Negotiations in Washington over the debt ceiling have reached another stalemate. President Obama and top Congressional leaders met at the White House last night. But they still remain far apart on the details of a deal. Saturday night, those talks hit a roadblock. House Speaker John Boehner abandoned efforts to reach a $4 trillion long-term plan. He blamed Democrats for insisting on higher taxes. Democrats say raising revenue must be part of a deal. As the debt ceiling deadline of August 2nd draws closer, President Obama and top party leaders will meet again this afternoon. Diane and her guests discuss the high stakes negotiations and the prospects for a deal.


  • Charlie Cook Editor and publisher of the "Cook Political Report"
  • Jeanne Cummings Deputy government editor, Bloomberg News.
  • Ron Elving Washington editor for NPR.


  • 10:06:55

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. High stakes negotiations over a deal to raise the debt ceiling continue. President Obama and congressional leaders met last night at the White House. The president said a plan needs to be worked out within 10 days, but leaders remain far apart on details. Joining me to talk about prospects for a deal before Aug. 2, Ron Elving of NPR, Jeanne Cummings of Bloomberg News, Charlie Cook of The Cook Political Report.

  • 10:07:36

    MS. DIANE REHMDo join us. I'm sure many of you have opinions, thoughts on the negotiations going on. Give us a call, 800-433-8850. Send us your email to Join us on Facebook or send us a tweet. Good morning, everybody.

  • 10:08:01

    MR. CHARLIE COOKGood morning, Diane.

  • 10:08:02

    REHMGood to see you.

  • 10:08:02

    MS. JEANNE CUMMINGSGood morning.

  • 10:08:03

    REHMRon Elving, tell us what we know about what happened last night.

  • 10:08:09

    MR. RON ELVINGWe know that they met -- that is to say the president and the negotiating leaders of the House and Democratic, Republican and -- Republican and Democratic Parties -- the House and Senate, that is to say. And they met for about an hour and 15 minutes. They apparently agreed that they are aiming towards some kind of a plan to avoid the default on Aug. 2, which means they would have to have something either this week or next, just to have time to put it into legislative language and get it in place by Aug. 2.

  • 10:08:37

    MR. RON ELVINGSo they seem to be agreeing to agree at some point. However, all the dynamics of what was going into a deal that we saw last week seemed to have blown up at the end of the week. And as Speaker Boehner, John Boehner, who had been the lead negotiator for the Republicans, expressed on Saturday night, the votes just aren't there for us to do a deal in which there are substantial new revenues along the lines of something like $800 billion to a trillion dollars to go with several trillion dollars in spending cuts.

  • 10:09:04

    MR. RON ELVINGNo matter what they are, we aren't going to be able to come up with that many votes on the Republican side for that much in tax increases or tax revenue improvements or tax collection improvements or any other euphemism you, you know, want to use.

  • 10:09:18

    REHMJeanne Cummings, what surprises me is that, wasn't John Boehner who came up with the $4 trillion big deal idea to begin with?

  • 10:09:35

    CUMMINGSHe did bring it up first. He brought it up in the spring. And it was a comment many people didn't pay much attention to because it seemed so unrealistic. But he did suggest that if they're going to negotiate a deal and they're going to increase the debt ceiling, that they go for the biggest deal that they can. And he invited President Obama to join him in that kind of negotiations. Now, you know, most people at the time thought it was just rhetoric.

  • 10:10:06

    CUMMINGSAnd from everything I have heard from White House officials and congressional sources as well, Boehner truly wanted the big deal. This was an honest negotiation between the speaker and the president, and the two of them were optimistic. I just had a breakfast last week where David Plouffe attended from the White House. He's the top adviser to the president, and he ran the president's campaign in '08. And he was very optimistic that they were going to get a big deal.

  • 10:10:42

    CUMMINGSAnd even then, I asked him if he really meant to raise expectations the way he was doing at this breakfast at Bloomberg, and he didn't back off. So I think they really felt like they were pretty close until they started to take a temperature of their caucuses, and, you know, the conservative Republicans who got upset about the revenue increases and the Democrats got upset about potential changes to Social Security and other entitlements.

  • 10:11:14

    REHMCharlie Cook, what happened?

  • 10:11:16

    COOKJohn Boehner is an institutionalist. He believes in the process. He believes in letting the process work. And John -- you know, John is conservative, but he is not a burn-the-barn-down, break-the-china kind of guy. But he does not necessarily reflect a majority -- anywhere near a majority of the members of the House Republican Conference, who are of the burn-the-barn-down, break-the-china kind of mold. So I think, in good faith, he brought it up, he pushed it, he was for it, but the troops weren't behind him.

  • 10:11:50

    COOKBut I think Jeanne was right, that the ends -- you were seeing a quieter insurrection among Democrats. And both sides are being totally intransigent in the sense that, you know, for Republicans, it's any form of not just tax increases but revenue increases. And for a lot of Democrats, just any meaningful cut in Social Security or Medicare is absolutely unacceptable. And, you know, it's -- I think it's absolutely parallel.

