, because it's -- I don't think it's an exaggeration to say that the character of the 21st century will in no small part be determined by the character of the U.S.-Chinese relationship.
REHMBut now, take another area, the world Syria. Isn't the U.S. under pressure to focus on Syria to indeed some members of Congress want to create a no-fly zone, some may even want to furnish hard, destructive weapons. Doesn't that us involved in yet one more way abroad and not focusing here at home?
HAASSPotentially very much so, which is one of the reasons that I think there ought to be some limits on what the United States does in Syria. We've always got ask ourselves a couple of questions, and Syria's a perfect example, Diane. You've got to ask yourself, what are the interests, and yes, there are humanitarian and strategic interests...
HAASS...but I wouldn't say they're vital. But then you've got to ask yourself two other questions. What can we really do, and at what costs to promote those interests, and I think it would be at great cost, but I'm not sure we could actually accomplish a whole lot if we were to get heavily involved in Syria. And then you've got to ask yourself at what indirect cost. If we were to get heavily involved there, what would that mean for our desire to get more involved in Asia where we do have vital national interests, or what would that mean for the argument I've made to do more at home?
HAASSSo I think the administration in right in showing considerable discipline in the degree of American involvement in Syria, though I would favor, since we're not getting involved directly, I would favor greater indirect support for the rebels, and I would, for example, favor giving them certain types of advanced anti-aircraft capabilities to those rebels, to those opposition forces we thought, you know, whose agendas we could essentially live with.
REHMAre you in favor of seeing President Bashar al-Assad removed from office in one way or another?
HAASSYes. But that is not -- that should not be equated with success in Syria. That simply paves the way to a transition to a new phase which could -- which will be prolonged, and it will be potentially as violent, if not more violent and destructive than this phase. What we've seen in history goes back to -- I don't know if you remember reading Crane Brinton and "The Anatomy of Revolutions." As soon as the opposition succeeds in getting rid of the king, or the old regime, or in this case, Bashar al-Assad, again, the one they agreed on then dissipates.
HAASSAnd suddenly then they start turning on each other because now they're fighting for the future direction of their country and their own role, and we would have to expect in Syria. There would also be tremendous vengeance.
REHMDo you see that already beginning to happen in Iraq?
HAASSAbsolutely. It was one of the reasons that people like me were skeptical of what I described at the time as a war of choice in Iraq, that given the nature of that society, I thought that the sectarian pressures would be immense and potentially impossible to be contained.
REHMWhen you think about the monies spent on these various foreign interventions, what do you think could have been accomplished if number one, we had not gone into Iraq?
HAASSWe probably would have saved on the order of a trillion dollars. Lots depends upon how long of a time horizon, because one of the things we haven't added into the costs are the long-term costs of the lost livelihoods of those Americans who were killed and injured, the 30,000 or so Americans who were injured in Iraq. So it's at least a trillion, it could be a trillion and a half dollars. Obviously that money could have been spent foolishly or wisely here at home. But it is resources.
HAASSI would say though the other resource, Diane, that was really lost in Iraq was time. Presidents only have so much bandwidth. They only have so much political capital. There's only so many hours in the day and so many meetings to be held. So all the energy that went into Iraq, I think actually was expensive to the United States in many ways.
REHMRichard Haass, he's president at the Council on Foreign Relations. His new book titled "Foreign Policy Begins at Home: The Case for Putting America's House in Order."
REHMAnd welcome back. I know many of our listeners have questions. The lines are filled. We'll talk a bit more before we open the phones with Richard Haass. He's president of the Council on Foreign Relations. His new book is titled "Foreign Policy Begins at Home: The Case For Putting America's House in Order." Ambassador Haass, you talked earlier about the growth in spending on things like Social Security, on Medicare, on Medicaid.
REHMHere's an email saying, "I wonder if your guest could address defense spending in relation to the budgetary woes the federal government faces. Does the Council on Foreign Relations believe the government should cut defense spending in order to invest more funds in education and infrastructure? And how would that affect American foreign policy?"
HAASSWell, let me just make clear, Diane, I'm speaking for myself, not for my organization which doesn't...
