tv Meet the Press MSNBC July 18, 2011 1:00am-2:00am PDT
this sunday -- running out of time in the debt talk. can a deal be reached or will america fail to pay its bills? >> if washington operates as usual and can't get anything done, let's at least avert armageddon. >> really gave us three bad choices -- higher taxes, smoke and mirrors, or default. and we refuse to accept any of them. >> inside the talks and the latest on the prospects for an agreement this morning with the president's top budget adviser, jack lew. then, the debate over taxes and spending. will it take another election before washington is willing to make the hardest choices? with us, assistant senate majority leader, democrat dick
durbin of illinois, and tea party favorite, republican senator jim demint of south carolina. finally, a roundtable discussion, a "meet the press" jobs and economy summit. we try to cut through the confusion and ask where are the jobs, how important are taxes to economic growth, where are the bright spots, and when will recovery start feeling like recovery? with us, republican governor of ohio john kasich, chairman and ceo of honeywell, david cote, former mayor of new orleans, now president of the national urban league, marc morial, chief economist for mesirow financial, diane swonk, and host of cbs nbc's "strategy session," david faber. captions paid for by nbc-universal television breaking news this morning. there are reports that former "news of the world "newspaper editor in britain, rebekah brooks, was arrested this morning in connection with the
phone hacking and police bribery scandal in great britain. there are some calls for the justice department here in the united states to step up its investigation of parent company news corporation. meanwhile, in washington, the president this weekend tried to keep pressure on congress to reach an agreement on a deficit-cutting deal as the august 2nd deadline to raise the debt ceiling nears. >> i've put things on the table that are important to me and to democrats, and i expect republican leaders to do the same. >> as deliberations continue, there were no face-to-face talks this weekend, and house republicans are expected to vote tuesday on a series of measures to cut spending and balance the budget, although they don't appear to have the votes necessary for those measures to become law. joining me now, the president's top budget adviser, jack lew. welcome to "meet the press." >> good to be here, david. >> good to have you here. so, what is the latest? have there been substantive talks over the course of the weekend? >> well, the latest is that after the meeting on thursday, there have been a lot of
conversations within each of the party caucuses, within the house and the senate, phone calls, conversations back and forth. that's how the president left it on thursday, that we've kind of put all of the items on the table. it was now a question of congress figuring out what it could do. so, i think that will continue over the next day or so. >> but you don't have as we sit here now a better sense of what congress is willing and able to do? >> i think that what is encouraging is that the leaders in congress seem to all agree that we can't push to a default, that we need to have a path that makes sure that the united states can keep its obligations and pay its bills in august. so, i think that there are many conversations going on in order to make sure that that doesn't happen. >> well, let me be clear. is the president's position that he would accept no more than a trillion dollars in cuts if there's no tax increases, is that the number that he's sort of dealing with in his head? >> i think it's less mechanical than that. the president made clear he wants the largest deal possible, he wants to do the most we can to reduce the deficit. that would be the right thing to do for the american people. he made it clear he's willing to go into areas that he's not in
the past been comfortable going into, and others will have to do that as well. >> but he used that figure. >> but he also said that if we can't get the most done, then in addition to extending the debt, we should do as much as we can. there are a number of ways to get there. we aspire more -- >> but my question is on the number. if you get beyond $1 trillion and he still can't get any tax increases, the president said i'm not willing to cut more spending without having tax increases. >> well, what the president said was to do major structural changes on the spending side, there would have to be major tax increases, and we could see a path of getting to well over a trillion on something we agree to. >> if that's sort of a fallback plan, because he wanted something like $4 trillion over ten years in spending cuts -- erskine bowles told chuck todd on "the daily rundown" that that might fall well short of what's necessary here. this is what he said. >> the problem is, chuck, that so many people are talking about
doing it with just about $2 trillion of deficit reduction. that's not a solution. that's not going to fool our creditors. >> in other words, the markets, our creditors are going to look at that and say that's not a fall back position, that's well short of what they should be doing. >> i think looking at the markets, they're saying two things. first, the united states cannot default. and that is the bare minimum. i say that, again, only because it has to be clear that there are some extreme views in some places that think that's something we can do. we can't. the second is, we need to get our fiscal house in order. i think we've said for some time now, as have most, that we need to do on the order of $4 trillion of deficit reduction over the next 10, 12 years. we would like to get that done now. if that can't happen, if there's not a willingness to come together, the president has shown he's willing to make the moves necessary to get there, but if there's not a similar willingness, we should do as much as we can now. i think that the markets will understand moving as far as we can. what would be hard to explain is doing nothing. >> you talk about the perils of default, as have the fed chief and the president and others, as a given.
and yet, look at the polling on this. even among people who are paying close attention in the gallup poll, 53% are in favor of voting against raising the debt ceiling. do you think that's because there are republicans like michele bachmann and others saying that this administration's really selling in her words, a misnomer that we're headed toward default? where does that come from? do you think they actually believe that or do you think they're doing that cynically? >> i can't explain what motivates people to say those things. i can tell you the facts are the facts. if we don't raise the debt ceiling, we won't be able to pay our bills in august, and that has dire consequences. it will for the first time mean the united states cannot keep its obligations. it will cascade through the economy. it will mean that people, regular people who are buying homes and cars will pay higher interest rates. it means that we will put a cloud over the united states that might not go away any time soon. >> final question. you say this is a question of will, political will? it's also a question of political leadership. this president said back in 2009, economy, job one, his responsibility. here's what he said.
