UYGUR: President Obama‘s plan for reducing the deficit will introduce a topic that‘s sure to make last week‘s wrangling seem like a love-fest. That‘s because Obama‘s expected to call for tax increases for the wealthiest Americans, and they‘re not going to like that.
And that‘s a problem for Republicans, because they think our lopsided tax system is fair. In fact, they think it should be more lopsided. They‘re proposing massive tax cuts. Again. That‘s on top of the Bush tax cuts.
Just listen to Speaker Boehner.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: Washington has a spending problem. It doesn‘t have a revenue problem.
(END VIDEO CLIP)
UYGUR: They always say that, and it‘s just an assumption. But it‘s nowhere near reality. The reality is that we have a massive revenue problem.
But undeterred by reality, Paul Ryan‘s plan would lower the top tax rates for individuals and corporations from 35 percent to 25 percent. The plan would bring the tax rate on high earners down to its lowest level since 1931. And the Tax Policy Center puts the revenue lost from a Ryan‘s plan to $2.9 trillion over the next decade. That doesn‘t help the deficit. It hurts the deficit by 2.9 trillion. You know what? That money has got to come from somewhere. How do you think they make up for it? By taking it from the poor and the middle class, of course. Look at this graphic from Robert Greenstein of the Center on Budget and Policy Priorities. He shows that two thirds of the spending cuts come from programs that help lower-income Americans, programs like Medicaid, food stamps and low-income housing. Now, that doesn‘t sound like shared sacrifice to me, so how does the GOP spin this one?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MAN: We‘re in a situation where we‘ve got a safety net in place in this country for people who frankly don‘t need one. We have to focus on making sure we have a safety net for those who actually need it.
(END VIDEO CLIP)
UYGUR: That‘s amazing, now I might be wrong, but by cutting Medicare and Medicaid, the GOP is actually taking away the safety net away from people who do need it to create a safety net for the people who don‘t need it, but this is GOP 101. They are constantly trying to rig the system for the rich. Remember, just this December, the Bush tax cuts were extended for two more years. It cost the government $900 billion. And a quarter of those savings went to the top one percent of Americans. Let me just repeat that. Top one percent of the country.
Quarter of $900 billion, and now they say they got to have spending cuts from you. But by increasing the tax rate on the rich, of course, it could ease the pressure to make the sort of cuts that Paul Ryan is suggesting, and it‘s not unprecedented. Look at his graph, it shows that the top marginal tax rate was 50 percent in the mid 1980s, when Ronald Reagan was president, and much, much higher in the 1950s, the golden age of America. And remember when President Clinton had the higher rates? We created 22 million jobs.
Joining me now is former Clinton Labor Secretary Robert Reich, he‘s now professor at UC Berkeley. His latest book is “Aftershock,” and is now available on paper back. Look at that.
All right. Secretary Reich, first of all, is the team in Obama administration misreading the Clinton legacy? Is there something that you know, because they are saying, OK, we have to be centrist like you guys were, is there something wrong with that? Or do they have it right?
ROBERT REICH, FORMER LABOR SECRETARY: Well, the big thing wrong with it Cenk, is that this is not like the mid 1990s. A lot of people are hurting, we are still in the gravitational pull of the great recession, it‘s very difficult to get out. We‘ve got, you know, 13 and a half million people unemployed. We‘ve got six million people who have been unemployed for six months or more. You know, the economy is not buoyant. I mean, you don‘t have to be a rocket scientist or have a Ph D to understand that this economy is really in trouble. And if we actually make major cuts in programs that are important to the middle class and to the poor, make major cuts overall, we‘re going to be actually slowing economic growth down and slowing the creation of new jobs.
UYGUR: And I love the point you made in one of your articles, where you said, look, the reason Clinton got reelected was because we were creating 400,000 jobs a month. Not be because Washington thought he was more centrist. And I think that‘s a really available lesson. But to the point on taxes, we can also talk about the Clinton experience there. Now, there was a higher tax rate for everybody, for the rich, but also for the rest of us. It did create 22 million jobs. Is that the right way to go here? Should President Obama go further and say, hey, we just got to go back to those rates, period?
REICH: Look it, I don‘t think there‘s any choice, Cenk. I mean, most Americans in polls show that they are in favor of a millionaire‘s tax. They know, they‘re not stupid, they understand that the alternative, the only alternative of cutting Social Security and Medicare and education and roads and bridges, and everything we need is to raise taxes, and most people can‘t afford to pay more in taxes, as so who can‘t afford to pay more in taxes? The rich who have been getting a steadily larger percent of total income in this country. Look back over the past 30 years, you know, the people around the top one percent, they doubled their share of national income. Doubled. If you‘re in the top one-tenth of one percent by income, you‘ve tripled your share of national income. And yet through that whole period, your tax rates, and I‘m talking about income taxes, estate taxes, capital gains taxes, those tax rates keep on going down.
UYGUR: You know on Friday‘s show, we showed people a piece from Bloomberg business week that showed for the top 400 earners in the country, their effective tax rate has gone down to 17 percent, which is a lot less than what we pay, which is unbelievable, right? And now.
REICH: That‘s main by.
UYGUR: And let me just also add to that, they‘re doing better and better. The top CEOs, their pay went up this year by 12 percent. And now the average, you know, CEO for the top 200 major companies makes $9.6 million. It‘s absurd to say that they can‘t pay the tax.
(CROSSTALK)
REICH: Of course it‘s absurd. Look, I think it‘s a matter of patriotism here as well. Cenk, if you were taking home a bigger and bigger slice of the economy and you‘re paying less and less in terms of your tax rates, and you‘re imposing the costs on everybody else. Well, are you really being patriotic? Are you really fulfilling your responsibility to this country? I would say possibly no. I mean, Wall Street is doing better than ever. As you said, CEOs are doing better than they were doing before the recession, but most Americans are doing worse than they were doing before, and they are certainly in trouble—we are in a financial crisis right now, we‘re in an economic crisis, and the rich have to pay their fair share.
UYGUR: Secretary Reich, one last quick thing, maybe if we just ask them in the form of a trick question. If we asked the Republicans, would you be willing to agree to the tax rate, that the last republican president who balances the budget had, maybe they would go for that, and of course the answer to that is Dwight Eisenhower, and what was his tax rate? Was it 90 percent, 91 percent?
REICH: Well, it‘s 90, the marginal tax rates on top comes under the Dwight Eisenhower administration, and nobody would have accused Dwight Eisenhower, a republican, former general, of being a socialist, the top marginal income tax rate under Dwight Eisenhower was 91 percent. And the economy did well. In fact it was doing better in the three decades after the Second World War than it‘s been doing over the past decade.
UYGUR: You know, Rachel Maddow once said that she is a liberal, which means that she pretty much agrees with the Eisenhower administration, right?
REICH: Who would have known? Who would have known?
UYGUR: That‘s how much the spectrum has shifted in this country. But Secretary Reich, we always enjoy the conversation. Thank you for joining us tonight.
The budget battle that almost shut down the government Friday night was just the undercard. This week we begin the real fight over the debt ceiling and cuts that are not in the billions, but in the trillions.
This is about the core governing philosophy. What do Democrats and Republicans think the government should and should not do? At stake in this battle, a government default, another financial crisis, and the fate of the safety net that‘s been helping Americans since the Great Depression.
On Wednesday, President Obama will unveil his plan to reduce a deficit, presenting an alternative to the Republican 2012 budget from Congressman Paul Ryan. The president‘s plan would repeal the Bush tax cuts for the rich and cut defense spending. It would also cut Medicare, Medicaid, and reform Social Security.
We don‘t know yet exactly how the president plans to do this. What does he mean by Social Security reform, for example? And we don‘t know yet how big those spending cuts will be. So we‘ll find out soon enough, on Wednesday, of course.
But we do know what the Republicans want.
(BEGIN VIDEO CLIP)
REP. ERIC CANTOR ®, MAJORITY LEADER: This budget deal that was cut, or the spending deal that was cut this week, is only the beginning. This is the first bite at the apple.
