Friday, August 5, 2011
President Obama signed a bill on Tuesday that allows borrowing to continue and allows the nation's debt to increase. Today we look at the local political and economic fallout.
President Obama signed a bill on Tuesday that allows borrowing to continue and allows the nation's debt to increase. The consequences of not doing it would have been dire. But political debate brought the question of how to proceed down to the wire. The compromise bill meant no new taxes would be imposed, and by November Congress is going to have to come up with one trillion dollars in budget cuts. Today we look at the local political and economic fallout.
Guest: John Warren, Editor and Publisher, San Diego Voice and Viewpoint
Tom York, Contributing Editor, San Diego Business Journal
Kent Davy, Editor, North County Times
If I were working for the Bill Clinton campaign in 1992, I'd say, it's the economy, stupid. And we are going to try to stay on message during the first part of this Roundtable. Economic and financial turmoil has been the story of the week. We're going to start with the political part of that story as we discuss the raising of the debt ceiling. President Obama signed a bill on Tuesday that allows borrowing to continue and allows the nation's debt to increase. The consequences of not doing that would have been dire, but the political debate brought the question of how to proceed down to the wire. The compromised bill meant no new taxes would be imposed, and by November, Congress is going to have to come up with $1 million in budget cuts. John Warren, why do you think the process of raising the debt ceiling went on so long? WARREN: Mainly because of this new group we call the tea party. The idea of being connected to just one item and one item only, ignoring everything that was said about the impact of this, historically we've seen the debt ceiling raised before, the president kept reminding people, for instance, 18 times under Regan, and it's never been an issue before. This is part of the problem. What we see now is the result of that particular problem. Because we held it up, it's had an impact on investors and markets from every standpoint, and what we finally got in the end was not what we really needed. We just in effect got a Band-Aid for a very serious issue. FUDGE: Did this deal solve any long-term problems? WARREN: I don't think so. And a good example of what it didn't do is what's happened since then with the FAA issue. Here we had people holding up a bill, trying to save $16 million, and the week during which all of this occurred has cost us over three hundred and 90 million which we can't recover in terms of airport taxes. That's an example of being penny wise and pound foolish. That's a lot of what we see. FUDGE: Let's talk about how our local representatives voted. We had two Democrats and three Republicans who represent San Diego County in Congress. Now, three of them voted for the plan, and two voted against it. But interestingly, those numbers did not follow party lines. WARREN: No. You had Susan Davis as a Democrat who voted for the bill even though she didn't want to, and remember, there were many Democrats in the house who didn't want to vote for it. But they couldn't take the position of blocking the president at this twelfth hour. It wasn't even the 11th hour. Darryl Issa voted for it, Brian Bilbray voted, Bob Filner voted against it. We don't have his reasons, but we also know that Duncan hunter voted against the bill and did it from the standpoint he said of not wanting to see in the future, a 12 member select committee making decisions in terms of cuts to the military. FUDGE: That was his main issue: Cuts to the military. We didn't hear from Bob Filner, you're right. We don't know how he voted against. But it's interesting to see that the most liberal member of our congressional delegation voted against it, and the most conservative member of our delegation voted against it. WARREN: It reminds us that Filner is running for mayor, and he's more interested in those votes from people than Congress. FUDGE: Will there be any political fallout for our congressional representatives? Are people going to look back when the election comes around and say you voted against the debt limit, the debt ceiling or you voted for it, what do you think about that? WARREN: I think that's going to be determined by what happens with this 12 member select committee. What they come up with in November can't be changed. It has to be voted up and down. And that's where we're going to see the cuts, we have almost a million people on Social Security, Medicaid, Medicare. So those things come to entitlements. That's a time when redistricting is going to be at a factor, in which Filner is running for mayor, and we're going to see people then looking for reasons to determine their vote. FUDGE: Once again, listeners if you want to give us a call, the number is 1-888-895-5727. We're talking about a week of economic turmoil, and the debt ceiling being raised. Given us a call at 1-888-895-5727. Tom York, let's go to you, and talk a little bit about that select committee that is going to have to come up with budget cuts. One big issue for San Diego is whether they're going to make cuts to the military. YORK: Yes, it's going to be up to $400 million, I suspect, will come out of the cuts for the military. And that could have a big impact on San Diego. In fact in the daily newspaper today, one of the admirals was talking about the fact that they'll center to kill some sailors out of the Navy, and also probably put some ships into moth balls sore sell them off. And that would have a dire impact on the economy, come is already struggling here in San Diego to some extent. FUDGE: Kent Davy, what would you like to say about this? DAVY: The other thing to consider is what's going to happen to defense contractors in San Diego. They represent such an integral piece of the economy here to the extent that things like the joint strike fighter get canceled perhaps. They've already done a bunch of the big weapon systems. Those contractors are really going to be risked. You've got all those ancillary spinoff dollars that keep people in San Diego employed. FUDGE: Daniel, go ahead, you're on the Roundtable. NEW SPEAKER: Thank you very much, editors, and Tom, it's great to hear you on the radio again, Tom. FUDGE: Thank you. NEW SPEAKER: The question that I have -- and then I have a comment too -- is when was the last time has your representative e-mailed you directly on legislation or a law that's going forward to really represent you? And then the second statement that I have is a lot of us have lost our jobs. And if we get a chance for another job, if we were informed like this, we would not keep our jobs very long. We might even be held accountable via our paycheck to correct the mistakes that we had made. And I