  • 10:12:19

    REHMCharlie Cook, he is with The Cook Political Report and the National Journal. Do join us, 800-433-8850. When you talk about cuts to Social Security, Medicare and Medicaid, what are they talking about? Are they talking about actual cuts? Or are they talking about extending the amount of earnings on which an individual can be taxed? Or are they talking about raising the age of retirement? What?

  • 10:12:59

    COOKIt could be any or all of these. Some of them are as subtle as changing the way that the cost-of-living increases calculated debt. You know, the consumer price index is sort of based on everyone. But for people that aren't paying mortgages or, you know, I mean, for older -- you know, the cost of living for older people is a very different one than younger people. And they were coming up -- they were suggesting a different way of calculating the cost of living that would be a fairly modest change on an individual basis, but collectively could actually save a lot of money. Some of this is raising the retirement age by a couple of years.

  • 10:13:36

    COOKYou know, and all these things, you know, go back to when Social Security was founded and the life expectancy didn't exceed 65 by much. And, now, it exceeds it by decades. And so the idea that Social Security should evolve over time, you know, I think has a lot of merit.

  • 10:13:54

    REHMOkay. So, number one, what is going on that we don't know about? And second, are we going to get a deal, Jeanne Cummings?

  • 10:14:08

    CUMMINGSWell, the leaders all say that they will cut a deal. All of the leaders say that they don't want there to be a default. That may not be true of the feeling throughout the rank and file of the Republican caucus, but McConnell and Boehner have both said that there -- they want to a see a deal cut. What we don't know...

  • 10:14:28

    REHMBut what about Cantor? What has he said?

  • 10:14:31

    CUMMINGSWell, Cantor is taking the temperature of the 87 freshmen and others that are in the Republican caucus in the House who are of conflicted minds about what the impact would be if we were to default. And so they're resisting a deal, and they're going to have to go to the bottom to the very last minute. As Cantor has -- he has said that he doesn't want to default as well. He's likeminded on that with Boehner. They are not of the same mind on how you get a remedy.

  • 10:15:07

    CUMMINGSAnd I think, in part, that's because the Majority Leader Cantor is very much more attuned with the new members of his caucus, whereas -- as Charlie was pointing out -- Speaker Boehner is from a different era and a different school. He wanted a historic agreement that both he hoped that his caucus could benefit from -- $4 trillion dollars in reduction in the deficit is a very big accomplishment. And he truly wanted that for them.

  • 10:15:37

    CUMMINGSNow, what do we not know? One of the big unknowns this morning is Sen. McConnell suggested yesterday that there is a contingency plan in place in case they don't strike a deal. Well, we don't know what that is. That's a big question for us to try to discover today.

  • 10:15:56

    ELVINGYes. I'm reminded for a moment here of Nixon's secret plan to end the war in Vietnam. He didn't want to tell us about it until he was actually president. McConnell doesn't want to tell us about his secret contingency plan until we actually hit Aug. 2. One of the problems that McConnell has to deal with was evident yesterday on television where Jim DeMint, senator from South Carolina, member of Mr. McConnell's caucus, was saying that he really just doesn't see the problem with Aug. 2.

  • 10:16:20

    ELVINGHe just really thinks all this default talk is kind of blown up and out of proportion and that we'll find some way to deal with it, and there are other ways to deal with it. Maybe we can shut down some parts of the federal government that some of us don't like too much and do that instead of defaulting on obligations. So he does have to deal with a group -- I believe there are at least eight senators who have said they want to filibuster any kind of deal that comes out before it gets approved in the Senate.

  • 10:16:43

    ELVINGThat's not an insuperable number, of course, but as we know, even one senator can delay things for quite a long time. It could be problematic. So there's that struggle, and we don't know exactly what McConnell has in mind when he says he has a secret contingency plan. But there are many struggles going on here. There are struggles for power within the Senate. There is the struggle for power between the chambers.

  • 10:17:02

    ELVINGThe Senate used to be, in the last two years -- the first two years of the Obama presidency -- the fulcrum of action by the federal government. They were really making all the big decisions. They were the close vote. Now, they've been marginalized by the drama in the House, where the new Republican majority in the House seems to be driving the train, and most of the federal government decisions are being made over there.

  • 10:17:22

    ELVINGWe have struggles within the House power structure. We've already referred to Cantor and Boehner. Clearly, Cantor is breathing down Boehner's neck, and he's really been the ascendant leader whereas Boehner has been the hold-over leader from the old days.

  • 10:17:32

    COOKAnd there are two swords, different swords hanging over our heads. One sword is default and the Aug. 2 -- it may not be. I mean, there are still some games -- we were playing games stretching it out to that point. But there's still other games that could be played, you know, Treasury selling some gold to the Fed, that sort of thing. That could eek out a few more days.