(END VIDEO CLIP)
UYGUR: Republicans, of course, want to take another huge chunk out of that apple by attaching a new round of devastating cuts to any vote raising the nation‘s debt ceiling. Now, without that vote, the government will hit its credit limit on May 16th, with potential disastrous effects to our economy.
(BEGIN VIDEO CLIP)
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The consequences of failing to raise the debt ceiling would be Armageddon-like in terms of the economy. And we do not need to play chicken with our economy.
(END VIDEO CLIP)
UYGUR: Essentially, the Republicans are willing to hold the recovery hostage in exchange for more spending cuts. And much more importantly for them, more tax cuts for the top bracket.
Now, the GOP seems to be willing to shred Medicare and Medicaid to make sure that that top two percent get bigger tax breaks. The big question is, will the president let them? So far, presidential adviser David Plouffe seems to be focused on taking credit for spending cuts rather than fighting those cuts.
(BEGIN VIDEO CLIP)
DAVID PLOUFFE, OBAMA ADVISER: We cut spending, the biggest annual spending cut in the history of the country. These were some tough cuts. The president came together with Republicans and Democrats on behalf of the country in December, led an effort to cut taxes, and now we‘ve come together to cut spending.
(END VIDEO CLIP)
UYGUR: Cutting taxes and cutting spending. Just curious to see a Democratic administration boasting about that when that‘s what Republicans usually run on.
But the fight that Plouffe is referring to is just a warm-up for the title match. That‘s coming right now. How will the president position himself for that fight? Whatever he decides will likely define his presidency.
Joining me is now Congressman Peter DeFazio, Democrat from Oregon, and a member of the Progressive Caucus.
Congressman, first, are you encouraged or discouraged by how that undercard went, that first round?
REP. PETER DEFAZIO (D), OREGON: Pretty discouraged. Remember, we wouldn‘t have a record deficit this year if in one vote in December, we hadn‘t reduced the government‘s income by $400 billion when the president went along with extending all the Bush tax cuts. Then, suddenly, we have to—oh, my God, we have a record deficit. Yes, you reduce your income, you have a record deficit.
Now, Ryan proposes that we should reduce our income more and,
therefore, we‘ll get to a more fiscally responsible condition. How? And
even if the Ryan budget added up, he says, well, it wouldn‘t be balanced
until 2040. He carefully leaves a lot of the Republican pet things aside –
agriculture subsidies, paying people not to grow things—he‘s from an agriculture state.
Instead, we‘ll hit at kids, the WIC program, food stamps, things like that. You know, all tax cuts are sacrosanct. There‘ll be a whole new raft of tax cuts here.
No, I‘m pretty discouraged at where we‘re going. And I guess what I would say is, remember, this Republican class was substantially elected with a lot of help from folks on Wall Street, a lot of big money people through secretive giving, and through the U.S. Chamber of Commerce. And the people on the frontline, if they threaten the debt of the United States, are the people on Wall Street and are some of those big guys. And I would suggest they‘d be picking up their phone and call their friends here in Congress, the ones they just elected, to change things and tell them, don‘t mess with default for the United States of America.
UYGUR: Congressman, I appreciated your math in the beginning, because that really puts it into perspective for the American people. You know, they are bragging about this $38.5 billion in spending cuts that did hurt. That hurt a lot of people, right? But they added $400 billion.
So that means they added about 10 times as much to the deficit as they helped with the spending cuts. Now, it‘s amazing to me that Washington seems to think that that‘s perfectly normal.
So, how do you turn that conversation around, Congressman? Because like we said, the next fight is much, much larger, and it‘s critical that the conversation be different the next time around. How do you in Congress turn it around?
DEFAZIO: Well, I advocated in January to my colleagues, the Democratic Caucus. I said we‘ll have one point of leverage this year. That‘s going to be the debate over extending the debt of the U.S.
And we should say they don‘t get a single Democratic vote until they stop pretending that you can somehow achieve fiscal responsibility without revenues. You just can‘t do it.
I mean, today, if we eliminated the entire government, all of the Defense Department, everything else the government does day to day, we would still have a deficit. So you can‘t pretend you‘re getting there with cuts, and you can‘t keep cutting income, which is also called cutting taxes. And somehow, in their bizarre world, that‘s going to rectify the deficit.
UYGUR: Well, so, it seems to me again here, obviously, the White House is critical, because what you‘re saying obviously makes sense. There‘s two sides to this equation. There‘s revenue, and then there‘s spending. And it looks like we have got a massive problem with the revenue side of this equation, although Congressman Boehner keeps saying you don‘t.
So, are you sure the White House is going to be on your side? It looks like on Wednesday they are. It sounds like they‘re going to go back to the Bush—or take away the Bush tax cuts, I should say, for the tax bracket.
Are you encouraged by that? And are you sure that they‘re going to stay strong with that?
DEFAZIO: Well, that‘s a small step. Remember, the president did run on that, and he did cave on it in December. Now, whether he was blackmailed over the treaty over Russia, we‘ll never know. But he did cave just in December.
This would be a kick turnaround. And it‘s got to be actually more, honestly, than just the top bracket tax cuts.
You know, if we allowed all the Bush tax cuts to expire, own 190 years we would have cut the deficit in half. Now, that would have been a small increase on working families, a large increase on more wealthy folks, would have taken us back to Clinton-era tax rates when the economy boomed and we balanced the budget and had a surplus. We could cut the deficit in half if we just let them all expire. But we‘re headed the wrong way, I fear.
UYGUR: And look, as you see from that poll that we just put up, the American people are on your side. Eighty-one percent say raise taxes on millionaires. It‘s hard to imagine a better number in terms of politics, but you said something very interesting a little earlier on.
You said that that‘s a moment of leverage for you, whether we raise the debt ceiling or not. That‘s interesting, because that‘s what the Republicans say, too. Eric Cantor said the same thing.
So is there going to be a lot of pressure on the president in this case from both sides?
DEFAZIO: Yes, but it‘s time for him to call their bluff and to speak out more forcefully as we go into this debate. I mean, remember, they have a certain number of new members, Tea Party folks, who have signed pledges not to vote to increase the debt in the United States, despite the fact that the 14th Amendment says basically thou shalt not question the debt of the United States in any place or time.
They‘re going to do that, they‘re just saying they won‘t vote for it.
So they‘re creating an impossible scenario.
How many of those there are, I‘m not sure, but I think they‘re going to need some Democratic votes to get past this. And I think we could have a point of leverage here, and they could maybe get real. You can‘t get to fiscal responsibility with numbers this big without revenues.
UYGUR: One last thing, Congressman. Is it realistic to expect Democrats in Congress to actually pressure a Democratic president? Because a lot of times we‘ve seen some hints of that, and then when push comes to shove, the Democrats pull back and say, well, it‘s a Democratic president and we‘ve got to do what he says.
What‘s your sense of this time around? Is that going to be the same old thing, or is there going to be real pressure, saying no, no, we absolutely will not give votes if you go in the wrong direction.
DEFAZIO: Well, in my opinion, that‘s what the House did wrong in the last Congress, and in part why we lost, is we never pushed back. No matter how wrong he was or off base he was, we never pushed back.
There are a number of us in the caucus now whoa re pushing back very hard on our leadership. And I‘m just going to continue to do that. Who knows where they‘ll end up, but maybe we can take enough Ds with us to make them uncomfortable and to make them stick with making the president act like a Democrat.
UYGUR: Well, since he is a Democratic president, you would hope that he would do that, but we‘ll see how that turns out.
All right. Congressman DeFazio, thank you for your time. Really appreciate it.
DEFAZIO: Thank you.
UYGUR: All right.
Now let‘s bring in Ezra Klein. He‘s a staff reporter for “The Washington Post” and an MSNBC contributor.
Ezra, good to have you here.
EZRA KLEIN, MSNBC CONTRIBUTOR: Good to be here.
UYGUR: All right. Now, just real quick, let‘s score the last round so we can get on to the bigger round here. And tell me what you think it portends for the bigger round.
This budget battle, how did you see it coming out, and what do you think it means for the bigger match?
KLEIN: I think the central thing to know about this budget battle is that when it began, John Boehner had an opening bid that we should cut $32 billion from last year‘s budget. At the end, we cut $38.5 billion. So John Boehner ended up being in the center-left of the eventual compromise. I think that tells you pretty much what you need to know about how far right this ended up being.
