Congress expert Norman Ornstein on what the debate over the debt limit says about dysfunction in Congress, and his ideas for how to fix it.
Vice President Biden says congressional leaders are making progress to avoid a government shut-down. Advocacy groups have mixed reactions to President Obama’s energy speech. And a Wisconsin judge warns state officials about ignoring her order on collective bargaining rights. A panel of journalists joins Diane for analysis of the week’s top national news stories.
- John Dickerson Chief political correspondent for Slate.com and CBS political analyst and contributor. Author of "On Her Trail: My Mother, Nancy Dickerson, TV News' First Woman Star."
- Sheryl Gay Stolberg Washington correspondent, The New York Times.
- Major Garrett Congressional correspondent, National Journal.
Friday News Roundup Video
Diane and the panelists discuss the tax laws that allowed General Electric to make profits of $14.2 billion in 2010 while paying no U.S. taxes. The company instead claimed a tax benefit of $3.2 billion, causing a public outcry and raising questions about President Obama’s pick of GE CEO Jeffrey Immelt earlier this year to head the Presidential Council on Jobs and Competitiveness:
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The unemployment rate in March fell to a two-year low of 8.8 percent. Companies added workers at the fastest two-month pace since the recession began. A Wisconsin judge hears testimony on the legality of the Republican-passed law, stripping public unions of collective bargaining rights. And new revelations on the 30th anniversary of the assassination attempt on President Reagan. Joining me in the studio for the national hour of our Friday News Roundup, John Dickerson of slate.com and CBS, Sheryl Gay Stolberg of The New York Times, Major Garrett of National Journal magazine.
MS. DIANE REHMIf, by the way, you are not near a radio but at your computer, don't forget you can listen online to "The Diane Rehm Show." You can hear us streaming live. You can call us on 800-433-8850. Send us an email to firstname.lastname@example.org. Send us a tweet or join us on Facebook. Good morning, everybody.
MR. JOHN DICKERSONGood morning.
MS. SHERYL GAY STOLBERGGood morning.
MR. MAJOR GARRETTGood morning, Diane.
REHMSome good news, finally.
STOLBERGYes. The Bureau of Labor Statistics reports today that jobs are up in March by 216,000, although I saw the White House used a $230,000 (sic) figure. Not sure about that.
REHMYou don't mean dollars?
STOLBERGNo, no, not dollars. Sorry, 230,000 people, yes. And this is good news. It suggests kind of a steady as she goes recovery, not a taking off recovery, so not great news, but nonetheless, continuing to move in the right direction.
REHMSo what drove the gains, John Dickerson?
DICKERSONWell, these corporate profits that have been coming in steadily for a while but not translating in the jobs, we've had this disconnect between a lot of money, as the White House keeps talking about, sitting on the sidelines and the fact that it's not getting in. The White House argues that this is -- the improvement here is, in fact, from hiring and not from people just giving up and throwing their hands up and saying, we're not going to participate in the search anymore.
DICKERSONAnd so this is great news for the White House -- 500,000 jobs in the last three months or the first three months of the year -- but at a pace -- sorry to throw cold water in here -- but at a pace of 200,000 jobs a month, it will be 2019 before the jobs that were lost during the last recession are recovered.
REHMOn the other hand, Major Garrett, is it possible we could see a speeding up in that job recovery?
GARRETTThe trajectory suggests we might, Diane. The two months' total of job sector growth in the private sector is the best in five years. So we're picking up, and the arrow is going up. And the revised figures for January and February were larger than originally reported. So in April of next -- next April, we could have a revised March figure. This month -- last month's figure, they can also be up. So we could see these trajectories rise even more once they are revised.
GARRETTAs John pointed out, though, this is still a slow recovery. And it is not consistent with the kind of recoveries we've seen in the past after deep recessions. Usually, you see a very sharp upward growth in private sector job growth after the doldrums of a recession have been worn off. We're still not there yet.
REHMNow, is that because corporations have been holding onto their money?
GARRETTThat is part of the reason. That is not the only reason. We still have a very slack real estate market in this country, which is something we may get to later on in this hour.
GARRETTAnd that creates undercurrent throughout the entire U.S. economy. Energy prices are becoming more problematic. And there is still a general sense among small businesses and medium and large businesses that they're not quite sure what the regulatory climate is going to be in the next three or four years, or the tax code is going to be in the next three or four years. There's lot of talk in Washington, most of it abstract, about significant tax reform under Simpson-Bowles or some other grand bargain that is on the margins. But all these things are factors that small, medium and large businesses are considering as they decide whether or not to bring on full-time employees.
REHMYou mentioned real estate. Should be -- we be writing the epitaph for the administration's affordable home modification program?
GARRETTWe probably should. The House voted to kill it entirely. The Senate will try to save it. The Senate Democrats will try to save it. But it is a program fraught with problems and elevated expectations that simply have not been met. Now, there are a lot of complicated explanations for that. But when the president announced the home assistant modification program, he originally set a target of three to four million redone, or remodified or modified, foreclosure properties. They've done about $670,000, spent about a billion of the $50 billion Congress set aside. Now, is that because the mortgage servicers are not handling the paperwork properly, are giving those who apply also some conflicting information? That's part of the problem.
