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Plouffe: We Won’t Accept Boehner’s Short-Term Deal

July 27, 2011 at 12:00 AM EST
A vote on Speaker Boehner's debt plan was delayed until Thursday after the nonpartisan Congressional Budget Office said the bill would cut $850 billion instead of the promised $1.2 trillion. Gwen Ifill discusses the ongoing stalemate with President Obama's senior political adviser, David Plouffe, and Rep. Peter Roskam, R-Ill.
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JEFFREY BROWN: The knocks against House Speaker John Boehner’s plan for solving the debt crisis came mostly from Democrats today, as more Republicans got on board.

Meanwhile, financial markets nervously notched downward.

NewsHour congressional correspondent Kwame Holman starts us off.

KWAME HOLMAN: Republican lawmakers today appeared to rally around House Speaker John Boehner’s plan to avoid default, even as it was being retooled to achieve additional savings.

A vote on the Boehner proposal originally planned for today was delayed until tomorrow after the nonpartisan Congressional Budget Office said the bill would cut $850 billion, instead of the $1.2 trillion promised.

Despite the uncertainty about the plan, a wave of House Republicans emerged from their closed-door session this morning resigned to accept it, among them, Florida freshman Allen West, who was elected with strong Tea Party support.

REP. ALLEN WEST, R-Fla.: Does it meet all the criteria I would like to have? No. But I think part of governing is to be able to say, this is good enough for us to go forward.

KWAME HOLMAN: Another freshman, Blake Farenthold of Texas, said he had gone from lean no to lean yes.

REP. BLAKE FARENTHOLD, R-Texas: Well, you have got to claim a win when you can claim a win. A football game is a great example. “Cut, Cap and Balance,” it was a Hail Mary touchdown pass. Let’s go and take what we can get in this, get the five yards, get the first down and fight the next battles.

KWAME HOLMAN: Until this point, many conservatives had objected to any move away from that so-called “Cut, Cap and Balance” plan which passed the House last week.

It called for $6 trillion in deficit savings over 10 years, plus a balanced budget amendment to the Constitution. But as the Aug. 2 deadline has moved closer, pressure has mounted. Phone calls from citizens around the country flooded member offices again today, while online traffic bombarded congressional websites. And, the influential Republican-friendly Wall Street Journal editorial board wrote, “If conservatives defeat the Boehner plan, they will not only undermine their House majority. They will go far to re-electing Mr. Obama and making the entitlement state that much harder to reform.”

Still, not all Republicans were convinced, including Tim Huelskamp of Kansas.

REP. TIM HUELSKAMP, R-Kan.: It’s not about the speaker. It’s not about the president. It’s not about the Senate leadership. It’s about the what the American people are asking for. It’s about what my constituents are looking for.

They want a solution. And the deal-making, that’s all part of the process up here, but I think people are looking at it and saying, does this solve the problem? And I don’t think this does solve the problem.

KWAME HOLMAN: The Boehner plan also faced a firm wall of opposition in the Democratic-controlled Senate, where leaders pledged to turn back the measure if it successfully clears the House.

Majority Leader Harry Reid:

SEN. HARRY REID, D-Nev. Majority Leader: Magic things can happen here in Congress in a very short period of time under the right circumstances. But it appears quite clear that Boehner was — a favor was done by CBO for him yesterday, because his bill was doomed to failure, and he can juggle things around, and he had a caucus today, and they may get it passed. But it doesn’t matter. That is a flawed piece of legislation.

KWAME HOLMAN: The CBO also released its score of Reid’s plan, projecting savings of $2.2 trillion. That’s half-a-trillion* shy of what Democrats had aimed for in order to increase the debt limit through the end of 2012.

New York Sen. Chuck Schumer argued the numbers don’t lie.

SEN. CHARLES SCHUMER, D-N.Y.: Aside from avoiding default, aside from being more long-term, we have more cuts. On paper, the Republicans have no basis for rejecting the Senate plan.