UYGUR: So, Ezra, I think what everybody in the country is asking right now is, where is the president going to be in the next one? Right? Because he said to Chuck Todd, you know, who obviously works here, at some point that he was itching for a fight at some point, when Chuck pressed him on that a little while back, after they did the big tax cuts back in December. Right?
Obviously, based on what you‘re saying and based on what a lot of people are saying, this was not the big fight. The president gave more than Boehner originally asked for.
So, do we have any indication that the next time around is the time that when President Obama will fight, or do we not have an indication of that?
KLEIN: You can argue it both ways. We don‘t really have a strong indication.
The White House will tell you a couple things. They‘ll tell you they got good cuts mainly in this deal, that they did a better job than many people expected, getting a lot of those cuts out of what are called mandatory spending. It didn‘t all come from that non-defense discretionary bucket. The next time is the debt ceiling.
If you don‘t raise ceiling, the economy essentially goes into a tailspin. So, there are, on the one hand, much, much higher consequences for the Republicans to try and hold this hostage. On the other, the president may like the occasional fight. If he says so, I trust him on that. But he doesn‘t like to allow consequences to come to fruition.
He didn‘t want the Bush tax cuts to increase, even if that was the showdown he needed to get his preferred Bush tax cut compromise in there. He didn‘t want the government to shut down, and he‘s really not going to want the debt ceiling to expire.
So, one question for both him and for the Republicans is, if no one is willing to let this happen, then what is the nature of the negotiation that keeps it from happening? If no one, in the end, really has that leverage, if no one is willing to admit they have the leverage they want to say they have, then why should anybody listen to the other side when they say they‘re going to let the debt ceiling actually expire?
UYGUR: See, but I think that gets to a critical question, because who is going to blink?
Now, in reality, the Republicans are actually, in my opinion, controlled by the Chamber of Commerce. The Chamber of Commerce did not want to shut down, so they weren‘t really going to go for a shutdown, they were just playing poker. And the Chamber of Commerce certainly does not want us to not raise the debt ceiling, because that would have tremendous problems for the economy.
So I think you‘re right, the Republicans ultimately do want a deal, right? Because that‘s their main donors. The president wants a deal. But when we‘ve seen these showdowns in the past, am I wrong in thinking that the Democrats are usually the ones that blink? And again, any indication from the president that this time around he will not blink, he will force the Republicans to the table?
KLEIN: You know sometimes people say that in negotiations, so-and-so is an ace card. Boehner has a joker. Boehner has the Tea Party, Republicans, the freshmen, however he is referring to them this week. And he says listen, you know I don‘t want this shutdown, you know my donors don‘t want the shutdown, the people I care about don‘t want the shutdown, and I don‘t think the shutdown is a good idea. I‘ve been clear about that over and over and over again. But you also know I can‘t control these freshmen, these Tea Party conservatives, whatever it might be, so trust me when I say I would like to cut a deal with you, but unless you give my something I can give to them, I can‘t do it.
At the end of the day, the Republicans have the capacity to make a more credible threat that their people will let the government default on its debt. The Democrats, Obama, do not have that threat. So, the question then becomes whether or not the threat of what the Republicans would suffer if they allowed the Republicans to default on its debt, whether or not that outweighs their desire to try to negotiate a very large deal.
So far, Michele Bachmann and others have said this is going to be the big battle. Kay Bailey Hutchison called it Armageddon. So, I think it‘s going to be very difficult for Boehner to come to the table and not walk away with something very significant.
UYGUR: But Ezra—
KLEIN: At the same time, what they got in the shutdown deal was not that significant. And for Obama—and it‘s very unlikely, I think, that Obama is going to give up a whole lot more than that.
UYGUR: Right. Now, Ezra, final thing, real quick here, based on what you‘re saying, what Congressman DeFazio said just a little while ago is all the more important. If there‘s a real credible progressive caucus that says no to the president, which they haven‘t really effectively done yet, if they can do that, doesn‘t that give the Democrats something to go back to Boehner and go, well, I can‘t get my guys to vote yes, either, so sad day for you, we‘re really going to actually have to come to the middle here?
KLEIN: Arguably. I think these things are always difficult when they play out. And we saw some of this during health care reform.
And you have to balance out all sorts of different things about what would happen if, God forbid, we actually did default on the deficit and the economy went into a tailspin. At the end of the day, the problem for the House progressives is that they‘re actually too responsible to let that happen. So I don‘t know if that threat ends up being as credible as it sort of sounds at the beginning of a negotiation like this one, but what —
(CROSSTALK)
UYGUR: So, Ezra, though, but the bottom line is you‘re saying you‘re playing a game of chicken and the other side is crazier. So you‘re never going to win.
KLEIN: Well, that sometimes is a game you‘re playing. When you control most of the government and the other side is more willing to let things go bad than you are, you end up sometimes having to eat more than they do.
UYGUR: All right. Well, let‘s see how it turns out. It certainly is interesting.
UYGUR: Every day, we find out more and more about how Congressman Paul Ryan`s budget plan takes from the middle class and gives to the rich. The tax poll center has now released a study finding the major tax cuts in Ryan`s plan will decrease revenue by $2.9 trillion over the next ten years. This is a joke. And of course those tax cuts are skewed to benefit the wealthy. Ryan`s extension of Bush tax cuts alone gives people making more than a million dollars average tax cuts of $125,000 a year. That`s an enormous gift to millionaires. They`ve got to be very grateful for the republican politicians that they have bought.
But those cuts fly in the face of public opinion. A recent NBC News/”Wall Street Journal” poll found that 81 percent of people support raising taxes on millionaires. Despite these overwhelming numbers, Republicans are continuing their decades-long quest to cut taxes for the rich. Next week`s cover story on “Bloomberg Business Week” written by Jesse Drucker points out that between 1995 and 2007, the effective tax rate at the federal level for the 400 wealthiest American taxpayers dropped from 30 percent of their income to just under 17 percent. And in 2008 alone, the top one percent of Americans saw their effective income tax rate drop from 29 to 23 percent.
So, the rich have seen massive tax decreases and the richer they are, the bigger the decrease. And Republicans think it`s still not enough. Let`s give them more. And by the way, how do they pay so little?
By taking advantage of a slew of corporate loopholes and tax avoidance strategies gift wrapped for them by earlier republican proposals. As Republicans working really hard to make sure the rich get richer and richer and richer off your hide.
UYGUR: It`s time for the con job of the day. And once again, today`s winner is republican Congressman Paul Ryan of Wisconsin. Congratulations. He`s on a streak. As we explained last night, his whole budget proposal is one massive con on the American people. He transfers money from the poor and the middle class straight to the rich in the form of tax cuts for the very top brackets. But today we want to focus on one particular part of the proposal that isn`t getting a lot of attention. Ryan claims his budget is about reducing the deficit which just like the republican attack on Planned Parenthood that we`ve been talking about it all day. He`s targeting programs that have nothing to do with cutting debt all.
Instead, Ryan would gut financial reform so that big banks can make more money while endangering our entire economy yet again. Ryan`s budget would stop the FDIC from dismantling failing banks. The banks must be protected at all costs apparently, if you believe the Republicans, even if they`re failing ones. And would also stop the Federal Reserve from overseeing nonbanking firms. Now, that would be firms like AIG that needed a $180 billion bailout because we didn`t regulate them in first place. So, why regulate them now? We`ll just bail them out when they get in trouble, right?
That`s a terrible idea. Now, chair of the Senate Banking Committee Ken Johnson says, quote, “House Republicans` attacks on the Wall Street reform law have nothing to do with cutting the budget and they have everything to do with gutting consumer and investor protections and letting Wall Street run wild all over again.” So, Ryan`s plans to eliminate parts of the Dodd/Frank financial reform bill will actually give much more power to the banks and it actually also eliminates revenue. Get this ticker, according to the nonpartisan CBO, Dodd/Frank will cut the deficit by about $3 billion over the next ten years. That`s reducing the deficit. Now, Raya would get rid of that cost savings and he`d add to the deficit. Why? Because this isn`t about the deficit. Ryan`s budget proposal is one giant welfare program for the rich and the powerful. And the banks are on the top of that list. This particular trick to help their wealthy donors is the republican con job of the day.