>> now, my administration has a job to do as well. that job is to get this economy back on its feet. that's my job, and it's a job i gladly accept. i love these folks who helped get us in this mess and then suddenly say, well, this is obama's economy. that's fine. give it to me. >> is it the president's failed leadership that's brought us to this moment? does he bear responsibility? >> i think the president's shown enormous leadership from the first day in office. he inherited an economy where the bottom was falling out. he stabilized it through dramatic actions, without which millions of americans would be looking for work who are working today. we still have a lot of work to do. the economy is not growing fast enough. we have made a lot of proposals. we want congress to act on patent agreements and trade agreements that are up there right now that would help the economy. we think it's important to extend the payroll tax and unemployment insurance and we want to work together on infrastructure and things that are necessary for the future. there's a lot of work to be done.
>> that's a programmed answer. reality is he said my job is to get the economy back on its feet. that's my job. the reality is, it's not, and this budget deal has fallen apart. the president's trying to lead, but he's not accomplishing it. >> well, i think that if you look at where the parties are, compared to discussions over the last decades, there are things that both sides are talking about doing that are very dramatic. i think there's still time to get something big done. the president's made it clear he wants to do something substantial. you know, when you look in the past at agreements between divided government, it's taken leadership on both sides. it took reagan and o'neil, it took clinton and gingrich. the president is out there, he's willing to do it. he said it in the "state of the union," he said it in the budget. the question is do we have a partner to work with? and i hope the answer is yes. >> but you suspect it may not be yes. >> leadership requires a partner. >> mr. lew, thank you very much. appreciate your time. >> thank you. >> joining me is assistant majority leader of the senate, democrat dick durbin of illinois, and republican senator from south carolina, author of
"the great american awakening: two years that changed america, washington and me," senator jim demint. welcome both. >> thank you. >> good morning. thank you. >> tim geithner, treasury secretary, was here last sunday. i asked him about this ongoing deliberation, and he was emphatic about the outcome. this is what he said. >> let me make this clear, david, the united states is not going to default. we are a country that pays its bills. we're going to meet our obligations, and the leadership in congress, republicans and democrats, house and senate, understand that. there is no alternative for congress to act by the 2nd, and they recognize it, and i'm fairly confident they're going to do that. >> senator demint, is he right, no alternative but to raise the debt ceiling? >> well, he's probably right on that, but there's only one plan in congress right now to do it in a way that the credit agencies say won't turn us towards a negative rating, and that's to cut, cap and balance plan in the house that gives the president the increase in the debt limit, but it does it with those credible, long-term deficit reduction measures that
both moody's and s&p have said we have to do or they will lower our credit rating. >> what is in that? be specific about what that would do. >> well, it does the three things that we have to do. we cut spending significantly but reasonably in this budget year, we cap spending over the next ten years to bring us towards a balance, but probably most importantly, and to have any kind of permanent reform, we send to the states a constitutional amendment that would force congress to balance the budget. let's let the states and the american people decide. it wouldn't happen until about ten years out, but it gives us time to fix our tax code, to fix social security and medicare, and that's what we have to do. >> senator durbin, there aren't votes for what senator demint is talking about. that's just a legislative reality. however, the president made the point, look, we don't need a constitutional amendment to balance the budget, for us to do our job. but is he wrong? maybe you do need something to force you guys to do your job because it's not being done now.
>> let me tell you about the constitutional amendment. it does not have the votes in the senate. i don't know about the house of representatives. and this notion that we somehow have to change the constitution to do what we were elected to do is just plain wrong. bottom line is, those who want to push a balanced budget amendment are saying i can't promise you that i won't steal again, but i will vote for the ten commandments. that isn't a good, solid approach. i've set through a year and a half dealing with this whole deficit crisis, both at the bowles/simpson commission and the gang of five, both bipartisan commissions, and i can tell you the president has put on the table a reasonable list of alternatives that can bring us to $4 trillion in deficit reduction, and we don't have to wait for the states to ratify a constitutional amendment. let's get our job done now. >> senator demint, what's going on here? i mean, so many people i talk to are, frankly, disgusted with washington. you know, you have on the one side people saying that republicans are just crazy, that they won't negotiate, that they're being unreasonable, that they're denying the prospect of a default.
