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Lawmakers on Capitol Hill rushed through a package this week that averts tax increases for the majority of Americans. It also spares the Pentagon and other federal programs from severe spending cuts. We chat with local lawmakers about what the deal means for our region and what it means for future debates about federal spending and deficit reduction.
- Robert Goodlatte Member, U.S. House of Representatives (R-Va.)
- Jim Moran Member, U.S. House of Representatives (D-Va., 8th District)
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world.
MR. KOJO NNAMDILater in the broadcast, the saga of one of the Atlantic's most overlooked, but most essential fish. We'll learn why a showdown is brewing over the menhaden, a tiny fish that's considered a cornerstone of our eco-system. But first, behind the showdown that rang in the New Year on Capitol Hill. Lawmakers scrambled during the past few days to prevent tax increases on the vast majority of Americans. A package that cleared the House of the Representatives last night also spared the Pentagon and other federal programs from severe spending cuts.
MR. KOJO NNAMDIBut even for the members of Congress who voted for the deal it was a hold-your-nose kind of moment and many simply said no to the deal altogether. Joining us by phone right now is one such member. Jim Moran is a member of the U.S. House of Representatives. He's a Democrat from Virginia. Congressman Moran, Happy New Year. Thank you for joining us.
CONGRESSMAN JIM MORANWell, thank you, Kojo. It's always good to be on your show. I’m not sure how happy a New Year it's going to be, but go ahead.
NNAMDIMembers of Congress crashed up against deadlines throughout the holidays to get this bill passed. The House held its vote last night on a holiday, no less, but in the end you call this bill wholly inadequate and you voted against it. Why?
MORANI did. I think this was an utter mistake. For the short term it makes 98 percent of the people happy and so obviously politicians are going to want to do that. But the President played both of his points of leverage. And in return he got $3.9 trillion of revenue taken off the table permanently, but the Republicans didn't agree to any spending cuts being taken off the table and in fact, set up three more fiscal crises over the next three months, Kojo.
NNAMDIWhat do you see as the three fiscal crises over the next three months? Please tell our audience.
MORANThe sequester is only delayed for two months. So that comes up at the end of February. Then you've got the debt ceiling, which will come up at the same time. And then all of the appropriation bills expire on March 27. And in these three crises that we're going to have to face again, the only question will be what programs get cut and how deeply do we cut them? Because the Republicans made clear all of these revenue reductions are permanent. All of it is deficit financed. All of it adds to the debt. And so the situation that's been created is that we will never have more than 14 percent of GDP available for federal spending.
MORANThat's the lowest we've ever had in our lifetimes. We've never had a strong economy without an 18 to 20 percent federal investment level. And now it's only a question of time before the programs that are really the seed corn for the future in education and training and infrastructure, they will all die a death of a thousand cuts. I think we've set that situation up. And so I believe this to be a pyrrhic victory last night. And the consequences or even begun to be felt minutes after the vote when the Republicans refused to take up the money to pay for the Hurricane Sandy damage to repair the shoreline in New York and New Jersey.
MORANThey said there's no more money. There's no money to pay for it so we're not even bringing it to the floor. Now, some of these things may change, but I have to be pessimistic. If we remove the revenue that we need to fund the federal government it's going to not only damage the future, but also, from a parochial standpoint, 40 percent of our economy in the Washington area is directly attributable to the federal presence. So this is going to be very damaging the strength of our economy.
NNAMDIAnd we're going to get to that in a second. We're talking with Congressman Jim Moran. He's a Democrat from Virginia who voted no on the deal in Congress last night. We'll take your calls at 800-433-8850 if you have questions or comments for Congressman Moran. On the level of the revenues that were locked in last night, Congressman Moran, you said they were way to low. Where would you have wanted to see the revenue levels?
MORANThe Bush Tax Cuts were never paid for. I voted against both of them. And the Iraq War was never paid for, nor was the expansion of Medicare. And then, of course, we deregulated the derivatives and the secondary bond market. That's the reason why we have the deficit we did. When President Clinton left office we had a surplus projected. I think we have to undo those cuts. We have never paid a dime of any of those tax cuts. So I think there could have been some compromise. I would have accepted what the President wanted, $250,000. I wouldn't have raised the estate tax exemption up to 10 million and it's indexed.