BAREFOOT ACCOUNTANT: As Warren Buffett said: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
UYGUR: All right. Now, still ahead. Slick tricks. Oil companies are getting billions in tax giveaways, thanks to outrageous loopholes. And you`re not going to believe all of the things that taxpayers could do with that money if things were fair and square.
UYGUR: Today in “Rigged Game,” we`re going to show you what would happen if just one of the eight subsidies oil companies received were to be eliminated. The expensing of intangible drilling costs was the first subsidy given to oil companies back in 1916. According to the IRS Web site, it allows oil companies to deduct the cost of workers` wages, fuel, drill repairs, hauling equipment and, ready for this last one? Supplies related to drilling wells. That`s right. According to this subsidy, they can write off just about anything related to drilling their wells. This subsidy is obviously archaic. It was put on the books back in 1916 when oil and gas companies were in their infancy to help them grow. But those days are long over. They have grown and grown and grown. They`ve made a trillion dollars in the last ten years.
Just the top five of them.
Now, since 1968, this subsidy has cost the U.S. treasury $78 billion in lost tax revenue. That`s 78 billion that could have been in your pocket instead of oil executives` pockets. Now, if we did away with it today, it`s estimated that we would gain approximately $8 billion over the next decade. You know what we could do with that $8 billion? Build about 19 new solar power plants that could reduce greenhouse gas emissions by nearly 7.6 million tons a year. Now, it`s been 2,069 days since the last oil subsidy bill was signed into law. And we`re going to keep on this story until all Washington has to admit they make no sense whatsoever.
REP. JOHN BOEHNER (R), HOUSE SPEAKER: We`re not going to roll over and sell out the American people. When we say we`re serious about cutting spending, we`re damn serious about it.
(END VIDEO CLIP)
UYGUR: They always say they`re doing the will of the people. You ever notice that whenever a democrat wins an election, they look for bipartisan compromise, and whenever Republicans do, they claim that have an overwhelming mandate and know exactly what the American people want, and that the Democrats better get out of their way. Now, in this case, the numbers are clear, 58 percent of Americans want compromise. That`s the exact opposite of what Boehner has been doing all this time. But 68 percent of Tea Partiers don`t want compromise. That`s who Republicans are actually representing. Now, that`s a tiny sliver of the population, obviously, not the entirety of the American people as the GOP claims. Mike Pence even slipped up and accidentally admitted it the other day. Now, check out this video from Think Progress.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MAN: We`re trying to score a victory for the republican people — for the American — for the republican people. Trying to score a victory for the American people.
(END VIDEO CLIP)
UYGUR: That was great. The republican people — I mean the American people. But look, here`s the upside, as Ryan Brown (ph) of the National Journal points out, history shows that when the Republicans try to appeal only to others on the right, it ends disastrously for them. Especially when they target entitlement programs. The way Paul Ryan is doing right now to try to overhaul Medicare. He`s doing the same thing they`ve been doing all this time. Now, take a look at the brutal record of political missteps. In the early 1980s, Ronald Reagan tried to lower the cost of living adjustments for Social Security.
(BEGIN VIDEO CLIP)
RONALD REAGAN, FORMER U.S. PRESIDENT: The entitlement programs that make up our safety net for the truly needy have worthy goals but there`s only one way to see to it that these programs really help those whom they were designed to help and that is to bring their spiraling costs under control.
(END VIDEO CLIP)
UYGUR: You know what? Didn`t work. And the backlash was harsh. Democrats gained 27 House seats in the `82 midterms in part because of a surge in elderly support. Or go to 1995 when Newt Gingrich led the crusade to lower Medicare spending eventually triggering two government shutdowns.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MAN: The whole issue, the whole issue over this next month is how much reduction in Medicare growth and spending versus how big of a tax cut.
(END VIDEO CLIP)
UYGUR: We know how that played out. In the wake of the shutdowns, the voters spoke and re-elected Bill Clinton. Or how about 2004, George W. Bush promised to wield his political capital after beating John Carey. Bush`s big dream was to privatize Social Security.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: Maybe rumors are getting.
The crisis is now. We have a problem. Workers in their mid-20s today will find Social Security bankrupt when they retire.
(END VIDEO CLIP)
UYGUR: Now, that plan collapsed without even going to a vote in either the House or the Senate. And then, in the 2006 midterms, there were huge gains by the Democrats. Now, of course, Bush`s inept response to hurricane Katrina also played a rule in those democratic gains, as well as George Bush`s inept response to just about everything else. But history is clear, when the GOP attacks popular programs that have been working for the American people for decades, they eventually get crushed.
With me now is Ron Brownstein, editorial director of the National Journal Group, and democratic Congressman Earl Blumenauer of Oregon.
RON BROWNSTEIN, NATIONAL JOURNAL GROUP: Actually, Ron, let me start with you because you came up with that interesting analysis. Is there ever a time when they have tried to reduce Medicare or Social Security, the benefits that people got and it worked for them?
Well, it`s very hard to change these programs on a unilateral one- party basis, you know, we are living in the narrow where the public is intrinsically distrustful of both parties. And they are leery when politicians tell them they`ll going to be improving broadly supported programs like Social Security and Medicare. And I think really, the only way they`re able to get public support for that is when they do it together. The two counterexamples in the same 30 years, the only time they`ve retrenched benefits on entitlement programs without a big backlash was 1983 when the Social Security deal raised the retirement age and the payroll tax, and have bipartisan support in Congress. And 1996, when Bill Clinton and the Republicans agreed on ending the entitlements on welfare while increasing spending to child care and training.
So, I think the key here, the lesson of this past 30 years is when you try to do this on a one-party basis, even for that matter, you know, the Democrats having to pass health care on a one-party basis, it`s very hard to sell a change of that magnitude to the American people. And what Ryan has come up with is a plan that, by definition, is going to have virtually no appeal to Democrats. I do not think a single democrat in all likelihood would vote for this, would ever vote for voucherizing Medicare, and either the House with the Senate, whether you call it a voucher or premium support.
UYGUR: All right. So Congressman Blumenauer, obviously, we go to you for that question. Is Ron right? Would you guys under no circumstances vote for this plan, whether it`s voucherizing Medicare or making block grants for Medicaid?
REP. EARL BLUMENAUER (D), OREGON: Well, bear in mind that this is a proposal that Congressman Ryan rolled out earlier in last year, and nobody prior to the election wanted to embrace it. He had only a handful of representatives because, including his leadership, because it was too toxic. Well, now they`ve done that. The cuts for everybody 55 and under, the block grant for low income people, these are things that are not going to be sustainable over time. It`s actually going to increase overall health care spending while it shifts it on to individuals to pick up more of the gap. I can`t see anybody in my party embracing it. And I think there`s going to be a lot of people in his party that are going to run away before we`re through with this.
UYGUR: Ron, let me go back to you for a second, then. Look, if the will of the people that they constantly refer to is to not cut Medicare and you see the polls, 75 percent say, under no circumstances should you cut Medicare, why in the world would the Democrats agree to that at all? I mean, it looks like according to your analysis, they got the Republicans in a good spot. The Republicans have basically offered them their jaw right there, shouldn`t the Democrats swing away?
BROWNSTEIN: Well, look, I mean, the basic dynamic in public opinion about spending in the deficit has been consistent for decades. I mean, the American people are worried about the deficit and philosophically, generally if you ask them they support a smaller than larger government. When you get down to the details of the specific programs, however, you know, the opinion often shifts. And Medicare has been one of those. This idea of converting Medicare from what is now a defined benefit program where you go to the doctor and you`re guaranteed certain benefits into functionally defined contribution program where the government would only guarantee you a check every year to buy private insurance goes back to 1998, it was first hatched by a commission chair by John Breaux, a democratic senator and Bill Thomas, a republican House member.
There was not another significant democrat who endorsed the idea until the last year, when Alice Rivlin, the former OMB director on the Bill Clinton endorsed a similar plan with Ryan. But even she has renounced her support given the specifics of the Ryan proposal. So this is a big roll of the dice for House Republicans. They are betting that if next week when — will virtually all of them will vote for it.
