This morning President Obama said that time is running out for Congress to reach an agreement on raising the debt ceiling. Borrowing has become so rampant the ceiling must be raised if Washington is going to pay the bills, especially if tax increases are off the table. But Republicans and Democrats can't agree on how much more borrowing should be allowed. The consequences of making a compromise are both political and financial. The consequences of NOT making a compromise could be disastrous, as the U.S. government goes into default.
There a disagreement here between the parties, and between moderate and conservative Republicans.
Guests: Michael Smolens, government and Politics editor, San Diego Union Tribune
Katie Orr, metro reporter, KPBS News
Matthew Hall, correspondent, San Diego Union Tribune
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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.
FUDGE: The debt ceiling tests the nerve and the loyalty of San Diego members of Congress, and it's back to the starting line for medical marijuana shops. It's from, July†29th, and this is the midday Roundtable. I'm Tom Fudge, and we're talking about the no, sir of the week as it affects San Diego. Joining me around the Roundtable are Michael Smollens, Katie Orr, and Matthew Hall. Michael is government is politics editor for the UT. And Michael, good to see you.
SMOLLENS: Good to be here, Tom.
FUDGE: And Katie Orr didn't have far to go, she came from the KPBS news room, where she is the metro reporter.
ORR: Thank you, Tom.
FUDGE: And Matthew Hall is a correspondent for the Union Tribune thanks for being here.
HALL: Happy to be here.
FUDGE: You can chime in on the topic by calling 1-888-895-5727. This morning, President Obama made a public statement saying the time is running out for Congress to reach an agreement on raising the debt ceiling. Borrowing has become so ramp not, the ceiling must be raised. Especially given that tax increases are off the table. Republicans and Democrats can't agree on how much more borrowing should be allowed. The consequences are both political and financial. The consequences of not making a compromise could be economically disastrous. There are agreements here between the parties and between moderates -- moderate and conservative Republicans. And Michael, where do we begin?
SMOLLENS: Well --
FUDGE: Would you like to suggest a place?
SMOLLENS: We were talking, Tom, unlike other stories where we digest, this is happening right now. Speaker John Boehner is rewriting the bill. We we know, last night he was not able to get the vote. As you mentioned it was more a split in the party than the partisan split, and the tea party conservatives objected. What they're looking at now, is a bill that would allow the debt ceiling to be raised by a billion dollars, and cut that amount of money as well, but it would hinge a future raising of the debt ceiling next year on a beg your pardoned budget amendment. This makes this less pal to believe to Democrats. Speaker Boehner is really on the hook because he did suffer a setback last week, and is facing a revolt within his party.
FUDGE: Even if he gets Republicans to pass this house bill, it's not going to be accepted by the Senate, which is controlled by Democrats.
SMOLLENS: Correct. The people gang this outer, who knows if they'll be right ultimately, but the deal will come out of the Senate, and it just depends on what that looks like, as Senator harry reed hasn't fashioning a measure. Ultimately they may have to go with something along the lines that Republicans originally wanted. The key dividing line is that Republicans want a lower debt ceiling raise, and another won't during next year's election accept, and the Democrats won't stand for that.
FUDGE: We've got a presidential election coming up next November, and the Republicans want this issue, the ghost of debt ceilings past to revisit us during the election season.
SMOLLENS: They think it works for them. The law of unintended consequences. The more likely scenario is that the credit ratings drop, and that means more pain for the nation.
FUDGE: I bet a lot of the people are hearing, if the debt ceiling isn't raised and we any into default, the consequences are going to be horrible. Are they?
SMOLLENS: It would panic the markets, so the experts say, around the world. That in itself is a big enough concern. But it also means that interest rates for everything would go up, buying a home, a car, and so forth. Then there's the issue of that's speculative at this point, but do Medicare and Medicaid services start drying up? More personal, do Social Security checks start drying up? There's a whole litany of things. Nobody is -- they still find it hard to fathom that we would go into a default. The real question is whether the credit rating eight be lowered even if they get some sort of patch through deal. They're not going to get the grand deal that the president is talking about.
FUDGE: If you have an opinion on the debt ceiling, let us know what it is. 1-888-895-5727. Michael, a couple more things for you. Looking at our congressional representatives, the Republican side at the very least, is everybody from San Diego backing Boehner or do we have some tea party trouble makers who think that he's giving into the democrats?
SMOLLENS: Remember, tea party folks, it was Tom Fudge who called you trouble makers.
FUDGE: I think they would be very proud of being called trouble makers in this instance.
SMOLLENS: True. The San Diego delegation as a whole has been keeping a low profile. This has been a problem with conservativeship. You've got Darryl Issa, a real businessman, and he knows the issues confronting the kitchen should we get into default and a lowering of the credit rating. Bilbray is in the same boat. Duncan hunter, his district is more conservative, so he was holding his options open, giving the notion of support to barren, but not committing to anything. That proposal has changed. That's where they're coming from. And Susan Davis and Bob Filner have been sticking with the democratic point of view waiting to see what happens.