HAASSJust wanted to make that clear so I can keep my job. Look, the core defense spending is roughly on the order of 500 billion, with a B, dollars per year. On top of that we're now spending about 100 billion, plus or minus, in Afghanistan. That's down. If you added also Iraq, was probably at the peak, maybe $700 billion a year for all things defense. So we've come down a bit. We're going to come down more as we wind down in Afghanistan.
HAASSAnd so if we have a defense budget of roughly 500 billion or a little bit less, it's already come down again because of the sequester. It's quite modest by historic standards in terms of percentage of the budget or percentage of GDP. And so I think cutting defense has contributed, if you will, to the slight shrinking of the scale of the deficit that's welcome. I don't think we can balance the budget or get close to it on the back of defense.
HAASSAnd I even make a larger point, whether you're talking about defense or health care. In most issues, more important than how much you spend is how you spend it. On health, for example, we spend what, twice the average of the other developed countries in the world and we don't get medical outcomes that are any better for it. On defense we are spending a lot but I do think we're also getting a lot. And even if we were to spend a little bit less, the contributions that would make to the economy would be modest. It'd also be mixed. As you know in the Washington area it also means people would lose their jobs.
HAASSBut the -- I think the loss to potential stability in the world could be great. So I don't think we can go much farther than we've already gone in cutting defense. And I don't think we pay an economic price for not going farther.
REHMIs it your belief that the president's Affordable Care Act will help to cut some health care costs?
HAASSWell, at first blush it's a little bit hard to see how you can extend health care to another 25 or 30 million Americans and not have health care costs go up. It also is going to depend in part by how many Americans decide to opt out of the system pay penalties and so forth. There's a lot of uncertainties. I would simply say the cost thing to mention of the Affordable Care Act at the moment is the most uncertain. We've seen a slight slowing in growth in health care costs in the last few months. There's a lot of debate among the experts, and I don't claim to be one on health care, of exactly what that is.
HAASSI don't think yet we've gotten to the point of fixing the drivers of American health care costs, which again, it's nearly a fifth of our economy.
REHMWhat steps do you take to begin to uninvolved the United States from the current involvement in foreign policy to refocus on the United States and things like education, infrastructure, etcetera? How do you begin to do that?
HAASSWell, again, just to be clear, I'm not so much interested in uninvolving the United States as I am to selectively involve us. I think the biggest question is the topic you and I already began discussing, which is Syria, which is what is the United States going to do in ways of intervening or not intervening in these internal crises in the Middle East because Syria's not going to be the last one.
HAASSAnd I think they were right to put a ceiling on what it is we do. I think that could be the most significant decision we make, which is not to repeat elsewhere what we essentially did in Vietnam, Iraq, Afghanistan, which is massively ambitious foreign policy undertakings in these countries who, I think in many ways, we tended to overlook local realities.
HAASSSo the single most important thing we could do -- I'm not -- is to avoid these in the future. It's not an argument for withdrawal from the Middle East. It is an argument though for a very disciplined approach there.
REHMInteresting that you say the U.S. is no longer the dominant force we once were, but rather a first among unequals. What does that mean?
HAASSIt's exactly that, that the United States now is responsible for just over one-fifth of world economic output. We're still the most powerful country in the world. I think others still look to us. But our share, if you will, of world power is less than it was. And our ability to have our way is less than it was. It's not simply other countries, which in many cases now have leverage over us because they provide resources. We--they're sources of funding our debt.
HAASSBut it's simply that there's so many other forces in the world that matter, whether they're corporations, whether its nasty groups like terrorist groups or whether it's benign groups, different foundations. But the chessboard, if you will now, is filled with hundreds of pieces, mot all of whom are nation states. Coming back to the Middle East you've got the Hezbollahs, the Hamases, these thousands of individuals in groups in a place like Syria.
HAASSThe United States has power that second to none but power doesn't always translate into influence. And that seems to me one of the realities of living in a 21st century world.
REHMYou called earlier for perhaps the transfer of antiaircraft missiles to the rebels. You've got Senator John McCain calling for a no-fly zone. Isn't that precisely how we began to be involved in Vietnam?