michele bachmann saying it's a misnomer when the fed chief says it would be economic calamity. and on the other side, you know, you've got republicans saying, look, somebody's got to draw a line in the sand here. it's the democrats who have run up the debt since president obama got into office, but the reality is, nobody is really willing to compromise and to make a deal. >> well, david, we certainly are willing to compromise. we're willing to give the president an increase in the debt limit, and you'll see the house pass that bill this week. but senator durbin and 20 other democrats in the senate are on record supporting a balanced budget amendment, and that is a place that we have to get to, but we need to realize, setting all politics aside, that our country is on course for a financial disaster. we can't take another $10 trillion in debt that the president has proposed. so, it is absurd to say that we cannot agree that some time in the next decade that we have to stop spending more than we're bringing in.
you'll see in the next week, republicans are more than willing to work with the president, but the only proposal that the president has sent the congress, david, is a budget that increases the debt another $10 trillion -- >> but senator demint, let's be realistic. bottom line here, if a balanced budget amendment is not passed -- which, you heard senator durbin say it's not going to be passed -- will republicans still vote to raise the debt ceiling? and if not, are you prepared for the consequences on this economy and for the country? >> well, i hope the president won't take us through that, and i hope senator durbin won't, but we've got to draw a line in the sand now, because the day of reckoning is going to come, and the longer we put it off, the bigger the problems are going to be for our country. i mean, moody's, standard & poor's, these agencies are telling us, if we increase this debt limit without credible and long-term deficit reduction, that they're going to lower our ratings. that means it's going to be
harder and more expensive to borrow money, and we can't borrow another $10 trillion that the president's proposed. again, the president -- >> i'm not getting an answer, though. but what's going to happen? how does this end? i know what your position is. how does this end? are you saying that you would put the country into default by not raising the debt ceiling unless you get this balanced budget amendment? >> well, david, we're not going to default. and if you listen to your previous guest, he said we won't meet some obligations, but he didn't say we were going to default. i don't want to put the country through that, but the fact is, republicans and democrats have been irresponsible. they've brought our debt to the point where we literally can't borrow much more money without bankrupting our country. so, now is the time for the president, senator durbin, and the democrats to work with us and at least agree that we can make some cuts now and cap spending over ten years and let the states decide if some time over the next decade that we'll balance our budget. that's hardly a radical idea. >> senator durbin, you and others have described what senator demint just said as intransigence, a stubbornness and unwillingness to negotiate.
the reality is, it's exactly what democrats said about president bush when he wanted to raise the debt ceiling for bringing up too much debt, and the scale was completely different there. i mean, now you want $2.4 trillion in additional debt ceiling. then it was $800 billion. so, you can understand why republicans are saying enough has got to be enough. >> well, i can understand it, but keep in mind that it was the economic policies of the bush administration that led us into a situation where we more than doubled the national debt under president george w. bush. now i hear from senator demint and others, let's stick with those same policies, giving tax breaks to the wealthiest people in america and not facing reality. david, let me tell you, those people who minimize the impact of a default on the debt ceiling, a default on america's debt and our full faith and credit, really have said things that are outrageous. some of the republican presidential candidates in iowa, one of them says he's praying for default. another one said she is opposed to extending the debt ceiling. and others are saying, well, listen, maybe we can't make social security payments for a
month or two, maybe we can't pay our veterans what we promised, but we'll work it out. that is highly irresponsible. what we need to do is to sit down and work together. the president has laid out a big plan. majority leader harry reid and the senate democrats have said we want to work toward a big plan to reduce this deficit by at least $4 trillion over the next ten years. >> senator durbin -- >> we've got to do this. >> my question is, is whether president obama is the one to really lead this? there are some progressives as well as republicans who say that he has been late to this negotiation, late with ideas and late to provide leadership. >> david, let me tell you, if you could have been in the white house cabinet room, as i was, for six separate meetings, and watched this president of the united states patiently listen to each member of the leadership in congress lay out their ideas of where to go and how we can do this together, if you know that he started the meeting saying "i'm putting everything on the table" so that we can have a reasonable, comprehensive approach to it, you saw real leadership in action.
i can't think of another president in my memory who would have devoted that much time and that much patience to trying to bring both sides together, but ultimately, the responsibility is ours. >> quickly from both of you, senator demint first, what happens in the end? what resolution do we get before or by august 2nd? >> david, we can't vote on a speech. the president had to send us a proposal. there's been no proposal out of democrats in the senate. the only plan on the table that will keep us from default and will keep us from falling to a negative rating is the cut, cap and balance plan. folks can say that it's outrageous to balance our budget, but over 70% of americans think we need to, and that's what we're going to insist on as republicans. you're seeing real leadership now in the house from john boehner, and that's the only leadership you're seeing in washington right now. >> senator durbin, bottom line, what's going to happen? first of all, will they meet again today? will folks meet today? >> there won't be a meeting of the same group, but i can tell you what's going on.
