Will the president offer specific spending cuts regarding sequester?

>>> the all-new cadillac ats.

>>> we've also seen the effects that political dysfunction can have on our economic progress. the drawn-out process for resolving the fiscal cliff hurt consumer confidence . the threat of massive automatic cuts have already started to affect business decisions. so we've been reminded that while it's critical for us to cut wasteful spending, we can't just cut our way to prosperity.

>> that's ridiculous. welcome back to " morning joe ."

>> you weren't talking about the president.

>> no. of course not.

>> the picture in the "new york post."

>> tom brokaw looked at it, and he was very --

>> jon meacham is with us. with us at the table, the director of the earth institute at columbia university , economist dr. jeffrey sachs and nbc news' tom brokaw . like simon & garfunkel getting back together in the park. you and jane pauley .

>> this is going to be huge. she's coming on today.

>> i know she is. i dialed back and realized how long we had known each other.

>> how'd that go?

>> you can never look back, as don henley said. don't count the years. not good for any of us.

>> in the fall of 1976 , we were joined on the "today" show. i had covered watergate for three years and now the "today" show so i interviewed miss america like she had stolen the tierra. what did miss america know.

>> how much things haven't changed.

>> and jane came in from chicago and there was chaos at the top of nbc in those days. there had been a lot of turmoil in the executive ranks. i later said about the two of us, we were sent out in a life raft floating through the morning hours trying to find our way, and we did eventually.

>> you certainly did. incredible. a new government report, dr. sachs, is out predicting that the deficit is going to drop from $1 trillion for the first time since obama's presidency. the cbs which assumes federal spending cuts are going to be going into effect march 1st says the government's going to run a deficit of $845 trillion. let's get the confetti out. the cbo also says that in the next seven years, jeffrey , we're going to be spending more money on servicing interest on our debt than we are on national defense . and that's a lot of money. and that's assuming interest rates don't go up to their historic average.

>> yesterday's report was not good news. people should actually take a look at it. it's online. congressional budget office . it basically showed that we cannot afford the deal that we made two months ago when we made permanent all of those tax cuts . now what the report shows is okay. well, that added about $4.6 trillion cumulatively over the next ten years in debt. the debt service is going to be enormous. it's crowding out everything. like you say, it will be at an all-time high -- or nearly an all-time high, more than 3% of national income pay just to service the public debt by the end of the decade.

>> right. you talk about crowding out.

>> by the way, more than not only defense but more than all of the civilian programs of our government.

>> everything.

>> yeah.

>> except, of course, medicare and medicaid .

>> exactly.

>> and speaking of crowding out, jeffrey , people say oh, we don't have a debt problem, which is just shocking to me. and now some of obama's, i think, most desperate supporters are saying oh, the deficit problems over the deficit's going down. this year alone, medicare , medicaid, social security and interest on the debt consumes every dollar that washington takes in. this is such a crisis, and it's growing.

>> well, this whole idea that don't worry about the debt, you had a little tangle with the krugman a couple of weeks ago. this exposes how wrong the view is. don't worry about the debt because the debt has built to a large number what the congressional budget office is showing is that we're going to be paying a lot of money on that debt, and it's going to crowd out vital public services . and that's why we had to worry about the debt all along. and we didn't. now it's built up. now we're facing reality. i thought it was a little odd. the president said, well, we have to do something, but he didn't offer anything to do because the main part he played was two months ago, he said, let's make the tax cuts permanent, both sides, and now we see, well, you can't afford that.

>> you talk about paul krugman --

>> that's what they ended up.

>> it's fascinating, paul krugman and some other people kept coming back saying oh, don't worry about medicare until medicare collapses. and that's what was said. we don't have to worry about that, and we don't have to worry about the deficits. i think you can do two things at once. i say it every day. we can invest in education, r&d, we can invest in infrastructure. we can grow this economy in the short term, but we can take care of the long-term debt by focusing on health care costs over a generation, by cutting defense spending , but tax reform , by doing all of these things. it should be simple to do. washington seems incapable of doing it. and these debt deniers, i'm curious if you agree with mika and richard haass and steve rattner that these debt deniers have their head in the sand as much as climate change deniers do.