HAASSI think there's a difference between direct military intervention here and indirect military support. I don't support a no-fly zone. I worry about that, where that would drag us into potentially becoming a protagonist in the Syrian civil conflict. I don't want to go down that path again. I think it would be extraordinarily costly. And I'm not at all confident of the returns at the end of the day, given all the fissures within Syrian society, even if we were to be so fortunate as to see Mr. Assad removed from power.
HAASSI do think though that if you're not prepared to go down the path of direct military involvement, there is then a certain pressure on your or even a moral consideration to think about indirect support, to give those who all things being equal you support, the capacity to fight more themselves. I'm not saying there's not risk in that. I'm not so much worried about the risk of escalation as that question suggested as I am about the risk that some of those weapons will get into the wrong hands. I think that's a risk we have to be prepared to run.
HAASSWe've now got unattractive choices in Syria. And I think the one I've suggested is perhaps the least unattractive at this point.
REHMBut don't we already have advisors on the ground there? And wouldn't arming the rebels involve us in ways that could indeed at some point escalate?
HAASSThat would involve us more but the decision to escalate is just that. It's a decision that's out there. I don't see it as pressuring or biasing or prejudging such a decision. Indeed, I would actually think it makes it easier not to go beyond that, that we would say, look this is their civil conflict. We're going to give them the means to fight it. But people should understand that we ourselves are not prepared to go beyond a certain point.
REHMHave we gained anything from our involvement in Iraq, Afghanistan, Libya?
HAASSI would say we've gained things. In Iraq, for example, oil production is much higher. This is good for the world economy. We got rid of Saddam Hussein. I think that unbalance is good for the people of Iraq. In the case of Afghanistan, it's good that al-Qaida was really hammered there. But I think the larger question is, did we gain things in any way commensurate with what it is we invested? And we lost 6500 lives in these wars, 40,000 injured, somewhere between 1 and $2 trillion already of spending.
HAASSAnd I would simply say, I don't think in any way the gains justify those kinds of costs. I'm also not confident that this gains are going to endure. You mentioned before that Iraq looks to be getting worse. I'm afraid that's right. I worry about the future of Afghanistan. So the gains we have had in some cases I think could be quite fleeting.
REHMAll right. We're going to open the phones, take calls from around the country. First to St. Louis, Mo. Good morning, Steven, you're on the air. Steven, are you there? Oh dear. Let's go to Dallas, Texas. Good morning, John.
JOHNGood morning, Diane. Thank you so much for having me -- Mr. Haass, thank you so much for taking my call, both of you. My question is this. Is not a no-fly zone tantamount to a declaration of war? And do we not need the people to tell our representatives to go ahead and declare war, which is the constitution, which is the law of the land? There's a lot of concern out there about think tanks and the Council on Foreign Relation making the laws whereby we feel that we need to declare war before we go in there.
HAASSWell, places like, you know, the Council on Foreign Relations and other think tanks in Washington and other places -- we're in New York -- don't have power. We're simply involved in the marketplace of ideas. And we're trying to, in that case, contribute to the debate such as programs like this. This is to me -- shows like this are part of the oasis, if you will, of American serious debate about public policy. This question of the declaration of war is -- it's a long serious constitutional debate. It's increasingly the practice, is the word I guess I'd use, of presidents not to ask for formal declarations of war.
HAASSSo we did many -- whether it was Vietnam or many of the Iraq efforts have not had formal constitutional declarations of war. Often there's various expressions of direct and indirect congressional support. On the case of some of the things we've done around the world, we said they were pursuant to some of the authorities that were put into place after 9/11.
HAASSI would say more important than whether there's a formal declaration of war or anything like that in the case of Syria, is that we are just mindful, before we take steps, about the potential costs. What are the likely results, what kind of pressures we may then be putting ourselves under down the road? We've got to play chess here. We've got to think several moves ahead about what we might be getting into.
REHMAll right. Thanks for your call. To Sesani (sp?) in Chelan, Wash. You're on the air. Oh dear. Sesan (sic) , are you there? Not there. Let's go to Jesus in Fort Lauderdale, Fla. Good morning.