They`re betting that the broad support for deficit reduction will outweigh what is a clear I think reluctance on the public to change a program that affects this many people in such a fundamental way. This really is ending Medicare as it now exists and replacing it with something else. And at a time when Republicans won 60 percent of seniors in the 2010 election, we`re talking about before, their best showing in the last 30 years, that is a big disruptive change even if you`re telling people, you`ll not going to change, you know, alter it for ten years doesn`t affect anybody older than 55, it is not clear that seniors are going to hear that, or believe it if they do.
UYGUR: Right. Now, Congressman Blumenauer, the conventional wisdom unfortunately in Washington is, all the Democrats should work with the Republicans on this so-called deficit cutting program and look to cut Medicare and Medicaid. To me, as Ron explain the numbers and we see the history of it, that makes no sense whatsoever. And you have again three- quarters of the American people behind you. Can you assure me that the Democrats are not buying into the Washington conventional wisdom about working with the Republicans on this nonsense plan? And I`m not talking about just the vouchers or the block grants.
BLUMENAUER: Right.
UYGUR: I`m talking about cutting Medicare or Medicaid at all?
BLUMENAUER: Well, bear in mind that we have already put in place a number of reforms to make Medicare more efficient and to improve it. I come from an area of the country that has lower costs and higher quality than others where they`re spending twice as much. We know how to improve Medicare. We`ve got a number of those elements that used to be bipartisan improvements that are in the affordable care act. What we need to do is to work to implement those. It will save over a trillion dollars over the next 20 years and give senior citizens better Medicare. We can strengthen it and save money. That`s the path we`re on. CBO has scored it that way. And these are proposals that used to be bipartisan before the Republicans decided they were going to use it as a weapon.
UYGUR: Congressman, real quick, last question for you. Have the Democrats learned a lesson from these shutdown negotiations, that if you give the Republicans some amount of leeway, that they will take and take and take, that it makes sense to perhaps draw the line much, much, much earlier?
BLUMENAUER: Well, I`m wearing my members pin from the 104th Congress, so last time we did the cutout — the shutdown. I think absolutely we should have been more aggressive earlier and be more clear about what is involved with these billions of dollars that are being cut. Allowing this to drift, this is anonymous now. People have no clue about what is in the pipeline. That was a mistake. They have given us ammunition. We should do a better job of spotlighting what`s at stake because the American public, I don`t think, agrees with this meat cleaver approach.
UYGUR: All right. Oregon Congressman Earl Blumenauer and of course Ron Brownstein from the National Journal, thank you both, we really appreciate it.
UYGUR: With just hours until a possible government shutdown, one of the GOP`s top strategists is warning that Republicans will pay a price if they fail to compromise. In a memo on his website, Karl Rove reminds his party that the shutdowns benefited President Clinton in 1995 and 1996, and it could do the same for Obama.
He writes, quote, “The shutdowns helped improve Clinton`s political standing, boosting both his approval rating and perceptions of him as a strong leader. President Obama`s ratings as a strong leader have slipped this year. Republicans should be careful not to let him recover as he gears up for his 2012 election campaign.”
Now, look, I think he`s right in this case, which is already enough of a surprise, but think about what Rove just said there. Did you get it? He says, look, if they shut down the government, Obama will look strong. When he keeps negotiating and giving away more and more and more, he looks weak. You see that? The Republicans actually love that, but on the other hand, the Republicans also need to be careful because no matter what the fringe element of their party may want, most Americans want to avoid a shutdown.
A Gallup Poll out this week finds that 58 percent of Americans want leaders to reach a compromise compared to just 33 percent who said they should hold their position even if it means a shutdown. Now, ironically, even the man behind the 1995 shutdown thinks a compromise should be reached, but speaking at an event today, Newt Gingrich couldn`t help but take the opportunity to slam President Obama on the negotiations.
(BEGIN VIDEO CLIP)
NEWT GINGRICH, (R) FMR. HOUSE SPEAKER: At some point, he has to actually be the president. First of all, I would try to involve like a month ago, two months ago, I tried to work it out long before you get to this mess. Second, I`d try to — I would try to find a compromise to keep the government open.
(END VIDEO CLIP)
UYGUR: I think he`s missing an irony gene. You were the one who shut down the government last time. How can you possibly claim that you would make sure the government wasn`t shut down this time around? It`s unbelievable the stuff that he says without, you know, feeling any irony or hypocrisy at all.
Now, to find out what effect this will have politically on the GOP, the Democrats and President Obama, let`s bring in my next guest. Joining me now “Washington Post” columnist and senior fellow for the Brookings Institution, E.J. Dionne. First, I`m going to ask you a funny question, do you agree with Karl Rove that a shutdown helps the Democrats and hurts the Republicans?
E.J. DIONNE, THE WASHINGTON POST: I guess, it pains me to say, yes as well. I think he`s right. And I think if I can engage (ph) a little bit of Washingtonology here, Karl Rove is very close to Barry Jackson who is John Boehner`s chief of staff. I think one can interpret this as an indication of what most of us, I think, suspect, which is John Boehner does not want a shutdown because he knows they will pay.
Let`s look at two paths.
If they don`t shut down the government but get, you know, depending on how you want to count it, 38 or 79 billion in cuts, that`s a great victory for Boehner. The Republicans only control one-third of this process. Democrats have the presidency in the Senate, yet they will end up with somewhere between three-fifths and two-thirds of what they wanted, in the first place. And I do think that`s part of the cost of the president choosing not to be involved in this fight until the very end.
If there is a shutdown, then, the fact that the Democrats went all this way to give in to the Republicans and they still shut down the government, I think that begins to hurt the Republicans. So, as of this moment, I think a shutdown would be catastrophic for them keeping the government open with these cuts would be a great victory for them.
UYGUR: I mean, at this point, when you look at the numbers, it seems to be, if you ask me, just like you said, if they do the deal right now, it`d be a stunning loss for Democrats. I mean, how much could they have possibly — even me who is incredibly cynical about the Democrats` negotiation strategy, I still can`t believe how much they gave away. So, I think you hit it on the head, but here`s the trick, right, and here`s the problem for President Obama, to be fair to him.
He`s got to look reasonable. Most of the country wants compromise, so he` going for compromise. On the other hand, if you do too much compromise, as Rove pointed out, you look weak. So, how does he thread that needle? What`s the right answer?
DIONNE: Well, I think the right answer was to catch on to what the Republicans were doing early on. When they did those early extensions, they already pocketed a whole lot of cuts, so they`d already moved the discussion away from the Democrats. So, that`s the first thing they should have done. And you know, if I — I`ve said many times, I would not want the administration to negotiate for me on a new car or a new house because they have this strategy of preemptive concession.
And I just think if they had taken a harder line at the beginning, the middle wouldn`t be where the middle is right now, but I think this Planned Parenthood issue has been harmful to the Republicans. I mean, I think the best speech on this was actually given by a right to lifer, an anti- abortion Democrat, Steven Lynch, from Massachusetts who said, what you pointed out earlier, which is this can only increase the number of abortions in the country.
And what I heard — I was talking to somebody who was very close to this on the way here, that Boehner is now trying to negotiate a sort of fig leaf solution where they either have something in the bill that restates current law, that this money can`t go for abortions, or perhaps, he agrees to a separate vote in the House. He`s trying to end this thing and hold on to his social conservatives at the same time, which is why he`s doing a lot of public dancing right now.
UYGUR: All right. E.J. Dionne, thank you for your time tonight. I totally agree with you. You call it preemptive concessions, I call it preemptive surrender. And for the love of God, at some point, draw a line.
And in fact, that point should be at the beginning, not at the very end. It`s — you know, look, I know I`m being harsh, but I think they`re the world`s worst negotiators. I would love to play poker with them. All right.
Now, we got to go. Just ahead, our Con Job of the day, Paul Ryan backed in his 2012 budget with items that have nothing to do with the deficit, as always. Seems like a common theme for the Republicans these days.