>> i think the whole political class refuse to look forward. and the cbo takes a ten-year view, and that ten-year view is pretty ugly. that's the problem. and yet the politics and this kind of short-term stimulus and let's look one year, let's look two years, let's not worry about the buildup of these problems, finally shows up when you see a report like yesterday which shows what does it mean over a ten-year period of time? debt doesn't kill you the first day. it's how it builds up. but you have to look at how it builds up. and now it's really building up.

>> and deficits don't kill you, mika, the first day, the first year, the second year. as jeffrey and i were saying, back in january of 2009 , it's not the deficits that kill you. it's wasting the money which they wasted during the stimulus, as jeffrey and i said, that kills you. we can afford short-term deficits if we get something in return over the long run.

>> so tom, what's the solution? we argue that the president hasn't put any details forward. the white house would come back and say in 2012 he offered $4 trillion in cuts. during the deficit negotiations, he offered $900 billion in spending cuts. but then when you pick through what the cuts are, is that the problem?

>> which ones?

>> i've got a list here.

>> never specific. he's never specific. never specific.

>> there are specifics. it seems to me as long as one side is putting out what the cuts are, the other side's not going to agree with them because it's politically dangerous. don't they have to go in and do it together? but i think accusing the white house of not offering cuts or even accusing the other side of not offering cuts is not necessarily fair. because they have been specific.

>> no, they haven't.

>> i think --

>> i hate to interrupt you. they have not been specific.

>> i think a big part of the problem -- i don't want to get in the middle of this whole thing.

>> you can get right in the middle of it. we're fine.

>> this reminds me on a couple of different levels of what it was like in the summer before 9/11. the intelligence in america knew that there was a terrorist attack coming. we had had attacks on our embassies in tanzania and kenya, attacks on the " uss cole ." and yet we insisted on ignoring them. george tenet was the cia head at the time. he said, my hair is on fire in july of that year. i went down to see the fbi about something else. they said, you ought to take a look at terrorism. we just blithely kept going and then it blew up in our face. this is an opportunity, it seems to me, to take the immigration example of people in the house and in the senate to cross party lines and say, let's begin by doing something about medicare . we know -- we all know we have to do something about that. let's begin by doing something about tax reform . they have moved on immigration, which is an encouraging sign, but it's less than the sum of the parts at this moment in terms of how they want to take a kind of whole approach to what we're going to have to do. and there's going to have to be some people from the ground up in the house and the senate who are going to seize this and say, i don't want this on my record. i'm serving in congress. i'm serving in the senate. and when i go out of here, historians are going to look back and say that we completely failed our responsibility. shifted the burden to the young people . and then went home. i mean, congress has not improved its standing with the american people in the last couple of months. it was not a kumbaya moment when we had the inauguration in which people came together and said now we're going to solve things. they went back to their entrenched positions, and that's where they're stuck.

>> you say everybody needs to do something on medicare , on health care costs. there are debt deniers out there. we've had one on our show, and he's got scores of people -- oh, there's no problem with the debt. in fact, the deficit, it's going down, so don't worry, be happy. these are climate change deniers.

>> joe, but we haven't even begun to talk about the other issue that is tertiary out there which is that municipal and state levels and the pension funds that are underfunded and can't be fully realized. those are in play here as well. so it's not just at the federal level . and if we ever needed an objective lesson on the high costs of debt and overreaching, look what we've been through in the last nine years. just ask an individual homeowner who was told you can afford that house. fine se sign here. you take that to the federal level . that's what we're dealing with. the country is under water. that's the phrase we use in mortgages, and we're not dealing with it here.

>> all right. so dr. sachs, if leading republicans took the president up on his offer and showed up on his doorstep right now, which is what he has said, and they tried to agree on spending cuts, what do you think would happen?

>> i don't think they're going to. and i think we're going to go to a sequester. which is what was agreed before.

>> what do you think?

