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The congressional supercommittee on the deficit announced yesterday it had failed. The bipartisan panel was charged with crafting a deficit-reduction plan by Thanksgiving – a plan both sides could agree on. Many observers said the supercommittee was doomed from the start. In today’s divided Congress, with six Democrats and six Republicans on the panel, there was little chance for an agreement. Others say it was possible and rue a wasted opportunity to benefit the nation. What the deadlock means for the economy and American families – and what the Obama administration could do about it.
- Norman Ornstein Resident scholar at the American Enterprise Institute and coauthor of "The Broken Branch: How Congress Is Failing America and How to Get It Back on Track."
- Naftali Bendavid National correspondent, The Wall Street Journal.
- Robert Walker Former U.S. Congressman from Pennsylvania (1977-97); chairman of Wexler & Walker Public Policy Associates.
- Rep. Chris Van Hollen Democrat of Maryland, member of the 12-person Joint Select Committee on Deficit Reduction.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. It was the Democrats' fault. It was the Republicans' fault. It was Grover Norquist's fault. The blame game in Washington began even before the deficit super committee announced its failure to come to agreement. Joining me here in the studio to talk about what it means and what's next, Norman Ornstein at the American Enterprise Institute, Naftali Bendavid of The Wall Street Journal, and former Republican Congressman Robert Walker of Pennsylvania.
MS. DIANE REHMBefore we begin our discussion here in the studio, joining us by phone is Maryland Democrat Chris Van Hollen. We invited Democratic and Republican members of the super committee to join today's program. Congressman Van Hollen was the only one to accept. Good morning, sir. Thanks for joining us.
REP. CHRIS VAN HOLLENGood morning, Diane.
REHMCongressman Van Hollen, in your view, why was the super committee unable to come up with a plan that everyone on the committee could support?
HOLLENWell, first, Diane, let me say I'm very disappointed that we were unable to reach an agreement. I think it was huge missed opportunity for the country and the easy storyline will be, as you said at the beginning of program, that, you know, both sides refuse to compromise, no one -- refused to budge. And every time one of us tries to explain what happened, we'll be accused of, you know, political finger pointing. What I would ask people to do is look at the proposals that were advanced compared to other bipartisan groups, like Simpson-Bowles.
HOLLENAnd what the Democrat said from the beginning is that we wanted a plan that will balance. We understand that we need to make difficult cuts and we proposed many difficult cuts, including the Medicare and Medicaid reforms proposed in Simpson-Bowles. But we also insisted that there be balance, and we asked that folks at the very high end of the income scale participate in deficit reduction as to the Simpson-Bowles commission.
HOLLENUnfortunately, our colleagues refused to budge on that and insisted that we extend almost all of the Bush tax cuts that disproportionally benefit the wealthy, at the same time that they were talking about -- asking Medicare recipients at 23,000 annual income to pay a lot more, and we didn't think that was fair.
REHMDo you feel that the panel put in enough hours to try to get a deal considering the fact that, at least as I understand it, you didn't meet face to face very many times?
HOLLENWell, I do think that the panel put in the necessary time. I don't think the time invested was the issue. Speaking for myself -- I was working 24/7 on this issue -- and while there...
HOLLEN...weren't that many meetings of the full group at 12, there were a lot of meetings of subgroups and other members, trying to reach a solution, trying to find a way.
REHMSo what do you think President Obama's options are now?
HOLLENI think the president is very right to say that he will veto any effort to undo sequester 'cause that's just an effort to do an end-run on deficit reduction. And those who proposed to totally undo the sequester are clearly not serious about deficit reduction because the result would be an immediate $1.2 trillion increase in the deficit. And the whole purpose of the super committee was to confront other choices for getting that kind of deficit reduction, and to try and do it in a balanced way as other bipartisan groups had done.
REHMFinally, Congressman Van Hollen, we're coming up to the Thanksgiving holiday. You, your fellow members of Congress are all going home. You're going to see constituents. I will tell you that people are mad as hell. How are you going to deal with that?
HOLLENAs they should be, Diane -- and, look, I share their frustration. The best I can do is to ask people to take a thorough look at the record of these negotiations -- And I think that record will come out in the days ahead -- and measure what Democrats and Republicans were proposing against the standard of bipartisan commissions, because I know that by the standard of Simpson-Bowles, for example, the Democratic plan was very balanced.
HOLLENAnd, in fact, nonpartisan outside groups properly said that the Democratic proposal was to the right of Simpson-Bowles when they looked at the ratio of cuts to revenue, when they look at the willingness to reform Medicare and Medicaid. Now, let me be clear, we were not willing to accept the Republican budget proposal to totally end the Medicare guarantee as they proposed in their budget, which would force seniors out of the Medicare program into the private insurance market without adequate support.