JESUSHi, Diane. I'm just saying I'm a fan of the show. I wanted to ask the question towards the man you're interviewing.
REHMSure, go right ahead.
JESUSI'm 19 years old and I've been hearing this a lot lately that my generation is first generation America to not experiencing peace time and that we're going to inherit all the problems that we had around the world from all the wars and stuff like that. I wanted to ask your opinion on that.
REHMAll right. And you're listening to "The Diane Rehm Show." Go ahead, Ambassador Haass.
HAASSLook, history is always a mix of the good and the bad. And your generation, like all others, is going to inherit -- to use a trite phrase -- a mixed bag in the world. The good news is there's nothing out there, anything like say Nazi Germany in the middle of the 20th century or like the Soviet Union in the late 20th century. Actually I think that's one of the most positive things about the world. And there need not be any country like that out there in the 21st century. It doesn't mean there's going to be peace and harmony in the world, but the threats that emerge ought to be manageable.
HAASSParticularly -- and that gets me to the other side of the coin -- if we can do things to make sure our economy is sufficiently strong to provide the resources we need so the United States can act and lead in the world. And if I were your generation what I would focus on a lot is particularly this question of obligations we've built up, the entitlement programs. Because at the moment we're robbing the future in order to pay the present.
REHMI must tell you, Ambassador Haas, many of our listeners take great issue with the word entitlement. They feel as though, most especially with Social Security, even though experts may say people get back more than they put in, it is still a matter of individuals paying in for their entire working lives.
REHMAbsolutely, but as you say, individuals do get back a lot more than they pay in. Also the age has not been adjusted nearly enough for the fact that thank god we all tend to live a lot longer. We also don't means test Social Security. A lot of people are dependent on it, but there's a lot of people, quite honestly, this is in no way going to affect their living standards. So I just think we need a Social Security system that is modernized to take into fact the changing dynamics and demographics of American society.
REHMMore realistic to suit what has happened with, for example, that upper 2 percent of our economy, those who are earning so much more than those at the low end.
HAASSAbsolutely. I just want to make sure that Social Security is around 25, 50, 100 years from now for those Americans who will depend on it. But the only way it will be around is if we do introduce some changes again like means testing, like a higher retirement age, like changing the index by what Social Security is linked to inflation. Unless we adjust it, I'm worried that it won't be there and people in this country deserve it.
REHMTo Boca Raton, Fla. Good morning, Jeremy.
JEREMYHey, how you doing today?
JEREMYFirst of all, thanks for taking my call. I have a question. Is there not some kind of moral precedent or moral responsibility set by the U.S.'s actions in the '90s when we went to Kosovo? Does that not carry over into the Syrian conflict today? Don't we have -- didn't we already set the precedent that we would get involved from a moral standpoint, regardless of the military outcomes?
REHMA great many people have raised Kosovo.
HAASSLook, it's a big and important question and it's one of, I think, the toughest issues in the field right now. In 2005 the word came together and it endorsed this concept known as a responsibility to protect. And the idea, to put it bluntly, is that situations like Syria, like Rwanda, massive genocides or social unrest should not be allowed to take place, that the world has an obligation to do something about it.
HAASSThe problem is that now there's -- that idea is not universally accepted. And even to the extent it is accepted, implementing it could be extraordinarily difficult and expensive. That's not an argument for not doing it but it is an argument to say that if you want to get involved to try to do something in Syria, you have to understand the scale of the undertaking. What it will cost, what is it you won't be able to do.
HAASSAnd I'm simply suggesting, given the full range of interests around the world, given the full set of concerns here at home, given the difficult realities of Syrian society, we ought to think twice or three times before we begin to go down that path.
REHMRichard Haass. He's president of the Council on Foreign Relations. His new book is titled "Foreign Policy Begins at Home: The Case For Putting America's House in Order." We'll take a short break here. When we come back there'll be more emails, more calls. I look forward to speaking with you.
