The Last Word | February 26, 2013
>>> tonight, washington prepares us. how can nothing be the biggest news of the day?
>> so what happens if this sequester kicks in.
>> sequestration equals unemployment.
>> fear not, congress is back to wor work.
>> i don't sense a lot of urgency.
>> we have moved the bill in the house twice. we should not have to move a third bill before the senate gets off their ass, before the senate gets off their ass.
>> in the quote of the day .
>> the republican leadership says what would pass bills next year.
>> we should not have to move a third bill.
>> there is no house bill.
>> that was a different congress.
>> with this congress.
>> get the job done.
>> this is a chance to do the big bill .
>> this is the mixed message we see from republicans .
>> the president gets more money, he will just spend it. he has gotten his tax hikes.
>> so the republican party is probably in worse shape, out of touch than they were on election day .
>> out of touch with the american people .
>> they have a brand problem.
>> chris christie not excited to cpac.
>> the cpac convention is increasingly the bar convention, all that is missing is a couple of wookies.
>>> excuse us?
>> so what happens if this sequester kicks in.
>> fewer fbi agents , shortages that could jack up prices.
>>> i just want to state first as a matter of policy, there is nothing wrong with wookies, we love them. the big story today in washington is that nothing is happening, nothing at all. and that may not seem like a big story , right? a nothing happening. how could that be a big deal ? but if you have been through a lot of these budget showdowns, and i've been through a couple of them now, usually 24 hours or three days or a week before something really bad is going to happen, something is happening. this is the fifth budget showdown between president obama and congressional republicans since 2011 . and they usually all look the same right now. in these final days, yeah there is posturing. it doesn't stop. but the real focus, the real activity move to frenzied, almost around the clock negotiations. but not this time, there are no negotiations happening. not at all, actually. everybody is talking, in fact, talking a lot. just not to each other. today, president obama flew to virginia, where he said this.
>> all we were asking is to consider the tax loopholes and the deductions that the speaker of the house , john boehner said he is willing to do just a few months ago. he said there were loopholes and deductions you could close. said you could raise $800 billion or trillion by closing loopholes, i don't think that is too much to ask. i don't think that is partisan, the majority of american people agree with me. the majority of new port news agrees with me. we need to get this done.
>> speaker boehner , your turn.
>> to be clear, no revenue increases. we're not -- the president got his tax hikes in january. federal government will have more revenue this year than any year in our history. it is time to tackle spending. period.
>> okay, we need to stop here for a minute. speaker boehner is playing real loose with those numbers. what he said, if you listen, what he said is narrowly true. because we have inflation in this country, most countries and economic growth. and that means any revenue number today will be bigger than any other revenue number a decade ago or two decades ago, even if taxes were much higher. so we don't usually measure taxes like that because it doesn't tell us anything. we measure them as part of the entire economy because they can tell us something. and the revenue is definitely not at record highs. here is a graph, the final number is what the congressional budget office expects the number to be this year as the economy, 16.9%, yeah, not the highest ever. that was about 20 in 2000 . anyway, because speaker boehner wouldn't agree to raise revenue washington is doing nothing to stop the sequester, a sequester that is really unpopular. according to a newly released msnbc wall street journal poll, 21% of the americans think the cuts are a good idea. i would like to meet them and ask why. and 52% say they are a bad idea. so we're doing nothing, nothing at all about the bad idea. instead, speaker boehner is saying this.
>> we have moved the bill in the house twice. we should not have to move a third bill before the senate gets off their ass and begins to do something.
>> i don't think we all need to run to the fainting couch every time a legislator says a bad word , but that is not exactly the kind of approach that leads to a productive approach in the senate . meanwhile, the senate is planning to vote on a bill this week.
>> i think he should understand who is sitting on their posterior, we're doing our best here to pass something. our bill would reduce the deficit by having some smart spending cuts, with filling some of the tax loopholes that certainly should be filled. we're going to vote on this proposal this week. and we'll get a majority of the senate to vote for that.
>> look, that is the kind of bill the president wants. it is the kind of bill he campaigned on. he won on, it is also the kind of bill that speaker boehner has explicitly rejected. the senate democrats will accept whatever the white house signs off on. and if senate republicans will agree to any deal that boehner blesses, the house separately passes bills the other doesn't like, bills that go nowhere, well, get us nowhere. but speaker boehner refuses to negotiate, this is literally his announced policy right now. he wouldn't talk to the white house . the way he sees it to jump start negotiations with obama , he would be slammed for engaging in out of sight secret talks with the president who the party doesn't trust. he will endanger his very speakership, both are simply nonstarters. this is a nonstarter to negotiate and a nonstarter to compromise. so what is left? well, the sequester is left. joining me is howard fineman , and my colleague. thank you for joining us tonight.