HOLLENBut what we were willing to do was to incorporate every reform concepts for Medicare and Medicaid that was in Simpson-Bowles, the bipartisan group. So but, you know, we did ask our Republican colleagues to do what Simpson-Bowles did and ask for the wealthiest Americans to go back to paying the same amount that they would be paying under the old Clinton tax rates. It didn't have to be at the same rates necessarily but the same amount. And the answer came back no.
REHMMaryland Democratic Congressman Chris Van Hollen, thanks for joining us, sir.
REHMAnd turning to you now, Congressman Bob Walker, so does...
MR. ROBERT WALKERFormer congressman.
REHMFormer congressman Bob Walker. Oh, we still feel you deserve that title.
WALKEROh, I'll keep the title -- none of the power, but I'll keep the title. .
MR. NORMAN ORNSTEINHe may not want it, Diane.
REHMYeah. Okay. So you are clearly blaming the Democrats. Tell me why.
WALKERWell, I blame the process. In my view, the whole idea, the super committee, was failure of the entire process.
WALKERWell, because we have processes for taking care of budget and appropriations issues for deficit. It's called the Budget Act of 1974. Both houses of Congress are supposed to pass a budget. They are supposed to then reconcile those budgets, and there is a reconciliation process by which we move forward on budgets. That process has totally broken down. It's a scandal the fact that Congress cannot get its work done, that Congress can't do this. The House, at the beginning of this year, passed a budget. It was not an easy thing to do for them, but they passed a budget.
WALKERThe Senate has not passed a budget for nearly three years now. You can't, in anyway, put together the budget process and make it work if all you're doing is going all for gimmicks like super committees.
REHMNorm Ornstein, you see this as a totally missed opportunity.
ORNSTEINOh, there is no question it was a totally missed opportunity. I have a lot of sympathy with what Bob said. I am a strong defender as he is of the regular order. I wish we had done a deficit reduction deal using the regular order. I wish that they had a different set of rules for the Simpson-Bowles commission from the beginning that would have had, as the super committee did, just the majority because the majority supported it and have it come up for a vote. But along the way, here's the missed opportunity, Diane.
ORNSTEINEvery outside group -- Simpson-Bowles is one. The Bipartisan Policy Center's Rivlin-Domenici commission is another. The informal Gang of Six in the Senate is a third. The negotiations between Speaker Boehner and the president are a fourth. They all had roughly and even more than roughly the same template: $4 trillion dollars in deficit reduction over 10 years. It was a trillion dollars in revenues under Simpson-Bowles, $1.3 trillion in Rivlin-Domenici, $1.5 trillion in the Gang of Six, 800 billion with Boehner-Obama, all coupled with tax reform.
ORNSTEINAnd then another trillion at least from reform of entitlement programs. You have that on the table. You had a super committee that had unparalleled powers. Whatever they came up with, up or down vote, no delays in both houses, and they couldn't do this kind of a deal despite the fact that -- and I believe Van Hollen is right -- what they had put on the table was the set of Medicare and Medicaid reforms that were in Simpson-Bowles.
REHMNaftali Bendavid, in practical terms, what does this mean failing to reach a deal?
MR. NAFTALI BENDAVIDWell, what it means in practical terms is that in January of 2013, there's a series of cuts that are supposed to take effect, totaling 1.2 trillion but half of them from defense and half of them from domestic programs. But I think what it's really going to mean is that Congress is gonna be under tremendous amount of pressure before that time to come up with another $1.2 trillion package of deficit cuts because the cuts that would go into effect in January 2013 are pretty damaging, I think, and to both sides, both domestic and military.
MR. NAFTALI BENDAVIDWhat it turned out is that the bomb, if you will, for the committee wasn't scary enough. In other words, you know, in the previous budget talks, we had the possibility of default in economic cataclysm. Before that, we had the threat of government shutdown. The threat that, well, in a year, the same amount of cuts would go into effect wasn't enough to prompt action, and Congress these days seems to need that kind of a crisis.
MR. NAFTALI BENDAVIDBut I think they are gonna be under a lot of pressure to do it in the next year, but they're not gonna have the protections that the committee did have. It would have to take, for example, 61 votes in the Senate, 60.
REHMFormer congressman Walker, I want to ask you about something. David Brooks wrote this morning. We may not be able to get all your answers before the break. But he wrote Grover Norquist's tax pledge isn't really about tax policy. It's a chastity belt Republican politicians wear to show that they have not been defiled by the Washington culture. Short break and we'll be right back.
REHMAnd we're back. Congressman Walker, would you like me to read that quote to you again?