GARRETTThe other part of the problem is many Americans simply shouldn't have had the homes they had. And even on the remodification, in some cases, not all, but in some cases, can't keep the homes. The Republicans want to just give up on this entirely. Senate Democrats would like to try to do something to preserve what's worked so far, streamline the process and at least save those who can credibly say I can make my payments, just give me the modification.
STOLBERGWell, this program has been incredibly frustrating for homeowners because many have been simply waiting and waiting and waiting for banks to help them. And as they are trying to hang on to their homes, they're running through their savings, and they're depleting what little they have and then finding out at the end that the modifications that they had hoped were not forthcoming. It's been very difficult for the Treasury Department to force banks to cooperate, to adjust and make modifications to these loans. So that's been an issue.
STOLBERGRepublicans will say that this was a waste of money. Democrats will say, well, the money actually came out of the old TARP. Remember, the troubled assets relief program that was enacted under President Bush initially, and that it was money that was loaned to banks and that banks were going to be repaying the money to the government. So, really, it's not hurting the taxpayers. So why don't' we just try to figure out a way to massage it, improve it and keep it?
REHMAnd, John Dickerson, this is just one of the programs Republicans would like to do away with.
DICKERSONOh, well, yes. I mean, you know, starting -- I mean, they also want to do with -- do away with the president's health care plan. They would like to do away with funding for a whole host of different federal programs. One thing that's interesting about this, the president's modification program, though, is that it was also kind of an experiment in nudging banks, not trying to force them. The argument was, at the Treasury Department, that it would cripple these banks, which were recovering from the housing collapse, and that it would try to create a system in which it'll align the incentives so that, as Major said, these three to four million modifications would take place.
DICKERSONAnd so this was announced in February of 2009 when all of these emergency measures were taking place to try and get the economy going again. And the experiment, at least in that regard, failed. I mean, there is -- there have been stories after stories of -- and there are, again, different reasons. Sometimes the banks were incredibly bad at modifying these loans. Sometimes the government wasn't pushing the banks. Story after story, though, of families that were playing by the rules, paying their mortgages, doing all the right things, had good credit scores, had a mountain of paper to prove that they were all the things they said they were, and they were still frustrated.
DICKERSONAnd this experiment, as we get into campaign season, will be an instance in which, you know, when people think about government programs meant to help them. The question is whether those programs make sense. But then the second question is, even if they make sense in the abstract, can they even work in a world where things are so complicated?
STOLBERGJust a quick note. The president has said he would veto that legislation that was passed by the House to kill this. So...
GARRETTAnd it's worth remembering at the time that banks were being asked to rework these loans, they were also being subjected to stress test on their capital allotments. And banks were working very hard to improve and much increase their capital reserves and taking a very, very tough -- much tougher stance on loans of all kinds, modifications and otherwise. So you had these two things colliding. And the critics of the program as administered by the White House say, you simply should have badgered the banks. You should have been much more aggressive. The administration says, look, there were larger fish to fry. We were trying to also make sure the banking system writ large, got stronger and was able to loan. We're still waiting for that.
REHMMajor Garrett, congressional correspondent for National Journal, Sheryl Gay Stolberg, Washington correspondent for The New York Times, John Dickerson, chief political correspondent for slate.com, CBS political analyst and contributor. Do join us, 800-433-8850. Send us your email to email@example.com. Well, the Tea Party is certainly putting a fair amount of pressure on Republicans. You had some 200 activists out in front of the Capital yesterday saying to Republicans that they ought to do it, cut it, make sure cut, cut, cut.
GARRETTYes. And if I were to channel Speaker Boehner at this moment, I would say, read your Constitution, Tea Partiers. We are in control of the House. The Democrats are on the Senate, and the president has the veto pin. And we passed $61 billion in cuts from the 2010 budget. We've got $10 billion of that. We still like to get our 51, but the president won't sign it and the Senate Democrats won't pass it, which means the number has to be smaller than $51 billion. That is a straight up, hard-to-deny political reality. The number they currently agreed on is 31 -- $33 billion, but that number, Diane, is a number. What you have to agree on after that is the underlying cuts, which programs, and by how much. And we're nowhere near close to resolving those issues.
STOLBERGRight. The man to watch here is Speaker Boehner. He is really caught in competing forces. He's got these Tea Partiers pressing him, saying, cut it or shut it. We came here. We were sent here to cut the budget. We need to do it. He's concerned about, as Major said, getting this through, and there are philosophical issues here beyond the numbers that we should talk about.
REHMSheryl Gay Stolberg of The New York Times. We'll talk more about those philosophical issues. Stay with us.
REHMAnd just before the break, we were talking about what's happening on Capitol Hill as Republicans and Democrats each pushed for compromise of some sort. Sheryl.