REHMAnd welcome back. Richard Haass who is president of the Council on Foreign Relations is joining me from a studio in New York. We have him on Skype so I can see him and you can hear him. His new book is titled "Foreign Policy Begins at Home." He's arguing in favor of concentrating more on the needs of this country in the way of education infrastructure, rebuilding what has been lost in this country over the past certainly 12 years of foreign involvement. And here's an email on that very point from Darrel. He says, "Your guest talked about the cost of the wars in Iraq and Afghanistan. My question is how much of that cost have we actually paid? And how much was borrowed to be paid back by future generations?"
HAASSWell, it's a good question, but it's also one that's tough to add because we pay, but we also accumulate debt as we go along. The U.S. government is not in balance, so we have paid for these, but at the same time our debt, the cumulative debt of the United States has increased as a result of these. So I would say that most of the debt increase has not come from our foreign involvement. Most of the debt increase has come from what we've spent at home, from the slowing of the economy, all the things we had to do after 2008 and from various tax reductions.
REHMAll right. To Pittsburgh, Penn. Good morning, John.
JOHNGood morning. Hey, we have lost the entire Arab world because of a war in Iraq. I have been in the oil industry all my life. When we built (unintelligible) and (unintelligible) in Saudi Arabia in the '70s, we were welcome. The American were welcome. We walked around anywhere in America. And, you know, in those days, you know, we were young. We would have the loud Hawaiian shirts then. We just relax. Everyone welcomed us.
JOHNI'm retired now and a few months ago I talked to some of the younger guys. When they go to the Middle East, it's very low key. And they say when they were Kuwait, which is the friendliest towards America, we even have some -- I understand we even have some base or something like that. I don't know. But they told me that they are very low key, very careful. And when people ask them where they are from, they never say they're American.
REHMWhat do you think of that, Ambassador Haass? Is that all because of Iraq? Have we, in fact, lost our place in the Middle East?
HAASSI don't think it's mostly because of Iraq. It's true that anti-Americanism in the Middle East is quite high, any number of reasons. One is that the United States is closely associated with the authoritarian regimes that dominated the region. Those regimes were in many cases unpopular, so the United States is guilt by association. We're obviously unpopular because of our support for Israel. In some cases we're unpopular because of drone strikes or because of -- so I guess it could be because of Iraq. There's any number of reasons. That said, the United States still has a role to play in that part of the world. And there's no other outside force that I see coming in.
HAASSI actually think the point I'd make is if the caller's right and I think he's on to something, it's also quite possible what this reflects is the era of history the Middle East is in. And it's quite possible we're seeing the early stages, not so much of an Arab Spring, but a period of Arab politics dominated by political Islam, in which the United States and Western forces in general will not be welcome by wide swaths of the local population.
REHMReally? Considering the fact that you've got Hezbollah now active in Syria, you've got that taking a greater and greater role in that country, how is that going to affect the outcome of what happens in Syria? What would you do at this point to affect what Hezbollah is up to?
HAASSVery hard for the United States to affect what Hezbollah's up to, and it will make a difference given their military capabilities, the fact that they're receiving arms from Iran. It's a totally legitimate point. Again, it's what leads me to the direction that we need to balance it. And in this case we need to balance it through giving support to those who are fighting Hezbollah.
REHMAll right. And to Stamford, Conn. Good morning, Frances.
FRANCESHi. How are you?
REHMHi. Good, thanks.
FRANCESFirst time caller, love your show.
FRANCESQuestion to the ambassador. It seems like that we get into this dichotomy framing of it's either or. It's young against the old or it's the rich against the poor. We need to have a fuller discussion adding in the American corporations that aren't paying their fair share of taxes. Because I know we can't just do -- just cut the fence. But it needs to be everything. We need to have that full discussion. I'd like more comments from the ambassador on that.
REHMAll right. Thanks for your call. Corporations posting money out of the country, avoiding big tax hikes.
HAASSCorporations are doing that and the estimates are as high as one and a half or $2 trillion that are sitting on corporate balance sheets because they don’t want to bring them back where they're subject to a nominal taxation rate of 35 percent, which is the highest in the world. So what we need to do is make it possible or, what's the word, incentivize corporations to bring their profits back here and to build factories here, which among other things add to American economic growth and reduce unemployment. So we do need a large conversation. And this needs to be one piece of it.