WALKERNo, I heard it. And my reaction was that, the fact that there are any chastity belts at all in Capitol Hill is probably a surprise to the American people. But the fact is that Republicans do philosophically believe that government is too big and spends too much, and that what tax packages are designed to do is to give the government more revenue so it can spend even more. That has been a long-standing policy of the Republican Party.
WALKERAnd so, therefore, if there are going to be any kinds of revenue changes, and in particularly revenue enhancements, the Republicans believe that they have to be accompanied by massive spending cuts, so that what we're doing is actually dealing with the deficit and not simply feeding the beast with more revenue.
REHMDid you hear what Congressman Van Hollen said about Democrats' willingness to cut Medicare and Medicaid if Republicans express some willingness in raising some taxes?
WALKERWell, his view of that is somewhat different from the Republicans on the committee, who believe that the Democrats never fielded a proposal that they all agreed upon.
WALKERThe Republicans were prepared to put a definite proposal on the table that they were all agreed upon as a place to begin negotiations. And while there were floats of proposals from Democrats, including Max Baucus, there was never a proposal that they were agreed upon so that they could come to the table and negotiate. That ended up being a part of the problem. Once again, the super committee, because of that kind of setup, was a bad idea from the outside.
BENDAVIDYeah, I've heard other Republicans make that point. I can only tell you what the Democrats say, which is that, you know, the fact that they didn't get a sign-off from every single one of their members shouldn't be taken for not presenting a pretty serious proposal. There was one that Patty Murray made to Jeb Hensarling, to one of those that Max Baucus and Dave Camp were talking about.
BENDAVIDSo, I mean, I -- not representing the Democrats obviously, but what they would say is, that's true, we didn't get everybody to sign on the dotted line, but it doesn't mean that we didn't make some very serious proposals.
ORNSTEINYou know, there were -- if you look at what proposals were formally on the table, Ezra Klein and The Washington Post, I thought, had a pretty good template for this. You look at the deal that Boehner and Obama were close to getting, and from that, Democrats put concrete proposals that moved right. And these were proposals that Max Baucus, John Kerry, Patty Murray and Chris Van Hollen, at least, and Xavier Becerra, very likely as well, were willing to sign onto that were, in fact, very much like the Simpson-Bowles plans on Medicare and Medicaid.
ORNSTEINAnd Republicans, as the Democrats moved right from the Obama plan and moved down in revenues from Simpson-Bowles, Republicans moved further right.
ORNSTEINThe only plan of revenues put on the table -- and that was true even privately -- was the Pat Toomey plan almost at the end of this process. And that was a plan for $300 billion mostly in fees, not in tax increases. And in return for that, reducing the top marginal rate from the current level under the Bush tax cuts of 36 percent to 28 percent, and extending permanently all the Bush tax cuts. So it's a deal that says, we'll take $300 billion in new revenue for $3.7 trillion in revenue cuts. I -- to me, it doesn't look like an even process here.
WALKERWell, in so far as you want to lose -- use the Simpson-Bowles template, the fact is that the administration appointed that commission, and then when they reported, said thank you and ignored the whole thing. And so there's no faith whatsoever among Republicans that the administration wouldn't go out and do the same thing that they did to the Republican budget when it passed the House of Representatives, and that is go out and hammer people for actually having the courage to stand up and take real policy positions.
WALKERThis administration did not move that forward. Had the administration pushed forward the Simpson-Bowles plan, we might well have had some leadership that the Congress then would've followed. They didn't do that. And matter of fact, the president then walked away from the whole super committee process, called a couple of people on the phone a couple of times to say, good luck, guys. And so it got nothing in terms of leadership.
BENDAVIDAnd I think this is the kind of back and forth that we heard throughout the process, and it really struck me, the extent to which there was distrust and polarization. I -- to my mind, both sides did put forth proposals that actually did cross some lines that they hadn't previously been willing to cross. But instead of the other side saying, good, you've shifted your position. What they said is, well, you're still so far from where we would ever be that I don't take this in good faith.
BENDAVIDAnd the other striking thing to me was -- and this has been a problem that's bedeviled Congress I think all year, which is a lack of leaders who can deliver followers, so that they can say, okay, let's agree to this deal and then I know that my guys are gonna vote for it. We'll all step out on a limb, but we'll do it together. And this seemed to me like a leaderless process. It was hard to tell.
BENDAVIDOn the Republican side, was it Jeb Hensarling? Was it Pat Toomey? Was it John Boehner? And the Democrats had kind of a similar lack of clarity as to who was kind of leading the thing. And I think that was a big part of the problem.
REHMAnd what happened to President Obama?
ORNSTEINYou know, I fault President Obama significantly for not, at his State of the Union message a year past, embracing the Simpson-Bowles, at least in concept.