  • 10:17:53

    COOKBut the second one has to do with the stock and bond markets that, at any point along the way, if they lose whatever left -- confidence they have left, whatever patience they have left with Washington, you could see some real upheaval. And you could see some days kind of like that day back in late September 2008 during -- after Lehman Brothers fell and TARP was voted down and the stock market dropped 777 points in one day -- $13 trillion worth of shareholder value. You could see some really exciting days between now and then.

  • 10:18:24

    REHMCharlie Cook, he is editor and publisher of the Cook Political Report. He also writes for National Journal. Short break. When we come back, we'll talk about a few more details and take your calls.

  • 10:20:03

    REHMAnd welcome back. We're talking about the high-stakes negotiations going on, continuing to go on over the weekend, again today over raising the debt ceiling, the compromise that must be found in order to achieve that by Aug. 2. We don't know, even now, whether that Aug. 2 deadline has any fluidity to it. President Obama is scheduled to have a press conference today at 11 o'clock. Here is an email from Diane.

  • 10:20:45

    REHMShe's in New Hampshire. "If President Obama concedes on -- to the GOP and alters Social Security and Medicare, this will spell the end of the administration -- a shameless sellout to Republican ideologues, a betrayal of older, poor and disabled Americans that will alienate those few, the president's progressive base who are still with him." And she ends by saying, "And you can take that to the bank." Charlie Cook.

  • 10:21:23

    COOKSee, that, to me, is just an absolutely parallel view with the conservative that says if you raise taxes one iota. I mean, you simply can't look at the long-term figures for Social Security and for Medicare and see this is sustainable. I mean, you simply can't.

  • 10:21:38

    COOKAnd when you look at some of the -- they've got some fascinating studies about what people pay into Medicare and what they get out. And, you know, it approaches -- you get three bucks back for every dollar you put in. And people are so convinced I pay -- I'm just getting from Medicare what I paid in. Oh, no, it's actually a very big multiplier here, and it's unsustainable.

  • 10:21:56

    CUMMINGSAnd one of the White House's arguments for this deal is that if a deal like this, at some point, isn't cut, then we're not going to be able to afford those programs anyway. If we don't make adjustments now when it doesn't affect all of the proposals they talk about -- almost universally, from what I have learned or heard -- they don't affect current recipients of any of these programs. They're set out in the future. And in one case, you know, it could be where they might adjust the retirement age, wouldn't take effect until almost 20 years from now...

  • 10:22:35


  • 10:22:35

    CUMMINGS...or 30 years from now. And, you know, the very idea that people will be living longer with the improvements in health care that we have, it's a very sensible thing to imagine that we are going to have generations and generations that live longer. So their argument is that there's a progressive argument for a deal like this. Because if you cherish Social Security and you cherish Medicare and Medicaid, then something has to be done, or these programs simply won't be able -- won't be affordable, eventually.

  • 10:23:06

    REHMAnd here's another email from Jeff in Oklahoma. He says, "My thought on the budget deal is that Democrats might as well just wait until July 31 to even talk to Republicans. I believe Republicans cannot make a deal until the very last second so that they will have cover from the Tea Party side to say they had to compromise before a catastrophe." Charlie.

  • 10:23:42

    COOKIf we knew for sure that the stock and bond markets would hold their -- keep -- remain patient and not do anything that -- but, even then, it takes time for this process to work.

  • 10:23:56

    REHMOf course.

  • 10:23:56

    COOKI mean -- and there's a lead time of getting it -- of getting things through. That's just -- it's taken an enormous risk.

  • 10:24:05

    REHMAnd here's the second part of his message. He says, "Every time Democrats propose any compromise, Republicans simply move the line."

  • 10:24:17

    ELVINGThere is an argument to be made that every time Democrats have said, well, all right, we can discuss Medicare, we can discuss Social Security, we can certainly discuss putting the far greater proportion of this compromise on the spending side than on the revenue side -- I mean, I'm not seeing anyone seriously proposing that it all be done by revenue. Sure, there might be someone out there, but no one in Washington.

  • 10:24:37

    ELVINGSo this really is a war being fought on the turf of people who say the government spends too much, not that it taxes too much, and that not that the rich are getting off scot-free.

  • 10:24:47

    ELVINGBut look at some of the details of these rejections. I mean, Eric Cantor has now rejected the idea of closing loopholes on corporate jets, rejected the idea of any kind of change to millionaires-only taxes, any kind of changes even with respect to improving the collection on existing taxes without changing rates, without even broadening the base, just improving collections. So there's some real orthodoxy. There's some dogma on both sides here.

  • 10:25:13

    CUMMINGSThere's also some practicality here. I mean, the Republicans are pushing this to limit because they've done that the last two or three times. There's been a negotiation like this...

  • 10:25:23

    ELVINGAnd it worked.

  • 10:25:23

    CUMMINGS...and they gain ground. Right. It worked. So, I mean, this is a bit of poker. It's brinksmanship. And that was an effective strategy for them, and so they are employing it once more. The other risk about waiting until the last second to cut a deal is that's what's happened in 1990, when President -- the first President Bush cut a deal at Andrews Air Force Base and broke his no new taxes pledge in the process.

