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Brooks, Marcus Tackle Tax Reform, Deficits, and Don’t Ask, Don’t Tell

December 3, 2010 at 6:45 PM EDT
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Columnists David Brooks and Ruth Marcus sort through the week's top political headlines, including the November job numbers, the future of "don't ask, don't tell" and President Obama's surprise trip to Afghanistan.
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JIM LEHRER: And to the analysis of Brooks and Ruth Marcus, New York Times columnist David Brooks, Washington Post columnist Ruth Marcus. Mark Shields is away today.

David, Erskine Bowles — I will not ask you any banana jokes to follow up on Simpson.

(LAUGHTER)

JIM LEHRER: But Erskine Bowles also said that the one thing this commission proves is there is — or now sets out is an adult conversation about the deficit.

Do you agree?

DAVID BROOKS: I do agree. I think Simpson must save those up over the years.

JIM LEHRER: Oh, he writes them down.

DAVID BROOKS: Yes, he writes them down.

(LAUGHTER)

JIM LEHRER: Yes.

DAVID BROOKS: I do think it has had an important effect. Obviously, it is not going to go in effect any time soon, but it’s had an effect in a number of ways.

It has expanded everybody’s time horizons. So people are taking a look at the debt problem over more than just five years. Second, it has had a huge effect on tax reform debate. They really put some serious tax reform — it sort of looks a little like 1986. And that debate has spread.

And I think that could come more quickly than people think. There is a serious debate inside the White House about trying to do some tax reform. There are some serious moves inside the Congress. So that I think was really given a boost.

And then, finally, the cuts that were suggested are the sort of thing we are going to have to do, and actually a little less than we are probably going to have to do. And so the whole debate, I think, in Washington has changed. Whether it will lead to quick legislation, no. But there has been a shift.

JIM LEHRER: A shift, a change, Ruth?

RUTH MARCUS: I think there has been a change.

Senator — Senator Bowles — Erskine Bowles said that the era of deficit denial is over. What has been unclear, and I’m feeling a little bit more hopeful about it today, is whether the era of actually not just denying, but dealing with the deficit has begun.

And I think so. I think 11 — I see the glass as kind of eleven-fourteenths full and — or eleven-eighteenths, depending how you want to measure the glass.

(LAUGHTER)

That’s a lot. To see three Republicans and three Democrats, elected officials, on this commission supporting it is really something. To see Republicans acknowledging, yes, taxes, tax revenue will need to go up is something.

JIM LEHRER: Were you surprised that there were some liberal Democrats who supported this, after the initial response was very negative?

RUTH MARCUS: I thought it was very significant and very telling, and, from my point of view, very impressive that Senator Durbin was willing to come out and say something that he described as heretical, which is, yes, as part of a broader package, raising the retirement age for Social Security a very small amount over a very long period of time is acceptable.

These are the kind of realistic things. And, look, if this was my package — David said that we are going to have to cut more. If it was the market’s package, we would have to raise more in the way of tax revenue.

But it is a better package than the status quo, which is really, truly, not just unsustainable, but dangerous. And it’s the kind of discussion, adult — as adult as we have gotten.

DAVID BROOKS: Yes. And I — the case I have tried to make to Republicans is, you don’t like tax increases. I understand that. But it’s better than national bankruptcy. It’s just less painful.

And I’m not sure how many are there, but some are getting there. And to watch — I would say, in general, in Washington this week, I have gotten a strong sense — if you looked at the Senate floor or the House floor, there is still a lot of monkey business going on, to borrow Alan Simpson’s metaphor.

RUTH MARCUS: Let’s not go there.

DAVID BROOKS: But it is just the same old polarized games.

JIM LEHRER: Yes.

DAVID BROOKS: And that — you could take that view.

But if you get on the phone and call members, you find movement on a lot of issues, like the serious discussions — I mentioned the tax reform movement. There is some serious discussion of budget cuts among the freshmen who are coming in who are now in the midst of their orientation sessions, but also among some of the chairmen, who are pushing hard against…

JIM LEHRER: These are Republicans now, the new ones?

DAVID BROOKS: Republicans — to really do some serious budget cuts when we get around to that in April, and some even health care. Some people think — nobody wants to revisit health care, but there are some ways that’s fraying.