ORNSTEINBut I also have to say this, Diane. When the president embraced the Gang of Six plan, Politico quoted a senior aide to Mitch McConnell as saying, well, that's the end of that. If he's for it, we're against it. And the fact is that Obama, in this case, I think was wise politically to stay out of this process because anything that would've looked as if this were an Obama triumph would've have hardened those partisan lines at the time of a permanent campaign.
REHMNaftali, as a reporter, did you hear what Norm heard?
BENDAVIDWell, yes. I mean, I think that had The White House stepped in -- and I know a lot of Republicans were calling for this, and there's a certain logic to presidential leadership in these situations clearly. But I think there was a certain fear that it would lead to a hardening of positions. And there's been -- since it happened, there's been a certain amount of talk from Republicans that President Obama wanted this to fail.
ORNSTEINI don’t think there's necessarily evidence for that. I do think there is a way in which it plays to his strategy, his campaign strategy of running against a do-nothing Congress. He kept his distance. His fingerprints are not on the failure of this committee in any sort of an obvious way, and it's one more example of congressional failure.
REHMHere's an email from Bill in Chapel Hill, who says, "So even in a small committee, with nearly all procedural impediments to bringing a vote removed, the deficit reduction committee has failed, unable to put forth any proposal. It's time to start electing our representatives, not on their positions, but on their reasonableness, with a view toward governing rather than advancing any partisan position. To paraphrase Shakespeare, our faults, dear citizens, are not in our representatives, but in ourselves." Congressman Walker.
WALKERWell, look, the fact is that both parties have failed in the art of governing. And, you know, the Republican shut down the process when they were in control of the House back in the early part of the century. And Nancy Pelosi, when she was speaker, shut down the process even more. Boehner, to his credit, has been trying to open up the process some. But the fact is that regular order in the Congress has been abandoned.
WALKERThe idea that somehow that you will move this thing down to 12 people, making the decision for everybody else, is just a bad idea. I mean, if the super committee didn't work as the next gimmick, the super-duper committee, I mean, in the end here, you don't have a process that is working. The way to make the process work is to use the budget process that's now in law, and that is not happening.
REHMIt's interesting that you say both have failed in the art of governing, or has the system failed?
WALKERWell, the system, though, is based all the way back to Jefferson's manual, and it was designed so that you would have a process by which people would come together. You would come together first in subcommittees and then in committees and work your way through each of the Houses and so on, and you would find the mutual understandings through that process. We don't allow that process to work anymore.
WALKERThe authorization process is totally broken down. The budget process is totally broken down, and the appropriations process has now become one huge bill that's passed every year, which is an abdication of responsibility, in my opinion.
REHMNorm, if you've got one part of the political process, absolutely determined not to raise taxes, that they've signed this pledge. How does anything move from that?
ORNSTEINWell, that gets to the crux of the problem and I think what the caller said as well, Diane. We now have parliamentary parties. They are cohesive and unified, and that's particularly true of the Republican as a minority party. You cannot have parliamentary parties operating in a non-parliamentary system, especially when there is divided government. Even when there's united government, you know, the 111th Congress was enormously productive, but we don't have a parliamentary culture.
ORNSTEINSo when a majority acts on its own and the minority is in staunch opposition, the policy outputs are viewed as illegitimate by half the system. The bigger problem now, though, is not, I think, a process one, and I'm with Bob that we've had a process failure. But what's happened is we are dominated by the extremes. They're the ones nominating the candidates. They're the ones -- look at the Republican presidential candidates all gravitating away from what polls tell us is where the critical mass of Republicans overall are because it's the activist voters.
ORNSTEINWe are electing people or gravitating towards people who don't believe in the art of compromise. They're saying, I'm not like any of the rest of them. I've got nothing to do with Washington. I've got nothing to do with politics. And we're basically leaching out the politicians, those who believe in process and in compromise. Bob Walker is a very strong conservative. As a member of Congress, he was a politician. It shouldn't be a term of derogation. It should be a term we venerate.
ORNSTEINAnd now I fear that what's gonna happen in 2012 is the disgust that Americans have -- congressional approval may go down from its 9 percent now -- is we're gonna continue to look towards the Herman Cain type candidates for Congress and elsewhere and end up with even fewer people who respect the regular order, the legislative process or a compromise.
BENDAVIDYeah. I mean, I think it is interesting the disgust and the disdain in which Congress is held, and you see that over and over again in the polls. And members of Congress are very aware of it. I mean, they were very keenly aware during this process that should they fail, if they could go lower, they would go lower. But at the same time, who elects these people? I mean, I think we -- that's why I understand what the listener was saying.
BENDAVIDI mean, these are people we elected. It's because the electorate response to fiery campaigners who say Washington is completely messed up either in one direction or the other, and it needs people who are gonna burn the place down. And so we've elected people from both sides who have that kind of message, and they get here and then it's very difficult to achieve anything. And so people say they want reasonableness and compromise, but it's repeatedly not who we've elected recently.