>> i think that's the next step. it's more or less set. very hard to see any deals being made right now. the fact that the president wouldn't come forward with one specific yesterday signifies he's not taking any political risk at all. if he's not taking any political risk , no one else is going to take a political risk . we're just to auto drive at this point.

>> why isn't the president giving any specific spending cuts here? why hasn't he given any specific spending cuts? he'll throw out like oh, you know, i want to reform entitlements. will $4 trillion here or there, but there are never any specific cuts attached. why not?

>> you know my view. that's the job of the president, in my view, is to put down specifics. it could be specifics on spending and taxes. i'm not saying it's all one or the other. but it should be specifics. if the president just says we shouldn't have happen what we agreed will happen next month so somebody should do something, our system can't function that way. unless the president lays out an alternative path, we don't get to an alternative path. and i don't think he's going to, and i don't think the congress is going to agree on anything. so we won't have these cuts. these cuts will not -- they won't kill us, but they're just more evidence of us heading in the wrong direction.

>> hey, jon meacham , it's somebody's birthday today.

>> it is.

>> ronald reagan .

>> ronald reagan .

>> who had to make a very tough deal with dan rostenkowski and tip o'neill, two guys that did not like each other politically but figured out how to get along personally. that seems like such a quaint notion.

>> it does.

>> social security was going under, and a conservative republican and liberal democrats got together and fixed it.

>> and in 1986 in the second term, which is supposed to be so troubled, got a big tax reform act . going through what was called gucci gulch. so the emergence of lobbyists, the emergence of great financial problems is not particularly new. and they were able to cut this deal without mythologizing too much the mafia of that period. it is true, as mrs. reagan will remind you, that o'neill is the first person they had to the white house , to the family quarters. and they were -- there was more of a sense that they had to cut a deal without, again, not kumbaya, to use tom's image, it wasn't that. when things really mattered and you had to cooperate, they were able to get these two deals.

>> tom?

>> chris matthews likes to talk about what it was like when he worked for tip o'neill on the hill, the speaker. he said once a week in the back room, jim baker would be sitting back there. he was the chief of staff for ronald reagan . he would slip up to the hill and say, mr. speaker, here's where we're thinking about going. what's your reaction to that? and they'd have constantly opening lines of communication between the white house and the hill and what was possible, what needs to be done. jon and i both have read reagan 's diaries, for example, which are a remarkable political document, in my judgment, don't you think?

>> absolutely.

>> you really get an insight into what he was thinking. after i think the tax reform deal, jack kemp came screaming down to the white house saying this is the worst idea you've ever had. they had an argument for about an hour. then the president wrote in his diary, congressman kemp doesn't get it. what he needs to understand is that we had to give a little so that we could get something out of all this. and you see the play of negotiation that was going on, eyeball to eyeball. and president reagan was not always involved, but he had an a-team on his staff in congressional relations and jim baker and the other people who were in the middle of all of it.

>> there's no doubt, another, by the way, great man who has a birthday.

>> celebrating his birthday.

>> happy birthday , tom, right? i called you out.

>> same day as president reagan .

>> happy birthday .

>> my grandfather and i have the same birthday and then i grew up to discover i have the same birthday as ronald reagan . we had some memorable moments. i'd be down at the white house for a briefing on the state of the union , for example, at lunch on this day. and no one at the table would know until the president would come in and put his arm around me and say, " happy birthday ." i had a note yesterday from mrs. reagan . we always exchanged some kind of a communication. i hope to talk to her later today as well.

>> speaking of ronald reagan , though, can you imagine what ronald reagan , a guy who we've all grown up thinking was the conservatives' conservative. i'm sure jeffrey sachss would agree with that, very conservative guy. can you imagine what ronald reagan would be called by some republicans?

>> a rino.

>> republican in name only.

>> liberal.

