E-mail a friendSen. Kent Conrad
airdate March 30, 2009
Time magazine named Sen. Kent Conrad one of "America's Ten Best Senators," and The American ranked him as one of the "10 Most Economically Literate Members of Congress." He chairs the Senate Budget Committee and has bipartisan respect as a federal budget expert. Conrad has been a strong supporter of farming subsidies and helped write two farm bills. Prior to his election in '86, he spent six years as state tax commissioner. He's a fifth-generation North Dakotan and holds an MBA from George Washington University.
Chair of the Senate Budget Committee weighs in on the idea of the government spending its way out of trouble. (:53)
Full interview. (9:58)
Sen. Kent Conrad
Tavis: Senator Kent Conrad is chair of the Senate Budget Committee, which late last week approved its own version of President Obama's ambitious and very costly new budget. The full Senate is expected to vote on that budget later this week. He joins us tonight from Capitol Hill. Senator Conrad, nice to have you on the program, sir.
Sen. Kent Conrad: Good to be with you, Tavis.
Tavis: Before I talk about money matters, let me go home - that is, home for you, to North Dakota. Tell me how the residents in your state, certainly around the area of Fargo, are handling all this nervous tension that we assume that they're experiencing right about now.
Conrad: It's inspirational, really. The mayor said the other day, "We've got 90,000 residents, we've got 80,000 volunteers." (Laughs) I've never seen anything like it. I went into the Fargo Dome this weekend, which is where they play the football games - thousands of volunteers and just this spirit of community and coming together to protect our homes, protect our communities, and really a heroic effort underway.
They've built miles and miles of dike, and then they went further and built back-up dikes, and just an around-the-clock effort to try to win this flood fight. And we're cautiously optimistic, but we've got another major weather system moving through, it's already dumped 12 inches of snow in my home town of Bismarck, North Dakota and we're expecting some significant snow in Fargo and that region.
And of course the wind to pick up, and that's the thing we've got to be very worried about - creating wave action against the dikes.
Tavis: One other question before I move on to these money matters - are you comfortable with the fact that whatever support you need from the federal government is in place now, should this thing take a turn for the worse?
Conrad: We've met directly with the president. The president has called the mayor of Fargo. The president had the head of FEMA go with me to North Dakota this weekend, had the general that's in charge of the flood fight in that whole part of the country go with me, General Walsh.
The president, when I was out in my home town of Bismarck, called me right when I was doing a press conference with the local media and told them directly that he stands with us, not only in the flood fight but with whatever follows, and that was very encouraging to people back home.
We appreciate very much his focus in his radio address on what the spirit of people means in a flood fight like this, and what strength we can all take from the example.
Tavis: You've got a flood fight in North Dakota; you've got a budget fight on Capitol Hill, where you sit tonight. You have distinguished yourself and have become known in Washington as a deficit hawk. Indeed, when "Time" magazine picked you as one of the 10 best United States senators, that was in part what you got the nod for, for being such a hawk where deficits are concerned.
How does one hold up the honor of being a deficit hawk with these kinds of numbers?
Conrad: Look, Tavis, this is really uncharted territory. We've had one of the steepest economic declines in our history. The economy contracted at a rate of 6 percent in the last quarter of last year. That means large deficits and debt in the short term.
The key is being able to pivot from here and as the economy recovers get back on a more sustainable course. The budget that I've presented will reduce the deficit by two-thirds over the next five years, and we've got to do much more in the five years after that.
But at least we've got it headed back in the right direction, and we've got to recognize these are very, very tough and challenging times.
Tavis: In short order, how does one pivot, to use your word, from a $3.5 trillion budget?
Conrad: (Laughs) Well, you bring down the spending every year; you also try to close the revenue gaps that are occurring because of the abuse of these offshore tax havens and these abusive tax shelters that are really draining our revenue system. All of that has to be done.
And for the longer term, I think we're going to have to reform our entitlement programs, especially the healthcare accounts, because already $1 in every $6 in this economy is going to healthcare. If we stay on the current course, Tavis, by 2050 $1 in every $3 in this economy will be going to healthcare, and clearly, that is not sustainable.
