TOPICS > Politics

Coming to Terms

December 7, 1995 at 12:00 AM EDT


JIM LEHRER: We go first to Sen. Pete Domenici, Republican of New Mexico, chairman of the Senate Budget Committee. Senator, welcome.

SEN. PETE DOMENICI: (Capitol Hill) Thank you very much.

JIM LEHRER: In general terms, what do you think of the President’s ideas?

SEN. DOMENICI: Well, I’ll tell you a quick story–

JIM LEHRER: All right.

SEN. DOMENICI: –about Jack Benny. Jack Benny went to his doctor, I understand, and the doctor reviewed his X-rays and said, said to Jack Benny, “I’ve reviewed your X-rays, you need surgery. It’s going to cost $400.” Jack Benny looked at the doctor and said, “Could you touch up the X-rays and charge me $25?” Now, actually this is kind of what’s happened. They touched up the X-rays and, and they want to get the same effect as if they had a real operation.

JIM LEHRER: I take it you don’t like it?

SEN. DOMENICI: Well, actually it won’t work.

JIM LEHRER: Won’t work?

SEN. DOMENICI: I’m absolutely convinced if they submit this budget and we were to pass it, as the say it, it would have none of the good effects on the American economy. What we’re worried about is getting this deficit under control. This doesn’t do that. And let me tell you a little bit about what I think is sort of a pretend game. Let me put it this way. We’re going to use OMB’s economics, says the President, and when we do that, we’re going to pretend that it does the same thing as the Republican package and gets to balance. Now, how would the American people believe that if they can get to balance in the same year on the same budget, and they can spend $400 billion more than we can? And there’s some kind of magic in this, and yet, they say, that’s realistic. And then they say, let’s reinvent Gramm-Rudman, Gramm-Rudmans, Jr. or III, and if it doesn’t work, we’ll go back and cut afterwards. So, frankly, I am not–I am willing to go back to the table. The American people want a balanced budget now. I want to work on it, but I am not the least bit impressed, and I hope the American people aren’t. When the President’s people say, we can spend more on Medicare than them, we can spend more on education than them, well, is there magic to this? They can spend so much more and get the exact same results? I think that’s what the American people have to ask.

JIM LEHRER: Are you saying that this is a fraud, this is not a realistic budget?

SEN. DOMENICI: No. I’m saying if, in fact, the President was right and the Congress was right and Leon Panetta was right and Alice Rivlin was right when they said use the Congressional Budget Office estimates, if they were right then, they are right now, and there’s the OMB, that’s his own economists choose to do it differently, which permits them to traverse this country saying, we’ll get to balance, and we’ll be neater and nicer, and we won’t hurt so many people, we don’t think we hurt anybody, but we can do that if you can spend a lot more money.

JIM LEHRER: Well, Senator, where is the basic difference then between what the President offered today and what you all have already passed, or what he vetoed yesterday? I mean, is it– where is that–is it $400 billion–where is the $400 billion?

SEN. DOMENICI: Okay. Let me just pick a couple because–

JIM LEHRER: All right.

SEN. DOMENICI: –they’ve given them to us, and I don’t have to invent them.

JIM LEHRER: All right.

SEN. DOMENICI: They say that they are going to have net savings of $465 billion over seven years. We say to get to balance you need $812 billion. It happens that the blue dog Democrats say you need $812 billion also. So how do you do that then?

JIM LEHRER: So what are you saying is the problem there?

SEN. DOMENICI: The problem is that they don’t–

JIM LEHRER: They add up a different set of numbers and don’t–

SEN. DOMENICI: They add up less savings in Medicare, less savings in Medicaid, less savings in the farm program, less savings everywhere, and they say it’s still going to come out the same, it’s going to be balanced.

JIM LEHRER: Well, what about on taxes, on tax cuts?

SEN. DOMENICI: Okay. We already took that into consideration.

JIM LEHRER: All right.

SEN. DOMENICI: Because they still have a net of 78, and we have a net of 215, and we made that–

JIM LEHRER: In other words–excuse me–215–your plan is $215 billion in tax cuts versus–


JIM LEHRER: Net. Got it.

