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No Shutdown, But What's Next?

Monday, April 11, 2011

US House Majority Leader Eric Cantor (R-Va.) speaks on budget negotiations and a possible government shutdown at the U.S. Capitol on April 7, 2011. US House Majority Leader Eric Cantor (R-Va.) speaks on budget negotiations and a possible government shutdown at the U.S. Capitol on April 7, 2011. (AFP/Getty Images)

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer ShowJake Tapper, senior White House correspondent for ABC News, discusses the 11th hour budget deal and what to expect from President Obama's deficit plan to be unveiled on Wednesday.

The heated wrangling over money on Capital Hill is far from over. After Friday's tenuous agreement to fund the federal government through the end of the fiscal year, the president will respond on Wednesday with the announcement of a broad plan to reduce the nation's debt. Tapper expects we'll hear from the president that we need to ease in cuts in so we don't derail our fragile recovery and the usual backlash from Republicans about the dire need to cut spending, but he hopes at some point we can start talking about something real.

What we're missing:

The debate that needs to happen is one that has to do with what we as Americans get from our government, what we expect, what we want, and want we're willing to pay for. That debate is one that I think a lot of Americans would be surprised to find out the realities of where the money is.

Americans don't understand the deficit.

Polls show that the majority of Americans are under misconceptions about the cause of the government deficit. 

A lot of Americans, at least according to polling, believe that if you get rid of waste, fraud and abuse, and eliminate the foreign aid budget, which a lot of Americans according to polls think is about a quarter of the budget - when it's actually about one percent - there's this misperception that that would do a lot to stave off the debt and the deficit. It's just not the case.

In actuality, the big drivers of the deficit are Medicare, Medicaid, the military and the tax breaks depleting revenue over the last ten years, not to mention the wars in Iraq and Afghanistan. So are Americans just not reading the news? Tapper doesn't think that's the only issue.

I think another possible source of any confusion is the rhetoric from politicians who for decades now have been promising a free lunch. 'You don't have to give anything up, we are going to go to Washington and take care of this.' You can't discount how much politicians exploit vulnerabilities.

Did Obama win the budget battle?

Maybe. He swept in at the last minute and brokered a deal. That fits in to the administration's efforts to sell Obama as the common-sensical "adult in the room" who they hope will be able to woo Independent voters back in the next election.

That's why you keep hearing members of the Obama administration say 'It's time for a grown up conversation, it's time for an adult conversation.' What they're subliminally trying to convey is that the other side is not adult, is not mature and I think you're going to hear a lot of those themes in 2012.

If you thought last week was bad... just wait.

This argument last week was over 38.5 billion dollars. To raise the debt ceiling - which needs to be raised in May- to raise it just so the government can borrow enough money so the government can survive until the end of 2012, just a year and change, is 1.9 trillion dollars that the debt ceiling needs to be raised. That is fifty times what last week's argument was about. So the stakes could not be higher.

To recap, budget battles are about the values and priorities of government as expressed through spending. The fight is far from over.

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Comments [23]

@MartinC

Please go sell that "Upper 1% pay 41%" noise somewhere else. The average $51K household is kicking in $7,800 in payroll taxes AKA FICA. The $500k/yr worker - the threshhold for those one-percenters - kicks in $16,500. His FICA and MediCare withholding stopped at about $108K. The $500K guy put in 3.3% versus 15% for the median household (A bigger number but a far smaller percentage of his earnings. Half of the total bite includes employer contributions which is turning out to be the only Federal taxes that many corporations pay!)

If the one-percenters paid something close to the 35% marginal rate the Treasury would be collecting over 58% of its current rake from the top 1%. So another way to see it is that the one percenters are gaming the system for a 30% cut in their taxes.

Apr. 12 2011 11:21 PM
Muriel from Financial District

I am so tired of listening to people and politicians and pundits refer to social security as "entitlements". Do they not realize that in every paycheck we pay into that system. Do they not also realize that this is a very efficient form of insurance devoid of the burden of profit share that feeds the multbillion dollar insurance sector. Let's try to find another term please.

Apr. 12 2011 10:38 AM
Aaron Whitby from Brooklyn

@Martin,
Running away from your comment then? Spineless.
I realize that reading and comprehending are not your strong points but "on this very page" means just that. Read other's comments and at least try to understand them before throwing out spurious statements.
BTW How did that research on the tax structure go? Nowhere, what a surprise, the facts would get in the way of your fantasy world.