  • 10:25:50

    CUMMINGSHe brought that deal back to Congress with the expectation of essentially an overnight passage, and it failed because of a rebellion within the Republican caucus and the House led by Newt Gingrich. And that led to a government shutdown, and there were several short-term shutdowns in that period of time. So this is bigger than a government shutdown. This is a massive default, and so we can't run that risk.

  • 10:26:16

    REHMWe have terrible job numbers this past weekend. How's all that going to affect talks?

  • 10:26:23

    COOKWell, that's exactly where I was going to go where this economy's different from 1990 is so much more fragile. We're -- you know, this is a time when our policymakers ought to be walking on eggshells because this recovery is so anemic, and we've run out of tools. The Fed has done all the easing they could do. Economic stimulus, traditional spending is now a four-letter word. There's no accelerator for us to push right now, at this point.

  • 10:26:54

    COOKAnd so we're looking at truly horrific -- I saw a study from Northeastern University where they called this a jobless and wageless recovery because there is no earnings...

  • 10:27:07

    REHMSo how does that affect the talks between the two sides?

  • 10:27:14

    COOKI can't tell that it has. A friend of mine, a political economist, Tom Gallagher, likes to use the term that you're -- it's a plane that's flying just barely above the treetops, with no -- with very little power. And it doesn't take much for this economy to lose just a tiny bit of altitude and hit the ground.

  • 10:27:35


  • 10:27:35

    COOKAnd that's where we are now.

  • 10:27:36

    ELVINGAll the focus on the debt in recent months here in Washington, in the media, in all the discussion -- we're talking about the $14 trillion debt, but we are not talking as much about the 14 million unemployed Americans. And it's surprising to a lot of people that with unemployment bumping up to 9.2 percent last Friday, that there does not seem to be much political activity on behalf of the unemployed.

  • 10:27:59

    ELVINGOne of the interesting things in The New York Times yesterday on this overall subject was in the business section, talking about how the unemployed are politically inactive, by and large. They're not particularly effective. They vote much less often than people who are employed. There are a number of reasons for that. But that specter of unemployment -- and even the fact of unemployment -- does not have the same power in Washington that the $14 trillion debt does. In our time, this is the issue that is occupying...

  • 10:28:28

    CUMMINGSAnd if anything, those new jobless numbers drove the wedge deeper into...

  • 10:28:32


  • 10:28:33

    CUMMINGS...between the negotiators because the Republicans took those numbers and rallied around their belief that raising taxes during a weak economy is a bad thing. And so even if, in the agreement, those tax increases were not immediate, would not take effect right now, would be few years out, but that alone was enough for them to seize those numbers and say, see, this is yet another reason why we can't take a deal that has any kind of revenue increases.

  • 10:29:01

    REHMOkay. But here's what I'd like to understand. Some people are saying raising taxes isn't really raising taxes when you're simply taking away some benefits that the oil industry enjoys or benefits that millionaires -- billionaires enjoy.

  • 10:29:23

    COOKWell, I mean, tax -- you know, traditional economic view would say when you've got a -- either a recession or a sluggish recovery like we have now, what you need to do is cut taxes and increase government spending, both. Now, obviously, the country is facing enormous budget challenges right now. So logic would say what we need to do is cut taxes, increase spending short-term and then get out of this recession. And then taxes are going to need to come up, and spending's going to need to come down and do that.

  • 10:29:54

    COOKAnd each party is sort of embracing one side of it, where Republicans are saying, cut taxes, cut taxes, and Democrats are saying, increase spending, increase spending. But neither are willing to concede the other's point, and so we're not getting that stimulus that we effectively need.

  • 10:30:10

    REHMDo you believe that eventually they'll get to it, Jeanne?

  • 10:30:15

    CUMMINGSGet to?

  • 10:30:16

    REHMA place where there are some tax increases and some spending decreases.

  • 10:30:25

    CUMMINGSIt's possible that they could because I -- this issue, unless they cut the big deal, this issue is going into the campaign, and so it will be a major issue of...

  • 10:30:40

    REHMAnd who gets the blame?

  • 10:30:42

    CUMMINGSWell, that's -- there will be political repercussions, and so how that shakes out may or may not change the environment in a way in which a deal can be reached. Also, the tax rate, some argue the tax increases ultimately will have to come because we won't be able to afford Medicare. We won't be able to afford to make the payments on Social Security. There's just got to be additional revenue or more cuts.

  • 10:31:10

    CUMMINGSAnd as the baby boomers all start rolling into the programs, they become a bigger and bigger part of the electorate that will protect the programs and demand that there'll be some new revenue.

  • 10:31:22

    COOKWhat I suspect we're going to see happen is two deals. One deal -- they share in one in 2013, and this year is going to be overwhelmingly domestic discretionary spending cuts and discretionary defense spending cuts with very, very little, if any, revenue increases, very, very little, if any, entitlement cuts just 'cause the size won't give in. And then the big deal would be 2013. And that's when Democrats will have to give in on entitlements a good bit, and Republicans will have to give in on revenues increases.