UYGUR: Welcome to our first ever con job. It is my belief and experience that conservatives in this country hardly ever mean what they say. There`s usually another agenda and it`s usually about money, but I don`t want to just claim that. I want to prove it to you. So, we`re going to do this segment every day until it becomes abundantly clear to everyone what their really game is.
Today, we start with Congressman Paul Ryan, he swears up and down that his budget proposal is a government cutting debt reducing Tea Party dream come true, but guess what? Over the next ten years, his plan actually adds to the debt. Right now, the national debt is 62 percent in GDP. The Congressional Budget Office estimates it under current policy, it will be up to 67 percent in 10 years. Now, that`s not great, but under Ryan`s proposal, the debt would hit 70 percent of GDP by 2022. That`s much worse. Paul Ryan and the CBO say that eventually his plan would bring down the debt once they start hacking away at Medicare.
Now, Ryan didn`t say hacking, but you know how much extra your Health Care would cost onto that plan? You would have to add $20,000 a year on top. That`s the kind of deep cuts they have in Medicare, but get a load of how much they move the money around until it winds up in their pocket. That`s the interesting part. So, look at what Ryan`s says his plan would do. Remember the Center on Budget and Policy Priorities found the plan proposes about spending cuts at about 4.3 trillion by 2022, but Paul Ryan says, it also cuts $4.2 trillion in taxes, most of which goes straight to the rich.
So, he`s taking trillions of dollars away from programs like food stamp, Medicaid and Medicare, and giving almost the same exact amount to the top bracket in tax cuts. So voila, the money magically moves from the middle class and the poor to the rich, all in the name of so-called balancing the budget. That`s not what they`re doing at all. Now, this is exactly the kind of con game that the GOP plays all the time, and it`s something we`ll by pointing out every day right here at this point in the show. And trust me, we won`t run out of examples.
It`s 6:00 p.m. in Washington, 30 hours before the United States government shuts down, maybe. At this point probably.
Speaker John Boehner and Senate Majority Leader Harry Reid will be back at the White House at 7:00 p.m. Eastern, But there`s no reason to think another round of talks will make any difference as long as the GOP continues to play bait-and-switch during these negotiations.
Today, President Obama issued a rare veto threat against yet another sham bill from the Republicans. That`s a very good thing. The bill would keep the government running for another week. The Republicans are disguising it as a bill to fund the troops and daring the Democrats to vote against it.
(BEGIN VIDEO CLIP)
REP. HAL ROGERS (R), KENTUCKY: If you vote against this bill, you are voting against the troops.
(END VIDEO CLIP)
UYGUR: What nonsense. Now, by shutting the government down, you would be taking away the pay of the troops. Now, to their credit, the Democrats saw it as a political sham and called them out on it.
(BEGIN VIDEO CLIPS)
REP. NANCY PELOSI (D-CA), MINORITY LEADER: For them to want to disguise their bad proposal by hiding behind our troops is really a disservice to our troops.
REP. CHRIS VAN HOLLEN (D), MARYLAND: This is a cynical ploy to use our troops, to the try to impose the Republican agenda through the budget process.
(END VIDEO CLIPS)
UYGUR: Well, it`s also GOP 101. I`ve seen it for 10 straight years now hiding behind the troops.
Now, what`s becoming increasingly clear in all this budget battles is that, for Republicans, the fight is about ideologies, not about the numbers. They don`t care about a few billion here or there. What they really want to do is ram through those policy riders, attached to the budget that cuts social programs that don`t fit their conservative agenda.
(BEGIN VIDEO CLIP)
SEN. HARRY REID (D-NV), MAJORITY LEADER: We have bent, bent and bent as much as the caucus will bend. The only things holding up an agreement are two of their so-called social issues: women`s health and clean air. This is an extreme agenda that has nothing to do with a funding bill.
(END VIDEO CLIP)
UYGUR: Now, all of that is true. Extreme agenda, it has everything to do with those riders, and they bent and bent and bent. Those riders, by the way, target the EPA. They keep it from regulating greenhouse gases. They also defund Planned Parenthood and everybody knows this.
Look, it`s why protesters gathered today outside the capitol in support of Planned Parenthood and a woman`s right to choose.
Perhaps the only true moment of clarity spoke when Republican Majority Leader Eric Cantor spoke on the House floor and tried to blame Democrats for the country`s financial mess. The Democrats were not having it.
(BEGIN VIDEO CLIP)
REP. ERIC CANTOR (R-VA), MAJORITY LEADER: Let us look at why we are where we are to begin with. You know —
(CHEERING)
CROWD: Bush! Bush! Bush!
CANTOR: We are —
(END VIDEO C LIP)
UYGUR: That was awesome. When he said, let`s look at how we got here, the Democrats started chanting “Bush, Bush, Bush.” Oh, I love that.
We ought to find a guy who did that and give him a medal. That was a great chant. And did you notice the look on Cantor`s face, like, oh, yes, oops, I shouldn`t have brought that up.
And look, I want you guys to remember that. Don`t ever forget how we got here. Bush and the Republicans destroyed our economy. They cost us 8 million jobs. They started a giant recession and handed us an enormous deficit.
So, you`ll excuse me if I don`t pay much mind to their nonsense ideas on the budget now. That`s my take.
But let`s get other takes here. Joining me now is A.B. Stoddard, associate editor and columnist for “The Hill.” Also with us is Representative Marcy Kaptur, Democrat from Ohio. She serves on the Budget and Appropriations Committee. And did you know this? She`s the most senior woman in the House. That`s awesome.
All right. A.B., I want to start with you. I want to get the latest here.
Now, look, for many days now, the Democrats come out and go, I think we`ve got it, I think we`re really close to a deal here, and the Republicans come out and go, we want more.
Is there any reason to believe that tonight will be any different?
A.B. STODDARD, THE HILL: No. They do — they still want more, and we are really looking at the strong likelihood of a shutdown tomorrow night because the two parties are so far apart. John Boehner does not up the ante every time he leaves those negotiations. He says every time he leaves, it`s not enough. And unless you get that number now at the mid-30s up closer to $61 billion, he cannot find the votes, and he cannot pass it.
So, it really looks at this point like a shutdown is going to happen. It got very dramatic today and far more interesting. But we did not see a lot of progress. And I think Republicans having passed that temporary stop-gap measure again in the House funding the troops, unlike what you see it as, I think it was a pretty good move, and they`re very comfortable with where they are rhetorically, funding the troops for the rest of the year and moving on with the budget fight.
UYGUR: Yes. You know, by the way, rhetorically, it was a nice trick on their part, right? And the president was talking about Yellowstone National Park. He should have been talking about the military first, instead, of course, the Republicans came in, even though they`re the ones who you say won`t compromise. And so, oh, we care about the troops, that they`re not going to get paid.
Let me go to Representative Kaptur. I mean, again, it seems like they somehow got a political advantage when no one believes in reality that they`re willing to compromise. Tell me about what the caucus is thinking. I mean, have you guys had enough of giving in and giving in and then pulling the rug up from underneath you?
REP. MARCY KAPTUR (D), OHIO: Well, I think it`s pretty apparent that the problem is on the Republican side. You don`t really know what happens when Speaker Boehner goes back into his own caucus. But it appears that they can`t seal a deal, that everyone can agree to. And so, they come back to us with measures that don`t do anything to create jobs in this country.
But, then, today, they talk about using our soldiers as a pawn in this protracted struggle to reach an agreement for the budget year in which we`re in, 2011. It appears that they can`t govern. And the Democrats, obviously, it`s the leadership that`s involved in these meetings, but when they go back, he can`t satisfy his own caucus. So, there`s a severe problem on the other side of the aisle.
And what`s sad about this is the American people really want to go to work. They want their government to work also. They want a country that`s stable during these difficult times economically and militarily around the world. And we`re into this kind of juvenile back-and-forth, this ping-pong between the caucuses and the White House.
They`re going back in again tonight at 7:00, I don`t know if they can pull a rabbit out of the hat by tomorrow. But I hope so.
UYGUR: Yes.
You know, A.B., I want to go to you for a second actually because what I want to understand is: what is their priority here? Because as Representative Kaptur just said there, once they go into caucus, they come out saying, no, no, no. Are they saying no predominantly because of he riders, that they absolutely want the riders? Is it mainly that they just want more money? Or they`re just never going to get a deal — they actually do want to shut it down?