MORANSo in a few years it'll be 20 million. Just for comparison, for example, Kojo, to raise the estate tax level for 6000 people from seven million to ten million, the lost revenue is equal to the amount of additional revenue you would gain by raising the retirement age for Medicare from 65 to 67. Those kinds of comparisons I don't think were available to the members. I mean they certainly weren't aware of them, but these are all tradeoffs. And I think by making sure that the revenue is inadequate the idiologs on the Republican side are going to be able to achieve their objective, which they refer to as starving the beast.
MORANThey're going to shrink the size of the government to the point where it plays a very diminished role in American life. And I mean we've got such a large share of our workforce that doesn't have the education skills to be competitive. We've got a $2 trillion deficit in our physical infrastructure. We've got projects at NIH that desperately need to be funded that we don't have the money for. So, you know, you can call me a liberal if you want. I believe in this country and I believe that the federal government has a constructive role to play, but it needs the resources to be able to play that role. And as a result of the vote last night, we will not have those resources in our lifetimes.
NNAMDIHad the President stuck to his earlier $250,000 for family limit, had he insisted on more revenues, had all of the Republicans who voted for it refuse to vote for it and had it not passed what you think would have been the consequence?
MORANOh, I think that the Republicans would have given in. I think that they might have been willing to tax unearned income at approximately the same amount as earned income. Now it's going to be taxed at 20 percent only if it's over $450,000 for a family. I think they would have given in on the estate tax and not raised it and indexed it and I think they would have given in on many of the deductions. The bill we passed last night has 83 separate provisions where we eliminate revenue sources.
MORANEighty-three provisions where we cut taxes. And some of them are a little scandalous, you know, for film industry and for sports cars and so on, but most of them are extremely expensive and I think a lot of them we really didn't need to do. And if the American public had been aware of them I don't think they would have been part of that package last night. There was a lot more we could have gained and unfortunately we've now given up the leverage that the President had.
NNAMDII was about to ask you about the leverage question. What leverage do you think your side has now that Republicans have helped to push through the smaller agreement on taxes to start the year? You seem to be suggesting that there is no leverage left. And a lot of progressives have expressed frustration with the White House's handling of the negotiations, feeling the President caved on too many issues. And they feel they see a pattern with his negotiating style. At one point, Paul Krugman calling President Obama the Conceder in Chief. How do you see it?
MORANWell, I don't want to be critical of the President. I support the President. I wouldn't want to be in his shoes. And if I were I certainly couldn't perform anywhere near as well as he did, but I'm under no misconceptions about that. I don't think the Democrats should have enabled this bill to pass on us. I mean it passed only because the vast majority of Democrats, all but 16 of us, voted for it. That's the only way that it passed. And I think we were looking at the short term rather than the long term implications. But the President says that he has the leverage. He's not going to discuss the debt ceiling, but good luck with that.
MORANThe Republicans don't care if we default on a debt, many of them. And then he says well, we have the leverage of threatening to cut the defense bill. I'm afraid he's going to get rolled on that because the Defense Department has activities in every congressional district in the country. And the Pentagon budget has bipartisan support. And so I just don't see kind of leverage being available as we go forward that he gave up last night.
NNAMDISpeaking of the Pentagon budget having bipartisan support, earlier today we had a conversation about what was at stake for federal workers in this region in this debate. What did you see at stake in the end both for the federal workforce in the region and for the economic reality of your district in Northern Virginia?
MORANI don't think we gained anything. I think we lost a lot. You know, to delay the sequester for two months simply doesn’t help us. And to delay it for two months without any revenue to compensate for cuts I think pretty well condemns us to the kind of future that many of the idiologs on the right want. I mean they've been running on the thesis that government doesn't work. Now, that they're elected they're going to try to prove that to be the case. I'm afraid that the sequester that will happen in February is likely to result in the layoffs of thousands of people. Now, furloughs are less expensive over the short term, but you can't furlough air traffic controllers for a month. And that's what 8.2 percent cut represents.