  • 10:31:50


  • 10:31:51

    COOKBut that's the grand bargain coming after this election. I just don't think either party can bring themselves to ox any gore -- to gore any oxes on their the aisle between now and the election.

  • 10:32:03

    CUMMINGSAnd the contours of a 2013 big deal will be dramatically affected by whether it's President Obama who's in the White House or President Romney or Pawlenty or whoever.

  • 10:32:12

    REHMOf course. Whoever. Yeah.

  • 10:32:15

    ELVINGWhich, in some sense, both parties are willing to agree to that as a risk. They're willing to push it into 2013. The reason I think probably the Boehner idea, the big deal, the Boehner-Obama deal fell apart was because a lot Republicans said, that deal, now, is too good for Obama. It helps re-elect him. The Democrats were afraid in 1990 when they made that tax increase deal that wound up hurting George Bush the first.

  • 10:32:39

    ELVINGThey were afraid that by making that deal and making George H.W. Bush look good as a president and a compromise in the summer of 1990, they were re-electing him in 1992. These Republicans aren't willing to take the same chance.

  • 10:32:51

    REHMRon Elving, he is Washington editor for NPR. Short break, and we'll remind you that you're listening to "The Diane Rehm Show." Let's open the phones, 800-433-8850. To Columbia, Mo. Good morning, Willy. You're on the air.

  • 10:33:17

    WILLYGood morning. Thanks for taking my call.

  • 10:33:18


  • 10:33:19

    WILLYI think that this big brouhaha over budget cutting is a big farce. It's part of, you know, the super rich top 1 or 2 percent in the country having way too much, double the net worth of the bottom 80 percent. A huge part of the deficit comes from the tax cuts for millionaires. And we need to increase taxes, get rid of the tax breaks on the oil companies, increase the taxes on millionaires.

  • 10:33:54

    WILLYWe had the lowest tax rate as a proportion of the GNP since 1950, and we should not cut social spending at all. Social spending is good for the economy. We've lost several million jobs and public employees being laid off because of this budget cutting frenzy. The radical Republicans, they just want to emasculate everything the federal government does.

  • 10:34:21

    REHMAll right. And Ron Elving?

  • 10:34:24

    ELVINGThe caller probably should run for Congress in Oklahoma. I mean, this is not a viewpoint that is heard...

  • 10:34:29


  • 10:34:30

    ELVINGExcuse me. I'm sorry. I thought I heard Oklahoma.

  • 10:34:31

    REHMIt's all right.

  • 10:34:33

    ELVINGThe caller should call in his home state, whatever it is.

  • 10:34:35


  • 10:34:36

    ELVINGThis is not a viewpoint that is always heard from members who are being elected from some of the more rural and smaller town communities in Oklahoma or Missouri. And part of the reason that we are in the political situation we're in right now is that even though income distribution has gone back to what it was in 1928, the inequality of income distribution has gone back to the late '20s.

  • 10:34:57

    ELVINGNonetheless, much of the populist energy that is affecting Washington, much of the voice of the people that's being heard in Washington is coming from what we would more traditionally call the right -- from conservatives, from people who are anti-government and people who are saying, the problem here is that government is spending too much of our money.

  • 10:35:14

    REHMAll right. Let's hear from a member of the Tea Party. Good morning, Dennis. You're on the air.

  • 10:35:21

    DENNISHi. I'm very worried. I get the feeling that this is just not going to come -- this is just not going to work. And I have a feeling that it must be because of the Koch brothers and that they're just paying the congressmen so much money to stop working together to reduce what's really being, you know, to increase what's really being paid in taxes by rich people.

  • 10:35:52

    REHMHey, Dennis, did you -- when you talked to our call provider, did you identify yourself as a member of the Tea Party?

  • 10:36:07

    DENNISYes. I'm not going to do it anymore. I'm just -- I'm going to get out of this.

  • 10:36:15

    REHMOkay. And he talked about the Koch brothers. Charlie Cook.

  • 10:36:21

    COOKWell, every, you know, everybody likes to have their demons, and for a long time, conservatives demonized George Soros and Republicans -- Democrats like to demonize the Koch brothers. But, you know, I think sometimes the influence of these individuals are drastically exaggerated by each side. I mean, George Soros never controlled the Democratic Party, and I don't think the Koch brothers control the Republican Party. But it's convenient to create demons so that you can beat on them.

  • 10:36:53


  • 10:36:54

    CUMMINGSWell, I thought what Dennis elevated was the fact that the Tea Party was a very mixed group, and what animated them all was they were fed up. But they had lots of different reasons for being fed up. And there was a segment of the Tea Party who said it was a (word?) on both your houses and, you know, go to Washington and help our country and get things done. And, especially, they worried about jobs, and they worried about the economy. And it's that segment of the Tea Party movement that folks in Washington, both sides, could alienate anew because Washington isn't talking about jobs.