Apr. 11 2011 01:54 PM
Martin Chuzzlewit from Manhattan

Don't flatter yourself...I wasn't specifically talking to you.
...and, LOL, nobody here has been writing down and keeping a record of what you have made clear in the past about your personal politics.
Good heavens.

Apr. 11 2011 01:05 PM
Ron from NYC-Manhattan

I believe that president Obama and the senate should put forth a united and aggressive budget plan and not care what Paul Ryan or any of his cohorts say is necessary. It is not and it is a great danger to the people of the United States. It is not fair to the majority of people to have a 10% tax break. As we all know, or should know, a tax break is not an equal way to distribute money (ie 10%of a $billion is $100,000 as opposed to 10% of $50,000 is but $5,000).

I know that we should lower the debt, but not in this manner. How about starting with defense and working our way towards oil? Another thing that we can do is penalize companies for giving our jobs overseas.

Apr. 11 2011 12:35 PM
Aaron Whitby from Brooklyn

@Martin,

I was the one who reminded you of Bush's squandering of a surplus and of course you displayed your lack of interest in facts by calling me an Obama supporter when on this very page I've made it clear that I'm no such thing. Further, recent history is highly relevant, for you to dismiss it displays your ignorant tribalism. As for really agreeing with you in my gut...funny.

Here's some research for you to embark on - what were the tax rates bt 1945 and 1970, the year's of America's greatest growth?

Apr. 11 2011 12:00 PM
jgarbuz from Queens

I just love these building contractors and real estate speculators who made high incomes using illegal Mexican labor over the last 20 years, now complaining because their bubble burst, and find themselves flat on their backs with the rest of us. These people still have bubbles in their head. WE OVERBUILT TENS OF MILLIONS OF OVERSIZED HOMES based on lots of debt and using lots of oil, and now they are bitter that their house of cards (literally) has collapsed around them. Actually, I saw the bust coming back in 1991, when I came back from ten years living in ISrael, when I saw all those McMansions and SUVs all over the place. I saw every McMansion then as a nail in the coffin of America, and I was unfortunately totally prophetic.

Apr. 11 2011 10:44 AM
Martin Chuzzlewit from Manhattan

Great call, Contractor.
The stimulus money was squandered... acted as a band-aid... and it's just about gone.
This is a harbinger of what the Dems want to do on a long term basis....with the same pathetic results....and every "progressive" out there listening to this show knows it in their gut.

Apr. 11 2011 10:43 AM
Martin Chuzzlewit from Manhattan

Bush, Bush, Bush.
You know that Obama is in trouble when his supporters, two and a half years into his presidency, don't discuss his policies and performance...but say, well, at least he is better than Bush.
I thought we all knew that....and that was why he was elected.
OK, so "where's the beef?"

Apr. 11 2011 10:38 AM
jgarbuz from Queens

For those who are screaming that the sky is falling, they have to understand that most of our trading partners and economic competitors have even WORSE problems than we do. They have proportionately a LARGER aging population. And they pay much more for gasoline than do Americans. And many have higher unemployment rates. And have MORE debt proportionately than we do. This is a global problem, as was the Depression in the 1930s.
Sure we have to shrink the debt problem, which does mean cutting back on many social programs, but I think Obama has cut about the right deal. As for taxes, we have to check how we are doing compared to our economic competitors, and adjust them accordingly. WE don't live alone on the planet. We have to look to see what others are doing and take notes too. There are no clear cut easy answers. It's going to take a lot of structural reforms and adjustments to our standard of living.

Apr. 11 2011 10:35 AM
Aaron Whitby from Brooklyn

@Martin,

I hope you didn't vote for Bush, as it was his admin, with a Republican House and Congress, who turned a surplus into a financial crisis and started two unfunded wars. Tax and Spend the Democrats may be but the Republicans are Borrow and Spend advocates.
BTW There is a class war but it's being waged by the rich on the rest of us. And they're winning. Mexico here we come.

Apr. 11 2011 10:32 AM
Ken from Little Neck

Brian, I'd love to hear Obama come out with spending goals that need to be met, instead of cuts that we have to make, as you suggest. I don't think it has the remotest chance of happening. The conversation has been completely hijacked by the extreme right to the extent that the "liberal" position is rejected out of hand even by moderate Democrats. The left has been completely shut out of this debate, and it's incredibly frustrating that there doesn't seem to be anyone in Washington willing to fight for it.

