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Shields and Gerson Examine Tax Debate, Obama’s Staff Shake-ups

September 24, 2010 at 6:05 PM EST
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Syndicated columnist Mark Shields and Washington Post columnist Michael Gerson discuss this week's political stories, including the debate over tax cuts, a new GOP governing pledge and staff departures in the Obama administration.
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JUDY WOODRUFF: And to the analysis of Shields and Gerson. That’s syndicated columnist Mark Shields and Washington Post columnist Michael Gerson. David Brooks is off tonight.

It’s good to see you both. Thank you for being here.

MARK SHIELDS: Good to be with you.

JUDY WOODRUFF: Let’s talk about the Bush-era tax cuts. We just heard Alan Greenspan with the argument about why they should be allowed to lapse.

But let’s first talk about what is going on in the Congress. Democrats, Mark, in the Senate, they’re saying, let’s postpone a vote. But, in the House, we don’t know what’s going to happen. What’s the backstory here?

MARK SHIELDS: The story of the House is that the House could pass the tax cut extension for those under $250,000. But you have to understand, Judy, that Democrats who are in tough races across the country, many of whom are defending seats that were traditionally Republicans’ that they won in either 2006 or 2008 are very much on the defensive.

They’re on the defensive because of the economy, first of all, the reality of the economy. But they’re on the defensive explaining all sorts of votes they have cast. They want to get back and just go compete against their opponent. They don’t want to nationalize this race anymore. They want to localize it.

And the House Democrats have cast all the tough votes this session. And they — the Senate Democrats and the Senate in general has been the logjam. And they’re simply saying, the Senate had to go first. And Harry Reid, they didn’t have 60 votes in the Senate to pass — to bring it up.

JUDY WOODRUFF: So, the prospects are what?

MICHAEL GERSON: Slim to none in the session that’s coming up after the November elections, in my view.

I mean, you could have Harry Reid lose his seat. In that circumstance, his promises and plans wouldn’t mean very much. You could have some new members of the Senate that take place immediately — the turnover taking place immediately, not in the — you know, not down the road.

But because of state constitutions and the way they deal with this, you could have a changed Senate right away, with places like Colorado and other places. And you would have — if the Republicans win big — and that’s a big if, OK — it will be seen, broadly seen by — in the country as a repudiation of Obama’s economic approach.

And there’s no way that congressional leaders can act as though that hadn’t happened. It’s not going to be possible.

JUDY WOODRUFF: So, the Democratic hope of extending the middle-class tax cuts…… only?

 

MARK SHIELDS: I disagree with Michael in this sense. There is a longstanding tradition of lame-duck Congresses doing significant things. Some may recall, in 1998, after they lost seats in the midterm election, the Republican Congress impeached the president of the United States. A lame-duck Republican Congress did that, when, in fact, if they had seated the vote when the new members who won — they wouldn’t have passed at least one of the three articles of impeachment.

Here’s the way it would work. The Democrats, in my judgment, in the House — and that’s what the House leadership believes — could pass it on what is called a suspension calendar. The House, the majority in the House, the majority in the House runs the House, OK? The minority’s responsibility in the House is to help make a quorum. And that’s really it.

And the suspension calendar means there will be no amendments up or down. A two-thirds vote is required, and that would then pass it for the $250,000 under.

JUDY WOODRUFF: So, you are saying it is possible?

MARK SHIELDS: Sure, I do. And I think then it goes to the Senate, and what happens in the Senate is, there will be an attempt to try and isolate the $250,000 and above, the millionaires’ tax cut, to extend that for a shorter period of time, maybe a year, and separate that from the $250,000 and below.

JUDY WOODRUFF: Michael, I have a question about the substance. I mean, the Alan Greenspan argument, that the — we are — that the country is facing a catastrophic situation, why isn’t that argument catching on among his fellow Republicans?

MICHAEL GERSON: Well, I think it is important to note that it didn’t really catch on among some Democrats, which is the reason the Democrats are in this circumstance.

