GOP relies on public ignorance for deficit scare tactics

>> home for joining us this hour from washington , d.c. there is a ton going on here right now. there is a ton going on in politics in general right now, even in politics outside of washington , d.c. i want to start tonight by showing you something that just happened in alaska . one house of the state legislature there has just passed a law that threatens to arrest law enforcement officers if they try to enforce federal laws about guns in alaska . the law says that any guns or ammo possessed by alaskans are exempt from federal laws . so the state of alaska does not recognize the authority of the united states of america and will arrest that country's agents if they try to enforce that country's laws. that just passed in alaska in the republican-dominated house there, despite passionate arguments against it like this one from democratic state rep andy josephson. watch.

>> mr. speaker, we decided in 1955 to submit a state constitution . we joined the team. our star is on the flag. i see it there. we didn't have to do that. we demanded it. we implored our 48 sisters, because hawaii wasn't admitted yet, our 48 brothers and sisters , let us join this great team. and, you know, i care greatly about my state . but i'm very proud to be an american . very proud. and for the court to say an administration law is constitutional, it is. i think this is successionist talk. that's what i think it is.

>> successionist talk, democratic state rep andy josephson. that's the kind of existential politics alaskans are up to right now. also right now in arkansas today the democratic governor of alaska , mike beebe decided to ban an abortion ban that dominated both chambers in his state . lsd in indiana today, the senate there passed a new forced vaginal ultrasound bill. this had been the bill where they were going to force indiana women to have two vaginal ultrasounds at the order of the state government , but they pared it down to just one forced ultrasound and passed it today. it's part of a larger bill to try to force indiana abortion clinics to close all together, or to stop them from being able to provide abortion services. next door to indiana in illinois , we just had polls close an hour ago. in the first congressional election since the presidential, this is a heavily democratic district in illinois that used to be represented by jesse jackson jr . until he resigned. today in the primary to replace him, gun reform played a huge role in the race. we're going to have results and whatever explanation we have got about those results coming up on the show this hour. and as that illinois congressional election becomes sort of a test case for the democratic party 's newfound muscularity and confidence on the issue of gun policy, well, today in washington , vice president biden kept up his very high profile schedule on this issue. the vice president taking this meeting today with a group of really not the usual suspects on the gun issue. and also today, one key legislator announced a really important decision about what is going to happen now on the gun issue. we're going to be getting to that. alaska , don't wet your pants. something is going to happen on guns. try to hold it together.