REHMNaftali, where do we go from here?
BENDAVIDWell, I think -- as I said, I think there's gonna be a lot of pressure in the next year to come up with $1.2 trillion in deficit cuts that the committee failed to do, because if we don't, then in January 2013, there are gonna be significant cuts to the military. I mean, the first year, there would be like a 10 percent cut to the military budget -- that's a lot -- but there also would be very significant cuts to discretionary programs.
BENDAVIDAnd, you know, Congress doesn't function unless there's a huge cataclysm right around the corner, and that cataclysm would be in January 2013. So my sense is, in the next year, one way or another, they're gonna have to come together and come up with something that the super committee couldn't do.
REHMNaftali Bendavid of The Wall Street Journal. You're listening to "The Diane Rehm Show." And let's go to the phones now, 800-433-8850. First to Dallas, Texas. Good morning, Bill.
BILLHello. Thanks very much. You've already addressed part of the issues that I wanted to speak about. But my question is about the reporting of this whole issue, and you, Diane, and a couple of the commentators really addressed it in a way. But every time I hear the news, every hour, NPR News or anyone else, I always hear quotes from different sides. Maybe I hear Jeff Sessions and Mitch McConnell, and then I hear the president or another Democrat.
BILLIt seems to me that, as reporters, what I should hear is a balanced assessment of what happened, and you gave that a minute ago when you said what it is that happened. Well, each side, the Democrat started not wanting to compromise on spending. The Republican started not wanting to compromise on tax cuts. The Democrats seems to me -- maybe I'm wrong -- seems to me the Democrats gave some and were willing to compromise on making spending cuts. But I didn't see any -- even the slightest compromise of a millimeter from the Republicans on any sort of revenue increases.
REHMIs that true, Bob Walker?
WALKERWell, what the Republicans said was that what you don't want to do is raise taxes in the middle of a recession. They also said that tax increases will inevitably result in job losses. What we can't afford as a country right now is to move the unemployment rates up even more. And so, therefore, what we needed to do was reform the tax structure as a way of bringing in new revenues rather than raising tax rates.
WALKERAnd in the Toomey plan that Norm mentioned a little bit ago, they did, in fact, put on the table a series of major changes in the tax code so that special interest loopholes could be eliminated and the revenues could be increased through tax reform rather than tax increases.
BENDAVIDWell, to address the caller's point, though, I understand his frustration that, you know, you turn on the news and you hear the Republicans saying something and the Democrats saying something. And it sounds like they're in different planets. It doesn't even sound like the events that they were occurring are the same -- describing are the same events. And I think we in the media do have a responsibility to try to cut through some of that.
BENDAVIDIt's particularly difficult, though, in this kind of situation where so much of what happened was behind closed doors. And more of a situation than I've ever seen, the two sides would come out and give completely different account of what had just happened. I mean, there were some moments when it was hard to know, frankly, what to write because you would talk to one side and the other side, and they -- there were such -- they couldn't even agree on what it was they disagreed on. So I sympathize with the caller, and this is a story where I think that was particularly true.
REHMBill in Dallas said his understanding was that the Democrats had put forward a plan to compromise, but that Republicans were unwilling to compromise. Yes or no, Norm?
ORNSTEINWell, once again, let me go back to what Ezra Klein put out there as the template. And from where we had compromises before, Democrats moved right, and Republicans actually moved a little bit further right. You know, what Bob said about on the tax front, nobody was proposing tax increases now. And Republicans who said and continue to say you don't raise taxes in the middle of a recession because that would damage the economy weren't saying, well, you don't cut spending in the middle of a recession. They're all for cutting the spending.
ORNSTEINSo I don't accept that as a legitimate argument. I think it's trying to change the subject from where we otherwise would be. And I might note, Diane, that you've got people like David Stockman, Ramesh Ponnuru, Steve Hayward and David Frum who all look at this -- don't touch taxes. You know, everybody wants to see tax reform now, and that was on the table, as something that is moving away from what they view as the Republican Party's position and what it ought to be.
WALKERWell, just to be clear. I mean, the Republicans do believe that spending by government, in fact, undermines the economy in many instances and that the government has grown too big, that it's now taking 25 percent of the overall GDP. And we do believe that cutting spending as opposed to raising taxes, both of those things contribute to economic growth. Economic growth results when you move the government out of the economy and move more private industry into it.
REHMBob Walker, former Republican congressman from Pennsylvania. He's chairman of Wexler & Walker Public Policy Associates. Short break. We'll be right back.
REHMAnd here's an email from Virginia, who says, "This is all about job one, getting rid of Obama by maintaining a lousy economy. And the rest of us are collateral damage." What do you think, Norm?