STOLBERGRight. What we need to understand -- this is not just a numbers game. It's not just cutting money out of the budget. Republicans and Democrats have very different priorities about what should be funded. Republicans would like to cut federal funding for abortion providers. They would like to cut funding for the implementation of the president's health care law, as John mentioned earlier, for environmental regulations. All of these things are underpinning this debate over funding cuts, and they...
REHMSo it's philosophy. It's not just money.
STOLBERGIt's philosophy. They want to attach riders to these appropriations measures that will shape the way government money is spent. And Democrats are going to resist that, and that issue is going to be very difficult to resolve.
DICKERSONAnd getting back to John Boehner -- so the question is for each of the members he has to convince. And we can talk about the numbers because they're interesting, about how many will bolt. Every time he decreases the number from $33 billion, which is already a decrease from what the House conservatives want, he has to increase the -- whatever he is able to claim that he's gotten on these rider questions. So he can say, well, the number is smaller than we'd like. But we got abortion in here, EPA, Planned Parenthood.
DICKERSONWe got all these other things you want. On the other hand, if he's not able to deliver on those things, some of which Democrats have said absolutely no way, he then has to say, well, okay, we didn't -- we weren't able to defund Planned Parenthood. But the aggregate number is larger than we first thought.
GARRETTIt's a teeter-totter. What goes up, the other side has to go down. What goes down, the other side has to go up exactly as John has just described it, provided Senate Democrats and the president agree. And, right now, the conversations are between the appropriators in the House and the Senate, which is a good sign if you want to avoid a shutdown because, until Wednesday, the real people who write these laws were not talking to each other. Now, that's the good news.
GARRETTThe bad news is they haven't even agreed on a process by which to proceed. They haven't got to the numbers yet. They're just trying to decide when this legislation will come to the floor. Will it be on an expedited basis? What's the timeline? It's not the dimensions, or how the table is round or square, but it's almost that trivial. But at least they're talking, and, when you're talking, you have a chance of resolving things.
REHMHow far will Democrats go to compromise?
STOLBERGOoh. Major and I were just talking before the -- we got in the studio, about what's your best get as to a -- guess as to a shutdown. I felt, a few weeks ago, we would really avoid a shutdown. I don't feel as confident.
STOLBERGI really don't. You know, the administration has been trying to sort of stay above it all, but the president did send Vice President Joe Biden up to Capitol Hill the other day. He met with both sides. He came out, and he said, we're very close to a deal. We've reached this agreement, $33 billion in cuts. That was Wednesday.
REHMThat was Wednesday.
STOLBERGThursday, John Boehner came out and said, no deal. There's no -- we don't have a deal until everything is agreed to. So that sort of ended that, and I don't know.
DICKERSONAnd there's more monkey business going on than usual because it's in the Democrats' interest to say, we have a deal. So if they're -- ends up not being a deal, they can say, you know, we had a deal. It was in our fingertips. And these crazy Tea Partiers who run the House -- this is the Democrats' view of things, of course -- they forced John Boehner to not be able to agree to a deal. Boehner, on the other hand, whether he's agreed to a deal in private or not, has to, in public, say, we are fighting to the last drop of blood in our body to get one more dollar cut.
DICKERSONAnd so he can't ever look -- even if he's agreed to a deal in principle in private, in public he has to look like he's sweating it out, trying to get the last dollar because, ultimately, that will just kind of keep the conservatives in his ranks quiet so that he can have the one-on-one conversations with them and make the case. Look -- as Major said earlier -- here's the math. We can't get $51 billion. The alternative -- and some people on the steps of the Capitol yesterday were saying, okay, shut the government down. John Boehner does not want to shut the government down.
DICKERSONHe does not want his first major...
DICKERSONWell, three things. He does not want his first major act as Speaker of the House to be shutting the government down. Second of all, they run on a program of removing uncertainty from the economy to help business. This will inject a lot of uncertainty. We just had 200-some-odd-thousand new jobs. Why, when the economy is just getting going again, do you want to show the markets that the people in Washington are incapable of doing the simplest form of their jobs? And then, third, he doesn't want to confirm in there the story being told by Democrats, that he is incapable of controlling his 87 freshmen or his Tea Party members -- however you want to call it -- and that they call the shots and not the speaker.
GARRETTSpeaking of the Tea Party, there's some tea leaves to read from yesterday. One, even though there were Tea Party activists on the -- at the Capitol...
REHMOn the steps.
GARRETT...on the steps, John Boehner said, we're going to fight for the largest possible cuts we can get. That means we're not going to get $51 billion. He was advertising straight out the white flag we're not going to get -- we're going to fight for as much as we can get. Secondarily, House Budget Committee, let it be known that on Tuesday of next week, Paul Ryan, the Budget Committee chairman, is going to unveil his budget resolution, which will include significant reforms and cuts to entitlement spending, specifically Medicaid, but also Medicare. This is the next big budget fight. Boehner and Republicans in the leadership ranks want to resolve this continuing resolution, stopgap situation, and move on to the budget.