>>> furthermore today in washington , the collapse of one of the weirdest d.c. republican tantrums in this era in which we have a lot of weird d.c. republican tantrums as president obama 's nominee for defense secretary finally got confirmed after a long weird delay that nobody understands. and we will have more ahead on the show this hour as well. and also today pennsylvania republicans trying to move ahead with the scheme to rig that state 's electoral votes . other states flirted with this and gave up in the face of broad criticism after the election, but pennsylvania republicans are pressing ahead. and in conceivably related news, pennsylvania 's deeply unpopular governor tom corbett apparently just got a new democratic challenger in the form of congresswoman allyson schwartz . and the united states supreme court is hearing a challenge to the voting rights act tomorrow. and republicans are threatening john brennan 's nomination to run the cia now as well. and 75 republican bold-faced names, including four former governors and a whole bunch of republicans who never said they were for gay rights before all just signed a brief to the supreme court telling the court to side with same-sex marriage rights. republicans . and chris christie just became the eighth republican governor previously wanted nothing to do with boom care. and there are talks with iran over its nuclear program that have just gotten under way today in kazakhstan. and, and, and, and, and. it's that kind of day. this is that kind of news cycle. there is that much going on. this is a ton going on right now in politics. but in this city you might never know it. because the thing that is happening here that is dominating everything else, that is all but eclipsing all those other significant things going on in the country which might need some attention, hey, alaska is kind of succeeding, the thing that d.c. is spending all its time on and that the entire federal government has been wrenched around into dealing with is none of the real crises or real fights or real opportunities for progress in american politics right now. with all of that going on what washington is smothered by right now is this, the freakin' sequester which congress and the white house agreed to which they almost unanimously agree would be a terrible thing to inflict on the country, and which they could just decide not to do simply by repealing it. but apparently they're not going to repeal it. the white house taking every opportunity now to spell out the harm that this thing is going to do to the country. they have put out fact sheets on the hundreds of thousands of jobs expected to be lost with workers in every state . the tsa is warning that air travel is going to become a nightmare. the president today at a shipyard in newport news talking about the devastating expected effect, particularly on areas that are heavily dependent on the military. the republican speaker of the house today for his part demanding that the senate fix it, that they get off their starts with a rhymes with bass and do something to stop this thing. because he is not going. to. looks like it's going to happen, even though this is a purely voluntary thing because why not inflict wanton damage on the country and throw millions of people out of work. why not? the animating principle, the animating fear or assertion or argument behind this roundhouse punch to our own face is supposedly the deficit, right? there is so much worry about the out-of-control spiraling deficit that we must punch ourselves in the face like this. these cuts won't really make a difference in the deficit. but by agreeing to lose this gym of chicken and go flying off this cliff, punching ourselves in the face all the way down, we will somehow show symbolic commitment or something to turn around our out-of-control deficit. that i guess is the idea. here i guess is the deficit. here is what it was when barack obama took office. in 2009 , in the midst of the worst economic free fall since the great depression. then here is the deficit in 2010 . and here it is for the next year, and here it is for last year. yep. and here is the track for this year. yeah, see how it's spiraling out of control? see how much it's growing? higher and higher all the time. yeah, no. actually, down is not up. night is not day, and the deficit is getting smaller. it's dropped by hundreds of billions of dollars during barack obama 's presidency. we are currently experiencing the fastest deficit reduction in several generations, and nobody knows it. we're in the midst of a major national crisis, self-imposed, brought on by fear and loathing and worry and outrage over the supposed state of the deficit, and 90% of the country is wrong about what the state of the deficit is. i'm not saying 90% as a made-up rounded hyperbolic number. that's the actual number. look. bloomberg news just polled on this. is it your sense this year that the deficit is getting bigger or getting smaller or staying about the same as last year? 62% of americans say the deficit is getting bigger. 28% of americans say the deficit is staying about the same. yeah, those 62 plus 28, that's 90% of the country that gives a wrong answer to that question. so how many americans know the right answer? a proportion of the american public who knows the correct answer, which is that the deficit is getting smaller is 6%. total. if we are supposedly so worried about this problem that we are willing to inflict pretty big economic pain on the country starting on friday in order to strike a symbolic pose of seriousness in addressing this awful problem, wouldn't you think that more than 6% of people in the country should be able to correctly identify what the problem is? joining us now is congresswoman marcy kaptur , democrat of ohio and jared bernstein, a former economic policy adviser to vice president joe biden . he is also a cnbc and msnbc contributor. thank you both so much for being here. i'm sorry i made you sit through the alaska gun rights thing.

>> it's fascinating.

>> there is a lot going on that we aren't working on because we're working on this problem that we created for ourselves. jared , let me start with you. how it is only 6% of americans understand what is true about the deficit right now?

>> i think it has to do a lot with all the noise that is trying to point there in the other direction. there are a lot of people in this town whose policy agenda, whose ideology really depends on everyone's hair being on fire about the budget deficit . because their ultimate goal is to cut government, to slash government, to get rid of social insurance . and if people actually are aware of the kind of numbers you just showed, the fact that the deficit has fallen by half as a share of gdp. they say we have a spending problem. i just looked at the numbers the other day. between 2009 and 2012 , spending was up 0.6%.

>> it's out of control, spiraling out of control.

>> it's a very idealogically motivated argument. again, if you're freaked out about the budget deficit , you want to slash, burn, sequester, cliff all the rest of it.

>> congresswoman kaptur, as somebody who is in the middle of this thing, first of all, do you agree that is what is driving the misperception of the underlying factors here? and secondly, do you think anything can be done to avert this problem before friday?

>> i think in terms of political strategy on the part of the republicans who are being so obstinate and uncompromising, they've managed to move the debate from jobs to sequester. i'm not sure all members of congress could define sequester. it means automatic cuts with no thought. the meat ax just falls wherever. but they've managed to shift to a different turf, and therefore we're not arguing about how do we create more jobs in this country? because with a 7.8 unemployment rate , you're not going to balance the budget. we have to cut that by half. jared tried so hard in his own career and service to the people of our country to do that. so they've shifted the debate. and we're on their turf. we need to be talking about economic growth and how what they're proposing is actually going to cause more unemployment. do you know that just in the defense area, and i'm the first democratic woman in history to serve on defense appropriations, if you can believe that, and it's 2013 , we will likely see over 734,000 civilian defense department employees furloughed with a 20% pay cut over the next 22 days. and --

>> that's immediate.