KWAME HOLMAN: But the Senate’s top Republican, Mitch McConnell, said the Boehner plan offered the only way forward.

SEN. MITCH MCCONNELL, R-Ky. minority leader: I remain as committed as ever to resolving this crisis in a way that would allow us to avoid default without raising taxes and to cut spending without budget gimmicks. There’s only one option that does that, and that’s the one Speaker Boehner has proposed.

KWAME HOLMAN: Despite the continued stalemate, the president of the Standard & Poor’s ratings agency said he thought lawmakers would beat the clock and not risk default.

On Wall Street today, the impasse caused stocks to slide. The Dow Jones industrial average lost more than 198 points to close at 12,302. And the Nasdaq fell 75 points to close below 2,765.

GWEN IFILL: For more on the standoff, I spoke to the president’s senior political adviser, David Plouffe, from the White House Briefing Room a short while ago.

David Plouffe, thank you for joining us.

So House Republicans say they are closing ranks tonight. What do your Hill allies tell you about where things stand?

DAVID PLOUFFE, senior White House adviser: Well, we always assumed the speaker would find away to claw together the votes for his package.

But, you know, the Senate Democratic leaders said that package is dead on arrival, so what we need now is compromise. We need the leaders on Capitol Hill to — there’s actually quite a bit of common ground between the Senate and the House proposal. They need to compromise in the coming days here, so that we can avoid — avoid default next Tuesday and make sure we don’t have things like interest rate spikes.

And it’s clear this is already putting a very dangerous cloud over the American economy. You see a lot of business leaders small and large saying that this is really preventing them from investing and really having the certainty they need to move forward and invest and hire new employees.

So we need to make sure that we get this cloud out from over the economy, do the work the American people sent everybody to do here, make a good down payment on deficit reduction and then in the coming months finish the job, because entitlement reform, tax reform clearly are going to be left to Congress over the coming months.

GWEN IFILL: What do you base your optimism on that there will be a deal Aug. 2? Today, we see the stock market closed the lowest it has in eight weeks.

DAVID PLOUFFE: Well, We’re getting close. And so I think people are right to be getting increasingly worried.

But all the leaders, Democratic and Republican, have said they don’t think we should get to the brink of default, much less default. So sometimes these things happen late. But I have confidence that — because, again, the Senate proposal and the House proposal have quite a bit of commonality, some major differences that need to get ironed out.

But it would just be unthinkable that our leaders wouldn’t come together, because we’re not talking about something that’s 10 miles apart here. If we can just agree on a couple of the outstanding issues, we can bring this to a close.

Now, the president, as you know, in his conversations with Speaker Boehner, was hoping to do something much bigger in deficit reduction right now. But I think either of these proposals have a committee of Congress that will be charged with coming back to the American people and the Congress and saying here’s how we want to move forward on things like tax and entitlement reform.

GWEN IFILL: Let me talk to you about Speaker Boehner and what his proposal is that is on the table. Two things. Has the president spoken to Speaker Boehner since the meeting so famously broke off last Friday? And have there been conversations between them?

And, also, would — I just want you to be clear. Would the president veto the part of Speaker Boehner’s plan that would call for a second vote to happen at the end of this year to raise the debt limit?

DAVID PLOUFFE: Well, the president and the administration have been in constant touch with congressional leaders, Democratic and Republican. And what the president — the administration’s been clear. We do not accept a short-term debt limit extension, for this reason.

And you’re starting to see more business leaders talk about this. A couple of Republican senators, I believe, talked about this today — particularly now that the Boehner plan I think is going to have a debt ceiling extension that might not even get you through the end of the year.

So how — look at this spectacle. You know, the American people are watching their leaders in Congress wrestle with this, placing a great burden on the economy. Why on earth would we do this a few months from now, particularly if it’s around the holiday season, which is one of the most important times in our economy?