MORANYou can't furlough meat inspectors for a month. What would happen in our grocery stores? There are so many federal activities that people take for granted and yet, this bill requires an across the board reduction of every program, project and activity. Two-thirds of the federal workforce are in the area of national security. We can't afford to make that kind of a reduction in the federal workforce. And here, yesterday, we voted to freeze federal pay for the third year in a row and we've also voted to require new federal employees to pay four times as much as they're currently paying into their pension fund. Well, this is a signal we're sending. We don't want the best and brightest working for the federal government.
MORANIt's a wrong signal. It's a signal that's going to come back to haunt us in the future. And we can't afford to be punishing the federal workforce, but I'm afraid that's what we're doing.
NNAMDIAnd that's just one of the reasons that Congressman Jim Moran voted no yesterday. Congressman Moran, thank you so much for joining us.
MORANAnytime, Kojo. Thank you.
NNAMDIJim Moran is a member of the U.S. House of Representatives. He is a Democrat from Virginia. Joining us now by phone is a Republican from Virginia, Congressman Robert Goodlatte. He's a member of the House of Representatives and the incoming chairman of the House Judiciary Committee. Congressman Goodlatte, thank you for joining us.
CONGRESSMAN ROBERT GOODLATTEWell, Kojo, it's good to be with you. I've listened to your show for years. I don't think I've ever been on it.
NNAMDIWell, we are very happy to have you on today. And by the way, Happy New Year.
GOODLATTESame to you.
NNAMDIWhat in your view was at stake with this vote that was taken yesterday?
GOODLATTEWell, obviously, one thing at stake was massive tax increases and certainly I'm glad that 99 percent of the American people won't be facing those. But I felt that the other thing that was at stake was the president's commitment, both during the campaign and after the campaign, to take a balanced approach, as he called it -- I don't even agree with the details of his approach -- but he called for a balanced approach that entailed both tax increases and spending cuts.
GOODLATTEThe tax increases he got. The spending cuts didn't take place. In fact this legislation includes some spending increases. So it's very disappointing to me. And I listened to my colleague for the tail end of his comments and certainly share his concern about the predicament it presents for the Washington Metropolitan area and Virginia. But the fact of the matter is we're spending over a trillion dollars a year more than we take in now four years in a row. Our national debt is now $16 trillion and I don't think the president and many others appreciate the enormity of the debt problem that we're facing.
GOODLATTEAnd every dollar that we take and spend now to preserve the way the federal government operates today is money that we are jeopardizing our children and grand children's future because it won't be available to them. And instead they will have the debt burden to carry in its place.
NNAMDICongressman Goodlatte, if you'd like to see more spending cuts on the table, where specifically would you like to see those cuts?
GOODLATTEWell, I would take them from every part of the federal government. I have voted for -- I voted for the sequestration. I voted for -- which entailed $2.2 trillion in spending cuts. A trillion were agreed upon last year and 1.2 trillion are a part of these automatic cuts that'll take place now. Because I share Jim Moran's concern about the desperate impact upon defense spending I voted for legislation earlier this year that would have made entitlement reforms -- fairly modest entitlement reforms and used those savings to alleviate the discretionary spending. Not just in defense but also in other sectors of government spending.
GOODLATTESo that's the area, two-thirds -- almost two-thirds of the federal budget that has been largely untouched and is growing on automatic pilot. Medicare, for example, growing four times the rate of inflation, Medicaid by similar numbers. Many other entitlement programs growing too rapidly. The food stamps program, now called SNAP, has increased by 270 percent over the last ten years.
GOODLATTEAnd so these decisions are not easy. We're going to have to make them though and that, I think, is the thing that is being overlooked.