A significant of those in the House and significant, key members of the Senate decided, you know, if you are a Keynesian, you don’t raise taxes during an economic slowdown. That’s — that doesn’t make any sense, even according to Keynesian economics.

And it’s not only politically unpopular. I think there are some good economic arguments here. It’s like, well, if you want to raise taxes, why do it now, you know, at a time where we are facing this slow recovery that feels like a continued recession? I think that’s the argument.

JUDY WOODRUFF: I ask because he gave Jeff such a grim forecast.

MARK SHIELDS: Well, I mean, Judy, the average tax cut for a person making $1 million is $100,000 a year. So, what you are really suggesting is, we are going to borrow money from the Chinese to provide a tax cut for these folks.

And, by every measurement, economic standard I have seen, this is the least stimulative to the economy, the tax cut for these folks at this level. And that is the argument that’s made.

JUDY WOODRUFF: All right. Let’s talk about something that incorporates the tax cuts. Michael, that is the Republicans’ Pledge to America. They rolled it out yesterday. They went to a hardware store out in Sterling, Virginia, what do you make of it?

MICHAEL GERSON: Well, I think it is less interesting as a governing agenda than it is as kind of a Rorschach test.

Mainstream, moderate Republicans and conservatives seem to welcome it, were enthusiastic about it, precisely because it’s not particularly bold, not particularly dangerous or controversial. It really overturns the Obama agenda.

But Tea Party — the hard core of the Tea Party was very critical of the pledge, for the same reasons, because it wasn’t bold enough. They don’t want to just overturn the Obama agenda. They want to overturn broad layers of the U.S. government.

I think that that presents a problem for Republicans if they win the House between those that really want to take down the whole building and those that want to govern in effective ways. It’s going to be a serious conflict.

JUDY WOODRUFF: So we are getting a look at what could happen down the road.

MARK SHIELDS: I think it is more of a political document and sort of a vague blueprint for governing.

I mean, they finessed and punted the really tough issues, Social Security, Medicare. It was — there were crowd-pleasers in it, like a bill has to be printed 72 hours before it is voted upon. We’re going to repeal TARP.

I mean, they conveniently forget that TARP was courageously sponsored by President George Bush and voted before by both John Boehner and Eric Cantor, as well as Mitch McConnell.

But — so it was more of a crowd-pleaser. And I think they felt they had to have a document. And, of course, they include the tax cuts again.

JUDY WOODRUFF: Yes. And a lot of it was about the economy. And I want to come — come to the White House here, Michael, because you — you — we learned this week that the third senior member of the president’s economic team to announce he’s leaving in the last month or so, Larry Summers, is heading out the door.

What changes should we look for in economic policy…

MICHAEL GERSON: Well, first, I think you have to recognize that this is not that unusual after two years in an administration. It’s kind of a normal time for people to have turnover. And, in these cases, they had plausible personal reasons. That’s true.

But it’s much easier to stay in a team that seems successful. And there is a broad judgment that the economic team wasn’t particularly successful. I think that is unfair, in part, for exactly the reasons that Mark talked about.

Some of those early decisions to save the banking industry, the financial industry were very much in continuity with the Bush administration and very important. But I think they deserve the criticism that they haven’t put much emphasis on economic growth and job creation in this circumstance.

And the president deserves a lot of criticism for going with health care, instead of those themes, it seems to me, and some Democrats as well.

JUDY WOODRUFF: So, Mark, do you look for — what do you look for with the change?

MARK SHIELDS: Well, I mean, I think that it sounds plausible to me.

Larry Summers has a rule that he has to live by at Harvard that you can only be gone two years. But with Peter Orszag, the budget director, having left, and with Christina Romer, the chairman of the Council of Economic Advisers, and then Summers, I would say the person in Washington with the greatest job security at this point is Timothy Geithner, the secretary of the treasury, because there is no way in the world he’s leaving. You have to have that continuity.

JUDY WOODRUFF: Because he would be the last senior figure…

MARK SHIELDS: That’s exactly right, along with Austan Goolsbee.