So we need to get a lot of deficit reduction right now, and I think we can do that. We need to make sure the debt limit is not hanging over the economy any time soon. And then we need to finish the job of deficit reduction.

The other thing we have to do here, obviously, is keep a laser-like focus on the economy and on jobs. And reducing the deficit is part of that, but it’s not all there is.

GWEN IFILL: One of the things — pardon me — one of the things the president said within the last week is that revenues are essential in order to — to keep that laser focus on the economy, in order to keep the economy going.

And, yet, neither of these two proposals in front of us right now have any revenues attached to them.

DAVID PLOUFFE: They do not, but again revenues would have been part of a larger package where you actually — also had entitlement reform.

And so we think it’s very important that — because Congress is going to come back to this matter. Either of the proposals, the Reid or the Boehner proposal, have a committee of 12 members of Congress that are supposed to report out some additional deficit reduction ideas.

And part of that, you’re certainly going to have to have tax reform revenues and entitlement reform, because the spending cuts are important. It’s a good down payment. But to do anything significant about the deficit, you are going to have to do a lot more than that.

Now, the Reid proposal has more a lot savings in it than the Boehner proposal does. So that’s a better first step here. But what we need to do is do fundamental tax reform. And we went through that — by the way, we can lower rates, cut taxes for most people in the country, but the very wealthy, corporations who have been enjoying special loopholes.

And then, as the president was proposing, and — and, you know, we have gotten some — as you know, some criticism from our party. The president was willing to do really tough things as it relates to Medicare and Medicaid, even Social Security if it’s done carefully. So there’s no easy answers here. If we’re going to reduce the deficit, we are going to have to tackle those tougher things of taxes and entitlement reform down the road here.

GWEN IFILL: Is the White House willing to come up with its own compromise, separate from the Reid compromise and the Boehner plan, to get something through, rather than have to veto, or — or at least accept some kind of short-term extension?

DAVID PLOUFFE: Well, as I say, we’re working very closely with folks on Capitol Hill.

Now, most of the spending cuts in either the Reid plan or the Boehner plan were — a lot of those derived from the work that the president did with Speaker Boehner; the vice president did with congressional leaders.

And I think key thing here is, where are the areas of compromise? We’re going to have to make sure that you can have a spending cut package that can pass both chambers, so there is going to be some work to do there. And then obviously the House Republicans are insisting on having another debt limit vote hanging over the American people and the American economy.

And that’s the wrong thing to do. We’re not going to accept that. There’s other ways, though, to make sure that Congress does report out, because, obviously, everyone would want this committee in Congress to work. But there’s six Republicans and six Democrats.

In the event that there’s a stalemate, you want to make sure that there’s still deficit reduction that Congress is forced to enact. And those are the types of discussions that are happening.

GWEN IFILL: Let’s talk about real consequences if this deal is not reached between now and Aug. 2.

On Aug. 3, the Bipartisan Policy Center says a $23 billion check is due to pay Social Security benefits. Only $12 billion will be coming into the federal treasury. What do you do about that? What do you decide not to pay that day?

DAVID PLOUFFE: Well, the Treasury Department, I believe, later this week will be laying out in more detail exactly what would transpire here.

But it’s been pretty clear. Our borrowing authority runs out after Aug. 2. And we — for every $10 we spend, we obviously borrow a lot of it. And so this is going to have catastrophic consequences.

First of all, what kind of message does it send to people here in this country and around the world if we can’t do our business here? The United States of America would default for the very first time. You run the risk of a downgrade. You run the risk of rates going up, which would affect most small businesses and Americans.

And then obviously as you begin to run out of resources and you’re running on fumes, payments begin to get delayed in things like Social Security and veterans and to small businesses and contractors.

GWEN IFILL: If the consequences are so catastrophic, Mr. Plouffe, why would the president not take advantage of his executive authority to just decide to declare this debt ceiling raised?

