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White House Update: Budget Talks, Unemployment, 2012 Election

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Aired 4/5/11

It could be a busy week in Washington, D.C. as lawmakers try to work out a spending plan to prevent a possible government shutdown. We speak to NPR White House Correspondent about the budget negotiations, the president's reelection announcement, and the nationwide unemployment rate.

A view of the White House from the south lawn.
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Above: A view of the White House from the south lawn.

It could be a busy week in Washington, D.C. as lawmakers try to work out a spending plan to prevent a possible government shutdown. We speak to NPR White House Correspondent about the budget negotiations, the president's reelection announcement, and the nationwide unemployment rate.

Guest

Scott Horsley, White House correspondent for NPR

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This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: I'm Maureen Cavanaugh and you're listening to These Days on KPBS. If anyone had any doubts about president Barack Obama running fair second term, those doubts have been removed. Monday president Obama released a YouTube video announcing his run for reelection in 2012, and it came before any of his Republican opponents' official announcements. It may have lacked the fanfare of Barack Obama's first speech announcing he was running for president back in 2007, but he's got a lot more on his mind right now like potential government shutdowns and economic recoveries and that problem in Libya. Here to talk about what's on the Perez didn't's agenda is my guest, NPR White House correspondent, Scott horsily. Good morning, Scott.

HORSLEY: Good morning to you Maureen.

CAVANAUGH: Well, it sounds like another busy week in Washington, an especially busy week because lawmakers are working fast to agree on a short term spending plan. How much is the White House involved in these negotiations?

HORSLEY: Well, it's getting more involved. The president is having a meeting today with the senate leader harry reed and house speaker John boner as well as the house and the senate appropriations committee, so he's upping the ante a little bit here by having a personal meeting. Up until now, he's sort of delegated the task of trying to shepherd this short term budget to his vice president, Joe Biden, and even more so to the head of the office of management and budget and his economic team. But of course it's been dragging on, and we really are kind of getting to the end of the rope here if we're gonna avoid a government shut down at the end of the week, so the president is stepping in. He did make some telephone calls over the weekend, but those were -- you know they were on the weekend, there wasn't a whole lot of drama, and they announced that the phone calls had been made after the fact. So this very much puts the president's own political capital on the line for having all the law makers up to the White Hour for a sit down with the president himself.

CAVANAUGH: Now, you say, you call this a short term spending plan, which indeed it is. How short term is this budget? What are we talking about?

HORSLEY: Well, what they'd like to do is at least get a plan in place which will carry them to the end of the fiscal year, which is in September. There's a possibility, I suppose, that they're not quite ready to cast that vote, but they're getting close, they may try to avoid a shut down with an even shorter term measure, something on the order of a few days or a week. But everyone -- we have had a whole series of these stopgap spending bills to get us to this point. Everyone really wants to at least get a bill that would carry through the end of the fiscal year.

CAVANAUGH: Now, Republican Congressman Paul Ryan, chairman of the house budget committee is set to release his budget today. What do you expect his proposal is going to include?

HORSLEY: Well, in contrast to the stopgap measures which we've been talking about, and which have sort of been focused on that narrow sliver of the budget, which is discretionary nondefense spending, Congressman Ryan is going to go right to the heart of the matter. He is going to address entitlement programs, which are the big ticket items in the federal budget. He's going to call for pretty significant over haul of the Medicare program, which is the program that provides healthcare to seniors as well as Medicaid, the program that provides healthcare for the poor. In the case of Medicare, he'd leave it alone for existing retirees, and those who are close to retirement. But for everyone who's under 55, he would change Medicare as we know it. And instead of having the government basically just pay the medical bails, whatever they might be, he would have the government provide a subsidy for folks to go out and shop for private insurance from a menu of government approved insurance companies. And likewise for Medicaid, instead of having the government on the line for a potentially open ended commitment, he would have the federal government provide block grants of a set figure to the states. And then that would give the states more flexibility, but the federal government's exposure would be capped. In both these cases, what the tempt is to do is to slow the growth in healthcare inflation. But what critics say this would do is simply slow the government's contribution. It would not necessarily attack the root causes of that healthcare inflation and could wind up with seniors and the poor having to shoulder a larger share of their own healthcare bills.