majority leader harry reid and mitch mcconnell are working on an approach which will avoid this terrible deadline of august 2nd and a default, which would drive up interest rates and really hurt our economy. we will have a debate on the balanced budget amendment this week in the united states senate. we've got to get this job done. the president is there standing by, willing to help us, but we have got to accept the initiative as elected leaders in congress to really solve this problem and move america's economy forward. >> before i let you both go, i want to ask you about the breaking news and the arrest of rebekah brooks and "world of the news" in great britain, and rupert murdoch and the media empire is something that's reached here in the united states. would you like to see congressional hearings as to whether there's any tie here to the united states in this phone hacking scandal, senator durbin? >> yes, i would. i can tell you that there are questions about whether the foreign corrupt practices act has been violated by rupert murdoch and his news empire, and what's going on in england is startling to think of the extent
that they went to to break the law to try to report a story. we need to follow through with the fbi investigation and also with congressional investigations. >> senator demint, what do you think? >> david, we need to let law enforcement work here. congress has got a big issue in front of us. we need to handle our own business for a change. and the focus this week is on the only plan we've got, and that's cut, cap and balance. >> all right, we're going to leave it there. thanks to both of you. coming up, the debt deliberations are dominating the discussion here in washington, but the question that remains at the top of voters' minds, of course, where are the jobs? i'm going to talk about that up next during a special "meet the press jobs & economy summit." joining me on our panel this morning, republican governor of ohio, john kasich, and chairman and ceo of honeywell, david cote, president of the national urban league, marc morial, economist diane swonk, and cnbc's david faber.
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national urban league, marc morial. republican governor of ohio, john kasich. the chairman and ceo of honeywell, david cote. chief analyst for mesirow diane swonk and host of "strategy session" on cnbc, david faber. governor kasich, your 20th appearance on "meet the press." >> that right? >> you were house budget chairman, so you know what's going on. can you explain it to the rest of us? what is going on and how is this going to end? >> you know, you always -- i was budget chairman, one of the chief architects of the last time we balanced the budget in 1997. it always gets down to the end, but david, it's a matter of will. if both sides have a will to get this done, they'll get it done. >> do you see the will now? is it different than how it's been? >> look, it's always difficult to put a big deal together. is the will there? i think right now they're still talking past one another. but i have to tell you, in my state, where we faced an $8 billion deficit, we wiped it out, we eliminated it. here's the interesting thing -- we have just been taken off of
negative watch in the middle of this, and we also have jumped, according to cnbc, 11 places in terms of business-friendly. we've been able to cut taxes, improve, reform government. and you know why? we looked it square in the eye because ohio was dying, and we are beginning to really become business-friendly. that is what they're not doing here in d.c. right now. >> yeah. all right, financial implications. let's go around the horn here. diane, what do you see? i mean, this debate about whether we're really going to default or not default. seems like economists have been pretty clear -- don't mess with the debt ceiling. >> don't mess with the debt ceiling, but you know, it's interesting because david and i were talking, how little wall street is absorbing that this is a real possibility and even a probability. they're pricing in zero risk right now, but the fact that we actually might go past, this idea that you could go a day or two or three days or four days, that is really ridiculous to -- you know, i was just abroad, and our foreign counterparts abroad are looking at me going we have a real sovereign debt crisis here. why would you deliberately give away your credit rating in the united states, deliberately undermine yourself, cut your nose off to spite your face when you've got time -- you can fix
it now and save then the kind of changes and not be greece. >> david, seems like we're headed towards a small solution to a big problem, which is what a lot of corporate america thinks is wrong with washington. are politics unable to meet the challenges we face? >> it's the sort of thing that scares me, is -- honeywell is a global company, $37 billion in sales, got 130,000 people, half our sales in people outside the usa. i travel the world a lot, and the world has changed. we went from a billion participants in the global economy to 4 billion over the last 20 years, yet we still act like we did 20 years ago. and we need an american competitiveness agenda that gets our finances right, gets our energy policy, math and science education infrastructure, and we can't even do something like this. it's very scary as a businessman. >> i want to jump in to talking about jobs in just a second. david faber, i do want to ask you about this breaking story we're talking about. this is the cover of "the week" magazine, and it has rupert murdoch literally on the hot seat with the question "is
murdoch's media empire nearing its end?" the fact that rebekah brooks, editor of "news of the world" has reportedly been arrested for corruption and some other crimes, how serious is this at this point? >> well, it's the most serious crisis that murdoch has ever faced, certainly, in his long career. there's no doubt about that. and i think at the middle of last week, it started to sink in for him. prior to that, people close to murdoch, david, tell me that he perhaps did not appreciate the depth of anger that was taking place in the uk, and perhaps for the first time in his long career, he wasn't out in front of something, wasn't able to dictate the pace of events. that changed the middle of the week. the beginning of last week, he had his arm around rebekah brooks. end of the week, she was gone, along with his longtime lieutenant, les hinton. of course, you asked about the fbi u.s. probe. will subpoenas be issued? you knows what will happen if that occurs, and what, if anything, is found in the u.s. will be key for him. they will not be flat-footed in their response in the u.s. the way they appear to be in the uk. >> governor, you worked for fox
news. what's the impact there? what's the reaction there? >> they have not been touched by this, they have told me, and i believe them, and we just have to see how this all unfolds. murdoch's fired people, you know, he's quoted as being told his head's in his hands crying with the family that was impacted. i mean, it's a terrible thing, and hopefully, we'll get to the bottom of it and it will change journalism. you know, i want to go back to something david said about the inability to solve problems. i think the business community has been absent. they play politics themselves. instead of going to politicians and saying you fix this thing, they say give money to both sides, and they have been unwilling to stand up in too many cases and say enough is enough. look, i don't think we just have a crisis in washington of leadership, i think it's across all the sectors. i think we see it in sports, where we let sometimes these thugs go out on the field and play on sunday because they can score a touchdown.