DAVID PLOUFFE: Well, listen, we have looked at these constitutional issues. And in the closing days here, you’re starting to see members of Congress and others say, well, maybe there’s a constitutional way around this problem. Maybe there’s actually more money at Treasury.

There’s no off-ramps here. The only option here is for Congress to do its job. We have run out of excuses and we are running out of time.

GWEN IFILL: David Plouffe at the White House, thank you so much.

DAVID PLOUFFE: Thanks, Gwen.

GWEN IFILL: For another view, I spoke to Representative Peter Roskam of Illinois. He’s the chief deputy Republican whip and a member of the House Ways and Means Committee.

Congressman, thank you for joining us.

You are the chief nose-counter, vote-counter in the House Republican Caucus. Where does the Boehner plan stand tonight? Do you have those 217 votes?

REP. PETER ROSKAM, R-Ill.: I think there’s very good momentum on the Boehner plan. I think what most members of Congress are recognizing is that there’s a few options that they face.

One is to default, which is a nonstarter. It’s a non-option. The other is to accept Sen. Reid’s plan, which is filled with gimmicks, with all due respect to Sen. Reid. And the other pathway forward is the plan that Speaker Boehner laid out. And I think more and more members, the more they see in the plan, the more comfortable they are. And so we propose to move that within the next couple of days.

GWEN IFILL: In your caucus meeting today, what did people express that worried them the most about this? Why isn’t everyone automatically in favor of this?

REP. PETER ROSKAM: Well, look, I think that there’s a level of concern about the same sort of themes that we have been hearing throughout this entire debate. And that is that the cuts don’t match where we are as a nation and that we can always go deeper, which is a premise that I completely accept.

Now, the reality is that we’re dealing with Harry Reid, who controls the United States Senate, and a president of the United States who has not authored his own plan and has even resisted a great deal of these cuts along the way. So, what we’re trying to do is make sure that we accomplish a couple key goals, number one, make sure that the obligations of the federal government are met and that every obligation is taken care of, and, secondly, to make sure that the — we’re actually cutting more than we’re raising the debt ceiling.

Those are themes that we have been consistent with throughout. And within that framework, I think that there’s been a great spirit of accommodation and trying to move forward.

GWEN IFILL: Is there any across-the-aisle bipartisan conversation at all going on about this anymore?

REP. PETER ROSKAM: Well, look, there’s conversations, but they’re largely conversations in passing, I think, at this point, because the reality is I don’t expect any House Democrats to vote for this. I think the reality is, this is something that Speaker Boehner and Leader Reid negotiated together, until President Obama voiced some objections to Leader Reid about this.

So I think it’s been happening at the level of Leader Reid, Speaker Boehner. And now Speaker Boehner is planning to move it through the House with the support of his conference.

GWEN IFILL: We have heard today that there were phone — that the phone — that the phones were jammed at the Capitol with people calling in, your constituents calling in and saying, why can’t you get this done?

Is that what you’re hearing from your members as well?

REP. PETER ROSKAM: I think that there’s a high level of expectation on the part of the American public that their leaders come together and solve two things.

One is, make sure the obligations are met and that we don’t go into any sort of tailspin as a result of this, but, as importantly, make sure that the debt ceiling isn’t raised just willy-nilly, with no preconditions.

And I think if there’s a thoughtful way forward — and that, I would submit, is the Boehner plan that accomplishes those two things — I think most Americans can get their heads around that and feel a high level of confidence, which is why I think it’s interesting, when you were interviewing the White House representative, he very carefully didn’t say that the president would veto the bill.

And I think they have obviously left the door open because they know this bill is going to end up on President Obama’s desk.

GWEN IFILL: But they did say the two-step plan, the voting-now and voting-later plan, would be difficult for the economy.

REP. PETER ROSKAM: Well, look, I think’s all kinds of difficulties for the economy. Even worse and more difficult for the economy was the premise that President Obama came to the Congress with months ago. And that was simply raise the debt ceiling, give an additional $2.4 trillion with no preconditions.