REHMBy the way, this one goes to September. Right? Right.
GARRETTYes, this would fund the government through September, and then we will have another entirely different and much more -- much -- as important fight over the annual appropriations bills for this year. So we have three budget fights to go and a debt ceiling vote.
STOLBERGOne more reason why they don't want to shut the government down is because they well remember 1994, and that was a big loser for Republicans. And here are some people to watch, Diane. Watch the Senate GOP. Watch that Cochran, who is the appropriator, the Republican from Mississippi in the Senate, was saying, just this morning, that he feels a deal will be reached. The senators always pride themselves on being the moderating influence, the deliberative body. And I do think that John Boehner might be able to get some help from the Republicans in the Senate who don't have the Tea Party caucus in that chamber to contend with.
DICKERSONWe should also mention the other part of this equation, and the other thing that might keep a shutdown from happening, is the other big thing -- in addition to the fact John Boehner doesn't want a shutdown -- is the White House really doesn't want a shutdown.
DICKERSONAnd they talk about this. Do you remember the tax debate we had at the end of last year with the Bush tax cuts? And there was a time at which the White House said, look, we cannot have taxes go up on everyone, we're going to have to make a deal with Republicans. And that was kind of the ultimate wall. The president could never allow a situation in which taxes went up for everybody. Once they said that, you knew some kind of deal was going to happen.
REHMAnd here's an email from Jeff, who says, "Couldn't all of these cuts have been paid for by not extending the Bush tax cuts?" Of course, aren't there two ways of looking at this, making cuts or increasing revenue?
GARRETTSure. But this goes to Sheryl's point about the philosophical differences. This is about cutting, but it's also about changing government and changing what government does. And Republicans want to stop the government from doing certain things it's currently doing, like teen pregnancy, like WIC, like...
GARRETT...which is women, infants and children, like Pell Grants. There are things involved in these cuts that Republicans say, we want to reverse the trend lines on, or they received enormous gains during the stimulus in the first appropriations bill passed under President Obama. We want to reverse those lines of trajectory. And that's also what this is about. It's not just about dollars and cents. It's about actual philosophical differences.
STOLBERGAnd your correspondent is correct, of course. But we already crossed that bridge in the lame duck session when President Obama, as John said, cut the deal with Republicans to extend those tax cuts. And so that's sort of water under the dam, and now we've got to start from where we are.
REHMOkay. Let's talk about the latest twist in the law in Wisconsin, limiting public workers of collective bargaining rights, Sheryl.
STOLBERGWell, the law's on hold. The judge will hear a testimony today. You might remember that that law was passed kind of in a crazy haphazard way. The Senate Democrats in Wisconsin had...
REHMDemocrats ran away.
STOLBERG...flown the coop. They were across state lines. And the Republicans pushed it through on a vote of, I think, 18-1. And so there's been a court challenge. And while the law has been passed and signed into law by the governor there, there are questions about how it came to be and is it, in fact, legal?
REHM'Cause they changed the rules of how you would vote for it.
GARRETTYes. And what's at issue here is sort of an interesting question. Is a law published or posted? And does that make it conform to public explanation that a law has been passed? It's been posted online, but the Dane County Circuit Judge Maryann Sumi said, that's not good enough. And she's taking testimonies to whether or not the process in the legislature violated the Wisconsin Open Meeting Act, if they rushed through this special committee a provision that was part of the -- has become part of the law that was not adequately noticed to the public.
GARRETTThat's a big thing in Wisconsin for Republicans and Democrats. These issues are going to be resolved first at the circuit court level. Then they'll go to the Supreme Court, which is currently described as conservative-leaning, but there's an election for that court. And there is now a tremendous amount of activism money, campaigning going on to fill the seat on that court, where this could all eventually be resolved.
REHMAnd what about Ohio, I mean, following suit here?
DICKERSONWell, exactly. Ohio is going to have a -- has its own collective bargaining fight that it's having basically, in many ways, identical to what happened in Wisconsin. The one interesting thing that's happened there for John Kasich, the governor, is his polling numbers. He hasn't had the kind of public fight -- well, in Ohio, of course, it's quite well publicized, but he has not become nationally with the Wisconsin governor. But his popularity has dropped considerably since this fight.
DICKERSONAnd one thing that's -- we always must remember -- those of us in national politics -- is that Wisconsin and Ohio are battleground states, and these debates that we're having today are going to be continued throughout the presidential season.
DICKERSONAnd we will -- so we will and, of course, also because they echo the national debate. I mean -- and if you want more parallels, John Kasich, of course, was the last budget director when we had discussions of government shutdowns and balancing the budget. And so they both reflect the national conversation. They are the hot beds of -- for the election, and they're a place where unions are at stake. And unions, of course, are a key in democratic policy.
REHMAnd what about Michigan cutting employment?
