Martin Bashir | February 06, 2013
>>> the clock is now ticking on what many economists say is a near-certain double dip recession if more than a trillion dollars in automatic spending and defense cuts are allowed to occur at the beginning of next month. and while the president is busy running the government, today nominating a new candidate for the interior department . and yesterday pleading for action to prevent the so-called sequester, republicans have been out front telling anyone who will listen that they, too, are absolutely opposed to any cuts to military and discretionary spending .
>> i don't like the sequester. i think it's taking a meat ax to our government. a meat ax to many programs, and it will weaken our national defense .
>> however, just to be clear, speaker boehner says that he will not allow any new revenues to prevent the ax from falling. and he's not alone. congressman tom cole of oklahoma says we just had additional revenue for the federal government , so i don't see any way in the world the sequester won't happen. not to be outdone, tom rooney of florida says it seems that a large portion of our conference is resigned to the fact that sequestration is okay. what? our conference is resigned to the fact that sequestration is okay? it's not. it's dangerous. it's a huge mistake. a threat to our liberty. a threat to our liberty? not every republican is willing to show mr. rooney's candor. but if and when the sequester does happen, remember, it's all the president's fault.
>> many of your colleagues are saying okay. then there's no deal. let those cut gos through.
>> right. sequester is here. it's up to the president to come forward with serious cantor, the president has presented a serious plan. not the one you want, but it's the only one until you party decides whether it's for or against the sequester.
>> i believe that they should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months until congress finds a way to replace these cuts with a smarter solution.
>> and cue the hapless speaker boehner and his kick the can routine.
>> washington has to deal with its spending problem. i've watched them kick this can down the road for the 22 years i've been here. i've had enough of it. it's time to act.
>> yes, sir. let's get to our panel now. dana milbank for the washington post and senior fellow at the center on budget and priorities. good day to you both. jared , let's talk about this report that came out tuesday which says that if these trillion-dollar sequester cuts occur, then they'll cut gdp growth in half.
>> tell me this, jared . why are republicans so nonplus about this. and why not look at spain or italy or britain for the evidence? where economists are now predicting a triple-dip recession. all because they applied the paul ryan budget in those countries. that's what they did.
>> well, the word you used there, evidence, is anatima to these folks. if you looked around, you would conclude the best way to take a fragile recovery and turn it into a recession is to whack away at government spending . the private sector is still climbing back. and therefore, we need a robust government sector to compliment that. and that's what the cbo -- it's one of the things the cbo said yesterday. what they said was absent the sequestration which by the way is 85 billion in 2013 . not to mention other things congress has done. including taking the payroll tax cut out of the economy. that's over a hundred billion right there. cutting the gdp growth in half. it would be closer to 3%. instead, it's closer to 1.5%. if gdp is growing at 1.5%, the unemployment rate won't go down. it will slowly tick up.
>> indeed it will. dana , no gdp report is all good or all bad. in this report, there are good points. for instance, deficits are decreasing. however, all i ever hear from republicans is the president needs to get serious. from speaker john boehner . that's the best impersonation i can give you.
>> it's not bad.
>> wasn't very good, nothing personal.
>> but dana , is that it?
>> well, that was a little raspy, your john boehner . but i think you've captured the sentiment, more or less correctly. and yes, the cbo report shows that the deficit is shrinking. but it is also showing the efforts to shrink the deficit have taken away from growth and the economy. you can't have one of these things without the other. now, i think there's a fallacy in the first question you posed to jared . that is that republicans would be very upset if there were a double-dip recession in a political sense as rush limbaugh and others have stated, they may be in a stronger position if the economy goes back into recession. then the president and his majority party will be less powerful. so they actually have a political incentive.
>> hang on a second, dana . you're saying something that's troublingly close to the idea that they spent the first four years undermining this president and obstructing him in the hope that the economy wouldn't work for him at the election. now you're implying they're happy to destroy the economy for his second term. that is exactly what i'm saying. so you're saying that republican politicians are happy to tank the economy, push us into a recession for the benefit of their own political purposes.
>> i don't know if i'd say they're happy to, martin. their constituents are going to suffer as well. but when you dom one of these deadlines like we're going to have at the end of the month, they have a little bit less of an incentive to blink here. that may have the rosy effect of bringing down the numbers for the president and the democrats.
>> jared ?
>> here's the thing. i don't think the economy is going to go into recession if we have the sequester. if what's going on here is a level of growth is positive but too slow to bring the unemployment rate down, to give people the kind of jobs and earnings opportunities they need. the problem with the economy is we have been stuck in this slog for way too long.
>> and i'm of the mind set that if we actually leave the economy alone, i'd love to see infrastructure investment, for example. that's not going to happen. if we just stop self-inflicting wounds, i think there's enough underlying fundamental recovery that slowly, too slowly in any estimation, but slowly we would get better. this is not -- let me say. this is not the difference between recession and no recession. it's the difference between actual growth we could benefit from and continued slog.
>> but, jared , here's the problem. we talk about cuts to the military. but these cuts could hit localities hard.
>> philadelphia has warned of the possibility of fewer police officers on the streets. then of course the disaster that awaits the poor. does it really make sense for republicans , jared , to stand for protecting tax breaks for oil companies while slashing education training and the number of police officers in philadelphia?
>> not only does it not make sense to republicans , but republicans seem to be starting to see into it that it's not the greatest idea at least to run on this idea will take the economy. now they're stuck between the budget that does exactly that and a public face that says don't worry, be happy. hard to have a public face that says don't worry, be happy when your budget is all about getting rid of programs for the disadvantaged.
>> this is the thing, dana . these are not theoretical concepts anymore. this is real. jim miklaszewski says because of the sequester, the u.s. navy has cut its patrolling the persian gulf . the persian gulf , i wonder how they feel about sequestration in iran.
>> this is a very real thing. we had eric cantor yesterday giving a speech. he gave one line to the whole question of the fiscal situation. he says but we need to be about more than that. we have to be the happy party that talks about immigration, health care , job growth . all these other things. but then he's right back there talking about the sequester. and the party is unable to escape from that issue. if you can sigh what this is doing tho the united states military , you can infer it's going to be worse if the republicans with their budget were able to get their way.
>> yeah. jared , to that point, you know, the mythical paul ryan budget aside for the moment. that in 35 months, this nation has created six million jobs. the house price . it remains a fragile economy. you said earlier in this interview that you don't think that these sequesters will provoke a double-dip recession. but this isn't going to help where we are now, is it?
>> right. that's exactly my point. i mean, what we're talking about here -- if you think of the economy as sort of a bicycle, what you want to see is it moving enough so it's not wobbly. if you're growing at 2.5% to 3% which by the way cbo said yesterday growth could be 3%. but for all of this fiscal restrax we've been talking about now you're talking about 1.5%. that's a wobbly bicycle. yes, instead of building on some of the smengsed. job growth has done a little better than expected. instead of building on that kind of momentum, we're talking about yet another self-inflicted wound. i don't know how many times i've sat in the chair whether it's debt ceiling, sequester. we have got to stop inflicting wounds on this economy. it is political malpractice.
>> indeed, it is. jared bernstein and dana milbank , thank you so much.