REHMAre you suggesting that corporate taxes are too high?
HAASSAbsolutely. They're too high. And their behavior reflects it where it reduces our competitive -- look, I don't blame Tim Cook or Apple for avoiding taxes. We all avoid taxes. Tax avoidance is why people hire accountants. Tax evasion is illegal. So corporations are carrying out tax avoidance. What I want to do is make it in their business interest to bring those profits back home and invest them. And one of the ways we'll do that is by through the tax code which will incentivize them to bring that money back and perhaps we can give, you know, through the tax code various types of financial incentives then for them to then invest it in plants that hire people.
HAASSWhy not think about that?
REHMSo you're focusing for the money you're talking about to focus on putting America's house in order, you're focusing primarily on reforming Social Security and reforming the tax code.
HAASSMuch more actually...
REHMIs that fair to say?
HAASSThat's part of it, but also -- Social Security is actually a small piece of the problem...
HAASS...when you look at -- much more the Medicare and Medicaid are, you know, probably eight or nine times larger as a challenge. I'm also looking at infrastructure. I'm looking at immigration. The previous caller talked about a comprehensive conversation. I don't think, Diane, there's any single or silver bullet here. What we need to have is a much more bigger conversation about how we invest in physical infrastructure, how we invest in our people better and then how we -- how we decide levels of taxing and spending. I've got my own views, for what it's worth, about what tax levels should be, how it ought to be -- how to be reformed. But this has got to be part of a conversation.
HAASSAnd I think the real question, you cover this a lot on your show, is whether our politics now allow that conversation, whether we can have the kind of conversation we now need in this country where we put questions of spending, investment, taxation and so forth for individuals and corporations, what have you. The future versus the present when we look at entitlements, whether we can have a serious conversation about these issues or whether our politics have reached a point that almost precludes such a conversation.
REHMHow do you answer that question?
HAASSI wish I could be glib here and say not to worry, but I am worried, which is in part why I wrote this book. I think that special interests have become so powerful that it makes it very hard for the general interest. The AARP on the entitlement debate has disproportionate clout. It represents 35, 40 million Americans. Or take the gun control vote on background checks. You had 90 percent of Americans having a general preference for background checks, yet the 10 percent of Americans who opposed it carried the day. And what that shows you is what matters most in American politics is the intensity which people take, if you will, or bring into the political marketplace.
HAASSSo this to me suggests we need now rival organizations. Whether it's on gun control or on entitlement reform, we need more of a political marketplace, so to speak, in which these -- today's special interests are counterbalanced. And it also makes a case, I believe, for stronger presidential leadership, both to frame the debate and then to try to influence political outcomes.
REHMBut what about money as the governing influence in that debate?
HAASSMoney is pervasive and it is powerful, and that's why, again, you need to balance it out. So right now there's a lot of money on one side of this or that debate. There's nothing that prevents people who feel that the policies need to be changed for putting resources on the other side of the debate.
REHMLet's go to Jacksonville, Fla. Good morning, Parker.
PARKERGood morning, Diane. Thanks for taking my call.
PARKERAnd before I get to my question, I just wanted to correct your guest that everyone except for basically him and few others pay all their taxes and can't avoid them. And that the reason corporate tax rates are so high and they don't come down is because when you get in a factored tax rate of zero as a multi-national because of profit shifting, like Exxon and GE and Apple do, that if you can't really compete with the tax rate of zero, so that's why they don't come back here with their profits.
PARKERAnd my actual question was, with the Bush administration and the Obama administration, investing billions of dollars in ballistic and anti-ballistic military technology, do you see a future or a use for any of that such technology in an area where the last ballistic missile fired -- or the last nuclear weapon fired in anger was in 1945?