NNAMDICongressman Bob Goodlatte is a member of the U.S. House of Representatives. He's a Republican from Virginia and the incoming chairman of the House Judiciary committee. You can call us at 800-433-8850. Congressman Goodlatte, what did this fiscal cliff debate demonstrate to you about the leadership of your caucus? Are you satisfied with the leadership that the speaker and his team provided on this issue? Or do you think House Republicans would be wise to look at tweaking that team in Congress?
GOODLATTEWell, I think the situation here was one that on November 6 the voters decided that Barack Obama would continue as President of the United States. And once that decision was made the fact of the matter is taxes were going up. And so anyone, I think, who attempted to negotiate with the president, which the speaker attempted to do, was bound to be disappointed when the president, instead of sitting down and seriously negotiating, instead went out -- back out on the campaign trail and conducted events around the country to campaign for this.
GOODLATTEThe taxes were automatically going up. The president didn't need to do that. He simply needed to reach agreement on what the appropriate package should be. And quite frankly when we were unable to do that I think the speaker did the right thing in saying, look, we've already passed our House position of extending the tax relief for all tax brackets. And we have passed our legislation that takes care of the sequester problem, not for two months but for a whole year, and offsets it with other real spending reductions and entitlement programs.
GOODLATTEThe only way you can do that is by actually changing the law and reforming the entitlement programs. But we passed those laws to do that. And when we got no response to those I think he was right to say to the Senate, now you have to act. It's not a surprise to any of us, including the speaker, that how the Senate acted was not something that we were going to find palatable. And once that occurred, if we couldn't find 218 members on additional spending cuts that we thought the Senate would sit down and talk to us about, I don't think there was any other alternative but to address the issue because the tax increases had already taken place.
NNAMDIAllow me to go to the phones. I think Steven in Stevens City, Va. has criticism for both sides. But Steve, your turn. You're on the air. Go ahead, please.
STEVENThank you, Kojo. And how are you today?
STEVENSo I want to make two quick points. For both parties, Democrat and Republican, what people really need to realize is that this is grand larceny in the working because Obama wanted to do the grand bargains from the beginning. I mean, it's his last time in office. It's his legacy. So what we need to all realize is that they want to do entitlement reform. Democrats and Republicans want to do it because we've had wars that aren't paid for. We've had all these changes that have come about. We're cutting education. We're cutting down on infrastructure and nobody wants to divvy up the money.
GOODLATTESo we bring the debt ceiling into it. You're really going to say that Congress is not going to pay bills for money they've already spent?
NNAMDIWell, let's ask that of Congressman Bob Goodlatte. What will it take for you, Congressman Goodlatte, to vote to raise the debt ceiling in the next few months?
GOODLATTEWell, I think that Speaker Boehner actually put forward a good marker the last time we raised the debt ceiling. He said that over ten years we had to have at least as many cuts as the debt ceiling was raised so that over a period -- now remember, that's over ten years whereas the money's being spent a lot faster than ten years so it's not a one-for-one trade. But over time if you do that each time the debt ceiling is raised you'll achieve a balanced budget within six or seven years. And you will not, under those circumstances then have to raise the debt ceiling when the government balances its budget.
GOODLATTEYou never have to raise it when the government is living within its means. So I hope the caller is right when he says that both sides want to do entitlement reform because my party, in our budgets the last two years and in other measures have put these reforms into legislation in the budget and in this sequestration vote that I just referred to that deferred the defense spending cuts with other entitlement reforms.
GOODLATTEAnd we don't ask the democrats or the president to agree with our position on this. We obviously would like them to but we know they have a different perspective. All we ask that they do is put it into their budget in the Senate, into the president's budget, to put your cards on the table and show us how you would reform these programs that are busting the budget of the country and the economy.
NNAMDIAnd with that, Congressman Goodlatte, I'm afraid we're out of time. Steven, thank you very much for your call. Congressman Goodlatte, thank you very much for joining us.
NNAMDIBob Goodlatte is a member of the U.S. House of Representatives. He's a Republican from Virginia. He is the incoming Chairman of the House Judiciary Committee. We're going to take a short break. When we come back the saga of one of the Atlantic's most overlooked but most essential fish, the menhaden. I'm Kojo Nnamdi.
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