I sent this Simpson-Bowles transcript to a co-worker some time ago, a little long but good reading:
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January 6, Sunday morning “Meet The Press”:
DAVID GREGORY: And good Sunday morning. A new year and a new congress. Washington is getting back to work as President Obama ended his Hawaii vacation and members of the 113th class were sworn in earlier this week alongside their families. Spirits high, but the battle lines for the tough fights ahead are already being drawn - chief among them: whether Congress will vote to raise the country's debt ceiling.
Shortly after lawmakers reached a down-to-the-wire deal on taxes to pull the country back from fiscal cliff earlier this week - the president tried to pre-empt the debt limit showdown by firing a warning shot at Republicans. He reiterated that call yesterday.
(Videotape)
PRESIDENT OBAMA: One thing I will not compromise over is whether or not Congress should pay the tab for a bill they've already racked up. If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic.
DAVID GREGORY: Republicans have vowed to use upcoming votes such as the debt ceiling as a bargaining chips to get more spending cuts and reforms to entitlement programs like Medicare - some are even threatening another government shutdown.
In just a moment we'll talk to Alan Simpson and Erskine Bowles, the two chairs of the president's debt commission, about where they see the fiscal cliff deal leaving the country, if it falls short.
DAVID GREGORY:
Coming up, with all the numbers being thrown around in the last two weeks during the fiscal cliff negotiations, we thought we'd try to put things into perspective. Take a look at these figures. These are the key numbers in simple terms for the money that the U.S. takes in and spends roughly every year. You see the amount that we spend is greater than the total tax revenue that the country brings in. And that's the difference between the two or the money we'd have to find to borrow to cover our spending. And there's the total debt. $16.4 trillion for the United States government.
If we wanted to bring those numbers down to size, say for a family budget, by removing some of those daunting zeroes, here's what it would look like. The family would have an income of about $24,000, while in that same year spending more than they take in. $38,000. That would mean $14,000 or so would have to be put on a credit card that already has a balance of about $164,000.
In the past it's been politically difficult to make far reaching cuts. The debt ceiling deal back in April of 2011 cut $38.5 billion in spending. So if you scale that down to your family example we just showed you, that would be like paying down the $164,000 credit card balance by $385.
So bigger automatic cuts are expected in two months, but our next guests, Alan Simpson and Erskine Bowles, who men who were on the president's debt commission, think it won't be enough. And so Washington missed a magic moment to do something big. They're here to tell us where the fiscal cliff deal falls short.
DAVID GREGORY:
Joining me now, two of the nation's leading voices on fiscal responsibility, the co-founders of the campaign to fix the debt. Former Republican Senator Alan Simpson and former Clinton Chief of Staff Erskine Bowles. Welcome to you both. Mr. Bowles, let me start with you. You heard Leader McConnell. He said the question of revenue is now over. They've done this fiscal cliff deal and there's no more concern among Republicans about raising more revenue. How do you respond to that?
ERSKINE BOWLES:
Look, I think he's right about a lot of stuff. First of all, we've done all the easy stuff but all of the hard decisions lay ahead of us. We have got to reform the tax code to make it more globally competitive. We have got to reduce this entitlement spending, particularly as it relates to healthcare. We've got to slow the rate of growth of healthcare to the rate of growth of the economy or it will eat the rest of the budget alive.
And we've got to make Social Security sustainably solvent. If we do these things we can go a long ways to stabilizing the debt and keeping it on a downward path as a percent of GDP. But it's got to be growth, it's got to have some revenue, but the big part going forward's got to be spending cuts.
DAVID GREGORY:
All right. Well, Senator Simpson, you called this fiscal cliff deal that was just passed that doesn't deal with spending a "missed opportunity." Why?
FMR. SEN. ALAN SIMPSON:
Well, the sad part of it is the mountain roared and gave birth to a mouse. This thing isn't going to do anything really. And Erskine is so correct. Erskine and I have been working on-- and don't forget, in our commission we've got five Democrats, including Dick Durbin, five Republicans, including Tom Coburn, and one independent. How do you do any better than that?
And the president ignored it and the Congress has ignored it because they won't do the big stuff. And the big stuff has to get done. This other stuff is nothing. And as Erskine says so beautifully, we're the healthiest horse in the glue factory right now. The trajectory of debt, deficit and interest right now, the trajectory of debt, deficit and interest will match any of the PIG countries, Portugal, Ireland, Italy, Spain. Match it.
But of course we're lots bigger and, let me tell you, everybody out there in the Congress knows exactly what we have to do. And when Erskine and I traveled around for that whole year we knew they were in Congress because I could see their button. I didn't know any of them. And they said, "Save us from ourselves." How's that for courage?
DAVID GREGORY:
Well, but Mr. Bowles, you know, I asked the president this last week. I said, "You know, there's so much frustration out there. There's a pox on both houses." And he and other Democrats reject this idea that there's some sort of equivalence in intransigence in Washington. And this is how the president responded to it, laying the blame at the feet of Republicans. Let me play you this and have you respond.
(Videotape)
PRESIDENT OBAMA: The offers that I’ve made to them have been so fair that a lot of Democrats get mad at me. I mean I offered to make some significant changes to our entitlement programs in order to reduce the deficit. I offered not only a trillion dollars in -- over a trillion dollars in spending cuts over the next 10 years, but these changes would result in even more savings in the next 10 years. And would solve our deficit problem for a decade.