  • 10:37:32

    REHMJeanne Cummings, she's deputy government editor for Bloomberg News. We'll really take a short break here and when we come back, your calls.

  • 10:40:03

    REHMAnd welcome back. During the break, we were talking about jobs, the fact that not only small businesses, but also large corporations are not hiring. And you, Jeanne Cummings, believe that the big deal would really be good for corporations and for jobs.

  • 10:40:28

    CUMMINGSWell, some of the economists and bond holders and investors that we -- my colleagues at Bloomberg have talked with say that if -- one reason there isn't a lot of investment right now is because there's a great deal of uncertainty about what will the tax rates be. I mean, there aren't -- they're talking about corporate tax reform as part of all of this, and there are other moving parts to this and will the country really put itself on a much stronger financial footing with the deal.

  • 10:40:58

    CUMMINGSSo if you're a big corporation and you're thinking about expansion, and you're an international, you can expand here or anywhere in the world, you know, this kind of uncertainty could make you wait until you know for sure what is going to be the lay of the land here in the United States, what will be that corporate tax rate, et cetera.

  • 10:41:16

    CUMMINGSSo there are those who argue that if there is a big deal, that it would then -- it could make the U.S. a much more attractive country to invest, to expand, to put new plants and that sort of thing. But they got to see the deal first.

  • 10:41:32

    ELVINGTo take it farther, what I would say is that the financial crisis of 2008, we actually did sink some companies. But it was a near-death experience. It scared the heck out of a lot of corporate leaders in this country. And as a result, they have very little confidence in the durability of this recovery. And they don't have any confidence in political leadership of either party in Washington. And as a result, they're keeping as much dry powder, they're keeping as much cash reserves as they possibly can because they feel so uncertain.

  • 10:42:05

    ELVINGAnd I think Jeanne's absolutely right, that if they felt -- if they had more confidence in leadership in Washington and if they felt like they know what the rules of the game were going to be and that big problems were being dealt with in an adult way, I think they could unleash a lot and expand and higher and all kinds of good things. But right now, the only spending they're doing is for productivity-related things, machines that can replace people, because they don't feel confident to hire more people.

  • 10:42:36

    REHMAll right. To Irondale, Ala. Good morning, Margaret. You're on the air.

  • 10:42:43

    MARGARETGood morning. I'm a conservative Republican, and I've just started receiving benefits from Medicare. Oh, great.

  • 10:42:53

    REHMAre you there? Margaret? I'm afraid we lost her. Let's go instead to Key West, Fla. Good morning, David. Uh oh. David, are you there? Let's try Glenn in Miami, Fla. Good morning, Glenn.

  • 10:43:17

    GLENNGood morning, Diane. You know, I'm a little disappointed in the people who represent us in Washington. They don't seem to be checking with their constituency. I would think that most of us, if we were -- if somebody -- we were faced with an adversary that was going to destroy our economy and break up our social fabric, we'd be willing to pay a surcharge, temporary surcharge on taxes and receive fewer benefits for the good of the country. And yet nobody seems to be making this patriotic statement. What do you think?

  • 10:43:51

    ELVINGYou know, I think that most of Americans very possibly agree with this caller and have the exact same reaction. But that does not necessarily mean that the people in Congress, especially in the House, are not checking with their constituency. And that's the difference. The difference is that constituencies and the public are not necessarily the same thing.

  • 10:44:10

    ELVINGIf you elect Congress people from districts that had been drawn to be heavily Republican or heavily Democratic, you are primarily going to get people in Congress who represent one of those parties or one of the other parties. They are partisan more than they are, if you will, public-minded in the classic sense. That's the way the system works.

  • 10:44:29

    ELVINGThere are some states that are making efforts imitating Iowa, which was way upfront, to try to draw their congressional districts differently and have them be more representative of the country as a whole or at least of that state or that metropolitan area as a whole and not quite so lockdown hard base for one party or the other.

  • 10:44:45

    REHMAll right.

  • 10:44:46

    ELVINGI think that would make a difference.

  • 10:44:47

    REHMTo Charles in Raleigh, N.C. Good morning.

  • 10:44:53

    CHARLESGood morning, Diane. Yeah, my comment is what frightens me the most besides the Republicans saying no, no, no, which is what they're best at -- I mean, (unintelligible) be like my 3-year-old granddaughter and start holding their breath until their face turns red -- is the fact that there is a contingency within the supposed negotiation, basically, Sen. McConnell, that has said outrightly, we want the president to fail. We want President Obama be a one-term president.

  • 10:45:23

    CHARLESAnd I truly believe, I'm sorry to say -- and this is what I find really frightening -- that they are willing to do anything to have that failure occur, and I mean anything. Let the country blow up? Yeah, they're willing to do that. Let us default? Yes, they are. They're willing to do that in order to have the president fail.