And so people are beginning to have fundamental discussions. And so what is happening is, more fundamental discussions are happening, I would say, now about a whole range of domestic policy issues than I have seen happen maybe in a decade. And it’s partly because of a dramatic election. It’s partly because of a rotten economy. There is all this stuff feeding. People think, wow, something big probably has to change.

JIM LEHRER: Yes. Do you…

RUTH MARCUS: Well, before we all feel too good…

JIM LEHRER: Yes. Sure.

RUTH MARCUS: I’m sorry.

Before we all start feeling too good, I just want to interject a discordant note, which is, OK, it’s actually great that we are having this adult discussion. I was very surprised that we got to double digits in terms of the support.

But, at the same time we are having this adult discussion and we’re talking about all the painful ways to cut $4 trillion in spending in the next — and reduce the deficit by that amount in the next 10 years, we’re talking about extending tax cuts that will cost the same amount over the next 10 years, if that happens.

So, there is a cognitive dissonance. And some of the same people are having these discussions.

JIM LEHRER: Same thing.

DAVID BROOKS: Right.

RUTH MARCUS: And we can’t really see both at the same time.

JIM LEHRER: And, of course, meanwhile, we have the news today, the unemployment news. The unemployment rate went up, and very few — not as many jobs being created, as — as we heard in Jeff’s piece, that are needed to make this thing work.

So, where does that — how does that fit in to what is being — what people are talking about in Washington who are trying to work this thing out now?

RUTH MARCUS: Well, in the short term, it does two things that are — I don’t want to describe high unemployment rate as helpful, because, obviously, it’s bad for the nation. It’s bad for the unemployed. It’s bad for the administration.

But it does strengthen the administration’s and the Democrats’ hand in terms of arguing that it’s essential before the holiday to extend unemployment benefits, which have expired. It also, oddly enough, at the same time bolsters Republicans’ hands in arguing that it would be a bad idea to let even the upper-income tax cuts expire, because those, too, not particularly effective, from my point of view, but they do have some stimulative effect.

JIM LEHRER: Do agree with that, David, that this helps both arguments?

DAVID BROOKS: Yes.

JIM LEHRER: Or is what — is that a good thing, to help both arguments?

DAVID BROOKS: Right. Well, I think, in the short term, it is. I think we are headed toward a deal. And the deal is going to be the Republicans get their tax — extending the Bush tax cuts on the top, and the Democrats are going to get the extended unemployment insurance. That will be the deal.

And what I would say was, I would hope the president would do some face-saving by saying, OK, we will do this deal. We will extend the top rates for one year, or maybe three, but, in the middle — in the meantime, we’re going to work on some fundamental tax reform. And that would be his way of face-saving.

But I do think — I am not — I do think, given where the unemployment rate is, there is not a lot we can do in spending terms to address that in the short term.

JIM LEHRER: No more stimulus package, no more…

DAVID BROOKS: Well, that is, politically, not going to happen.

JIM LEHRER: Yes.

DAVID BROOKS: B., even if you did pass it, it wouldn’t affect anything in the next year or so.

JIM LEHRER: But in the deficit, in the atmosphere, there is going to be a stimulus?

DAVID BROOKS: Right, so it bucks up Bernanke’s quantitative easing policy, which is a very controversial policy. Maybe it is better to err on the stimulative side, as Bernanke is doing.

And this second thing, it introduces this two-track system to the budget process. We’re going to blow a hole in the deficit for at least another year, but that makes it more serious that we get serious after that.

And so, again, with Ruth’s qualms, that you shouldn’t say this is a good thing, Vladimir Lenin said, the worse, the better.

(LAUGHTER)

DAVID BROOKS: And, so in some sense, as things get…

JIM LEHRER: I think we will go back to the banana…

(LAUGHTER)

DAVID BROOKS: Yes. But, as things…

JIM LEHRER: Yes.

DAVID BROOKS: This is saying — this is — the bad economy, when it should really be getting better, is telling people you got to think seriously and you have got to think fundamentally.

And so I do think it is having a stimulative effect to get people to think more basically about the kind of changes we need.

JIM LEHRER: Do you agree that, that this is — this goes beyond some of the things that we’re talking about on the surface here, that, in order to solve this, people have to go beyond what they normally argue about politically when it comes to economics?