STOLBERGRight. Michigan has just passed the law -- and the governor says he'll sign it -- that will reduce unemployment benefits next year from 26 weeks, which is the typical standard, to 20 weeks. The bill was sold as a way to extend unemployment benefits this year because they were going to run out. Michigan, like many states, was running out of money in its trust fund that was used to pay unemployment benefits. And so, while it was sold as a way to extend benefits this year, it will, in fact, reduce them next year. And Democrats and union people are -- and jobless people, certainly, are very upset.
REHMAnd, in the meantime, we have corporations like General Electric making mucho money and getting tax refunds.
GARRETTWell, $14.2 billion in profits, no federal taxes, actual federal tax refunds on some of the things that were addressed to GE Capital, which is the subsidiary of GE. And NBC did not report this, which became kind of a low-level media drama.
REHMUntil last night.
GARRETTRight. It was covered by MSNBC and CNBC, but the Mac Daddy didn't cover it -- 49 percent of NBC Universal is owned by GE. Comcast owns the other 51 percent. It's interesting. I was hosting a National Journal panel earlier this week, and former Vermont governor and DNC chairman and presidential candidate Howard Dean said, look, on this whole issue of GE and large corporations, there are -- GE is not alone. Many other American corporations, multinationals, have their money parked offshore so they do not have to pay substantial U.S. federal taxes.
GARRETTHoward Dean said, look, I -- liberals get furious about this, and legitimately so, but they need to get over themselves. We need to repatriate this money, lower the rate on the amount of taxes paid so the money is at least returned to the United States, creates jobs and some tax revenue is gained. And I thought to myself, look, if Howard Dean is telling liberals to get over themselves in the repatriation issue, maybe this issue can be resolved in Congress.
STOLBERGYou know, we've talked a lot about GE and NBC as having this as a problem. It's also a problem for President Obama. You know, the president has named Jeffrey Immelt, the CEO of General Electric, as chairman of the president's Council on Jobs and Competitiveness. Part of the charge of that council is to look at tax reform, and this will be an issue before this board. This is not good news for the president.
REHMSheryl Gay Stolberg of The New York Times. You're listening to "The Diane Rehm Show."
DICKERSONAnd just another bit of problem for the president is that when he announced that Jeffrey Immelt was going to be the head of this council, the economic council, he said, because GE and Jeffrey Immelt know something about creating jobs. But one of the things that came out in this report, of course, is that a fifth of the American workforce at GE had been cut, and so that's another problem.
REHMSo how much pressure for him to step down and will he...
DICKERSONI don't think...
REHM...even though Howard Dean said gather yourselves?
DICKERSONWell, that's -- Major's point is the point -- is the -- you know, I think there is pressure and it's out there, but it's not huge. The president's got other problems. And, also, the big reason he named Immelt and the whole reason he wants a big name like GE, is that the president is in his own improvement campaign in terms of improving his relationship with business, sending the right signals to business so that they know that they have a friend in the White House who is trying to do things to help them so that they will then recognize that the environment is more favorable, and they will maybe start hiring people and investing.
STOLBERGAnd in fairness to GE, the company does say that it's been bringing jobs back to the United States recently -- it's relocating divisions here -- and that the reason for this situation of not paying taxes was losses in GE Capital, and that they expect, they say, that their 2011 tax rate will come up to normal and that 2010 was simply below ordinary levels.
DICKERSONRight. And it's...
STOLBERGHowever, others would say they use tax avoidance strategies and effective lobbying and a whole other array of tools to not pay taxes.
GARRETTRight. This is a scandal of optics, not of law. It's perfectly legal. Everything that was done by their account...
REHMI understand that.
GARRETT...completely conforms with federal tax law. It just looks miserable.
REHMIt looks miserable. And we keep hearing that corporations have a responsibility to shareholders. What about the taxpayers? What about the rest of the people in this country, not just the shareholders?
STOLBERGRight. Well, this certainly taps right into that populist strain that we saw right at the outset of the Obama administration, which is, you know, why are all the banks getting the help? Why are the Wall Street fat cats making out like bandits when, you know, ordinary Americans are still struggling, still on 8.8 percent unemployment rate in this country -- tough times for a lot of people? And, you know, this just doesn't (unintelligible), as Major said.
GARRETTAnd one of the issues in tax reform is eliminating some of the very advantages that GE and other multinationals use to offshore their funds, protect them from federal corporate tax law. Lower the rate, but make it clear and direct so you actually do pay corporate taxes, not find ways to offshore your money and avoid them. There are those in the tax reform movement who believe you can actually increase corporate tax revenue, create simplicity and generate jobs. It's just, within the lobbying culture in Washington, it's difficult to believe those things will happen when you know you've protected and won all the games you've accumulated over time.
DICKERSONThis is going to be a huge part -- and going back to the correspondent's earlier question about the Bush tax cuts -- this debate about how we structure taxes is coming in the larger budget debate. We got the budget debate about funding the government for the next six-and-a-half months. Then we've got the huge 10-year budget debate that, as Major mentioned earlier, Paul Ryan, the House budget chairman, is putting on his plan for doing that. And then we've got the debt ceiling debate.