(End videotape)
DAVID GREGORY:
Mr. Bowles, you heard Leader McConnell and his views about the president not leading. Had Republicans conceded the point on revenue earlier, say in 2011, could we have had a broader agreement along the lines that you think is necessary?
ERSKINE BOWLES:
Oh, we definitely could have had it. I think, as you said in your opening part, this was the magic moment. This was our opportunity to do something really big to bring down this deficit and put our fiscal house in order. Yes, the president has taken some steps forward on the entitlement programs, but has he done enough? Absolutely not.
And has the speaker shown the flexibility he needs to show in order for us to broaden the base and simplify the code and reform our tax structure or to be specific about which ones of the entitlements he would actually reduce? No. What we've got to do is both of us have got to get out of our comfort zones, both sides, and we've got to come together and make the tough decisions it takes to bring down this deficit. We believe it can be done. I think the American people want it done. And now's the time to do it.
DAVID GREGORY:
Let me ask you specifically about Medicare, and I'll start with you Mr. Bowles and then get Senator Simpson's reaction. The president, again, when I asked him specifically about what he would do on Medicare, had this response. Watch.
(Videotape)
DAVID GREGORY: What is your single priority of the second term? What is the equivalent to healthcare?
PRESIDENT OBAMA: Well, there are a couple of things that we need to get done. I've said that fixing our broken immigration system is a top priority. I will introduce legislation in the first year to get that done. …
The second thing that we've got to do is to stabilize the economy and make sure it's growing. Part of that is deficit reduction. Part of it is also making sure that we're investing, for example, in rebuilding our infrastructure, which is broken. …
Number three. We've got a huge opportunity around energy. We are producing more energy and America can become an energy exporter. How do we do that in a way that also deals with some of the environmental challenges that we have at the same time?
(End videotape)
DAVID GREGORY:
So to both of you, Mr. Bowles first, what would you specifically call on the president to do on Medicare that he's been unwilling to do heretofore?
ERSKINE BOWLES:
Well, first of all, David, if you look at the combination of what was done in the Budget Control Act, the cuts there, and in this cliff deal, it's about half of what we need to do in order to fix our debt problem. So we've got about $1.6 trillion worth of spending we've got to do and we've got about $600 billion worth of revenue we've got to get from broadening the base and simplifying the code and wiping out this back door spending in the tax code. What would I do on healthcare?
(OVERTALK)
DAVID GREGORY:
On Medicare?
ERSKINE BOWLES:
--going to have to reduce healthcare spending on Medicare by about $500 to $600 billion over the next 10 years. You're going to have to do it in some of the ways that Mitch McConnell talked about. You're going to have to look at some kind of cost sharing. Some kind of means testing. You're going to have to look at age. You're going to have to look at lowering the price we pay the drug companies for the drugs.
You're going to have to look at paying for quality instead of quantity. You're going to have to have some kind of tort reform. And we've got to do something about this whole end of life scenario without talking about death panels. We think these kinds of things we could bring down the cost of healthcare.
DAVID GREGORY:
Senator Simpson, tactics and strategy are part of this. To achieve goals. You heard Leader McConnell. He's not ruling out a government shut down. He wouldn't do that in the interview. He also didn't back away from a comment he made in 2011 which is using the debt ceiling, holding it ransom, even though our credit rating suffered as a result, to force spending cuts. What do you think of those strategies or those tactics?
FMR. SEN. ALAN SIMPSON:
Well, I'll tell you what I think. I've been on a lot of commissions and a lot of them worked. I was on the Iraq study group. I did other things. The issue is what happened in the past, that doesn't matter a whit. Or who said what. It's what the hell do you do now.
And right now I can't imagine a worse place for Mitch McConnell. He apparently can't deal with Reid and that's a sad thing. I know them both. But let me tell you, when I was in the U.S. Senate the work was done between Howard Baker and Robert Byrd and Bob Dole and George Mitchell and Tom Daschle.
And now, apparently, poor Mitch is caught in a situation he has to go to the vice president, who's a good egg. I've known Joe for 40 years. Think of that. You can't do the work of the Senate because the leaders won't work together. They don't like each other.
DAVID GREGORY:
So Senator--
(OVERTALK)
DAVID GREGORY:
--said.
FMR. SEN. ALAN SIMPSON:
--forget who said what.
DAVID GREGORY:
Okay. So what breaks this impasse? I mean you're looking at the next two years. The president's talking about immigration and gun control and energy and all the rest, but he's locked in trench warfare with the Republicans over the budget.
FMR. SEN. ALAN SIMPSON:
Look, that's going to happen. It is happening. But if the American people can't understand. I love it. They say, "Well, the polls showed you should tax the rich." Well, great, I'm ready for that. But they also said, 75% of them have said, "Cut spending." Now if anybody can't get that, and if you can't cut-- forget the word cut. You stabilize. You do something with healthcare.
You stabilize Social Security. For god's sake, there were 16 people paying into that and one taking out when I was a freshman at the University of Wyoming. Now there are three people paying into that baby and one taking out and the life expectancy is 78.1 instead of 60. What the hell? Who's kidding who.
DAVID GREGORY:
All right. Senator Alan Simpson and Erskine Bowles. Simpson Bowles. Thank you both very much this morning.