we see it in our pop culture. there is a crisis of leadership in america, and we are witnessing it now in politics. >> all right, i want to focus a little bit, i want to get marc morial in on this, but i want to refocus to this primary question, too, because the debt fight is part of the backdrop to this still chronic problem of unemployment. let me just show the figures, marc, if i can. this is unemployment around the states, the unemployment figures where it is highest. nevada over 12%, california almost 12%, rhode island, florida, michigan over 10%. where are the jobs? is government sufficiently focused on this? >> we have a jobs crisis in america and i think that the debt ceiling discussion should be decoupled from the deficit discussion, and the nation needs a jobs plan. we have 14 million people out of work. the black unemployment rate is at stifling levels. it's, in fact, increased since the recovery has begun. and so, we need a jobs plan and
we need to be very cautious and careful that a deficit-cutting plan that unfairly targets vulnerable people, jobs, housing and education programs, might be a cause for short-term celebration and a cause for deepening the recession, stifling the recovery. that's the hard reality. and the polling shows, my visits around the country demonstrate, that's what's in the hearts and minds of the american people. >> what's driving this persistent jobless recovery? >> you know, that's the real interesting issue. one, i want to respond to the leadership issue. i've actually been involved in some of the bipartisan meetings around here. we've shown up together at meetings. and the business community, i've been warned, you know, be careful. it's gotten so politicized. >> yes, be careful. >> you can't go out there. and i'm just an economist. i'm talking about the economy and what's best for the economy. i'm not political. but it's gotten politicized. i know people who say i won't sit at that table and be seen with those politicians, but -- [ everyone talking at once ] >> we can have the leadership
debate in a moment. i want to focus on where the jobs are in the states. >> but no, there is an issue. you know, in norway, sweden and finland, they had a financial crisis in the early '90s. they did everything right. they had consensus in government. they reformed, went toward more market reforms, got their fiscal house in order. you know the one thing that disturbs me? they've never 20 years later hit their precise lows on unemployment. 20 years later, participation in the labor force, which is something i view as a hope to throw your hat on, is lower than it was before the crisis and long-term unemployment is higher. >> david walsh writes this in the "wall street journal" on friday, about what we're facing -- "when the great recession wiped out $7.8 trillion of home values --" former labor secretary -- "it crushed the nest eggs and eliminated the collateral of america's middle class. as a result, consumer spending has been decimated. we're in a vicious cycle in which job and wage losses further reduce americans' willingness to spend which further slows the economy. job growth has effectively stopped. the fraction of the population
working is near a 25-year low, lower than when the recession officially ended in june of 2009." >> all those are frightening statistics. this is a consumer-led economy and has been and you had a poll on consumers' unwillingness to spend. consumers actually face it at home. if i don't have a job or lose my job, of course, i am not going to be spending money. that said, i'm curious, you know, we talk about a jobs crisis now, david, but the fact is that during the bush presidency, we had the lowest job creation numbers we ever had annually, about 3 million total jobs over those eight years. the question really is has there been a seminole change in the business of the u.s. economy to create jobs? that's something the people are beginning to believe. you heard david cote talking about the issue of competitiveness, but we haven't created jobs for a very, very long time, not just the last year. >> why? what's happened? >> right now, the problem we've got is uncertainty of demand. businesses don't add until they're sure that somebody's going to actually want to buy
something. to that, we've added uncertainty of regulation. and when you combine those two, it just causes businesses to say i'm going to wait a little bit. and i always find it interesting when i hear government say we need to create jobs, and i say, no, actually, government doesn't create jobs. government can create an environment where jobs can be created, and i think it's important to distinguish between those. [ everyone talking at once ] >> it would be a no-brainer, we'd be generating jobs and the uncertainty would be erased. >> believe it or not, consumer spending is up over the last eight months, okay? >> i know that. >> here's the problem. here's the problem. this man doesn't know what's coming, whether it's regulation, whether it's taxes. and this high debt presupposes you're going to have higher taxes. he can't make a decision about investment when the roof's about to cave in. we need certainty. that's what we're trying to do in ohio. >> i'm glad you raised the issue of demand, because i think there's a lot of politics in uncertainty about taxes, uncertainty about regulation.