DICKERSONBut, in that middle one -- the one about how we fund the government over the long-term, questions of taxes and this tradeoff -- because it seems like, wait a minute, why would you want to lower tax rates when people are getting away scot-free? Well, the idea is if you lower the rate, as Major has already explained, you then create a situation in which corporation -- you can actually get some portion of the money, so it goes from zero to a little bit -- to some amount more.
STOLBERGWell, I think this is the reason that we've seen President Obama talk about corporate tax reform and not do a whole lot about it.
REHMSheryl Gay Stolberg, Major Garrett, John Dickerson. Short break. When we come back, Obama's energy policy and your calls. Stay with us.
REHMAnd it's time to open the phones, 800-433-8850. First, to Grand Rapids, Mich. Good morning, Brian. You're on the air.
BRIANGood morning, Diane and guests. Here in Michigan, where the government is controlled wholly by the Republicans -- the House, the Senate, the governor and the Supreme Court -- there's not a whole lot of work that the Democrats can do to stop the legislation that's happening. And I see it's kind of a backdoor way of doing what they're doing in Ohio and Wisconsin, by giving tremendous powers to these emergency managers to take over cities and bust the unions, and at the same time, they're dwindling the resources to those communities to put them, in effect, in an emergency situation. I wonder if your panel could comment on that.
GARRETTWell, I'm not sure about the underlying state in -- the local, rather county and city, issues that the caller is bringing up. But this issue about reducing the allocations for unemployment benefits in Michigan from 26 to 20, that does not have any budgetary impact. What it does is it relieves businesses in Michigan of the requirement to pay into the system for unemployment benefits. That's how the state share of unemployment benefits is financed. Businesses pay into that. When you reduce the allocated amount of benefits you're paying out, then businesses have to pay less into the system. This is like a tax cut over time for Michigan businesses.
GARRETTThe idea being that, with an unemployment rate of 10.7 percent in 27 consecutive months of double-digit unemployment in Michigan, things must be done to improve the business climate, the job creating climate in Michigan. I'm not so sure this is going to work, but Michigan is not alone. Florida is looking at this, so is Arkansas, and other states are considering. Though they haven't acted as much as Michigan, Florida and Arkansas have to reduce their allocations and the assessments to business that fund them.
REHMTo Cincinnati, Ohio. Good morning, Blake.
BLAKEYes. Good morning, folks. My question is, did we completely abandon the mark-to-market concept? I mean, was there just not enough utility with people to handle reprocessing some of these mortgage applications so that they could keep the people in their homes and the businesses going with them? Or is there just -- is it -- was it just determined that it would be rewarding bad behavior on part of the mortgage lenders for upping the prices beyond the people's ability to pay? We seem to be (unintelligible)...
REHMAll right. John.
DICKERSONWell, what the -- I'm not exactly sure this will answer the question. But what the banks, trying to put together this modification, say is that they were just -- they were simply swamped, and they were doing two competing problems here. One, they had to clean up all of the loans that were collapsing and trying to figure out what -- which of those, you know, were real and able to continue, but also deal with just a flood of foreclosures. They were also having to increase their standards for any new mortgages because they didn't want to exacerbate their problem.
DICKERSONAnd in the middle of those two problems, which are -- were getting bigger by the day, and are still quite large -- 200,000 plus home foreclosures last month -- they were then being asked to go through a highly complicated process of trying to modify some of these loans and that they just collapsed under the weight of the -- of all of those requirements.
REHMHere is an email from Terry -- pardon me -- in Davenport, Iowa, who says, "As a 70-year-old, I grew up thinking government reduction was the last thing one wanted in a recession. Now, I see they're cutting unemployment, insurance benefits, laying off teachers. How can this possibly lead us out of a recession?" You don't kill jobs to gain jobs, do you?
STOLBERGRight. Well, this was, of course, the theory going into President Obama's inauguration. When he took office, the feeling was -- from economists, really -- on both sides of the aisle that we needed government spending to bring us out of the recession. Well, we've had two years of that, and we're still having, as we noted earlier in the program, a pretty slow recovery. And we've had a political seat change here in Washington. Republicans were always uneasy about the stimulus measure and about that kind of government spending. They ran on a platform of basically, enough is enough, and I think it's a -- the caller makes an interesting argument, but it's a much harder sell to make in the current climate in Washington.
REHMAnd here is another email from Paulie in Springfield, Mo., who wants to remind the panel that funding for abortion is not in question in the budget. Federal funding for abortion is already prohibited by the Hyde Amendment. Republicans are arguing for defunding Planned Parenthood's reproductive and health service.
STOLBERGThe caller is absolutely correct. I used the language, I think earlier, abortion providers. Planned Parenthood does provide abortion services, but the caller is absolutely correct. The federal tax dollars are not used to pay for abortions, but the Republican's gripe is that they are used to pay for groups like Planned Parenthood.