SEN. DOMENICI: And theirs is net 78 or 88.

JIM LEHRER: 78. Okay.

SEN. DOMENICI: And we’ve taken that into account and done the arithmetic, and what happens is there’s still about $350 billion less in terms of the amount of restraint they need.

JIM LEHRER: Well, then how did they come up with a balanced budget in seven years?

SEN. DOMENICI: Very good. You’re right on.


SEN. DOMENICI: They used the Office of Management & Budget’s estimates both of the economy of how much Medicaid and Medicare are going to cost. Look, it’s neat. If you can say, we got better numbers, Medicaid is not going to cost so much. So without changing anything, we save a whole bunch of money.

JIM LEHRER: Well, Senator, how do you know they’re wrong and you’re right?

SEN. DOMENICI: Look, we are saying, let’s follow the convention that the President told us we should follow, that Congress said we should follow, that the–that Alice Rivlin said we should follow, and using OM–not using OMB’s but use the Congressional Budget Office estimates. Now, they’re going to redo ’em all and bring ’em current, and we’re saying when they bring ’em current, we ought to all follow ’em and remember, the President said he would too.

JIM LEHRER: All right. Now those are supposed to come out on Tuesday, is that right, the new figures?


JIM LEHRER: All right. Now, if those new figures happen to gel with the President’s–

SEN. DOMENICI: Wonderful.

JIM LEHRER: –then this plan is okay with you, is that right?

SEN. DOMENICI: You know, I don’t think there’s any chance–

JIM LEHRER: Okay, but if it–for discussion purposes, if the CBO figures add up the way the President says they will add up, then this is no big deal, right?

SEN. DOMENICI: So what we’re going to do is we’re going to ask the Congressional Budget Office as soon as they can to reevaluate this budget and see what it does. We’re pretty confident that deficits are going to be in the hundred and fifty/hundred and thirty billion dollar for as far as you can see, rather than balance, and that’ll prove our point.

JIM LEHRER: All right. Let’s say that your point is proved, your point is proved with the new figures. Is this–does what the President offered today, does it offer a serious point of negotiation for you all?

SEN. DOMENICI: Well, what it will say is, Mr. President, didn’t you, didn’t you agree just about 12 days ago when you signed the continuing resolution that we would use the Congressional Budget Office? Here they are, you submitted something, here’s what CBO says, shouldn’t you now do whatever is necessary to get the CBO number, since you agreed to it, and frankly, we’re asking them right now, will you submit a new budget if the Congressional Budget Office says you are way off the mark, or you’re off the mark, and we haven’t had an answer yet.

JIM LEHRER: When did you ask them that?

SEN. DOMENICI: Well, we implied it, we talked about it.

JIM LEHRER: Okay. Well, I’m going to talk to Alice Rivlin in a minute. That’ll be the first question I’ll ask her.

SEN. DOMENICI: That’s a great question.


SEN. DOMENICI: And also, you might ask, on this look-back, see they’re saying if OMB’s wrong, and we use their economics, we can go back and set in motion a means of cleaning things up and cutting things automatically, sort of like the Gramm-Rudman-Hollings, and you might ask that the Democrats in the Congress are willing to do that. I would assume that she’s going to have a lot of trouble with that, but I don’t know how to do it. You might ask her, do you know how to do that, how to go back and cut entitlements, if we are spending too much in an automatic way to assure the American people that we’re getting a balanced budget, rather than going through this every year.

JIM LEHRER: Senator, I don’t want to make trouble here, but do you see this as a serious proposal for the President?

SEN. DOMENICI: Well, to tell you the truth, it is the June budget which got no Democrat votes, no Republican votes, it’s that budget warmed over, and I really say that–

JIM LEHRER: Warmed over.

SEN. DOMENICI: –it isn’t even boiled over, it’s warmed over. It’s got one change that’s significant, and that is they claimed they’re going to save $70 billion more over seven years in the discretionary programs. But that’s because they were going to spend so much in that program, in those programs.

JIM LEHRER: All right. Let me, let me ask you this. Is this a proposal enough at least to make you all willing to sign a temporary agreement to keep the government from shutting down again on the 15th, when the current temporary funding thing expires?

