JIM LEHRER: Welcome.
LAURA D'ANDREA TYSON: Nice to be here.
JIM LEHRER: Sen. Dole said today that the Republicans did not blink. Did the President blink?
MS. TYSON: No, the President did not blink. I think we should think about it the following way. The President was unwavering in his determination to balance the budget but to balance the budget in a way which is good for the American people and reflects American values. He said throughout this discussion of the past two weeks that he wanted his principles recognized, principles to protect Medicare and Medicaid, to adequately fund education and training, to deal with the protection of our environment and to deal with tax breaks, tax cuts to reward working families. Now, he went into this debate with those principles clearly articulated. His determination was finally recognized by the Republicans, and they recognize in their language not just that we will work with them to try to achieve a budget balance in seven years, but also that that balance that both the President and the Congress will agree that that balance does reflect the President's priorities.
JIM LEHRER: Let's talk about all of this, but let's begin with a seven-year commitment. You saw the tape excerpt now that Leon Panetta says, well, seven or eight, and then you saw the Republican reaction, is it seven, or is it eight, or what does that seven mean to the President?
MS. TYSON: The compromise agreement that we have worked out here has two parts. One part says that there will be an enactment of a balanced budget that will achieve balance in seven years, and, though, and that such a path to balance both the President and the Congress must agree will have adequate funding for the President's priorities. Now, the President said last night he is doubtful that, in fact, we can find a path to balance in seven years which reflects his priorities, but what we wanted here was a good faith full debate before the American people outside of the crisis of con--outside of a crisis situation, which were in last week. We would have that debate, we would look for a way to achieve balance in seven years, reflecting our priorities. If we cannot find that, we will stick with our priorities. Our priorities--remember, we believe that balancing the budget the right way is more important than balancing the budget in some arbitrary number of years.
JIM LEHRER: So the President hasn't really committed to balancing the budget in seven years, period?
MS. TYSON: I think the way this agreement is, is written, it clearly says that nothing is agreed to until everything is agreed to. If we can find with the Congress, working in a good faith, non-crisis atmosphere, a path to balance in seven years which reflects these principles and priorities, incidentally, which we believe reflect the principles and priorities of the American people, the American people do not want massive cuts in Medicare and Medicaid, they don't want to endanger funding on education and training, they don't want to endanger the environment, and they don't want to see taxes increase on working families. They would like to see some tax relief for working families. So if we can find a way to achieve those objectives, which is what the American people want, and get to balance in seven years, then we want to have a good faith negotiation to get that outcome.
JIM LEHRER: So when Panetta said, as he did, oh, it might take eight years, that that's--that that is definitely the President's view on this, right? That--because the President's negotiators are going to come at it from his priorities, rather than from the Republican Congress's priorities.
MS. TYSON: Here's what I would say. We really want this to be a good faith, full discussion. The first thing we had to do was get rid of the crisis atmosphere. The first thing we had to do was get the government back to work, get services back to the American people, important government services back to the American people, and then have the real negotiations. This deal--this agreement that we reached allows us to have the real negotiations. Now, if we cannot find a way to reach balance in seven years and maintain those critically important priorities to our economic future, then, of course, we're going to have to do something else. And ultimately, our view is the budgetary priorities, what we defend and protect and spend on and how we invest in the American people matter more than the number of years. We did our budget work always the same way. We said what is the right set of policies and then we looked for achieving balance within the right set of policies. We concluded in our own work that it looked like it took about ten years or then about nine, because the economy has done better than we thought. Now, we're willing to look with the Republican majority for a path to balance in seven, but we are not willing to compromise our priorities and principles. And that is clear in the wording of that agreement last night.
JIM LEHRER: So it would be a mistake to call it a compromise, wouldn't it? There's been no compromise. This is kind of an agreement to continue to disagree, to try to work out something.
MS. TYSON: I think it's an agreement to continue to discuss in an atmosphere which is not filled with crisis and which allows the American people to have the full debate that they deserve. They deserve to have this debate. We think that they have clearly spoken already in terms of believing that we should protect Medicare and Medicaid, believing that we should invest in education and the environment, and believing that tax cuts to the extent that we have them should really focus on working Americans.