REHMAll right. And to Rochester, N.Y. Good morning, Don. You're on the air.
DONGood morning. I'd like to say that the recent events in Wisconsin and Ohio point up to the fact that the only way we're going to stop this right wing trend in the United States is for the American people to get out into the streets and demand. We've had a great start in Wisconsin and Ohio showing -- I think one of the rallies, 180,000 people and so on. This is what we need to do. The only times in the past 100 years when progressive legislation has taken place was the 1930s, the 1960s, when hundreds of thousands, if not millions, of people were out in the streets demanding it.
REHMAnd just to follow up on that, we've had a few emails like this one from Grace who says, "Why do 200 Tea Party protesters get similar media attention as 85,000 union protesters in Wisconsin (unintelligible) ?
GARRETTI don't think they did. I don't think they did at all. I mean, it was a sleepy, sort of rain-drenched, little crowd on the Capitol steps yesterday.
REHMBut they did get a lot of television coverage. You heard them...
DICKERSONWell, but nothing close. But nothing close to the protest...
GARRETTWell, yes. But, I mean, when cameras cover a small crowd like that, one of the things that's covered is the crowd is small. And when you have seven days or 12 days or 14 days -- however long it was -- in Madison, people see the crowd is large, energized and passionate. I mean, those things speak for themselves.
STOLBERGAnd they get attention because the House leadership is listening to them. So it's not so much what they're saying but that...
GARRETTThat's another part of it, but that was true before they showed up.
STOLBERG...they have a powerful audience.
REHMAll right. To, let's see, Birch Tree, Mo. Good morning, Michael.
MICHAELGood morning. I listen on KASU, and my question is, why does no one address the industrial military complex for protecting corporations? The corporations aren't paying taxes. The working people are covering the banks and yada, yada. And, you know, we're ready to stand up. I am a liberal, and I've had enough.
DICKERSONI was -- I interviewed Heath Shuler, Democratic congressman from North Carolina, a conservative Democrat, one of the Blue Dogs that John Boehner is going to have to rely on if he's going to get this vote on the budget through the House because he's going to lose some of his Republicans. And Heath Shuler recently voted against funding the war in Afghanistan on fiscal grounds and argues basically that it's -- the commitment there has been too long, but also makes the case that the money we spend on wars is just -- we can't afford it.
DICKERSONWe've got to cut, and we've got to live within our means. And that should apply to all of our endeavors. There should no -- and not be exemptions for the wars that we fight in. And this debate is happening also more broadly in terms of who -- which candidate is running for president and also who in the Republican leadership is on the side of saying, look we've got to cut from defense, and those who say, no, that must be protected.
STOLBERGThere are Republican leaders who are saying we've got to cut from defense, that nothing can be exempt. I think that's a real shift for -- we're a country that's been at war for 10 years now and for much of this decade that you would not have heard Republicans say that we should cut money from the Pentagon, but you are hearing that now.
DICKERSONAnd so the Democrats in the context of trying to get to this $33 billion number to keep the government open and operating for the remainder of this fiscal year are going to push for more defense cuts. And Republicans are going to have to decide whether or not they will live with them in order to get a deal.
STOLBERGAnd I think...
DICKERSONSo we're going to get an early test of this theory very soon.
REHMLet me ask you all about the president's energy policy. Mr. Obama called for the U.S. to cut its oil imports by one-third by 2025. How realistic is that?
DICKERSONProbably not very realistic, and it's from a 2008 level of imports, which was 11.1 million barrels. That's less than we're currently importing, so it's an easier standard to meet. The president took a lower number in order to make it easier to reach that one-third threshold of reduction. But even with that lower threshold, it's difficult to see. Considering where Republicans are in the House, particularly on energy policy, they want to vastly increase domestic exploration and extraction of oil and natural gas.
REHMAnd that's the part...
DICKERSONThe president's not there yet.
REHM...I don't understand. With all the licenses already issued, how come the oil companies are pushing for more, John Dickerson?
DICKERSONWell, more means more, and we need more. So if -- and the president, in fact, says part of his plan is to increase domestic oil explorations. So he's -- he agrees at least at some level. Now, of course, it's how much more we explore...
GARRETTAnd where? And that's the...
DICKERSONAnd the where question goes -- answers the question of easier. Because where they are not allowed to drill, it is easier to extract the oil.
REHMAnd that's why they want to go there.
DICKERSONYes. And then there's the politics of it, which is sometimes the place they want to drill where it's easier and there might be more also happens to be in electorally important places where people get nervous about drilling off of their coastlines.
STOLBERGYou know, if we look at the president's energy policy, really, I think, it has been star-crossed, right? He came in talking about an aggressive cap and trade program to reduce carbon emissions. Well, that went by the boards. And then he -- it's been derailed by forces manmade, political. We had the Deepwater Horizon explosion. The president also wanted to incorporate more nuclear plants into his energy policy. Now, we've got this tsunami in Japan raising fears about nuclear power and not to mention deep differences with the Republicans, who now control half the Congress.