the bottom line is there's not enough demand in the economy. so, if you have a job, you're concerned about being laid off. look at state and local government, where you've had a plethora of layoffs over the last eight months. if there are further budget cuts from the federal government in those areas, you're going to have more layoffs, and the private sector's not poised because of demand to pick that up. we need a jobs plan in this country. if as much time was devoted to a consensus jobs plan as the country's devoting to a consensus deficit reduction plan, then -- >> but governor, what does that actually mean? because i asked the treasury secretary last week, does the president have to acknowledge, look, there's things we've done, there's things the fed can do, but we can only do so much as the government? is that a political truth? >> david, when a business -- and i've been in business for ten years before i got this governor's job -- when a business is uncertain about the future, they sit on the sidelines. we have more -- we have so much money on the sidelines waiting to be invested, but they're
uncertain about where we're going to go. the answer, get this god darn deficit under control, do not raise taxes on capital gains risk-taking, provide incentives for investment, real changes in education to connect our kids with real job opportunities. and you know, if you begin -- and lay down some certainty on regulatory reform, he'll be investing! >> well, you know, he's got over $3 billion in cash in the balance sheet, probably gone up. that was last quarter, so it's probably gone up. it's not yours, obviously, it's your shareholders' but what'd you spend, $800 million on capital expenditures this year? it could be more, it could be a lot more. but i hear this uncertainty about regulation, and frankly, i think a lot of ceos say it because why not? why not get regulatory or tax relief if you can? but at the end of the day, your first answer, demand, it would seem to me, is the key. >> uncertainty and demand. >> can we unpack that a little bit? because any idea that the consumer being king, that debt is really the issue -- there's government debt, personal debt,
people deleveraging, the fancy term from getting out under your debt, paying it down, means you're not spending, not creating demand. businesses, it seems to me, diane, are deciding we're just going to get leaner and meaner. the jobs aren't coming back. >> well, many of the jobs aren't coming back, but the ones that do are the ones we never expect. the fact that we're in the manufacturing sector, it's the lack of imagination. i do think the one silver lining here, and it's part of the reason we haven't generated jobs, is because coming out of a financial crisis like you do, this is the nature of it. you don't get enough growth and enough demand. that said, where's the silver lining? we've had more ipos since the fourth quarter of 2010 than we've had since 2000. why is that important? new businesses, not just small businesses, new businesses interacting with established firms is where you get the miracle in job creation. that was what happened in the 1990s to an extreme. companies that maybe never should have hired -- there were some bubbles out there -- >> never should have raised capital. that's a good point. if you want a good news story, take a look at groupon, for example, a name some of your
viewers may know. 7,000 employees have been hired over the past couple years. google, only ten years old, 28,600 employees. there is still growth in the economy. >> what this conversation shows is wall street is back, the business community's come back, but main street, back street lag behind. >> right. >> and it may point to the fact that these are structural shifts in the american economy. we have to focus on competitiveness, yes, but producing things so that when we spend money in this country, it creates jobs in this country, so we need a larger plan -- >> we also need -- >> your point, governor, then we'll take a break. >> we need training in the real world, vouchers for companies so they can train for what we need. in ohio, because we faced our $8 billion budget deficit and provide tax relief, what's happened? cnbc says we've jumped 11 points, 11 places in terms of business-friendly. the credit agencies say your credit, we have taken you off negative watch. when you provide certainty to
people, then they are able to respond to it. and what we're seeing in ohio are positive things. if they did it in washington, we'd be better. >> i want to get a break in here. i want to talk more about the issue of jobs, the overall economy, when recovery will actually feel like recovery, including the debate over taxes
we're back with our discussion about the economy, which continued even during the break because this is a hot topic, as you know, and these are spirited folks. all right, i want to talk about the debate over taxes, and it's very interesting. you had house speaker john boehner on friday say the following about these debt talks and taxes. >> our stand on the debt limit has been clear -- there can be no tax hikes, because tax hikes destroy jobs. >> that's the assertion. is that really true? ron brown's team took a whack at that in his column in "the national journal" this weekend and writes -- "in the past three decades, job growth has thrived after tax cuts and after tax