JIM LEHRER: Was it--was it all worth it? Was it worth the government shutdown to get this agreement?
MS. TYSON: You know, we never thought the government shutdown was a good idea. I just want to say that it's clear that at least some members of Congress going back early into April of last year were saying that a shutdown would be used really to force the hands of the President and the administration to accept what the Congress wanted in terms of its own path to balance. What we did here is by having the President show his unwavering determination to our budgetary priorities, we have now achieved a situation in which we're out of crisis and we can begin to have this debate, but not wavering from our principles.
JIM LEHRER: How much did the shutdown cost?
MS. TYSON: Well, you know, it's hard to put a dollar sign on the shutdown. I think more--I think that there was one estimate today that by yesterday at least 20 percent of American households were affected in some way or the other by a shutdown, not being able to get passports, not being able to get into national parks, not being able to process their loans through the Federal Housing Agency, not being able to get student loans, not being able to sign up to be--to essentially join the armed forces. These are all things which the American people suffered from and frankly, as I said, we always thought that we should have these negotiations with a continuing resolution to allow the debate to be heard but not have any situation of crisis which would be manufactured and might force the debate in one way or the other.
JIM LEHRER: Now, the debate to come, the one that--the real debate--the real negotiations, once the final reconciliation package actually gets to the President, the President vetoes it, and then the real negotiations begin. What does this--what does this word--these words about the real economic numbers that matter, whether it's the Congressional Budget Office or the White House numbers, what is your understanding of what that means?
MS. TYSON: Well, look, it says very clearly that in this development of the underlying assumptions, look, I think it should be just clear why you need assumptions in the first place. Before you develop a plan to balance the budget, you have to project deficits going forward and spending going forward. Before you can make those projections, you have to make economic forecasts. So we made a set of economic forecasts using our best--
JIM LEHRER: "We" meaning your office?
MS. TYSON: We, the administration. The administration made its economic forecast. The Congressional Budget Office working for the Congress made its economic forecast. Now, what the wording of this agreement says is essentially it calls for consultation and review of numbers prepared by the non-partisan Congressional Budget Office. So in point of fact, when all is said and done, what this agreement means is that we would have, if there is to be an agreement at the end of this negotiation, it will be a mutually- acceptable agreement, it will both achieve balance in seven years and reflect the President's priorities, which are clearly stated there. The President's priorities must be part of the deal. And then also clearly, since it would be a mutually-acceptable deal, there would be input into the underlying economic assumptions not just from the administration but also from private sector forecasters.
JIM LEHRER: Finally, speaking of private sector economists, a lot of those folks say the whole things is absurd; there's no way to project seven years ahead and guarantee that a budget could be balanced, because you don't know what economic factors could come, what crisis could happen in the country, et cetera, et cetera. They're right about that, are they not?
MS. TYSON: There is always going to be uncertainty in laying out a path to balance over seven years. If you lay it out over seven, rather than five, you increase the amount of uncertainty. That's why I think the policies are so important. That's why I think the priorities are so important. We need to sit down and negotiate the right policies in the area of Medicaid, the right policies in the area of Medicaid, the right polices in the area of education and training, look at the appropriate funding levels which come from the policy analysis and then look at the number of years. I agree completely that since there is going to be uncertainty along this path that we should focus the issue on policies and priorities.
JIM LEHRER: And of course, the President, even if he is reelected, won't even be in office seven years from now, and many of the members of Congress, who voted on the deal, won't be in office either.
MS. TYSON: That is true. That is true. But I do think it is important--I do think we are at an historic moment here, and I do think that that's why this agreement we've reached to have this negotiation is so important. There--the President is committed to balancing the budget, and I think that's recognized in this, in this agreement. The Congress is committed to balancing the budget. It is very important to our economic health to set out a believable, credible strategy for balancing the budget over the long run. So even if we can't get it precisely right, because there's always some uncertainty, getting on the right path and having underlying policies done in a non-crisis atmosphere is going to be very important for our economic health.
JIM LEHRER: Laura Tyson, thank you very much.
MS. TYSON: Thank you, Jim.