  • 10:45:45

    CUMMINGSWell, the caller is right in that. And as in anything in Washington, there are politics at play in all of these negotiations. And as Ron pointed out earlier, to agree to the great big $4 trillion package right now would be a benefit that would go to Obama when he goes out on the re-election campaign. And there are some Republicans who don't want to give him that credential. Now, are they going to blow the country up?

  • 10:46:17

    CUMMINGSI think the immediate pivot by Republican leadership to the 2.4 smaller deal suggests that, no, they're not willing to go that far. They're going to do just enough to keep the government operating and take this in to the next election cycle and let -- take their arguments and let the public decide who's going to drive the next negotiation, whether it will be a Democratic president or a Republican president. And I should note real quick here, there are Democratic politics, too.

  • 10:46:46


  • 10:46:46

    CUMMINGSAnd that is when, in a big deal, the $4 trillion deal, then Medicare gets touched in a bipartisan way. And House Democrats believe they've got a hot issue with that Paul Ryan proposal on -- over privatizing Medicare. That's one they can win on next November, and they were loathed to give up that political change.

  • 10:47:10

    REHMAll right. To San Antonio, Texas. Hi there, Michael.

  • 10:47:16

    MICHAELYeah, just a couple of quick points. I think Obama has the 14th Amendment on his side. And, you know, if the Republicans don't want to agree to something reasonable, he can always use that as a backstop. Also, I think there's a race issue that's involved with this whole thing. And these guys, we might see them a lot on the microphones, they look like a version of the White Citizens' Council in the South. They don't want to give this black guy any kind of credit or help on anything, and it's just ridiculous. Thank you very much.

  • 10:47:50

    REHMYou know, it's interesting, the number of callers who call in and say they have a question about something and then pose a completely different question. Michael's proposed question to our caller was, can the panel comment on the tension between Boehner and Cantor, and he turned it into a question about race, which I'm sorry to hear. I mean, there are people who have questions about race, but for heaven's sakes, tell us the truth when you're calling in, please. Talking...

  • 10:48:37

    COOKYou don't have to be in Washington to be untruthful.

  • 10:48:39

    REHMAbsolutely. Talk about the tensions between Boehner and Cantor.

  • 10:48:44

    ELVINGWell, you know, systems, I suppose, will be deemed by those who wish to. The tension between Boehner and Cantor goes back a number of years, really, because Cantor is a rising star, tied to the younger members of Congress. (unintelligible) Charlie observed earlier, an institutionalist, and John Boehner is a guy who stuck around even after his star began to descend after the departure of Newt Gingrich. He wasn't really part of the team for a number of years in the leadership, but he stuck it out.

  • 10:49:11

    ELVINGHe chaired a big committee, he learned how to get things done, he learned how to work with people from the other party, and he really grew as a legislator and put out that judgment. He really became somebody who had a lot more to offer than he had before. That, then, enabled him to rise in leadership again. And when the Republicans came back into the majority, they elected him speaker. But there was a kind of provisional sense to this, that he was only speaker so long as he was on what you might call good Tea Party behavior.

  • 10:49:38

    ELVINGBecause it was clear that the Tea Party was calling shots necessarily -- not necessarily because they have all the seats in the House in the Republican conference. They don't, but they are the energy. They are the cutting edge. They are, if you will, the head on the spear. And the Republican Party, as a whole, is following that in the House of Representatives and John Boehner has to as well.

  • 10:49:57


  • 10:49:57

    COOKLet me play on that in something else that Ron said earlier, that it's absolutely true that we've created, through the redistricting process, so many absolutely conservative Republican districts and absolutely liberal Democratic districts without a line in between. But beyond that, I think when so many of these members go back home, they hate confrontation, and they go to see groups that are in their comfort zone. And so they get reinforcement of their pre-existing views so that, you know, if you're a conservative Republican, you like to go to Tea Party groups.

  • 10:50:33

    COOKYou like to go to groups that you'll -- that you will hear validation for your positions, and the same thing for Democrats on the left, and so they just get sort of whipped up into a frenzy. And the 40 percent of the people that are in the middle between the 40 yard lines of American politics, they kind of get left out here.

  • 10:50:53

    CUMMINGSWell, and we should also note, though, that the Boehner-Cantor partnership, as much as there are tensions within, it's been a pretty effective partnership so far. And that Cantor is, you know, always there to take the temperature of the more conservative members, and he reports it on to Boehner. He doesn't ambush him with that information. He reports it to him. The two of them have worked together, and we've avoided two government shutdowns because they've been able to manage to get the votes in the House to pass whatever agreement was cuddled together.

  • 10:51:30

    CUMMINGSThis one may just have been a bridge too far for Boehner to take his conference. And we should also note that Boehner wanted, by his own choosing, to be a different kind of speaker that we have seen. He is not a Nancy Pelosi. He is not a Newt Gingrich. He came in saying he was going to return authority and power back to the committee chairman. The Tea Partiers didn't make him do that. That's his style of leadership. He wanted to go back more to the Tip O'Neill model and get away from some of the modern-day, power-down speakers.