RUTH MARCUS: Well, I think everybody — this economy keeps disappointing. You think you have turned the corner, and then it just disappoints you again.

And I feel very nervous about the — the more I hear serious policy-makers talk about their fears about the economy, the more I think erring on the side of stimulus. And I think that that message is being conveyed privately to people.

And it is a very big risk not to do that. I also think, if you think about the longer term — now, I’m not talking about many years, but just a few years out — boy, if you are the administration, and you look at this unemployment rate now, and you are looking at what things are going to look like in 2012, it is not going to be a pretty sight.

Goldman Sachs has the unemployment — has projected an unemployment rate — and this was before this morning’s numbers — in 2012 of no less than 8.5 percent. That is a dismal electoral picture.

JIM LEHRER: To run for reelection…

RUTH MARCUS: To run for reelection.

JIM LEHRER: … if you happen to be the president.

RUTH MARCUS: If you happen to be the president.

JIM LEHRER: Yes. Speaking of the president — this is called a segue — the…

(LAUGHTER)

… other big news, of course, was the president’s visit to — surprise visit, unannounced visit, to Afghanistan.

What should be made of that?

DAVID BROOKS: Well, there is a lot of talk as to, why is he doing that? Did he want to get out of town with the job numbers?

(LAUGHTER)

DAVID BROOKS: But most things are just scheduling. He had an election he was fighting for about three or four months. Then, he had all these summits. So, I think this was the first time he could get away.

And what is interesting about the commitment to Afghanistan is, I would say a difference of opinion between those in the Pentagon and those in the White House right now. If you polled the average senior brass in the Pentagon, there are still some upbeat feelings about what can be accomplished, I think much less so in the White House right now.

And it’s good for him to go over there just to get a sense of where we are, to reconcile these two views.

JIM LEHRER: What would you add or subtract?

RUTH MARCUS: And it is good for him to get over there, in addition, because the troops are there. They — we have been there for a very long time, longer than Vietnam, longer than the Russians were in Afghanistan.

JIM LEHRER: You know, we forget that, that we’re now — we have now been there longer than most wars that the United States has fought.

RUTH MARCUS: It’s quite remarkable, and it’s a very good message for the commander in chief to go and send that.

That being said, this wasn’t really what the — I agree with David. It was a scheduling issue. This is not really the message that the White House wanted to be conveying now. First of all, there was this extraordinarily uncomfortable collision of the WikiLeaks information about President Karzai with this trip.

I don’t think that’s the reason that this tete-a-tete was canceled. But it is also true that you don’t really want to be reminding people that we have this very difficult situation to deal with, with a guy running the country who we are really not that sure about.

And, second of all, look, on a day where there are — where there are these disappointing unemployment numbers, and people want to know that the president is focusing on jobs, jobs, jobs, they don’t begrudge him going there, but the White House keeps somehow stepping on its jobs message.

DAVID BROOKS: Yes. There is a weird thing — or an interesting thing that has happened, I would say, in the liberal — among liberals, I would sense, in the last couple weeks, which is a greater sense of demoralization than even after the election.

I think there is a great sense — my colleague Paul Krugman had a column this morning.

JIM LEHRER: He was really, really down on…

DAVID BROOKS: Ruth’s colleague E.J. Dionne had a column, and the similar sense that they are not playing this — they are not being very strong. They are not being resolute. You don’t get the sense they know what they want.

I hear a lot the guy doesn’t seem to enjoy being president. And I think, among the core Democratic voter, there is a greater sense of being disheartened — it’s not necessarily Afghanistan-related — in the last week or so than one has seen even just after the election.

JIM LEHRER: And a word? Do you feel the same sense of disheartenment…

RUTH MARCUS: I think there is disheartenment.

JIM LEHRER: … among the Democrats?

RUTH MARCUS: There is — the president’s kind of lost the mojo, and he needs to — this is the holiday season. He’s not going to demonstrate that back. Then, the next really significant point we will be looking for is the State of the Union…

JIM LEHRER: State of the Union, right.

RUTH MARCUS: … where he really needs to engage, for example, on the deficit commission.

JIM LEHRER: We now have to disengage.

(LAUGHTER)

Ruth, good to see you again. Thank you, David. Thank you both.