>> there's something else, joe, that i think is important about ronald reagan 's ramp-up to the presidency. i was there when he got elected governor of california . the first campaign i covered when i joined nbc was ronald reagan 's run for the nomination. he had not yet gotten the nomination in the spring of 1966 . then he arrives in sacramento with a very hard right kind of agenda. we're going to turn this state around in a different direction. and he encounters the state legislature which is run by brilliant politician of the speaker assembly in those days who had been a great senator, by the way, and willie brown and bob moretti and mosconi. at the end of three months, he said this guy is a lot smarter than we realized, and you can work with him. they would go in and close the door and they'd make the deals at the state level. that went on for two terms.

>> by the way, that was the union negotiator coming out in reagan , and reagan always said, it was a lot harder dealing with jack warner than it was gorbachev. and he was serious.

>> of course he was. but the point is, california was the equivalent of the sixth largest nation in the world. i mean, it was not just some small town state legislature . this was a huge economy, a big- state budget , a university system . they had to do something about the mental health institutions, for example, in the state. and it was exploding in terms of population. so by the time he got to washington , he had really been through a trial by fire , and he was ready for what he knew he had to do on behalf of the country. he had also -- people ought to remember this -- he had been through a really tough campaign. george bush 41 beat him in iowa in the opening of the primaries.

>> in '80.

>> in '80. he was prepared in a way for what he arrived at. and i think it's worth remembering.

>> so let's take a trip down memory lane .

>> oh, i like that.

>> i love doing this. here's a clip of tom brokaw in 1967 .

>> what?

>> yeah. watch this.

>> interviewing dwight eisenhower during eisenhower's visit to see then-governor and presidential candidate ronald reagan . wow!

>> almost four years ago now you encouraged all republicans who thought that they might be candidates for president to get into the race. do you still stand by that feeling?

>> i like that case. as a matter of fact, that's the reason i like the favorite son theory. because you bring a lot of people in and let all the delegates a chance to look at them, think about it and say, who do we want? i'm very much for the favorite son.

>> reporter: at the same time, sir, three years ago you would not endorse any candidate until after the nomination at the convention.

>> well, that's true because i'm a republican, i'm going to support any republican, i hope.

>> oh, my gosh. tom.

>> i was 26 years old.

>> reagan was looking at you like, who is this guy?

>> i knew -- reagan was not a presidential candidate at that point, but there was a stealth underground campaign being built for him by the kitchen cabinet . and what's interesting about this is that nixon was already moving around. we knew that he was probably going to run. and ike didn't reach out and say anything about richard nixon . reagan had gone down to palm springs to visit ike to getting a laying out of the hands of the new governor of california . if you see reagan off to the side there, he was 56 years old. dashing looking. looked every inch the role of a governor. and ike died not too long after that, actually. but it was a memorable occasion for me.

>> wow, i bet. that was really cool.

>> '66 is such a great year because you have reagan wins the governorship. george bush sr . wins the house seat. nixon's running around building up those chips for '68. it all kind of grew out of that year.

>> it really did. it's so interesting, those two republicans both gained a lot by being underestimated. you said reagan was underestimated. ike , we heard for years, you know, my mom. i mean, my family, they were all fdr democrats. and whenever i grew up and asked her about ike , oh, he wasn't that smart. he just went around playing golf and he was owned by corporate ceos. and he played that to his advantage.

>> i don't want to get too far down into the political history weeds here, but --

>> i think that's too late, tom.

>> oh, we're here.

>> something else worth remembering. pat brown got beat by reagan . he built the california water system , he built the university system . he really made the modern state of california , but it cost the middle class a lot of money, and they turned against that when reagan ran. reagan exploited that. now who's the governor of california ?

>> you got it.

>> jerry brown . third term. and what is he doing? he's saying the legacy of my father was important to the state. we're going to rebuild the state university system . we're going to bring it back because it's the great engine that drives growth here in california . he got a tax increase through this last election.

>> he's doing it.

>> they're balancing their budget. it's a state that we ought to keep our eye on, frankly, in terms of what they're getting done out there.

>> continuing with cool, up next, former host of "today" and emmy award -winning journalist jane pauley joins us to discuss the unprecedented influence of baby boomers and how they're changing the face of aging. you're watching " morning joe " brewed by starbucks.