SEN. DOMENICI: Yeah. I, look, from my standpoint, I would give you my view. First, I don’t want to see government close down during the Christmas holidays. I want to do what I can to be positive on that score. But I am really not the one that’s going to make the decision. I’m going to join in the discussion about it.


SEN. DOMENICI: And frankly, I don’t think this is a very constructive, very positive step in the direction of saying to all our people who’ve worked so hard for the future, for our children, say, look, let’s just go ahead and go with another continuing resolution for a month or so, things look good. They don’t look very good.

JIM LEHRER: All right. Senator, thank you very much.

SEN. DOMENICI: Thank you.

JIM LEHRER: All right. Now we go to reaction to the reaction now from President Clinton’s Budget Director, Alice Rivlin. Ms. Rivlin, you’ve been listening to Sen. Domenici. Let’s start and move back–he said this is not a constructive step toward, first of all, resolving the temporary impasse to keep the government operating.

ALICE RIVLIN, Budget Director: Well, I’m sorry we disappointed the chairman. I found it a little hard to follow what he was saying, but the facts are this. We worked very hard on this budget. We think it is a good faith effort. We are involved in the negotiation here. We all started with the same goal, we want to balance the budget. The Congress wants to do it while they’re financing a very large tax cut and they wanted to do it in seven years. We thought that was too fast, and we don’t accept their tax cut. We said that it ought to be done in a more moderate way, so that it wasn’t necessary to make deep cuts in Medicare and Medicaid in education and other programs that people need, and that could be done over ten years and with a much more moderate tax cut. They said that wasn’t acceptable. They wanted seven years. And so we agreed to look at could we do it in seven years, and we came back with this budget which is a modification of our original proposal. It cuts more deeply into many programs, but it still preserves the President’s priority, and it balances in seven years but without the big tax cuts and without the slashing of Medicare and Medicaid and education. We think it is a very good budget. I don’t think they want to talk about the issues. They don’t want to talk about Medicare or Medicaid or education or environment or any of those things. They just want to throw up our hands and say, oh, it isn’t good enough, and somehow we didn’t use the right numbers.

JIM LEHRER: Well, did you use–

MS. RIVLIN: I’d like to get them onto the real issues.

JIM LEHRER: All right. Well, let’s–let’s go to this question of the numbers. You heard what Sen. Domenici said. First of all, he said, yours don’t add up if you use the current CBO numbers. Is he right about that?

MS. RIVLIN: We don’t have any current CBO numbers.

JIM LEHRER: So what numbers did you all use?

MS. RIVLIN: We used the best numbers we had, which were the OMB forecast and scoring. We believe those are right. They’re very mainstream. They’re about what private sector people are saying.

JIM LEHRER: Well, we’re talking here the difference between–we’re talking about projected economic growth which would then be reflected in, in tax revenues of the government.

MS. RIVLIN: That’s right.

JIM LEHRER: So the percentages are small, but the amounts are huge?

MS. RIVLIN: That’s right.

JIM LEHRER: All right.

MS. RIVLIN: And there are differences between our economic assumptions. CBO has gone back–that’s the Congressional Budget Office–


MS. RIVLIN: A good group of folks.

JIM LEHRER: You used to be the head of it in earlier times.

MS. RIVLIN: That’s right. They’ve gone back to the drawing board to reexamine their numbers and to update them. And we’re supposed to get those next week, so we couldn’t have used their numbers even if we’d wanted to because we don’t have them yet.

JIM LEHRER: I promised Sen. Domenici in front of everybody just a moment ago that I would ask you directly that if the CBO, whatever the CBO figures are, when they come out, the new ones, come out on Tuesday, will you and the President accept those in terms of what will be negotiated from then on?