Apr. 11 2011 10:30 AM
Robert from NYC

Obama must go. I was ardently an Obama supporter in 2008 and now I think he is not what he portrayed himself to be then. I don't want him. I don't want any republicans but I don't want Obama either. For the first time in my life I will not vote the presidential like in 2012 or write in a candidate or if a third party pops up that offers someone acceptable to me then I'll vote the line. He is a wimp and doesn't stand up to the republicans nor anyone for that matter. He seems to appear every now and then to make a statement or declaration then disappears for long periods and nothing gets done.

Apr. 11 2011 10:28 AM
Martin Chuzzlewit from Manhattan

2nd caller.....the upper 1% pays 41% of the taxes.
The Democrats have hoodwinked you into obsession about "income inequality"....a nebulous concept that promotes class warfare and keeps attention off their irresponsibe stewardship of the economy.

Apr. 11 2011 10:27 AM
Sam from Chelsea

Considering that the Democrats control the WH and the Senate, it seems to me that the GOP gets disproportionately more from the current arrangement. The GOP's negotiating strategy seems to be to focus the argument around a couple of key issues that the Democrats identify with and hold them hostage in exchange for billions in tax cuts or spending cuts. In December it was DADT and New Start, on Friday it was Planned Parenthood and the EPA. I don't think this is a fair trade at all.

Apr. 11 2011 10:26 AM
Jack Jackson from Central New Jersey

The GOP is hypocritical and wants the economy to stay weak so they can blame the weak economy on Obama...My god, the political spot writes itself..."Isn't four years of fumbling long enough??..."

Hypocritical - "Raising taxes during a recession is the wrong thing to do, let the rich keep their cuts" versus "The deficit is too high, we need to cut spending."

This is a guarantee to make everyone's pain last longer. For the bottom, homelessness, bankruptcy and poverty increase. For the top, the portfolio produces less trust fund money.

The President and the dems need to find a way to explain Macro 101 concepts to a non-college educated audience. That's what half the electorate is. To paraphrase Carville's words "It's the ECONOMY, stupids!"

Apr. 11 2011 10:23 AM
Martin Chuzzlewit from Manhattan

There aren't even close to enough rich people to EVER pay for this reckless spending that the Democratic politicians shamelessly sell us in order to buy votes from the gullible and stay in power. They each know that they won't be around when the bill to pay the piper comes due down the road......Chuck Schumer and the others will be retired in Boca Raton.

Apr. 11 2011 10:23 AM
Aaron Whitby from Brooklyn

@Tom - exactly right. As usual the compromise is middle ground Republicanism.

Apr. 11 2011 10:21 AM
chris from new york

Jake Tapper is wrong: the Ryan plan will not cut the deficit 4.2 trillion as the cuts he makes are offset by tax cuts. the non partisan CBO did not agree with his ridiculously optimistic projections- projections which the heritage Foundation no longer endorses.

Obama needs to stand up for medicare and medicaid and the need to tax the wealthy (and middle class!!) more.

Apr. 11 2011 10:17 AM
Aaron Whitby from Brooklyn

Thanks Brian for disenfranchising me. You said you wanted callers of three dispositions - Obama supporters, Tea Partiers and Republicans...and then you seemed to realize you'd left something out - so I and anyone of a progressive persuasion became 'and anything else'.
And this is the supposedly liberal media!

PS - Obama does not represent the left, he is a corporate Democrat and I and most politically astute liberals never bought into him.

Apr. 11 2011 10:17 AM
Martin Chuzzlewit from Manhattan

Brian, just when you seem trustworthy, what a pathetically biased lead-in to this segment you recited. Everything was either a cut to xyz services for "the poor" and "the elderly"..... or an xyz "for the rich." Give me a break! The Democrat strategists thank you for staying on their message. You should file an FEC report as a campaign contribution for this segment.
What would have been closed were "non-essential sevices". Why are we funding "non-essential services anyway?

I am neither an Obama supporter nor a tea partier....but we will never get out of this economic quicksand when radio hosts describe every effort to balance our books as war on the usual victims.

Apr. 11 2011 10:17 AM
tom

Simpson Bowles will be the "compromise" budget. Prepare yourself for disappointment.

Apr. 11 2011 10:16 AM
Xtina from e. Village

There was no budget deficit and 'debt crisis the trillions dollar warS, and unaffordabl tax cuts for the rich. But now 'entitlem l have to pay for those things. Take from te poor to pay the rich. grover norquist must be ecstatic.

Apr. 11 2011 10:11 AM

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