>> great to be here.
>> howard, if you're not going to talk, if you're not going to negotiate with the white house , what do we do? how do you get out of it?
>> what you do is talk to the rest of the country, which is what is happening right now. i was over at the white house today. it is crickets, as you would describe. there is nothing going on. and we're sort of in a situation where everybody is in the canoe which is about to go over the water fall and nobody is paddling. what are they doing to start negotiations? nothing from either side, from what i can tell. and everybody is now moving to the next phase, which is the sequester goes into effect on friday. we see what happens, world saved, world doomed. you know, how dramatic it will be, probably not so immediately dramatic in most cases. but the picture will build over the days and weeks, especially as the effect of the sequester becomes plain in the military. in terms of civilian layoffs in the pentagon, and in terms of readiness around tell world, including in the persian gulf .
>> the thing that i think we miss when we look at the sequester on its own is at the end of the month we have a fight over how to fund the government. at the end of march, march 27th , i believe, something called the continuing resolution . if we don't pass one the government shuts down. i don't understand how we'll continue to pass the resolution if we haven't even figured out the sequester beforehand. it seems as though the shutdown will be likely.
>> that is what the republicans are betting on. there is sort of this gaming narrative on what it will be, obama actually thinking the world will end in some ways and people will then move and buckle. republicans thinking that after this happens obama will start to get the blame and he will buckle. but there also is the sense that it is the continuing resolution that everything will get done then. but again, how does it happen when you have these sides that are so wide apart in terms of what they want to happen? republicans are refusing on tax hikes and obama not wanting to see some of the drastic cuts and insisting on tax hikes.
>> and one thing that was fascinating that obama did today, howard, the senate republicans talked about giving him the ability, the power, to move the sequester cuts around, the ability to get a portion. i want you to hear what he said, because i think it is big news.
>> lately some people have said well, maybe we'll just give the president some flexibility, he can make the cuts the way he wants and that way it won't be as damaging. you know, the problem is when you're cutting $85 billion in seven months, which represents over a 10% cut in the defense budget , in seven months, there is no smart way to do that. and the broader point is, virginia, we can't just cut our way to prosperity.
>> so why don't they want that authority?
>> well, they don't want that authority for the reason the president said, not just in terms of defense but in terms of domestic spending where there are also very deep cuts . and the way one white house official put it to me, he said that is great. they're going to give us the -- the power --
>> might give them that, too.
>> they're going to give us the power to decide whichf. do you cut head start or early childhood education , and then feeding programs and so forth? so they see it as a political trap. but i also agree with you, ezra, that even if somehow they're forced to the table by the sequester, which is questionable, there are these other trip wires that are coming. and i don't see why anybody should assume that suddenly the democrats and republicans and the president and john boehner are going to say you know what? forget all about that. let's just sit down now. you have got the continuing resolution at the end of the month. and i hate to say it but there is a debt ceiling thing coming up in the summer, as well. and the way the white house puts it, they think the sequester is the least dramatic of the impacts. that the shutting of the -- continuing resolution , which could shut down the government altogether is terrible and the debt ceiling is america's credit in the world.
>> right, but i think that is actually a huge question, because one reason i think things that may come down to a government shutdown , the continuing resolution , is you can't get a resolution off the sequester itself. and they are scared of moving it to another debt ceiling, to have it in this middle ground , bad enough to force us to do something. not bad enough to crash a global economy may end up looking perversely attractive.
>> right, it may be the best of terrible options. i think one of the things about this crisis, it is uncharted territory . you talk to republicans who lay out a scenario. and then you push them hard enough, they have no idea what they really want to see happen going forward.
>> i think actually i would put it in just the opposite terms. it is all too charted territory, by which i mean everybody is so locked into the positions that they're in, politically, john boehner can't afford to give up on revenues. the president doesn't want to concede too much ground on entitlements. and he is right, he has put forward a balanced program, they're not buying it.
>> thank you guys for being here tonight. i feel like we'll talk about this a lot.
>>> thank you, ezra.
>>> so where does this latest -- not really a crisis but kind of a crisis