STODDARD: Well — no, it really is a mix of both, Cenk. I mean, the riders remain important to many conservatives in the caucus. You know those are environmental, abortion-related, and also efforts to stop the implementation of health care reform. Those are important to their members.
But, also, I think that if you saw an offer from the Democrats without riders, but far deeper cuts, it would be — it would be more popular among their ranks and probably something that they could pass, and likely with the help of the Blue Dog Democrats, 15 of whom voted with the Republicans today.
But I do want to make a point. While the Democrats were in the majority, they did not pass a budget. And it`s not that it`s on Congresswoman Kaptur and other House Democrats` shoulders, but the Senate Democrats have never passed a bill yet. All of the continuing resolutions to keep the government open have been written by Republicans and brought to the table by Republicans. The Senate Democrats have passed nothing, and the Senate Democrats and the House Democrats last year holding the majority passed no budget.
And so, as they come to the table, they are — if a shutdown happens, Republicans are convinced at this point that they`ve showed the public that they have been the ones trying to keep the government open with resolution after resolution.
UYGUR: Well — no, no, but, A.B., there`s a couple unfair things there. First, you have a better point when they controlled the Senate, right? Well, they still do. What I`m saying when they controlled all of Congress, when they had the House and they could have passed this.
STODDARD: They did not pass a budget last year.
UYGUR: I know. That`s what I`m saying. They didn`t pass it. That`s the better point of it. But at the same time, the Republicans filibustered everything anyway, right?
So, now — hold on — now when they have the whole House, what`s the point of the Senate passing a bill that they know isn`t going to go past the House? Isn`t it just political games? Is it a point to get a bill that everybody agrees on and then the Senate passes it?
STODDARD: Well, the way that it usually is done, and I know Congresswoman Kaptur will agree with me that you have two chambers, and each supposed to pass a bill, and you negotiate the differences between two bills. And so, when you only have Republican bills, they think that you`re supposed to come further to their bill unless you have your own Democratic bill.
I`m not arguing on behalf of them. I`m saying that is traditionally the process. Senator Reid could have passed a Democratic budget bill and represented that bill in the negotiations at the White House. That has never been happening. It`s all on Republican terms.
UYGUR: I`m going to let Congresswoman —
STODDARD: They`ve allowed Republicans to drive the debate.
UYGUR: I`m going to let the congresswoman respond. Go ahead.
KAPTUR: Yes. You know, it`s hard for me to speak about the other body, the Senate. But it is true with the filibuster process in place and with Senator McConnell pulling the rug out from everyone all the time, they can`t muster 60 votes over there. So, it places a great deal of burden on the House.
I will say, in the defense of Democrats, and I`ve served in Congress a while now, that the only balanced budgets we ever got were during Democratic administration administrations. We gave the Bush administration balanced budgets and we were paying down long-term debt. Until President Bush, he not only pushed us into these growing deficits, because the wars were not paid for, but he basically gave the public treasury to Wall Street.
And if you look at the tax cuts that he enacted which didn`t produce job growth in this country, over $1 trillion —
UYGUR: That`s right.
KAPTUR: — of public money is going into the pockets of the wealthiest people in this country when the middle class and working class are getting gouged.
So, I think you have to look at what`s on the table in these budget negotiations, and only 12 percent is even being talked about. These other tax breaks that I`m talking about and the costs of running a government are not even on the table.
So, it`s unrealistic to think you can balance trillion dollar deficits when not everything is on the table. You`ve got to produce a growth economy.
UYGUR: I actually have numbers on there. A.B., though, I`m going to be a little unfair and I`m going to spring a pop quiz on you. Do you know the last Republican president to balance a budget?
STODDARD: I`m not prepared for this pop can I see. It was not Ronald Reagan. How is that?
UYGUR: That`s true. It was Eisenhower.
KAPTUR: I was going to guess that.
STODDARD: You know, in fairness, I agree. You know, we can argue all night about how much the Bush administration and the Bush years recently drove us into debt with two unpaid wars and a prescription drug plan that also was used borrowing money from China. But what we`re talking about this, if the government shuts down, the Republicans believe they have shown a willingness to govern by drafting —
UYGUR: Nonsense. I`m sorry. I`ve got to jump in.
STODDARD: That`s all I`m saying.
UYGUR: Nonsense. Not true even remotely for two reasons —
STODDARD: They`re comfortable — I`m not their spokesman. I`m just saying they`re comfortable where they are.
UGYUR: And what I`m telling you that their position is nonsense.
Let me explain two things. First, historically, it does matter, because they have no credibility. Here, let me show you the numbers. Last time we had a balanced budget, of course, was under Clinton. He left office with $127 billion surplus.
When Bush left office, he had a $1.3 trillion deficit. These guys don`t know what they`re doing. They`ve never balanced a budget. They just — so they have no credibility.
Now, when you come to the present, the president gave them $40 billion, then he gave them $4 billion, and then $6 billion, and then $20 billion. And then, we were up to $73 billion and now, apparently, they`ve offered a couple more billion as you`ve reported, and it`s still not good enough.
A.B., how can anybody in their right mind think that the Democrats have not compromised enough and are not ready to govern, and that it`s the Republicans who are responsible? That defies all sense and reason.
STODDARD: You know, Cenk, I agree with you. I think that the administration has been extremely compromising and has come to the table willing to cut a long way to $61 billion. Unfortunately, the Republicans want $61 billion plus the riders, and as I said before, if they went way above 40, there might be a willingness to take out of the policy changes.
But that is what they passed in the House, there is no Senate bill, and they argue that`s not halfway.
UYGUR: Congresswoman, last question, are you willing to go above 40? Please tell me no.
(LAUGHTER)
KAPTUR: I want everything on the table. And if we put everything on the table, we could get well above 40, but that will mean every American, including the Wall Street billionaires, who are doing quite well, thank you, only paying at an 11 percent tax rate, they should be paying at a 35 percent tax rate like every other honest business in this country.
Companies like General Electric, ExxonMobil paying no taxes? They ought to put those tax breaks out on the table. It just shouldn`t be taken out hides of our veterans, children in school —
UYGUR: Right.
KAPTUR: — our senior citizens who are hungry. I mean, the 12 percent that`s on the table comes right out of the hides of the working class and middle class, the people who really need the help.
UYGUR: Absolutely. And later in the show, we`re going to talk about those oil subsidies, how they`re robbing us blind and nobody is talking about them, except Representative Kaptur here, as she pointed out.
But I want to thank both of you tonight for your time. A.B. Stoddard and Representative Kaptur, I really appreciate the conversation.
UYGUR: All right. Up next action: Paul Ryan`s budget in my opinion is a con job. His plan is called the path to prosperity — yes, if you`re rich, it will make you more prosperous.
Plus, quick help. Donald Trump has fallen and he can`t give up. Seriously, he`s saying all kinds of nonsense and people are giving him attention that he craves. So, we`re going to give him some attention to the real facts and real business of his career. That`s not a pretty picture. We`ll show you the details.
UYGUR: Welcome to our first ever con job. It is my belief and experience that conservatives in this country hardly ever mean what they say. There`s usually another agenda and it`s usually about money, but I don`t want to just claim that. I want to prove it to you. So, we`re going to do this segment every day until it becomes abundantly clear to everyone what their really game is.
Today, we start with Congressman Paul Ryan, he swears up and down that his budget proposal is a government cutting debt reducing Tea Party dream come true, but guess what? Over the next ten years, his plan actually adds to the debt. Right now, the national debt is 62 percent in GDP. The Congressional Budget Office estimates it under current policy, it will be up to 67 percent in 10 years. Now, that`s not great, but under Ryan`s proposal, the debt would hit 70 percent of GDP by 2022. That`s much worse. Paul Ryan and the CBO say that eventually his plan would bring down the debt once they start hacking away at Medicare.
Now, Ryan didn`t say hacking, but you know how much extra your Health Care would cost onto that plan? You would have to add $20,000 a year on top. That`s the kind of deep cuts they have in Medicare, but get a load of how much they move the money around until it winds up in their pocket. That`s the interesting part. So, look at what Ryan`s says his plan would do. Remember the Center on Budget and Policy Priorities found the plan proposes about spending cuts at about 4.3 trillion by 2022, but Paul Ryan says, it also cuts $4.2 trillion in taxes, most of which goes straight to the rich.