CAVANAUGH: Now, isn't this along with Social Security usually referred to as the third rail of politics? Nobody wants to touch it?

HORSLEY: That's right. I guess Social Security is perhaps more political untouchable than Medicare. But they're all thought to be politically dangerous, and certainly Congressman Ryan is not being timid here. He has said he recognizes that he is handing a potential political weapon to the Democrats by tackling these issues. That said, there are some Democrats who have come around to thinking this is not as dangerous as it once was, and that the real danger is not appearing serious in the public eyes about tackling the federal government's long-term budget challenges. And so the congressman from Wisconsin has said, look, I'm gone bite that bullet, I'm gonna tackle it. Now, he's also proposing big spending cut, and not only in the discretionary part of the budget, but in other parts of the bottoming, including entitlements. The thing he is not really talking about doing is increasing tax revenues, and that's something that of course, the democrats would like to see, an increase in tax revenues, as well as spending cuts to balance the budget.

CAVANAUGH: Now, there is, I understand, a bipartisan effort underway in the senate to find some way to solve these long-term budget problems, and actually get a long-term budget going for the United States. What is that group being called?

HORSLEY: That's right. That's the so called gang of six. It's three Democrats and three Republicans, led by Republican Saxby Chanlis of Georgia, and Democrat mark warner of Virginia, along with two of their colleagues, two Democrats and two Republicans, all of whom were on the president's fiscal commission, and they are really calling for a comprehensive approach to the budget, and what they want to do is basically take the recommendation it is of the fiscal commission, and put them into the form of legislation. That would mean, again, big spending cuts, major over haul of entitlement programs and tax reform that would result in lower tax rates but would do away with a lot of these tax loophole, and some of them very popular tax loopholes like the mortgage interest reduction, and would in fact raise more tax revenue than we're getting from the tax system now. So it's -- their approach to dealing with the budget crunch.

CAVANAUGH: Well, as I said, a busy week, and lot of negotiations going on in Washington, the president --

HORSLEY: Yeah, and excuse me, the gang of six, they're not necessarily -- they're not facing that Friday deadline.

CAVANAUGH: Sure.

HORSLEY: As we're talking about with the stopgap measure. But they are talking about doing something sooner rather than later. They'd like to see something happen this year, because the sense is that next year, the presidential campaign will sort of get in the way. And there are some talks that their solutions, their budget fix, might be offered up as sort of a carrot to induce lawmakers to also vote for the increase in the debt dealing which is probably something that's gonna happen in the next month or so in order to make sure that the government can continue to borrow the money it needs to keep operating.

CAVANAUGH: Now, Scott, the president got some really good news with the unemployment rate dropping to 8.8 percent. What does this tell us about the nation's economy.

HORSLEY: Well, it tells us that the recovery, which has been under way for some time, it finally getting into the job market, which is, of course, where it's most needed. It's not as rapid a recovery, and it's not as rapid an improvement in the job market as everybody would like to see. But we have seen now for several months in a row of fairly significant job gains, and also we've seen a dramatic reduction in the unemployment rate. The unemployment rate has fallen from 9.8 to 8.8 percent in a matter of months. That's the fastest decline since the 1980s when we were again coming out of a severe recession. There is some skepticism that that drop in the unemployment rate was real. It was thought that maybe it was kind of a statistical blip. But we've now seen it coming down for four months straight, and people are starting to think, maybe it's not a statistical blip, maybe that's a real drop. Now, that said, 8.8 percent is higher than anyone would like, certainly higher than the president would like for his reelection chances, but it is -- it's better than 9.8 percent. And we're starting to see pretty serious gains in the private sector and jobs, and that is very encouraging.

CAVANAUGH: When we come to Libya, Scott, the last Monday night, president Obama spoke to the nation about why he decided to have the US intervene in the conflict in Libya. Since that time, I believe that most the command of that operation has gone to NATO. But it makes us wonder what the U.S. involvement in the Libya conflict is at that point. Has the White House been clear in what our involvement is in Libya right now?

