Newsmaker: Budget Director Alice Rivlin
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MARGARET WARNER: Joining us now representing the Clinton administration is Budget Director Alice Rivlin. Ms. Rivlin, welcome.
ALICE RIVLIN, Budget Director: Good to be here.
MARGARET WARNER: I think you just heard Speaker Gingrich. Do you have as pessimistic a view of the progress or lack of progress so far on this whole impasse?
MS. RIVLIN: Well, I think it’s a sad day. The President did not want to see the government close down. None of us do. There are people who need to go about their business out there who need services from the government, who ought to be getting them. Passports are just one. There are lots of people and lots of areas in the country, school districts, expecting that they will get money from the federal government that won’t be coming, all kinds of things that will inconvenience people and make it difficult for them to do their lives, and this wasn’t necessary. It was totally unnecessary. The Congress just wanted for some reason to close down the government when there was a very simple opportunity to not do so. They could have passed a continuing resolution. We’ve been operating on one for some time, a continuing resolution to allow this budget debate to be resolved. We haven’t even gotten a budget from the Congress yet. They haven’t finished their work, so I don’t know why they are doing this thing, but it is a very unpleasant thing for many people to be deprived of services of the government that they need.
MARGARET WARNER: Well, do I take it from your answer that you didn’t see much progress being made today in your talks, your two sets of talks?
MS. RIVLIN: No, I didn’t. We met. We had a good exchange of views with the two budget chairmen, and we, I guess, agreed to disagree. We offered them–we asked them just if you want to finish your budget by the end of the week, at least pass a continuing resolution for forty-eight hours so that the government doesn’t have to shut down while you finish your budget, but they didn’t even want to do that.
MARGARET WARNER: Do you think it’s possible that, in fact, you’ll never resolve this current impasse and that you’ll just go directly into negotiations over the budget, itself?
MS. RIVLIN: Oh, I think that’s possible. When they finish their budget and send it to the President, we now know that he will have to veto it. It is unacceptable to the Clinton administration. It does not reflect the values that the President holds. It cuts too deeply into programs that we think are very important in order to fund a big tax cut. So no question he will veto it. After that, I hope we will get down to serious negotiations and get this thing settled.
MARGARET WARNER: And in the meantime, Speaker Gingrich suggested the Republicans on the Hill might send you different appropriations bills bit by bit. Would the President sign some of those and sort of reopen the government bit by bit?
MS. RIVLIN: He signed an appropriation bill yesterday. He vetoed two bills, but he signed the Energy & Water Bill, which is a good bill mostly, and when the Congress gets its work done, the President will sign those bills. It seems to me sort of silly to be saying, well, we might open the passport office, well, we might open the national parks. That’s a childish way to go about this thing. We ought to keep the government running, keep everybody doing what they’re supposed to be doing while this budget negotiation goes forward.
MARGARET WARNER: Okay. Let me ask you about the issue that the Republicans say if the President would agree to, this could all be settled, and that is if the President would simply agree in principle that when the big budget bill is considered that will end up balancing the budget bill in seven years, is the President ready to agree to that?
MS. RIVLIN: No. The President can’t agree to that now. We have a lot of differences over how to balance the budget and how quickly. The President proposed a budget that would balance in ten years, and the Republicans want a budget that will balance in seven years, and we’re not hung up on ten or seven, but the problem is that if they want to fund a large tax cut and they want a budget that balances more quickly, then they have to make deep cuts that are unacceptable to the President. We cannot accept that.
MARGARET WARNER: On October 19th, though, the President did say, I think there’s a way for me to meet their stated objectives, which is a balanced budget in seven years, with a family tax cut, and I think they want a capital gains tax cut. Are you saying basically that statement no longer applies, that he’s not ready to endorse that?
MS. RIVLIN: No. You’re only giving, giving part of it. He said that he thought maybe we could go to seven years if they would accept the economic assumptions on which the administration’s budget is built, which we think are equally plausible, but the Congress doesn’t, and they made clear today that they were insisting not only on a seven-year balanced budget but on their assumptions about what the economy will be like.
MARGARET WARNER: Well, let me ask you about those assumptions, because I think it’s those assumptions and the President’s statements about the fact that he had proposed a balanced budget that Speaker Gingrich was referring to when he just spoke to Jim and said the President did not tell the truth. What the Republicans say is that your assumptions drawn up by the Office of Management & Budget are just too rosy, too optimistic, and that the President’s budget when scored by the Congressional Budget Office, which you used to head, it does not balance the budget.
MS. RIVLIN: Well, those–we have not based our budget on rosy assumptions at all. Our assumptions about how fast the economy will grow are more conservative than most private forecasters. We are saying we think that the economy can grow at 2.5 percent after inflation over the next few years. Most private forecasters are at 2.6, 2.7. We are not engaged in rosy scenario. And let me remind you that Speaker Gingrich and many others predicted that when the President’s balanced budget plan in 1993 was passed that we would not have the deficit reduced as fast as we thought. In fact, the deficit has come down faster than we predicted, and the economy has done better than we predicted. We have a very strong track record in economic predictions.
MARGARET WARNER: But one more question on those assumptions. When President Clinton gave his first State of the Union Address in February of ’93, he promised to use what he called the independent numbers of the CBO. When did the President decide no longer to use CBO numbers and to go with his own Office of Management & Budget numbers?
MS. RIVLIN: We did do them that year, and the first set of assumptions when the Clinton administration was very new, and we didn’t even have our own forecast prepared, we did use the CBO ones for the clear reason that they were there, and in the past, the CBO had had a better record of forecasting than the OMB. That’s no longer true. Over the last three years, we have predicted much better than the CBO, and the CBO thought that the deficit by now would have still been over $200 billion. Ours is under $160 billion, which is–it’s fact, it’s history. It’s not a prediction. We did better than they thought.
MARGARET WARNER: And is the White House pretty confident that it is winning the battle for public opinion on this current impasse?
MS. RIVLIN: Oh, I don’t think anybody wins when the government closes down. It is very unfortunate, and we think the Congress should not have precipitated this crisis.
MARGARET WARNER: But do you think that the President in this particular impasse does look resolute, and does look firm?
MS. RIVLIN: The President has been very resolute and has been very clear. He wants to balance the budget, but he has principles that he thinks must be maintained. We don’t want savage cuts in Medicare or Medicaid. We don’t want to cut education and the environment, things that the economy really need, and above all, we don’t want a huge tax cut for people who don’t need it. The President has made those principles very, very clear.
MARGARET WARNER: And do you feel there’s some political advantage in that firmness?
MS. RIVLIN: Oh, absolutely. We believe that the American people want a balanced budget, but they want it in a moderate and sensible, non-extreme way, and they don’t want this huge tax cut for rich people. So we believe that the President is being not only very firm and resolute, but that he is sticking with the principles that most Americans hold.
MARGARET WARNER: And as we close this, Ms. Rivlin, would you agree with Speaker Gingrich that this might take weeks or even months to resolve?
MS. RIVLIN: I hope not. He may be right. If we can get through the next few days, get the government operating again, get the Congressional budget up to the White House so that we–the President can veto it- -then maybe we can get down to serious negotiation, and I would hope that they would move quickly. We need to balance the budget. We need to do it in a moderate way, and we need to do it quickly.
MARGARET WARNER: Thanks, Ms. Rivlin, very much. Thanks for being with us.
MS. RIVLIN: Thank you.