ORNSTEINI actually think that this thesis that Obama wanted the super committee to fail so that he could go out there and pursue his theme against the do-nothing Congress is pretty ridiculous. The theme that Obama is pursuing is not his first choice. His first choice would be it's morning in America. And indeed, anything that would provide some notion that things were working and that might get an economy that's very sluggish right now moving back on track would be positive for the president.
ORNSTEINWhat's gonna be interesting as we look ahead is what kind of assessment will members of Congress make now including the Republican members of Congress? They're gonna go back home for Thanksgiving. And, as you said Diane, they're mad as hell. Some members of Congress are gonna get the message from their constituents. You get back there and solve this problem. Others are gonna get the message from their constituents. If you raise a dime in taxes, we're gonna primary you out of office.
ORNSTEINAnd so this may harden those views. If you get with a 9 percent approval rating which, you know, John McCain is fond of saying he leaves Congress with blood relatives and paid staff, and I'm not even sure about the blood relatives anymore, moving down. If more incumbents believe that unlike the past, this is one where they might get thrown out if they don't begin to solve problems, we may see an impetus in 2012 to get something done. But because this is a primary-driven process, it could actually create an even bigger problem, a gulf in terms of getting into the (unintelligible)
REHMAll right. To Fort Myers, Fla...
WALKERWell, can I respond to that (unintelligible)
REHMSurely. Go right ahead.
WALKERBecause, I mean it is important to say that President Obama's campaign that is specifically determined to divide the country into us versus them is, in fact, underpinning a lot of the political discussion in our inability to move forward. And so I think that we do need to have some understanding that by dividing the country and understand -- and suggesting that we're not all 100 percent Americans is just, I think, detrimental to the whole political process.
BENDAVIDWell, obviously both sides thinks it's the other that's dividing the country and saying that they're not American. I think there's been a lot of that going around, unfortunately. But I also think we're not gonna really have to wait until next year or late next year before these things erupt again. The current spending measure funding the government is gonna expire on Dec. 18. There's talk about whether or not we extend the current payroll tax holiday. There's talk about extending unemployment benefits.
BENDAVIDThere's a lot of stuff that Congress was hoping the super committee would kind of take care of. But instead, Congress is gonna have to deal with when they get back over the next few weeks.
REHMThey're gonna have to do their job.
BENDAVIDAnd they're gonna have to do it fast and intensively. And I think we're not gonna have a lot of time to wait before it gets ugly again.
REHMAll right. Let's take a call from Fort Myers, Fla. Good morning Mike.
MIKEGood morning. Thanks for taking my call.
MIKEI'm very interested in the subject of the show. One of the things that has frustrated me watching the media and the coverage of this first and foremost is whenever the left talks about raising taxes on the wealthy among us, they're basically advocating discrimination. We got half the country paying no federal income taxes. We've got the rich paying a higher income tax rate than the rest of the world -- than the rest of the country already, and yet we're -- and that is, fundamentally, discrimination.
MIKEI don't know where we got the idea that it's -- well, we figured out as a country it's wrong to discriminate by race but, for some reason, it's OK to discriminate by class. That blows my mind.
REHMInteresting perspective. What do you think, Naftali?
BENDAVIDWell, obviously, we've had policies in this country for a long time. They take into account people's income and assets. An idea that that's inherently discrimination is, I think, a novel idea. I mean, people do talk about flat taxes of course and so forth, but the -- to me, discrimination is a pretty inflammatory term. It's usually described to talk about racial discrimination or religious discrimination.
BENDAVIDAnd to apply it to a policy that takes into account differences in people's situation economically, even if you agree with them or disagree with them, strikes me as a fairly strongly worded way to put it.
REHMAnd class warfare is the other term that's been used.
ORNSTEINWell, I do find it striking. Here again, Ramesh Ponnuru of National Review wrote about this notion of the 47 percent who pay no federal income taxes. The main, you know, you got the elderly and the working poor. And they pay no income taxes mostly because of Republican proposals over many years to have and earn income tax credit and expand it. And those people pay a lot in taxes. They pay payroll taxes. They pay sales taxes as a share of their income It's higher than that of those at the very top.
ORNSTEINAnd while it's true that those at the very top have paid a higher proportion of the taxes, their incomes have gone up much, much more and the level of inequality has been much sharper than we've ever seen in this society over the last five or 10 years.
WALKERWell, clearly, I agree that the word discrimination may not be exactly the right term, but class warfare is certainly the right term. I mean, there are people who think for their political purposes that dividing this country into classes is, in fact, to their advantage. And I find that extremely disturbing. Now, in terms of the whole tax policy and so on, I think we would be better off moving to a flatter tax kind of situation.