But I would say, Judy, that what has been missing in this administration from the outset — you can argue about policy and its effectiveness — but there has never been an economic spokesman. There has never been somebody who could answer all the questions, rather than having Geithner do it one day or Romer do it or the president do it.

The president should never be explaining bad economic news. And I think that’s what they need, whether — you can call it an economic czar, whoever it is, but it ought to be somebody that — who can — can speak with credibility, especially — because Michael’s point about what has been done, there’s been no greater salvation to the American manufacturing system than the bailout of General Motors and Chrysler.

I mean, it saved the American automobile industry, which is now flourishing. And it is the most unpopular initiative of the whole administration. So, I mean somebody ought to be able to make that case, and it shouldn’t just fall to the president to do it.

JUDY WOODRUFF: I want to ask you both about something that the Senate — or I guess a couple things the Senate didn’t do this week. One of them, Michael, was that they rejected the so-called DISCLOSE act. This is an act that would have required that we know who political contributions are coming from.

Does this matter in this environment that we’re…

MICHAEL GERSON: Well, I think it reinforces a clear lesson. You don’t undertake campaign finance reform a few weeks before an election, when it looks like you are stacking the deck in your favor. Any self-respecting opposition party is going to oppose that. You know, the bill itself is supposed to prevent conflicts of interest. This is a clear conflict of interests on the part of the Democrats, who view this as a favorable change.

And you can’t do that right before an election. It’s not possible.

MARK SHIELDS: I disagree. I think that the Democrats — the bill was offered not to touch this election. It would only take effect in 2011. The position of the Republican Party, led by Mitch McConnell, their leader, for generations has been, on campaign finance, don’t limit expenditures, don’t limit contributions, but have full, timely, and immediate disclosure.

And now that the Supreme Court of the United States, in its collective wisdom, has determined that corporations are individuals, and they have all these rights to spend money, and not to answer any questions, anybody, I think it’s changing our politics more profoundly, financially, than anything that’s happened in my lifetime.

JUDY WOODRUFF: Is this going to stay this way, Michael? If we get into — you get into next year, with a presidential election…

MICHAEL GERSON: I think you have to do campaign finance reform in a less political season. There’s no — and this is a conflicted issue, because it’s not just the Chamber of Commerce that opposes this law. It’s also the ACLU and the Sierra Club and others that feel like they have a right to express themselves in these public settings.

So it is a real battle, but you are not going to get it a few weeks before an election. It’s not going to happen.

MARK SHIELDS: There were — there was an attempt earlier to give special preference to traditional Democratic constituencies.

But the offer was made, and it was on the table, in rewriting the bill to treat everybody exactly the same, full disclosure for everyone. And I think, when somebody is giving $25,000 to a — in spending to a campaign to attack Michael, I think Michael, as a candidate, has a right to know who is doing it, and so do the voters of his district.

JUDY WOODRUFF: Very quick last question, very quick. Bob Woodward’s new book inside the Obama administration, how they dealt with the war, wars in Iraq and Afghanistan, do we learn something from this?

MICHAEL GERSON: Well, there’s not much new, but it’s still pretty disturbing, the politicization of these decisions, the fact that the administration is so divided on very basic questions, and the ambivalence of the president.

I think it’s — the book is going to lead a lot of people to say, get in or get out, instead of pursuing kind of split-the-difference policies that don’t achieve the objective.

MARK SHIELDS: I thought the president’s own approach to it, where he welcomed dissent, where there was free and open discussion with competing points of view, unlike perhaps previous administrations we’re familiar in going to war and planning, the extensive planning I think was refreshing.

I think, about Bob Woodward, you either talk to him or you don’t talk to him. And if you don’t talk to him, you risk a negative interpretation. So, people continue to talk to Bob Woodward.

JUDY WOODRUFF: Well, we continue to talk to you, Mark Shields, Michael Gerson. Thank you both.

MICHAEL GERSON: Thank you.