REHMAll right. To Southport, Conn. Good morning Joanne.
JOANNEOh, hi. I wanted to (unintelligible) that's really been bothering me. Mr. Boehner's practice and how he is -- he should really preach. Why doesn't he take a cutback in his salary, and why doesn't he cut back on his offices? I think they get about $3 million a year just for staff, et cetera. I think if we begin with that, we can begin to cut government waste, and I really think he ought to...
REHMOkay. And I just want to make a slight correction, Joanne. The speaker's name is pronounced Boehner.
DICKERSONYes, it is. And what the House Republicans did very early on is cut allocations for committee staff and leadership staff. They didn't cut their salaries. But, today, they will pass a piece of legislation, largely symbolic, that says, if the government shuts down, members of Congress have their salaries cut, as does the president.
STOLBERGAnd President Obama has already frozen salaries for federal workers.
DICKERSONFor two years.
REHMAnd you're listening to "The Diane Rehm Show." Sheryl, let's talk for a moment about Geraldine -- pardon me -- Ferraro, who died last Saturday. Walter Mondale said she broke the mold.
STOLBERGShe really did. And, you know, many women -- women certainly of my age -- feel a sense of gratitude to Geraldine Ferraro. And I was very struck by a story Walter Mondale told at her funeral. He recalled a moment in 1984 when they were out campaigning together, and they were in Mississippi. And here was Geraldine Ferraro, this sort of gutsy congresswoman, brash, from New York. And they are there in Mississippi, and a farmer says to her, young lady, do you know how to make blueberry muffins? And she didn't skip a beat. She said, yes, do you? And, you know, that really was Geraldine Ferraro, just sort of sassy...
STOLBERG...funny, sharp, groundbreaking. And I think all the women who have been in public service after her, certainly women like Hillary Clinton and Sarah Palin, owe her a debt.
REHMThe 1984 campaign when she became the first female vice presidential candidate to Walter Mondale, how did it go?
GARRETTWell, not well for Walter Mondale. And, you know, what's actually amazing is that she, you know -- that everything Sheryl just said is true and exists, even though the campaign was a disaster. Mondale got swamped and destroyed. Now, a lot of people would say...
STOLBERGAnd there were tax questions about her husband.
GARRETTAnd they were -- she did have it -- right, she had -- but the notion that we can do anything as a woman, which is one of her famous quotes, and also the story that Mondale told and her pushback against George Bush, the vice presidential candidate in the debates where she held her ground and established, you know, the notion that she -- that women could not only play -- participate in a role but be tough enough, there's always a question of candidates whether they can be tough enough, male or female. And -- but anyway, the big problem for Walter Mondale is that he talked about raising people's taxes. He argued that it was an act of candor. No candidate has ever said they would raise taxes at the national level and succeeded since then.
REHMAll right. And this week is the 30th anniversary of the attempted assassination of Ronald Reagan. We've now learned he came very close to dying.
GARRETTLost half his blood. His systolic blood pressure dropped to 70 -- rather -- 60 rather, normal, 140. For a 70-year-old man, that usually is fatal. And though he walked into George Washington University Hospital, he fell to his knee very shortly thereafter. And the doctors removed the bullet -- not knowing it was one of these cop-killer explosive-tipped bullet -- and that could have been complicating of the surgery and complicating for the resident surgeons themselves. And the Secret Service has also learned a great deal about how it failed that day. It's remarkable to think about it now. All of us here have been a part of presidential coverage, and we understand and know very well, viscerally and physically, the perimeters, the safety and everything.
GARRETTBack then, Ronald Reagan walked out of the Washington Hilton 30' from a crowd that had not been screened, that was 15' from him. It's inconceivable to me now. He was not wearing a flak jacket. Neither were any of the Secret Service agents on his detail that day wearing a flak jacket. And the Secret Service said, you know, we've made this walk many times before. It's only 30', everything will be fine. And the crowd that was there hadn't been checked, wanted nothing. It is absolutely inconceivable to me. And yet, Jerry Parr, the Secret Service agent who pushed Ronald Reagan into the limousine, it was the sixth bullet from John Hinckley's gun that ricocheted off the limousine and landed under his left arm.
GARRETTIf Jerry Parr had not pushed him so forcefully into the back of that limousine, it is quite clear that Ronald Reagan probably would have been shot in the head.
REHMAnd of course, James Brady.
STOLBERGWe saw James Brady and his wife out this week, talking about the cause that has defined their lives since the shooting, gun control. Brady said, if we had had tougher gun laws, I wouldn't be in this damn wheelchair.
REHMSheryl Gay Stolberg, she is Washington correspondent for The New York Times. Major Garrett, congressional correspondent for National Journal. John Dickerson of slate.com, he's also a CBS political analyst and contributor. Thank you, all.
DICKERSONVery good weekend to you, Diane. Thank you.
REHMThank you. And thanks for listening, all. I'm Diane Rehm.
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