WALKERI happen to think the consumption taxes might be a way of going if, in fact, we eliminate all the income taxes as a part of moving to a consumption tax. There are some proposals out there that will make us vastly more competitive in a global economy than the tax system that we have right now. What we ought to be looking at is whether or not, as a nation, we are gonna continue the -- to lead the world economically or whether or not we're gonna drop behind the world. One of the things that is preventing us from being a leader economically is a tax system that is badly, badly out of control.
REHMLet's go to O'Fallon, Ill. Good morning, Tracey.
TRACEYGood morning, Ms. Rehm. I'm a tremendous fan, and thank you for having me. And more importantly thank you for having these frank discussions about what's happening at the House of Representatives and the budget right now. I have to say, you know, my current representative, Jerry Costello, has announced he is not running anymore, and he's not running because he cannot handle the dysfunction in Washington. And I am frustrated as a voter because I have elected representatives to represent me, to compromise.
TRACEYAnd I really do believe that there are many representatives and senators who are doing just that. But the fact is is that the right continues to raise the bar and move the line in the sand no matter how many times the Democrats or the progressives come up to an agreement. I'm very resentful that everyone continues to blame the president for this issue as far as, well, the theory of the super committee because I truly believe that the Super committee was put in place by the representatives in Congress to do a job that they would not do.
TRACEYAnd the representatives did not do that job. And the president stayed out of it because every time, whether he's in the fight or he's out of the fight, he's getting such rhetoric, abusing him for not -- whether he's involved he gets abused or he's no involved he gets abused,
WALKERWell, the fact is that the process can be made to work. A decade and a half ago, we were able to balance budgets. We were able to reform entitlement programs. We were able to pass tax changes that increased economic growth. We did it with a Democrat in the white House and Republicans on Capitol Hill. We were able to work through all of that and so...
REHMSo what's different now?
WALKERWell, what's different now is that during the early part of the -- of this century, the process broke down in major ways. And I blame some of the leadership in the Congress among the Republicans for that breakdown because I think what happened was that they decided that they could use the appropriations process to take care of their friends, and that played itself out in perverse ways. I believe that that was expanded upon by the Democrats when they took control of the Congress.
WALKERWe have been left with a Congress that's extremely distrustful of each other because of the political rhetoric, and that we are now at a point where we require some real sitting down and determining...
REHMDo you think that's really gonna happen considering the fact that we've been waiting and waiting...
WALKERWell, I think...
REHM...for the super committee to come to a conclusion that would help the country? So what happens next?
WALKERWell, what I'd like to see happen is I'd like to see the Senate stand up and put a budget on the table and actually pass a budget. I'd like to see a coming together of the House and the Senate then to determine what the overall budget is going to be, and so that we could come to a point where we have what's called the reconciliation process, where we could, in fact, look at these big issues in the standard format.
REHMSo you -- what you're saying is that you believe we should move the clock back to when you were in office and the way the Congress operated then and not now?
WALKERWell, I wasn't entirely satisfied with it then.
WALKERBut the fact is that if you maintain what we call -- what Norman and I often referred to as regular order, there are, in fact, processes in place for allowing compromise to take place. When you peel off and do -- I regard the super committee as a gimmick. When you peel off and you do gimmicks as your way of governing, you are always gonna end up at the end with a disaster.
ORNSTEINYou know, I think, we shouldn't lose sight of the fact that this isn't just a process failure. We're losing the Jerry Costellos. We're losing a lot of people who were in the middle. We are moving further to extremes. We still have some in the Senate, and there's still -- I hold out some hope. When you get people like Mark Warner and Saxby Chambliss and Mike Crapo and Dick Durbin coming together as the Gang of Six did, we've got some hope.
ORNSTEINYou've got some people in the House, even those who are at the polls, like Mike Simpson of Idaho, who came out and said we've got to compromise. But beyond the fact that we're seeing the changes in members, the money system, post Citizens United and even before that, the rise and dramatic expansion since Bob was in Congress, of the partisan media creating a kind of echo chamber and dividing us further and moving us to a point where you have people who do not even share a common set of facts.
ORNSTEINThe growing level of tribal warfare, which has hit Capitol Hill, but is leaching out into the rest of the country and states as well, all of this is different than it was a decade ago. And the reason we don't have the regular order, some of it is in what Bob said, but some of it is because our culture has moved in a direction that makes it much harder to find a center even though there is a center in the country.
REHMNaftali, how much does Grover Norquist play into this entire failure scenario?
BENDAVIDWell, he certainly played hugely into the rhetoric. I mean, the Democrats really started pointing fingers at him and at his pledge. And you even had a situation where some Republicans were starting to publicly repudiate the pledge and say, look, I made it a long time ago. I shouldn't tie my hands. And then, of course, Norquist is not shy, came out and said, you know, of course, the pledge is binding and it'll be binding forever.