>> that's immediate.

>> three-quarters of a million people over the next few weeks.

>> that's right. they are going to cut become on gas purchases, purchases of clothing for their children, food. this goes directly to the bottom line of growth in this economy, and it's going to be a damper on that growth.

>> jared , from an economic perspective, the prescriptions that we have heard like congresswoman kaptur just explained and like the white house has been explaining about, what is going to happen if this goes through, that kind of rapid not paying too much attention to details contraction that we will see starting friday if this happens, would it have a significant negative impact?

>> not only would it, but it already. remember, the sequester is fiscal contraction on top of fiscal contraction. the expiration of the holiday payroll tax has taken $100 billion out of americans this year. i've looked at estimates of economists across the board, nonpartisans who argue that put it all together, add the sequester on top of it, and you're talking about growth that is about a percent and a half slower this year than it would be otherwise. let me read you a quick quote from somebody today up on capitol hill . "moreover, besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short-run." now that's not karl marx or chairman mao . that's ben bernanke . he is saying not only does slower growth hurt us in the way the congresswoman is mentioned, growth in jobs, it's counterproductive if your goal is truly deficit reduction.

>> so the deficit is getting smaller. we're setting our hair on fire about the deficit as if it's getting larger. and in order to show the seriousness of how on fire our hair is, we're going the make the deficit problem worse.

>> exactly.

>> woo-hoo!

>> and we're going to put a damper on growth. we're going to put more people out of work. and there will be more suffering where there needs to be recovery.

>> what do you see as the way out of this? in congress since the republicans won control of the house and were sworn in 2011 , we've had these repeated trips to the brink, whether it's the debt ceiling fights or the government shutdown fights and now this sequester fight. all of them coming to the 11th hour that weren't imposed from the country without, but were designed crises. how do we get out of it?

>> manufactured crises. well, we get out of it politically when people go to the polls in 2014 , we need a democratic house. but what has happened is that gerrymandering in a state like ohio has been so severe that a state that voted 50/50, half for president obama , half for governor romney actually is only sending 4 out of 16 members on the democratic side of the aisle. so it's 25%. we could have an additional four members just from ohio that would be more representative of how -- what our population actually is. but we don't have a representative house because of the gerrymandering that happened.

>> does the democratic party have a plan to fix that? i mean, the republicans are very overt and very proud of how they have been able to use redistricting, use gerrymandering to get more seats than they were due by the number of votes that they have. they brag about it. they say this is one of their great successes of the last election cycle. do the democrats have a plan to counter it?

>> well, i tell you, chairwoman debbie wasserman schultz has talked about this. she has talked about what we need to do to prepare for the future. and i know that those who are paying close attention are very aware of how unfairly representative the house currently is.

>> in terms of what is about to happen and what we are on the self-imposed precipice of, jared , how -- when you said that damage has already been done and that more damage is coming.

>> right.

>> how much of it is reversible? and what would be the best way to reverse it?

>> well, first of all, it would be great if policymakers would at least take a do no harm, a hippocratic oath . if i were pulling levers, i would implement job measures of the type the president introduced in the jobs act, the kind that congresswoman kaptur is constantly banging up there. i don't think that's very realistic right now. so my first argument could be to do no harm. just put these kinds of spending cuts off until the economy is firing on all cylinders again. now let me be precise. i'm not implying that this fiscal drag that we have talked about, sequester, the other cuts we've mentioned, it's going to throw the economy into a recession. but too often the discussion is we're in recession bad, or we're not in recession good. no. the fact that growth is already slow and it's going to be slower means that the unemployment rate is going to be stuck where it is. the congresswoman said we're talking about the loss of hundreds of thousands of jobs. when the gdp starts growing below 2%, which is what will happen if all this stuff goes through and sticks, we're not going to be growing fast enough to absorb new people coming into the job market , to provide opportunities for the currently unemployed. so it's this kind of persistent slog that just eats away at families' living standards.

>> it's not just stop digging. i really feel like in a way it's stop punching yourself in the face.

>> exactly.

>> it's self-inflict and wanton and makes no mathematical seasons.

>> marcy kaptur and jared bernstein, thank you both so much for being here.

>> thank you.

>>> republicans in the u.s. senate certainly proved a point by delaying chuck hagel 's confirmation as defense secretary . honestly, a point was proven. i don't think it was the point they thought they were making, but they proved it. we will try to explic the unexplicable.