HAASSUnfortunately, yes. I'm afraid the proliferation of certain technologies is part and parcel of the modern world. We already have the North Koreas, the Irans and others who have ballistic missile technology in various stages of development. The North Koreans have a handful of nuclear weapons. The Iranians may or may not be developing one, although they're clearly getting an awful lot closer. Drones are proliferating around the world. So I think we've got to accept the fact that the 21st century is going to be a world of what you might call distributed technology, where a lot of capabilities are going to be in a lot of hands. And the United States is going to have to think systematically about how we make ourselves less vulnerable to that.
REHMAnd doesn't that require more monies going into precisely that national security in defense terms rather than the kind of national security you're focusing on building roads, building bridges, focusing on education?
HAASSWell, someone else said, it's not a case of either or. We've obviously got to do both. And where political debates get real is when you get down into the details. But some of the things I would do also have a national security component. One, for example, is infrastructure. If American infrastructure is more robust, it's more resilient, we'll be in a much better place to contend with whether it's natural disaster or terrorism. This is, again, it's something we've got to build in our society so we can better withstand or bounce back from destructive developments.
REHMAll right. To Cape Neddick, Maine. And you're listening to "The Diane Rehm Show." Eric, you're on the air.
ERICGood morning, Diane. It's a pleasure speaking with you.
REHMGood morning, sir. Thank you.
ERICI've got to tell you if I wasn't a happily married father of five, you'd be in trouble, so anyway, and I'm only 47, so...
REHMI accept that as a compliment, thank you.
ERICI hope so. If I may ask you a quick question, you can answer it yes or no. And then I have a comment about Mr. -- a comment Mr. Haass made.
ERICIn the past, I've heard you make a comment on certain shows where your family leases land for companies that do fracking. Is that still the case?
REHMNo, I have never leased any part of the land we own, 150 acres north of Scranton, south of Binghamton in the Endless Mountains. Ours was the only property that was not leased.
ERICVery good. Very good. Okay. Thank you. And, Mr. Haass, you made a comment earlier about the benefits of these wars, if you want to call them wars, as one benefit being more oil on the open market. And I'm driving Prius and I'm still paying 3.50 gallon. Where's the benefit?
HAASSWell, that's a lot less than it is in many other countries around the world. And I would think that with some of the changes we're making to American technology and engines that that demand will hopefully come down in this country. But oil's a global market. And the differentials in price are mainly showing up in natural gas, where natural gas in this country as you know is what, roughly a fifth of what it is in cost in much of the world. Oil tends to be a global price. And even though demand is coming down here, it's rising in places like China and India. So the fact that Iraq has put more oil on the market is one of the forces that keeps prices lower than they would otherwise be.
REHMSo, Ambassador Haass, in the couple of minutes we have left, considering all the obligations that the U.S. is currently faced with, plus the political difficulty and discourse at this moment, how would you as president of the Council on Foreign Relations hope to get the congress to focus on what needs to be done here at home? How much are you going to members of congress to say what you have said in this book?
HAASSI speak to them all the time and it's the reason I wrote this book, Diane, is hopefully it'll have some traction. And on the foreign policy side of the national security coin, I'm arguing for limits on what we do in the Middle East. I am arguing for doing more in the Asian Pacific where the great powers are colliding and where I think American foreign policy, where our tools lend themselves to actually accomplishing a lot of good. And here at home I personally am making the argument for things like a more strategic immigration system. I am making the case for a national infrastructure bank. I think it's very good that we've started these two new trade negotiations.
HAASSI think we've got the wind at our backs from the transformation of the American energy picture with natural gas and oil. I would like to see tax reform which I've talked about in great detail. I do think we need entitlement reform, but we need to do entitlement reform now. Not that it kicks in immediately, but it's like a supertanker. We've got to make the changes now so they kick in 10 or 15 years from now. It's not fair to people to make these changes when they're suddenly on the verge of retirement. But we've got to get these -- this debate has got to get to the point now where we're willing to make some tough decisions about our future.
REHMRichard Haass, he's President of the Council on Foreign Relations. His new book is titled "Foreign Policy Begins at Home." Thank you for being with us.
HAASSThanks so much for having me.
REHMMy pleasure. And thanks for listening all. I'm Diane Rehm.
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