MS. RIVLIN: It sounds like a pig in a poke, Jim. And I don’t know what we will get from the CBO. I expect that they will move in our direction. Basically, they were more pessimistic about the economy than we were, and the economy has been performing very well, so any update is going to move in our direction. We’ll have to see what we’re doing–what they’re doing before I can react to it, but let me say one thing–


MS. RIVLIN: –that I think is really important. The President has agreed with the Congress that when we get an agreement on this budget, it will be estimated by the Congressional Budget Office, as indeed it should, after consultation with the Office of Management & Budget. And whatever they say will be the final estimate, but more important, we have agreed that if the estimates aren’t right, we want to work with the Congress on some kind of mechanism to enforce them to make sure that we keep track of what’s actually happening to spending and taxes and the deficit, and if it’s getting off track for some reason, we find a way to bring it back on track. Nobody can predict the future. Economists aren’t any better at it than anybody else. What we need is the best estimates we can find, and then we need a mechanism for making sure that we make a mid-course correction and are keeping on the track.

JIM LEHRER: So that was what Sen. Domenici was objecting to, what he called a kind of a modified Gramm-Rudman that–but the way you explain it, it’s just–it’s just keeping track of what’s happening in the real world as it moves along, is that right?

MS. RIVLIN: That’s right, and modifying the policies so that the deficit stays on track. We all want to get this deficit down. Nobody, I think, wants to do it in an extreme way. The public certainly doesn’t want to. We don’t want to make bigger cuts in Medicare, or Medicaid, or education than are necessary to get the deficit down, so we need to find out what happened and make corrections.

JIM LEHRER: Do you agree with Sen. Domenici and Congressman Kasich’s basic point that as we sit here tonight the plan that you all laid on the table today contrasted with the plan that the Republicans have already passed and that the President vetoed yesterday is $400 billion apart?

MS. RIVLIN: Well, we don’t know how far it is apart, as I said earlier, because–


MS. RIVLIN: –we don’t know what’s happening to the CBO estimate.

JIM LEHRER: But I mean based on what you–the figures that you used, they–contrasted with the figures they used, do you agree that there’s a $400 billion difference?

MS. RIVLIN: No, I don’t think it’s as big as that. I think it’s about $350 billion. That’s still significant, but they could move very much in our direction if, if the Congressional Budget Office re-estimated and came say $200 billion toward, toward us, that would narrow the gap. This is a negotiation. We put an offer on the table. It is a very serious offer that we believe protects the values of the American people and gets the budget to balance. They don’t seem to want to talk about it; they just want to trash it. We want to sit down and talk about issue by issue how are we going to protect people who need the government and still get the deficit to zero.

JIM LEHRER: What is the President’s position on what to do by the 15th, which is a week from tomorrow, which is the Friday when this temporary funding thing, resolution expires, and the government theoretically could shut down again? What–how important is it to the President for that not to happen?

MS. RIVLIN: Oh, it’s very important to the President not to shut down the government again. It was a bad experience for everybody, but we’re not going to be blackmailed. We are certainly not going to accept slashing Medicare, for instance, just because the Republicans say if you don’t agree with these drastic cuts we’re going to close down the government. That’s something that we just won’t stand for.

JIM LEHRER: Is it–would it be correct to say, having listened to the two of you now back to back, that these CBO figures on Tuesday are crucial to whether or not you all are going to make a deal? In other words, if the new figures move in your direction in a sizeable way, then–and– because Sen. Domenici said if they do, in fact, that would change the nature of their proposal, that there might be a deal, but if they remain where they are now, which is more on the Republican side, we’re going to have–this impasse is going to continue?

MS. RIVLIN: Well, I don’t think that closing the impasse is entirely up to the Congressional Budget Office.

JIM LEHRER: All right.

MS. RIVLIN: Certainly, if the assumptions move in our direction, that will help, but we put a good offer on the table. The other side has got to put a good offer on the table. By the other side, I mean Sen. Domenici and his fellow negotiators.

JIM LEHRER: You don’t consider the budget plan the President vetoed a, a–that’s no longer on the table–

MS. RIVLIN: That’s no longer on the table because it’s been vetoed. We put a new plan on the table we believe in, and we worked very hard on it. Now we want to see what they come up with that will be a new plan that protects the priorities that the American people and the President hold dear.

JIM LEHRER: All right. Alice Rivlin, thank you very much.

JIM LEHRER: Still to come on the NewsHour tonight, the Gingrich ethics investigation and.