Donna Brazile takes the rest of the CNN panel to task for their concern for the deficit at a time when our main concern should be putting people back to work. Of course Bill Bennett continues to claim we need more tax cuts and thinks the Democrats are going to "go off the cliff" if they increase the deficit. Brazile reminds him "we've been off the cliff".
Transcript via CNN.
KING: And, Donna, on that point, I want you to listen to Larry Summers because Gloria notes they're starting to talk about the deficit because they're going to raise the federal debt ceiling this week and the numbers get incredibly high. Republicans are starting to say, you know, where's the fiscal discipline here?
And yet, if the you listen to Larry Summers, he seems convinced that they have a little more political space to make the case, that, in the short term, spending to help the economy is more important than reducing the deficit.
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SUMMERS: We've got to do a lot more. There's no more important issue facing the country than job growth because, if we don't create jobs, we've got no prospect that the kind of budget deficits we want. If unemployment stays high, we're not going to have the strength in the world that we want, if unemployment stays high.
(END VIDEO CLIP)
KING: They get away with that a bit longer?
BRAZILE: All the politics aside, the administration is walking a real tightrope between creating the jobs that the American people clearly want and trying to focus on the long-term fiscal health of the nation, the debt.
The Republicans raised the debt ceiling 2002, 2003, 2004, 2007. SO this is customary sometimes during a budget process, to raise it that way. But because of the additional spending that we have on the wars and other issues, we have to raise it again. That's a responsible thing that Congress needs to do.
On the other hand, I think the president is absolutely right to use some of the additional TARP money that will be utilized to pay down the deficit, but to use some of it to create jobs.
Now, hopefully, the private sector -- the president will be able to put some fire under the bankers tomorrow for them to start lending to small businesses so we don't have to continue this rate of government spending.
KING: What happens when the stimulus money stops? Is the economy, right now, being propped up by the government?
BENNETT: I don't know. And the problem as indicated by your two quotes. You said "somewhat different language."
Well, it was worse than that. Larry Summers said on your show, absolutely, the recession is over; everyone agrees. And she said, of course not, and in effect, everyone knows.
The question is, what do you do now? You can sometimes raise the debt ceiling. And that's been done by both administrations indeed. But a second stimulus? Remember the first stimulus was promised, in part, so that we wouldn't get past 8.5 percent unemployment. Well, we're at 10 percent now. And while raising the debt ceiling, do you really need to increase spending across the Cabinet departments by 10 percent or 12 percent for the overall budget? that seems really out of whack with what's going on in the country. I don't think that sits well.
In terms of whether the American people celebrate passage of health care, I don't think they will. In fact, I don't think they're going to get it. We'll talk about that later.
BENNETT: It's very unpopular.
KING: We'll talk more about health care. But to Bill's point about the spending bill that increases some 9 percent, some 10 percent, some as much as 12 percent spending on federal agencies, I want you to weigh in.
But first I want you to listen to the former Massachusetts governor, Mitt Romney, who is connecting those dots. He's saying, if you don't like the spending and you don't like the high unemployment rate, don't just blame the president. Democrats run Congress, too.
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FORMER GOV. MITT ROMNEY, R-MASS.: This not going to be a jobless recovery. The economy will come back. The private sector will grow again. But it has been a jobless stimulus, and that's unfortunate because the president had an opportunity to focus on the economy, to create jobs. But instead Nancy Pelosi and Harry Reid created something that -- that stimulated government.
(END VIDEO CLIP)
KING: There's a guy thinking about the midterm elections.
BASH: And beyond.
BASH: Look, the reality is that -- I actually am surprised, in covering Congress and listening to at least some of the most vulnerable Democrats talk about, in the words of Blanche Lincoln, who is probably the most vulnerable Democrat, a quote/unquote, "orgy of spending" that they have been doing, and then watching them, later today, in a couple of hours go in and vote to pass, again, about a 10 percent increase in spending across the board.
It's actually quite surprising because, although Summers says there's running room, in terms of -- in terms of spending for the government, I don't think that there is, in listening to how nervous a lot of these Democrats are politically.
HENRY: If you think about it, at the beginning of the year, there was this massive spending bill as well. They call it the omnibus. And President Obama signed it into law, even though it had all kinds of earmarks, had all kinds of increases in spending, because he kept saying it was last year's business. It was left over from the Bush administration; we have to deal with this.
Well, this, now, is this year's business. So the president doesn't have to just be a bystander. He can veto this if he really wanted to. Now, it would create a big mess, but if he wants to get serious about spending, veto a Democratic spending...
BRAZILE: So veto the Veteran Administration bill and close those hospitals down?
BRAZILE: Veto those highway spending bills?
BRAZILE: But this is regular appropriation. This is regular appropriation. This is a regular appropriation process. This is not loose benefits. This is a regular keeping the government...
KING: Did Bill balance the budget to an irregular appropriations process?
BRAZILE: This is the regular spending process that wasn't completed on September 30th. That was an omnibus. So this is the spending bills for the rest of the fiscal year.
I think we need to separate that and start giving the American people the honest to god truth. Now the point is that that this is not the first stimulus, second stimulus. I think we're on like number three because George Bush started to stimulate the economy to try to create growth.
We passed tax cuts, we've lowered some rates. But this is an opportunity at some point to create jobs for ordinary American citizens. Eighteen million of our fellow citizens are either unemployed or underemployed. So are we just going to sit around and wait?
BENNETT: There are alternatives. There are other things you can do. There are other philosophies, not that we have enough people.
BRAZILE: More tax cuts? More misguided policies?
BENNETT: I think I would cut Social Security tax for everybody, absolutely. I think I would.
BRAZILE: But payroll taxes are out there, too, Bill.
BENNETT: Payroll taxes, absolutely.
BRAZILE: Absolutely. Keep them all going.
BORGER: And then what happens with the deficit?
BENNETT: I think the deficit would go down. I wouldn't increase economic activity this way, it's not working. But they are the majorities, we have very little say. Let them do it. They want to go off the cliff, let them go off the cliff.
BRAZILE: We've been off the cliff. We're trying to bring the economy back on the road to prosperity.
KING: We're going to go off to break and bring this show back to prosperity after a commercial break. We'll be right back. We'll talk more about this, including a report card on the big debate about the stimulus plan. Is it working? Is it helping? Or is it just a waste of money? Stay with us.