  • 10:52:01

    CUMMINGSAnd so here we've come to a moment where only a power-down speaker could maybe have pushed a big deal through, and that's not his style and nor is that where his power lies.

  • 10:52:12

    ELVINGThere also could be an aspect of trial balloon here where John Boehner made a secret visit to the White House and had some sort of commerce with President Obama, and that they talked about having a big deal, and they were cooking something up, not unlike some of the deals that were done by Newt Gingrich and Bill Clinton back in the '99.

  • 10:52:27

    REHMAnd then who leaked it?

  • 10:52:29

    ELVINGWell, it appears that it kind of came a little bit from the White House that they had Boehner kind of online and he was coming along. That was not good for John Boehner in the House and with the conservatives in general. Let's also remember, you've got a lot of Republican candidates for president out there running around Iowa, South Carolina, North Carolina -- northern -- north -- excuse me, New Hampshire and other early states and talking about how much they hate the idea of compromise and how much a good conservative would not compromise in Washington. That's undercut John Boehner as well.

  • 10:52:57

    REHMRon Elving of NPR, and you're listening to "The Diane Rehm Show." Here's an email from Joel in Indianapolis, "I'm an independent voter. I'm impressed with the deal hammered out by the president and Rep. Boehner. It's seemed like an opportunity to make a real difference. But I'm extremely discouraged by the far left and a far right who are opposing this deal. Besides writing to my congressional representative, does your panel believe there is anything the average person can do to encourage this package to get through?"

  • 10:53:43

    ELVINGCall "The Diane Rehm Show."

  • 10:53:44

    REHMYeah, well, that and tell -- call program, exactly, which are never talked about.

  • 10:53:49

    COOKIf you have -- I would say that we have, and I like this caller. I should take him to get a steak at St. Elmo Steak House in Indianapolis...

  • 10:53:56


  • 10:53:57

    COOK...and shrimp cocktail. But I would say, you know, if you've got a member of Congress that's having a town meeting, go and speak. Because the thing is the hotheads on the left and the right are going to go, but they need some sensible, reasonable voices in the middle to chime in because those people are far too silent.

  • 10:54:18

    REHMAre people writing, emailing, phoning congressional offices or are they sitting back watching this play out? Anybody have any thoughts?

  • 10:54:31

    ELVINGToo many are doing the latter, and not enough are doing the former. And of the people who are doing the former, too many of them are doing it at the behest of someone else who has organized them, told them what to say and said this is the way you get your piece of the action. Pressure your congressmen. People always say they want to see deals worked out and compromise in Washington, but then they also say I don't want to see my own representative give up my basic interest.

  • 10:54:54

    COOKThere's a difference between grassroots and astro turf.

  • 10:54:56

    REHMMm hmm.

  • 10:54:57

    COOKAnd people who work in congressional office, they can tell when these things are petitions. They can tell when this stuff is ginned up, and those things, they just have a lot less validity than an individualized, personalized communication. It clearly is of the heart and not instigated by an outside group.

  • 10:55:16

    CUMMINGSBut that's not...

  • 10:55:16

    REHMBut the real question is, are people who are not extreme involved intellectually in this problem? And are they willing to write or call or email individually?

  • 10:55:35

    CUMMINGSIt's very hard to tell because the only data that we get from members of Congress is what they are willing to share. The only thing we can detect is that the activists are clearly involved.

  • 10:55:45

    REHMThe activists.

  • 10:55:46

    CUMMINGSThey are. And so you have on one -- you have for Americans for tax reform. Governor Chris' group that's adamantly anti-tax has a very big shadowy presence in all of this because they are threatening political retribution to any Republican who would go along with any deal that has revenue increases. So they are very influential in this, and they're among the reasons that the Republicans have had to go back on. And on the left, those who want to -- protect the protect Social Security organizations, they are activated.

  • 10:56:20

    REHMExcept that you had the AARP come out and say they would agree to some changes in social...

  • 10:56:31

    COOKThey'd back off within hours.

  • 10:56:32

    ELVINGThey had to back off because there are other group, as Jeanne said, who are dedicated strictly to Social security or strictly to Medicare or just to those two programs. And I think we heard from one of their people earlier in the program who just want to be absolutist about defending those programs.

  • 10:56:47

    COOKI think the people in the middle you're talking about, I think they're disgusted, and I think they're withdrawn. But the thing is I -- we've just seen two back-to-back elections in '06 and '08 where voters just beat the hell out of Republicans, and then they beat the hell out of Democrats in -- I think they're going to go indiscriminately in a lot of incumbents from both sides.

  • 10:57:06

    REHMCharlie Cook, editor and publisher of the Cook Political Report. He's also with National Journal. Jeanne Cummings of Bloomberg News. Ron Elving of NPR. Let's hope it gets done soon. Thanks for being here. Thanks for listening. I'm Diane Rehm.

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