don't understand why we don't have something to make these people more accountable or why we aren't doing something and have an easier system to be able to get these people that are illegally seeming to represent us and then represent us at great economic cost. FUDGE: Well, Daniel, thank you very much for calling. Let's take another call and then we'll respond to both of their comments after that. Joe is calling us from Kearny Mesa. Joe, go ahead. NEW SPEAKER: I just want to say I think the whole debt ceiling thing was much ado about nothing. The reality is, I don't think that we were as close to default as both sides played it up in the media. If you look at the people who actually vote with their dollars, not the people sitting around talking about this, but the people who actually put money in investments, they put a lot of money in the Treasury, so much so that the -- so people who were actually investing their money didn't seem to be worried about the treasuries that they pushed them to the point of yield, then why the heck are we worried about it. FUDGE: Thanks very much. John Warren, did you hear anything you want to respond to? WARREN: I think to the first issue that was raised, we keep thinking that the American people are the ones, the folks elected are responsible to, but increasingly, they appear to be responsible to the lobbyists and the interest groups that provide the financing for their campaigns. That's an issue to look at here. The people might have a voice but their voice does not translate into the kind of war chest we've seen develop at the initial and local level. DAVY: Although on the other hand, you can talk about being responsible to the people. In one sense, a segment of the American electorate put 80 some new Republican, many of them part of this tea party, kind of movement in office principally because of anger over the way the administration had handled economic measures in the crash of 2008, the stimulus plan, and so forth. We have a system that yins and yangs back and forth, and who knows what will happen with regard to the 2012 election? And will the tea party be held accountable? Or will it go the other way? FUDGE: When I look at this issue of the debt ceiling and trying to solve the budget crisis, it seems like a couple of questions come up. Do you need to get more government revenue by raising taxes? Second question, can we continue to go into debt to stimulate job growth or do we have to start being budget hawks? On the first question, the tea party folks said read my lips, no new taxes. Is that what the American people want? WARREN: No, the American people show through the poles that were taken that they were not adverse to a mixture of both cutbacks and taxes, but it's the hard line Republican attitude as further magnified through the tea party element that said no new taxes under any circumstances. And let's remember we can't talk about jobs on the one hand and what the unemployment situation is in the economy when we're talking about not spending because there's been a government spending factor in every economic unemployment period from the great depression all the way up to the present one. And it's just taken different forms, whether it was a war or economic opportunity or manpower development. There's been -- FUDGE: Kent Davy. DAVY: You've got nearly a trillion dollar stimulus that has not moved the jobless rate a scintilla. WARREN: That's not true. And I keep hearing people say that. We have had movement, we have had people may back moneys they've borrowed, we have had a tsunami, all kinds of disasters that have impacted us, and yet we're going to blame the president for that total package as if nothing has happened. Even this month 119,000 jobs have been added that would not have necessarily been there. FUDGE: Tom York? YORK: How many of those jobs are private jobs and government jobs and if they're taking money from one pocket and putting it into another, that isn't helping the economy. If it's public jobs, that might be improving the economy. As I see it, we're just spending too darn much money. $3 million of the economy in the last three years, and it hasn't done a thing this. FUDGE: So were the Republicans right in insisting in these cuts? YORK: I'm neither for the Republicans or the Democrats. I'm more of a libertarian. I think it's political theatre to have two sides opposing each other, a protagonist and an antagonist. Who's right and who's wrong is to be determined, but we're in the lines of what's happening in why you were with Greece or Italy or Spain. We have to take responsibility for what's happening. We're spending too much money. FUDGE: Kent? DAVY: The elephant in the room is what to do about the entitlements of Social Security, Medicare, and the greater than issue of paying for healthcare. YORK: Wait a minute. Social Security has been paid for. I've been paying for 40 years. Why would they take my money away from me? DAVY: Somebody spent it, didn't they? If the government were held to the same standards of accounting as all private businesses, we would see a whole lot of politicians in jail. FUDGE: We do have to take a break. When we return, we're going to finish up this conversation about the debt ceiling and related issues, and then we're going to move onto another related issue, the state of the San Diego economy. And you're listening to the midday Roundtable on KPBS. Joining me at the Roundtable today to talk about the news of the past week are John Warren, editor and publisher of San Diego Voice and Viewpoint, Tom York, contributing editor to the San Diego business journal, and Kent Davy, editor of the New York Times. Listeners, if you want to give us a call, the number is 1-888-895-5727. Before we leave this national story, I'd like to put one more question to you, Kent, and it's related to the debt ceiling and political sequences for voting one way or another. The fact is, members of Congress in San Diego County are going to be elected by a different group of people coming up next time because we have had redistricting. Has that -- has congressional redistricting had any dramatic effects on our congressional districts? DAVY: In the maybe main, no, except for the 49th. Which is currently occupied by Brian Bilbray. And that conservative Republican is now going to face considerably more democratic voters as his district is pushed south. Issa's district has also been pushed south. His district had extended up into Temecula. Under the current maps, Temecula is now split. Duncan hunter has a piece of it from where he sits. The redistricting does not relate much at all to the debt ceiling. Issa and Bilbray were for it, Hunter is against it. But it will change the political landscape in San Diego. FUDGE: It's my understanding the Democratic Party is already going after Bilbray because they consider him to be vulnerable. DAVY: Right.