So, he`s taking trillions of dollars away from programs like food stamp, Medicaid and Medicare, and giving almost the same exact amount to the top bracket in tax cuts. So voila, the money magically moves from the middle class and the poor to the rich, all in the name of so-called balancing the budget. That`s not what they`re doing at all. Now, this is exactly the kind of con game that the GOP plays all the time, and it`s something we`ll by pointing out every day right here at this point in the show. And trust me, we won`t run out of examples.
All right. Now, Donald trump is pitching himself as a great businessman, ready to turn the economy around, but the thing about facts is that there are stubborn things. And we`ll show you those facts about Donald Trump`s real business career, next.
And progressives are already making good on their promise to send Republicans packing in Wisconsin. That`s also a great story, coming up.
(BEGIN VIDEO CLIP)
DONALD TRUMP, BUSINESSMAN: I have a huge business and a great business, and I`m a builder, and I`m a great builder. And that`s what this country needs. This country has to rebuild itself.
(END VIDEO CLIP)
UYGUR: That, of course is Donald Trump, speaking on the “Today” show this morning. And of course he`s a great businessman. He`s Donald Trump. If anyone can turn the economy around, it`s this famous businessman, right? Well, funny thing, though, Trump`s record shows he may not be such a great businessman after all. In fact some of his companies have had serious trouble paying their bills, like in 1990, when the Trump Castle Casino defaulted.
(BEGIN VIDEO CLIP)
UNIDENTIFIED WOMAN: One day after Donald Trump`s 44th birthday, no one in his organization was celebrating today. The Donald defaulted on payments of almost $20 billion due on some of the bonds used to finance one of his hotel casinos.
(END VIDEO CLIP)
UYGUR: The next year, things got worse. The unpaid bills piled up, triggering a process that would soon push Trump Taj Mahal into bankruptcy.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MAN: When you borrow as much money as Donald Trump did, nearly $2 billion, and the economy goes into a tail spin and you can`t pay the interest on your loans, the bankers move in, and they have.
(END VIDEO CLIP)
UYGUR: But I`m sure Trump must have learned his lesson, right? I mean, his casinos wouldn`t go bankrupt again, would they? Well, let`s find out and go to 2004.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MAN: Donald Trump`s hotels and casino resorts are in deep debt to the tune of nearly $2 billion.
(END VIDEO CLIP)
UYGUR: And once again, Trump`s casinos would file for bankruptcy. Am I detecting a pattern here? You tell me. Here`s what happened in 2009, four days after Trump resigned as chairman of the board.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MAN: The three Atlantic City casinos once run by Donald Trump have filed for chapter 11 bankruptcy protection for the third time.
(END VIDEO CLIP)
UYGUR: That`s not good. And yet, Trump keeps saying he`s a great businessman, like in 1999, when it just so happens he decided to run for president.
(BEGIN VIDEO CLIP)
TRUMP: I am serious. I`ve seen what`s happened, I`ve seen polls come out that say that I would win.
UNIDENTIFIED MAN: Yes. You say this, there is no spirit in America. Why can Donald Trump give spirit to America?
TRUMP: I`ve just given spirit to everything I have done, whether it`s my business, whether it`s whatever.
(END VIDEO CLIP)
UYGUR: Except for all those businesses that went bankrupt. In other words, Trump has played this joke on the country before. He`s not a serious candidate, and he`s got some seriously gaping holes in his business record, but here`s an even bigger joke, republican voters seem to be taking him seriously. Look at the new NBC/”Wall Street Journal” poll. Among 2012 republican candidates within the republican field, Trump is coming in number two at 17 percent right behind Mitt Romney. But it gets worse. Among Tea Party supporters, look at this, Trump is number one. That is really sad. Look, nothing about this guy is real. How idea logically bankrupt is the Republican Party that they turn to a man who perpetually bankrupts what he runs and then claims he`s doing a great job. Actually, come to think of it, he does sound like a republican president.
All right. With me now is Dan Gross, a columnist at Yahoo! Finance, author of “Dumb Money: How our Greatest Financial Minds Bankrupted the Nation.” All right. Dan, I want to start with this, is Trump really — what business is he in? And he seems like he`s more than the name recognition and media business.
DAN GROSS, COLUMNIST, YAHOO! FINANCE: Well, he started off as a builder. You know, his father had huge numbers of apartments, in Queens and Brooklyn, you know, un-fancy, outer borough places. He made money building Trump Tower, several other projects, but like every real estate developer and like homeowners, you know, when things are going great and you have all the credit in the world, you`re a genius, and the minute things go a little downhill and credit is hard to come by, you are on the verge of bankruptcy. And he`s been that way sort of in his personal life in the `80s.
Many of the enterprises he would involved with. He had the Trump Shuttle that he had to essentially give back to banks. These days, he`s mostly in the branding and marketing business. You know, I think his great comeback was, one of his great comeback was with “The Apprentice” which was a hit show, his books sell well. And a lot of the buildings around the country and around the world that you see with his name on them, Trump Soho, a Trump building in Ft. Lauderdale. Even the huge project on the upper west side of Manhattan that bears his name.
It`s not so much his money, his other investors who don`t have, you know, a big fancy name for themselves who bring him on for marketing purposes. And maybe he gets a stake in the company or maybe not. And he and his kids, you know, they are very adept and marketing. And this also gives him some deniability. If a venture he`s involved with goes south, goes bankrupt or can`t pay the loan, he said, you know, that really wasn`t my deal, I just put my name on it.
UYGUR: So, when people think they are buying Trump, they`re not really getting what they paid for. I mean, if they got what they paid for, it might be worse, but the reality is these companies, apparently are buying Trump`s name and just putting it on the building, whether he`s involved in building it or not, is that what`s going on in some of these projects?
GROSS: Well, in the same way you might do with Polo or Paris Hilton or anything else that has a really good name brand. Think about it, if you`re in New York where there are a gazillion fancy apartment buildings, how do you differentiate yourself? Say, you`re some sort of anonymous investor from New York or from Hong Kong, and you want to give your building some sort of position in the marketplace, well, you put Trump`s name on it. Think of all the free media he gets you. And so he does development some of his own stuff. He`s involved with golf course development. He has made a lot of money over the years certainly more than you and I or most people, but it`s largely done with other people`s money. With debt that is incurred by companies and with other people`s equity that he is able to put his name on by providing, you know, marketing support.
UYGUR: And so, Dan, to tie it back to this quizzical thing that he`s doing, pretending to run for president, which you think, he`s done before. Is that just to keep building and building and building the name, so that he can then charge more money for the name?
GROSS: I don`t think it`s that calculating. I think, you know, we`re all around people who are on TV. And once people are on TV, what do they want? They want to be on TV more. And it`s kind of like, you know, so at one point if you have your own show, you want something bigger, you want your own network, like some, you know, the Oprahs of the world or other people.
UYGUR: Right.
GROSS: And I think, you know, for people who spend a lot of their time in the media, who like the attention, I think you get to a point where you say, well, I`ve had a primetime show, where you do you go from there? And, you know, running for office, if he wasn`t running for office, would we be talking about him? Would he be on morning shows? Would he be the subject of — do you think you could say the same thing about a lot of people who are running for president, you know, whether it`s Michele Bachmann or some other people?
UYGUR: Right. No, I hear you. I`ll tell you though, if he actually does run, then this is the tip of the iceberg. Once people get into his business affairs, look at what he`s actually done, he might be a little bit in trouble in terms of that brand name. And it might not be as good as you think it is.
GROSS: Yes, I don`t think it`s the business that`s the problem, I think what he says about policy.
UYGUR: That`s a whole other game.
(CROSSTALK)
GROSS: We`re just going to somehow beat up China?
UYGUR: I know, that`s a crazy stuff.
GROSS: A lot of random stuff out there.
UYGUR: You`re right. That`s a whole another kind of — but Dan Gross, thank you for your expertise tonight. We appreciate it.
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