So there’s a great deal of concern as we move forward with any economic growth. And I think the 9.2 percent unemployment figure is actually a body blow to the whole American economy. And so we have all got our work cut out for us.

But for administration to lay at the feet of this debt ceiling conversation all the economic woes, I think, is an overstatement.

GWEN IFILL: Let me read to you something that Speaker Boehner said today in a radio interview, as we talk about this compromise issue or this “coming to some sort of agreement” issue.

He said, “Barack Obama” — speaking of his own plan: “Barack Obama hates it. Harry Reid hates it. Nancy Pelosi hates it. Now, why would Republicans want to be on the side of Barack Obama, Harry Reid and Nancy Pelosi? That’s beyond me,” he said.

Where do you see a solution with that kind of rhetoric?

REP. PETER ROSKAM: Well, was he referring — because I don’t see the quote. Was he referring to John…

GWEN IFILL: His own plan.

REP. PETER ROSKAM: To John Boehner’s plan.

Well, ultimately, that’s, I think, a clue to the pathway forward. And I think what most…

GWEN IFILL: How’s that?

REP. PETER ROSKAM: Well, I think it — it’s representative of the idea that what is it in this plan that President Obama objects to? He objects to the spending restraints in the plan and ultimately the inability to move forward and do the types of spending that he’s proposed in the past.

Now we’re down to this witching hour. It is upon us. And I think what has to happen is, cooler heads have to prevail. We have got to come together around a plan. The Boehner plan is the only one that can get to the president’s desk. We need to get this done, and the president needs to sign it.

GWEN IFILL: What path do you see to this getting to the White House, to the president’s desk, if the Senate, as they say now, have no intention of endorsing and supporting the Boehner plan?

REP. PETER ROSKAM: I think two things.

First is, this is something that Leader Reid did negotiate with Speaker Boehner. And to know John Boehner is to know that he’s not a person that overstates positions. So, clearly, in that negotiation, Speaker — or Leader Reid disclosed where the majority was in the United States Senate. That’s the first thing.

The second thing is, we have heard a lot of bluster out of the United States Senate over the past couple of weeks. We heard the Senate admonish the House that it was going to be working until this all went to fruition. And, ultimately, the Senate adjourned last weekend.

So I think, when it all comes down to it, and we’re faced with paying our bills and meeting our obligations, the Senate will step up, do the right thing, pass this, and the president will sign it.

GWEN IFILL: The Wall Street Journal editorial page, which usually sides with you on these things, wrote today that they basically think that Republican lawmakers may be seeking the perfect over the good in opposing the Boehner plan. Is that about — is that the way you see it?

REP. PETER ROSKAM: Well, I think the that there’s — I have been involved in a lot of conversations even within the past few hours with some Republican lawmakers who were reluctant about the Boehner plan to begin with.

And to that point, they have recognized that the perfect is the enemy of the good, and we have had members that have been very eloquent on that point. And so now what they’re trying to do is to move forward with two simple concepts. One is meet the obligations of the federal government, and, number two, cut more than you’re raising the debt ceiling.

GWEN IFILL: How much of this is about getting to that, and how much of this is about forcing — ultimately forcing the president to choose?

REP. PETER ROSKAM: Well, I don’t think people are laying awake at night trying to opine and come up with schemes about making the president choose.

Ultimately, what’s bringing everybody together on all of these votes is the notion that Aug. 2 is a date of consequence that has to be dealt with. So, I wouldn’t submit that there’s any, you know, political posturing and other nonsense. I think that there’s a lot of folks that are looking for a pathway forward. And that’s where I think John Boehner is trying to lead. And I think, ultimately, that will be a successful effort.

GWEN IFILL: Peter Roskam, Republican from Illinois, thank you so much.

REP. PETER ROSKAM: Thanks, Gwen.