Tavis: Beyond healthcare, when you say we have to - and I'm paraphrasing here - when you suggest that we have to watch and be careful about entitlement spending, there are a lot of folk on the left, a lot of Democrats who don't want to hear that. That's the kind of language they heard from George Bush over the last eight years.
They thought that President Obama would take us in a different direction. Your response to them would be what?
Conrad: Well, it is the very direction that President Obama is taking us on. President Obama wants to reform healthcare in a way that not only bends the cost curve in the long term, but also provides more coverage in the short term. And those two things are not contradictory. We find more and more people recognizing now if you don't have people in the system, ultimately they go to the emergency room, which is the most expensive place to treat them.
We're much better off being more compassionate and getting everybody in a system that gets them better healthcare. That will ultimately save money.
Tavis: When you talk about entitlement programs, though, what has happened, as you know, any number of times - you've been on the Hill for a number of years - so often, the budget ends up being balanced on the backs of the poor. Tell me that's not going to happen this time around.
Conrad: With President Obama, that is not going to happen. I was given the responsibility of delivering the very bad news to him that we were losing $2 trillion from the revenue forecast. In other words, he wrote a budget and then months later we write a budget. In the interval, the forecast for revenue was reduced by $2 trillion over 10 years.
When I had to deliver that news to him, he knew that was tough but he understood immediately the implications of it and he said to me, "Senator, what I'd like you to do is do your level best to preserve my priorities because I think they're the right ones for the nation."
And I told him, "Mr. President, they are the right ones for the nation." Reducing our dependence on foreign energy, focusing on excellence in education, and reforming our healthcare system, all the while dramatically reducing our deficit after these record levels because of the sharp economic downturn - those are the right things and we're going to do our level best to have them in this budget in a way that will work for the American people.
Tavis: How partisan is this fight going to be?
Conrad: It's going to be very partisan. Our Republican friends - it's interesting. They were responsible for doubling the debt, tripling foreign holdings of U.S. debt, and they did that in the good times. And then they left the economy in shambles, and this president, none of this is his fault or his responsibility. He's in on the clean up crew.
And I must say I deeply admire President Obama. I have met with him now many times on the financial challenges to our country and he is - number one, not only is he smart, he's one of the calmest people I've ever seen. He is the kind of guy you want in charge in a crisis because he maintains his very cool, rational thinking about things, and that's exactly what we need with all the crises facing the country which he inherited.
Tavis: What many Republicans feel about this budget is that we're trying to spend our way out of the hole that we are in, and that's the main reason, if I can put it that way, that they're opposed to this, because they think you can't spend your way out of this trouble. To them, to those who feel that way, your response is?
Conrad: Well, that's going back to Hoover economics - the notion that the government doesn't have much of a role, that the market will correct itself on its own. It didn't work in the Great Depression, it wouldn't work here, and even the previous administration recognized that.
The secretary of the Treasury and the chairman of the Federal Reserve and almost every responsible economist has told us in this kind of precipitous decline the government has to step in and provide some lift to the economy to give us a chance to avoid a much steeper fall, and that's what's being done. I think history will prove that is the right set of policies.
But we also know over the longer term we then have to pivot and get back to a more sustainable budget circumstance. We've got to be concerned about the growth of the debt, especially long term, and this president is.
Tavis: And finally, to your point about, again, pivoting at the right time, that would happen roughly, you estimate, when?
Conrad: I think we should be very cautious of doing anything in the next two years that would put more pressure on this economy, so I anticipate that we'll start to recover toward the end of this year, perhaps early next, but we'll still be in a weakened state for the next several years.
Tavis: And is this budget going to get done before the Easter break? How much longer will the American people have to wait for this balanced budget?
Conrad: Well, in fairness, we don't balance but we do dramatically reduce the deficit. We reduced the deficit by two-thirds over the five years of the budget. We will pass this budget this week in the Senate and then we'll go to conference with the House and we'll do everything we can to get agreement with them in short order.
Tavis: Senator Kent Conrad, Democrat of North Dakota, chair of the Senate Budget Committee, got his work cut out for him. Senator Conrad, nice to have you on the program, all the best to you, and for that matter, all the residents in your state of North Dakota.
Conrad: Thank you so much, Tavis. We're thinking about our people back home. They're just being heroic.
Tavis: Thank you, Senator. Good to have you on the program.
Conrad: You bet.
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