BENDAVIDSo, I mean, I think it did play into this. You know, as Mr. Walker said, Republicans believe that raising tax is a bad idea, regardless of Grover Norquist. But when you have a guy out there who's made you sign a pledge -- I shouldn't say made you, but encouraged you to sign a pledge and swears to hold you into account and to make a big deal of it if he thinks you're violating that pledge...
REHMA big deal in what sense?
BENDAVIDWell, if, you know, when he makes it -- when he feels that somebody's violated the pledge, he's very public about it and it makes it a lot easier, for example, to have a primary challenger in the Republican Party. And so there's a certain amount of political peril in deviating from that pledge.
WALKERBut just to make a point, Grover has been around for 20 or 25 years. And we have gone through periods when we have managed to do real policy and so on. So all of the sudden to say that Grover is the real problem, I mean, the AARP is out there saying don't touch Social Security in any way. You can't tell me that the Democrats don't pay attention to that.
REHMAnd you're listening to "The Diane Rehm Show." Norm, what difference has Grover Norquist made?
ORNSTEINIt's been a big, big difference. Now, it is true that he's been around for a long time. But here, again, I come back to the echo chamber and the rise of the other partisan media. Grover has taken this, and then you throw in Rush Limbaugh and you throw in The Wall Street Journal editorial page and you throw in a lot of others, not the news section, the editorial page, and it creates intense pressure on the members.
ORNSTEINAnd as Naftali said, they're all more worried about primary challenges now, and that includes senators worried about the Bob Bennett effect, of being bounced from even being able to run for your party's nomination because you don't have enough fealty to the tribe. So Grover is a key player, but it's not just Grover Norquist.
BENDAVIDThere was this -- so almost poignant thing that happened to the middle of all this were about a 150 lawmakers of both parties and both chambers got together and said we want a big compromise, and we're willing to compromise on the things that we believe in because we think reaching a deal is very important. And they had these press conferences, and it was almost cognitive dissonance to watch because you had Republicans and Democrats instead of attacking each other, kind of, saying nice things about each other.
BENDAVIDAnd they wanted to exert this countervailing pressure on the committee to reach a deal against the people on either side. And they tried hard and they failed. And it was a remarkable thing to see, but, ultimately, they couldn't overcome the prevailing political dynamics.
WALKERAnd that's the reason why I believe that if you get back to a regular order process that allows those people to have a voice inside their committees, inside the House as a whole, that you will, in fact, begin to move in the direction that is the right direction.
REHMHow likely are we to get back to that point?
WALKERWell, you know, again, I mean, I will tell you that John Boehner has certainly been working to try to do that. He has opened up the process far more than it was opened under Speaker Pelosi. And I believe that there is an effort here to bring back some regular order in the process.
ORNSTEINI wish that John Boehner had some backup from his own leadership team, starting with Eric Cantor. But along with that, there is a move now from some of this group of 145 to bring up the Simpson-Bowles plan and get an up or down vote. And that, I think, could be the most interesting dynamic here. You got to get leaders who are willing -- gutsy enough to make that happen.
REHMHow many Republicans? How many Democrats?
ORNSTEINWell, there was 100 House members and 45 senators who, basically, said bring this up, and they were fairly evenly divided. It was somewhat more Democrats than Republicans. But I think, frankly, if you brought the Simpson-Bowles plan up for an up or down vote, it passes the Senate easily. The House becomes a little more problematic, but you're gonna get half the Democrats, a little bit more, and close to half the Republicans, and we might be able to make that happen. Now, whether it comes up for a vote, not likely.
BENDAVIDWell, I think there gonna be growing pressure to do that. I think that leaders are gonna resist it, but I think it's something that could happen. You know, and there are people who say that the failure of the committee will force Congress to go back to what Mr. Walker was saying, to the way, you know, it suppose to be. It was...
REHMIt used to be.
BENDAVIDYeah. There are people who view the failure of the committee is not the worst thing in the world because they say it will force Congress to do the job it was meant to be done.
WALKERLet's bring the Simpson-Bowles plan up. Let's have some hearings on it in the committees and so on. Let's (unintelligible)...
REHMHaven't there been enough hearings?
WALKERWell, no. Hearings are a part of the process of beginning to bring people together, to having them understand the details so that you can get compromise and so on. That's the reason why they're there. And I think you ought to through that process and then move it forward.
REHMFormer Republican Congressman Bob Walker of Pennsylvania, Naftali Bendavid of The Wall Street Journal, Norman Ornstein of the American Enterprise Institute. Watch this space. If Simpson-Bowles comes up again, I want you all back here. Thanks for listening, all. I'm Diane Rehm.
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