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The Welfare State

Ali Velshi grilled anti-tax zealot Grover Norquist about his responsibility for Republicans being completely inflexible on raising taxes today on CNN's Your Money, and you can read the transcript of that back and forth here, but it was the segments
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Ali Velshi grilled anti-tax zealot Grover Norquist about his responsibility for Republicans being completely inflexible on raising taxes today on CNN's Your Money, and you can read the transcript of that back and forth here, but it was the segments preceding and following that interview and David Gergen's comments that had me irked after watching this.

Norquist was painted as an extremist and a rigid ideologue, but what did we get for analysis surrounding that? David Gergen repeating one right-wing talking point after another on the "bloated welfare state" and how wonderful austerity measures will be for our economy and making excuses for these House Republicans playing hostage with raising the debt ceiling even as he admits he's not quite sure if they're insane enough to wreck our economy on purpose.

David Gergen can always be counted on for some right-wing turd polishing and for helping to move that Overton window to the right. We need to be having some honest discussions about how to get our economy back on track and Americans back to work, but in our corporate media those discussions never include fixing our trade laws or not rewarding companies for shipping jobs overseas and instead we're being told that these politicians are somehow "principled" because they believe in myths and trickle-down economics. Sorry Gergen but I think it's perfectly fair to villainize them when they're doing things that harm Americans and our economy and doing them on purpose.

VELSHI: David, you have been in the White House. You understand how people think. Why are some people so concerned, particularly those who are concerned with scoring political points -- why is it this fealty to lower taxes overtaking the idea that this actually could have broader and more devastating effect, to not raise this credit limit?

GERGEN: Well, I think, ultimately, the Republicans -- at least I hope -- will agree to go and lift the debt ceiling. Certainly, Speaker McConnell (SIC) has agreed to that. Certainly -- I mean, Speaker Boehner has certainly. Mitch McConnell has over on the Senate side.

But there is a strong sentiment among Republicans that the cuts that are on the table now are illusory, that there are some gimmicks in there, that just as we saw at the end of last year, we had this announcement about great, big budget cuts -- when you really broke it right down, it didn't turn out to be very much.

VELSHI: Right.

GERGEN: You remember that. Turned out to be peanuts. There's a strong feeling that what they're being asked to do is to agree to cuts that are not actually -- that are actually quite modest, and then increase taxes, and in effect, to pay for the welfare state, a bloated welfare state. And they would like to shrink the size of the welfare state.

This is ultimately a conversation, a debate, a debate, you know, a food fight over how big the American government should be. And you know, that's why they're not -- that's why they're not doing it.

But I -- the question becomes -- I cannot believe, at the end of the day, House Republicans will be so recalcitrant that they'll take us into default. It just -- I -- I -- that would be so much beyond what I think we've ever experienced, Ali, knowing we're on the edge of Niagara Falls, knowing we're on the edge of a precipice, I can't believe they'll take us over.

VELSHI: You would think so and you would hope so. I don't know.

[...]

VELSHI: David, Grover Norquist is remarkably committed to what he's talking about. But he -- there is a problem here. There's an underlying problem that politicians in America cannot do something that risks their seat because their voters won't let them. And pledges like this contribute to a great deal of inflexibility in Washington.

GERGEN: Well, Ali, listen, let me put my cards on the table. And Grover knows this. I have supported the Simpson-Bowles plan all along. I do believe that taxes need to go up as part of an effort -- overall effort to get the deficits under control.

But you know, in fairness, you know, Grover does have a point. And Simpson-Bowles itself said -- it wasn't one-to-one, a tax increase versus $1 in spending cuts, it was two-to-one in spending cuts versus tax increases. The Simpson-Bowles commission recognized that the -- more central than taxes is the question of how much we're now spending. We've taken the level of spending in this country from about 20 percent of GDP at the federal level up, as you well know, to 24 to 25 percent over the last two years, another year in sight for 25 percent.

And what Republicans are saying is you got to sweat that down. And I believe that taxes ought to go up as part of this package, but I think it's unfair to villainize the Republicans when, in fact, there is a very real possibility that the Senate will present a plan which will have $1 trillion to $1.5 trillion dollars in cuts and no tax increases, and that's what the president is ultimately going to accept, and that may be where we come out at the end of the day.

VELSHI: The problem --

GERGEN: I just -- I think --

VELSHI: The issue is more political, David.

GERGEN: I think to say that default versus tax increases is -- is -- it misstates the problem somewhat.

VELSHI: Yes, well, I'm not sure why the two are in the same discussion. I would have really preferred that they deal with the debt ceiling, and they deal with spending and taxing entirely separately. But we're not in that position, David.

The reality is, in part because of people like Grover Norquist, we're not in that position. A lot of people who otherwise would vote for an increase in the debt ceiling can't do so because they are not in a position to compromise.

GERGEN: Well, yes and no. I -- it comes back, Ali, to what people fundamentally believe is the problem. And Republicans fundamentally believe that this underlying problem is we've allowed spending to go higher and higher, and they don't want to raise taxes to pay for that. They would rather see it shrink down.

The Democrats -- I -- you know, who -- and I'm not trying to villainize Democrats, either. I think that they come from a very sincere place of really wanting to provide a stronger social safety net. They want to provide, you know, far more services to the country. And they believe that the rich ought to pay a lot more to get there to -- to get there.

VELSHI: Diane Swonk, is there any way to reduce our debt, to get into a situation where our deficits are not as big in a meaningful way to the tune of $2.4 trillion that we're talking about without increasing some taxes?

SWONK: Oh, there's a way to do it. It's whether or not that's really going to be politically acceptable to the American public. The kind of pain that that would induce -- and I agree completely with David on this one. The kind of pain that that would induce is not something that we're really ready to swallow. There's a balance in this country between spending and tax cuts. And it is more. We do need to cut spending more than raise taxes.

VELSHI: David Gergen, thanks very much. David Gergen is CNN's senior political analyst. Diane Swonk is a chief economist with Mesirow Financial.

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