increases, and it has stagnated after tax cuts. if there's a pattern, it's that tax policy typically isn't the decisive factor in driving a machine as complex as the u.s. economy. given those, the president's tax policy ought to be seen not as the secret to growth, but more modestly, as one part of the fiscal policy toolbox, and on that front, the case against some revenue in part of a deficit reduction package is even weaker." budget chairman, governor, you were proposing tax loopholes. >> yep, i was. look, in '97, we cut taxes, by the way, we cut taxes on capital gains, balanced our budget. the economy was going great. the problem with tax increases, and i was telling david this. he was on the bowles commission, god bless him. is that you raise the taxes, they spend the money but never cut the spending. i saw when bush said "read my lips" and then caved in on a tax increase, we put graham rudman in, this is the program to cut spending. we spent money and when we got to the cuts, we put them off. the problem here is we have a
spending problem, not a tax problem, but i would support loophole closings, lowering rates, lowering the corporate rate, lower the personal rate. but frankly, the revenues that come from that shouldn't be spent on -- >> can i show you one thing from grover norquist who a.m.ifies in the argument -- we talked to him as part of the "press pass" conversation on the blog. i asked why conservatives don't care as much about deficits as keeping taxes low and this is what he said. >> the problem is we're spending too much money. raising taxes is no part of spending less money. raising taxes is what politicians do instead of spending less money. obama, reid and pelosi have jumped up spending from $2.9 trillion to $3.8 trillion, almost $1 trillion addition each year going forward. we need to pull that down. raising taxes just enables that. i mean, if you're smirking too much, the solution is to smoke less. >> grover is engaging in spin, because the issue is not tax
increases, it's tax reform, tax simplification and closing loopholes. a dirty secret of washington is that the tax earmark business tied to k street lobbyists is bigger than the spending earmark business. so you've got $1 trillion worth of tax loopholes, and if congress would attack that and if the conversation would be about tax simplification and reform, we might be able to get a combined package. i reject the idea that spending on domestic programs -- housing, jobs, programs like food stamps -- is the reason for the budget deficit. you had wars, you had increases in the prescription drug benefit program. you had a wide range of things. you had tax cuts. they all piled on to the deficit. don't fix the deficit on the backs of the most vulnerable americans. >> david cote, what about corporations and taxes? we hear about the need to lower tax rates, but then you have companies that aren't paying taxes at all. >> well, if you wanted the most
dynamic jobs-creating economy in the world, you would have a 0% corporate tax rate. however, nobody can stand that, because in our pursuit of fairness, we actually hurt the very people we're trying to be fair to. so, if we say, all right, what we need to do is, in the pursuit of fairness, attach some kind of tax rate, you should make it the most simple, easy-to-do thing possible, and that's why i think the simpson/bowles commission, i think we got it right, as we said take it away for everybody. all the exclusions, all the exemptions, take it away for everybody so you broaden the base and significantly lower the rates. >> yes. >> you can get an increase in taxes and everybody's going to be happy, and corporations will also get territoriality. >> so they'll be able to get their cash back from outside the u.s. >> and this gets to the issue of we have -- we're in a position where freedoms are what we love in this country. we have the freedom to decide what our future is going to be like or we're going to give away that freedom and let the world decide for us. and in the long term, if we get
on a more simplified tax, get out of these complications, eliminate the loopholes, lower the rates, get in a more clean tax code, we're going to be making better decisions economically. >> yes. >> we're going to be more competitive economically. >> exactly. >> and that's an opportunity to let it go away because of lobbyists and the tax lobbyists we talk about. that's just incomprehensible right now. >> we were in a position in these negotiations, boehner and the president, talking about raising some taxes while at the same time getting the kind of tax reform that you're talking about, and there was a disagreement, ultimately, about not so much where rates were, but how progressive it was, and it got a buiit complicated, bute couldn't eve get to that point. >> it seems an impossibility that what we hear from the panelists would actually occur, elimination of all loopholes -- it would be great -- [ everyone talking at once ] >> -- in '99. >> and we got them all back. >> david faber, go ahead.