HORSLEY: I think the White House has been fairly clear. It's a somewhat nuanced message. And so some folks have perhaps been confused by that. But the White House has been pretty clear. What they have said is that there will absolutely be no U.S. military troops on the ground. Although we've been reporting that there are CIA operatives on the ground, that the U.S. military will now be after playing sort of the lead role in the early part of the military campaign. Of the U.S. military has now taken up something of a backseat, it's still involved, about you not as heavily involved, and as you say, command has been passed on to NATO. And we've seen kind of a -- some back and forth of the front lines of -- in Libya where the anti-Gaddafi forces have made headway for a long, and they have been beaten back by the more professional Gaddafi forces, and that's kind of gone back and forth a couple of times now. But at the same time, the U.S. has said its military campaign is not aimed at over throwing the Libyan leader, but as a matter of policy, are the U.S. government would like to see Muammar Gadaffi removed from power, and if that is not achieved militarily, they have other tools in their tool kit to try to achieve that, including sanctions, including the threat of prosecution in criminal courts, and there have been hints that perhaps Muammar Gaddafi is looking for a way out, although it certainly seems as if he is not in any immediate danger of being forced out militarily.

CAVANAUGH: There was a report last week that apparently leaked that there was a finding that the presidential findings that there could be a covert operation to arm the rebels in Libya, and I'm wondering how happy or unhappy the White House was with that material getting out.

HORSLEY: Well, the White House has said all along that that the U.S. is not immediately interested in arming the rebels, but that if they decide that that's necessary, that the UN resolution for an arms embargo leaves flexibility for that to happen. So they've always sort of left the door open for either the U.S. or for another country to arm the rebels. The finding authorizing the covert operation is something that the president had to authorize in order to let those CIA operatives be on the ground in Libya. I suspect that they're never happen when covert becomes less covert.

CAVANAUGH: Let's talk about the announcement this week, president Obama announces his intentions to run for reelection on YouTube, more than 18 months before the November 2012 election. What about that announcement, Scott.

HORSLEY: Well, I don't know about you, Maureen. I was shocked, weren't you? This was the worst kept secret in Washington, that the president would be filing his official paperwork. This is -- I suppose as much as anything, it gives a green light for the reelection team to begin raising money for the president's campaign. And a lot of observers think it's going to be a billion dollar campaign. He of course broke all the records four years ago when it is president ran for office and he will surely outspend that this time around, and to raise that kind of money takes a lot of time. So they want to get started on a lot of that. They also want to start with the grassroots organizing. And so this helps them to do that. The way that they've made the announcement was reminiscent of the way that the campaign ran the first time around, the way they announced that Joe Biden would be the choice for the running meat, in an e-mail, two supporters, that's sort of an incentive for people to sign up, kind of be the first on the block to get the word. But it was certainly not a shock to anyone that this president does want to stick around past 2012. In fact during the White House briefing last Friday, Jay carney, the press secretary was sort of teasing reporters as he was spelling out the schedule for the coming week. Would sort of pretend as if each day that was going to be the announcement. Of course it came before most people got to work at the White House Monday morning.

CAVANAUGH: Isn't it -- at least a lot has been made of the fact that the president has reannounced his reelection campaign before any of his challengers in the Republican party have made any actual official announcement of their trying to seek the presidency. That unusual?

HORSLEY: Well, I think what it signals that the reelection campaign, even though as the president said in that e-mail to supporters that he is still focused on his day job of being the president. They don't want to wait too long. And I don't think they're gonna let the pace of the reelection effort or the political effort be dictated by the GOP. They want to dictate the schedule on their own terms. It's all, I think fair to say, that whether they had formally announced or not, there are Republicans who are out there doing all the things that they need to do to lay their own ground work for the 2012 campaign. And so it's no surprise that the president would do the same.

CAVANAUGH: And it's begun. 2012 campaign. Are you ready for it, Scott?

HORSLEY: Catch the spirit! No, I'm happy to wait just as long as possible for the silly season to begin.

CAVANAUGH: Well, I want to appreciate your talking with us today, Scott.

HORSLEY: My pleasure, Maureen. Any time.

CAVANAUGH: NPR White House correspondent, Scott Horsley. If you would like to comment, please go online, KPBS.org/thesedays. Coming up, an update on California's budget battles as These Days continues here on KPBS.

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