FUDGE: And San Diego is a place that has so many government contracts with all the defense work that goes on here. If we do go into default, do people just not get paid?
SMOLLENS: We'll see. To some degree, that will happen. I don't know how widespread that will be. But there will be money to know paying some bill, but they will have to prioritize. So how that priority happens, I would suspect we're just guessing certain things, vital services for people would be the first to get funded. As you move down the line, the less essential things and long-term contracts don't.
FUDGE: And Michael Smollens is government and politics editor for the Union Tribune. Joining me are also Katie Orr and Matthew Hall, also. And Katie Orr, what would you like to say about the debt ceiling?
ORR: Certainly it's not my primary field of expertise. But were in I thought had a really interesting story this morning on the psychological aspect of it. And just tacking about the psychology behind why these choices are made, because we are just dealing with people at the end of the day. And they were saying to some extent if you want to see something happen, you need to link it to something that the congressmen and women care about. So for instance, you better pass a deal or you're going to lose your parking spot. And the psychologists do say it has some effect. To some extent, we saw that in California when the lawmakers were gonna lose their party. Suddenly they were facing their own paychecks, and they passed a budget. Granted it wasn't a great budget, but it forced them into some kind of action. So just a look at the psychological side of things, and the fact that this is -- it's a politicized debate now, but this has happened benefit. I was reading the New York Times, and it said that this has happened something like close to 70 times since 1960. And it speaks to how the tea party are in Washington now, that they're able to take what has been a fairly routine thing and turn it into a big national debate.
FUDGE: Matthew Hall?
HALL: That's an interesting point that Katie just made about the frequency with which this has happened in the past. I saw a similar statistic that said since 1980, the debt ceiling has been raised more than 39 times. That is more than once a year. And in that time span, you have Republican and democratic presidents. It's not a one party issue. The question becomes why is it so important now? Another statistic I saw was from the Washington post, who in the fall, they tried to survey every tea party organization in the country to see what issues were their number one issue. 24% of them said debt, the country's debt, and its finances upon it was the number one issue by far. And when they put that out on twitter this week, it was under I headline, look what the tea party told us in the fall. They kind of presaged what was going to happen. But beyond the statistics, this is a human story, and I've been trying to humanize it this week. Talking to veterans, folks at community clinics. That's where the broader issue of the nation's finances and how it over reached is going to come home. Doctors are nervous that their patients on Medicare and Medicaid won't be able to get services, veterans are worried about veteran disability checks. And as Michael said, we have no idea at this point what's going to be cut, and how people will be affected. But the people who are paying attention, I think, are anxious and angry as the week progresses.
SMOLLENS: Let's go to Gavin from Sorrento Valley. Go ahead.
NEW SPEAKER: Hi. I just wanted to say I fell like the idea of raising the amount of debt that America has is a little silly. Maybe raise it for the six-month, but then increase the restrictions for entitlement programs and make it harder for people to get those unless they actually need them. I myself know a number of people who are getting those entitlement programs but they really don't deserve them, they don't really meet the qualifications.
FUDGE: Is your point that we should take this as an opportunity to cut down on some of those entitlements and reform the system?
SMOLLENS:
NEW SPEAKER: Exactly. Take this and bite the bullet and raise it for six months to revamp the whole system and get everything running smoothly.
FUDGE: Thanks very much for your call. Michael, are members of Congress seriously talking about that, reforming Medicare, Medicaid?
SMOLLENS: To some degree. The president certainly is. He was looking at a grand bargain that wouldn't be a pleasant thing necessarily. There would be serious cuts. But the tea party folks are looked at as obstructionists, but they are speaking to I a concern a lot of folks have. Will in most years, debt is not something people get too worked up about, the average public. But the debt is so huge that it is scaring people. And I think that a critical mass is coming to where you have the democratic president really wanting to do something he knew would be pain will of. But his solutions are some things that wouldn't fly with the Republicans.
FUDGE: Lori sal-Dana.
NEW SPEAKER: Kevin McCarthy, who's now the house majority whip, was a Republican here in California. And the budget plans that were stalled and cost California tens of millions of dollars in delays over the last several years, that's really what's happening now at the national level. So if people want to know what this will affect, look at California's history. Vendors won't get paid, the vendors that care for our seniors in adult daycare, which is the California budget has now eliminated, people won't get their EDD checks because the Department of Labor won't provide the funds to the state to pay for those, in addition it all the other things that were talked about. So this is -- we saw this happening in California last year with our billion. And Kevin McCarthy from Bakersfield who's now the whip in wash walk, he's running the same type of seen on the American public. And it's shameful and hurtful to the people who are already living difficult lives.
FUDGE: Thank you very much. We're listening to the Roundtable on Midday Edition. I'm Tom Fudge filling in for Gloria Penner. Wee going to take a break. And when we return, we'll wrap up our conversation about it is debt ceiling. And then we'll talk about the subject of medical marijuana in San Diego and how those pot dispensaries might be regulated. Stay tuned.