>> we started this conversation about the markets to a certain extent and the debt ceiling. and the fact is, if you were to get that $4 trillion in spending cuts and see some compromise, you'd get a very positive response from our creditors around the world, there's no doubt. it seems, though, unfortunately, perhaps something too far beyond our leaders' ability. >> enhance the debt limit and continue to have discussions about a consensus plan that's going to create jobs and address all of these problems. it's being done under the pressure of a false deadline. >> i think -- >> and that is tying this to the debt limit vote. look, the car was purchased it was driven off the lot. now we're going to debate whether we signed the loan papers? >> look, at the end of the day, you have to deal with this deficit and you're not going to get it done without reforming programs. >> mayor, i would just disagree with you on this. i believe it is possible to design a federal government that doesn't hurt the most vulnerable by bringing in reform of those programs. we've done it in ohio with medicaid. we've saved billions, and the aarp supports our program. we let mom and dad stay home if
they qualify for a nursing home. it saves us a lot of money. but, so, i think that's one thing. the loophole closings ultimately will happen because if you can get lower flatter rates, it's going to happen. but at this point, look, we all know it, if we don't deal with the $14 trillion debt by changing the spending patterns of washington, it's not going to respond -- >> i have two questions. i want to go back to david faber and put up the housing crisis, which is still a crisis. look at the bright spots and the weak spots around the country in terms of housing markets. the cities with the highest increases in home prices -- d.c., san francisco, which includes silicon valley, which is hot because of technology out there, atlanta, seattle, and then the highest drops in home prices -- detroit, vegas, chicago and tampa. the reality is that everything the federal government has tried to do has not worked. a lot of threats about the mortgage giants fannie mae and freddie mac. everybody's afraid to wind those down because they're the only ones propping up our housing market. can we have recovery until we bottom out on housing? >> it's very hard to imagine
we'll have a significant recovery until we bottom out on housing, not because of just what you mentioned. i talked earlier about the lack of job growth under the bush administration. so much of that came as a result of a housing boom that ultimately turned into this bust you're talking about with construction and all the related industries. so, there's a lot of employment-related recovery in housing as well as psychological impact. when you're under water on your mortgage, as about 30% of people are in this country, when your mortgage is worth more than your home, you're not going to go out and spend a great deal of money. of course, the reverse happened when we watched everybody take out home equity loans because of the rise in value of homes, resulting in enormous consumer spending. so, housing is very much interrelated with the economic problems that we can see there. >> david cote, you're a jobs creator, a businessman. explain to folks out there who are either scared about losing their job or have been out of work for a long time, when is economic recovery actually going to feel like economic recovery? >> well, it never feels like a recovery until you get your job back, right? i mean, it's at that point that
you get there. but it's interesting with consumers. we're at a point where we tell them we need you spending, but hey, by the way, save for a rainy day because bad times happen. and those two don't quite go together. we need to start thinking about consumers perhaps a little differently when it comes to something like oil prices, because right now, you take a look at consumers. they're just starting to feel a little bit better. the news is generally better. now they're paying 4 bucks a gallon for gas and they're saying i don't know where this is going to go. we need a different policy when it comes to oil, for example. if we just allowed more drilling -- and i keep saying, i'm an old energy efficiency guy, my old company voted for that. however, oil supply would make a big difference in driving down gas prices, putting money in people's pockets, generating royalties for the government and generating a couple hundred thousand jobs in the process. that's the sort of changes we ought to be thinking about that i don't even see us talking about. >> let's get in a final break and come back with the "trends & takeaways," a look at what was said here today and what to look
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we're back. final moments with our roundtable, and we wanted to refer back to a takeaway sound bite from earlier in the program from jack lew, the president's budget director who again reiterated the stakes in these negotiations. this is what he said. >> i think that if you look at where the parties are, compared to discussions over the last decades, there are things that both sides are talking about doing that are very dramatic.
i think there's still time to get something big done. the president's made it clear he wants to do something substantial. >> marc morial, we're still waiting. you listen to the senators this morning, there doesn't seem to be a lot of room. they want to spend the next week talking about a balanced budget amendment. >> i think they'll need to engage in a temporary measure to raise the debt ceiling and i think they should continue the discussions. i don't think it should be the end. it's an artificial deadline. a plan for the future of the economy and a fiscal plan for the nation is going to take more time. >> we are watching, of course, as there is a simultaneous conversation going on online this morning, and from facebook, there's this from christopher g. -- "i think both sides are playing chicken with an important situation and i believe that both sides need to agree and stop the same scuffle that you would see two kindergarteners have with a toy they both wanted." david cote, it's interesting, the "weekly standard" cover shows the following scene taking place here in washington -- "pols playing poker" with republican and democratic
leaders really facing each other off at this point to see who will blink first. >> well, the way i've likened it is it's like both parties have a grip on each other's throat and they're more focused on simultaneous asphyxiation than they are in actually solving the problem, and that's got to change. we're not going to be a competitive power in the world unless we start to be able to fix things like get our fiscal house in order. it's really sad. >> is there a threshold, quickly, diane, where it has to be a certain level for our creditors to think we're serious? >> we've already seen the debt rating agencies say if we don't make august 2nd, they're going to downgrade us. so yes, the threshold is here already, but washington's not listening to that, wall street's not listening to that. >> $4 trillion, we could be doing this again in five years. >> i want to show you the "trend tracker," the hottest political stories this morning as we're following them. the debt limit debate, the president met with the dalai lama and obama 2012 fund-raising. he's raising a lot of money. i do want to ask you a political question -- are you going to endorse a republican candidate
in the process of the primaries? >> not for a while. >> not for a while. in the primaries? >> i don't know yet. david, let me say, i had a little golf game with john boehner, the president and the vice president. we sat around the table when it was all over, and i said, guys, none of us really belong at this table. the lord's put us here. we've been blessed. let's not blow it. at the end of the day, america can be great when every american looks in the mirror and says what did i do to make this country a little bit stronger? what did i do for my children? and that means these congressmen and senators, the president, everybody as well. we can do it. >> all right. call to action. the president tweeted "go usa," president tweeted "go usa," usa women's soccer team facing japan today. >> go for the women. >> kek out our facebook page tomorrow morning where we'll be making a special announcement about the campaign. that is all for today. we'll be back next week. if it's sunday, it's "meet the press."