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  June 10, 2011

TRNN Replay: Wrestle Mania Over Debt Ceiling

Tom Ferguson: All the insiders in DC already know the outcome of Debt Ceiling Debate
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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Washington. And in Washington, the debate continues about the bill to raise the deficit ceiling. Apparently, the debate rages on. Now joining us from Boston, Massachusetts, is Tom Ferguson. He teaches at UMass Boston, and he's a senior fellow at the Roosevelt Institute and often-contributor to The Real News Network. Thanks for joining us, Tom.


JAY: So what do you make of this debate about deficit ceiling?

FERGUSON: Well, at this point it's now like professional wrestling, I think. That is to say, each side's doing it to stir up the fans on each side, but I think the end is probably fixed. Now, unfortunately, most of the audience doesn't realize that, and I'm not sure we're going to like the way it comes out. I mean, my take is if everybody at the moment is still demonstrating for their constituency, at least on the Republican side--that is to say, there's lots of Tea Party people, you know, threatening to cut the budget down to, I don't know, Calvin Coolidge dimensions or something like that. Now, the Democratic side's a little--somewhat different. I mean, there aren't many folks there standing up for sort of normal Democratic principles. You know, I think that's the most ominous part of this whole discussion to me, the near silence coming out of the White House. And, indeed, even the Democrats in Congress, and especially the Democrats in the Senate, have been, well, quite complacent pussy cats, frankly. They haven't had very much to say. And some House folks and one or two senators endorsed a progressive budget, but they haven't done much to push it. You don't see congressmen and women meeting every day, issuing press releases, sort of excitedly saying, here's our whole new plan to save Social Security or not turn Medicare into a voucher program. You don't actually hear much of that stuff, and instead what you hear is just a drumbeat of groups, you know, Biden's group, supposedly bipartisan, the group of six, which is sometimes just five, depending on, I guess, how Senator Coburn feels that day, whether he's, you know, sort of getting like John Kerry on the Warner Act--he's for it before he's against it.

JAY: I think your analogy about the wrestling--the wrestling metaphor's really good. What I don't understand is why President Obama doesn't call the Republicans' what I think is a bluff. The American Chamber of Commerce and most of the highfalutin business groups in the country have very publicly told the Republicans and the rest of Congress that they cannot do anything but raise the debt ceiling. So if that's the case, then why don't the Democrats just call the bluff and say, okay, we're not going to do what you want us to do, now next move is yours?

FERGUSON: Well, I'm sorry to say I think the president is preparing to do on this exactly what he did with the tax cuts. That is to say, after campaigning against an extension of the Bush tax cuts all through the campaign in 2010, right after it he sort of then proceeded to extend the tax cuts for the super rich, just as he--you know, exactly the opposite of what he'd been promising to do, then of course promised he wouldn't do it again in 2012. Well, he's already actually--if you look closely, they're already signaling they're going to try to go for another year on the tax cuts there for the rich, now citing weakness in the economy. And, you know, you can see we are setting up for a really insane kind of roller coaster. That is to say, we're going to--right now the sort of buzzwords are cut, cut, cut. Soon as they get past this debt ceiling, you watch. Remember I said this here. They'll all move toward we might have to actually stimulate. I got a big laugh out of--it was Mark Zandi's comment, well, you know, we can think about stimulus in the fall, that's right, after the budget ceiling battle, right, and everybody's postured to be a deficit cutter. The fact is is that the US economy is slowing substantially, and there's a good deal of evidence that so is the rest of the world, under the impact, especially, of the euro crisis, oil price rises, and things like that. And in the fall, you know, my guess is they'll make a hash out of some of the Middle East. The Arab Spring will turn into the Arab Fall, and you might not like it quite as much, and you'll probably see a rise in oil prices. That's going to be an even bigger problem.

JAY: Well, especially after what happened in OPEC the last few days.


JAY: Apparently, the Saudis lost their position, which is to increase production and lower the cost.

FERGUSON: Yeah. On the other hand, since it's the Saudis who can actually ramp up production--I mean, a lot of these countries that were holding the opposite view in fact couldn't increase production. The Saudis can, and my bet is they probably will.

JAY: And break with OPEC?

FERGUSON: Yeah. But I think more likely it's just--I mean, you can--the events in Yemen in particular, you know, a sort of fire bell ringing in the night [incompr.] all of those places there. And when the Egyptian election hits, you know, I hope for the best, but I'm not so sure that--. I mean, the truth is it's unsayable right now in the American media, but the American state just doesn't have any good way to deal with that crisis over there. They're just sort of really at a dead end. And, I mean, nobody can admit it. I mean, they talk about let's get a lot of aid, and sometimes some of that aid is important up to a point, but, you know, it's not going to--the course of events there is now probably beyond the capacity of the American state to seriously influence.

JAY: Let's go back to this theater that's going on in Washington. By participating in these negotiations rather than just taking a position, calling the Republicans' bluff, it seems to me they've given so much credibility to that the issue is cuts, whether they're bigger or smaller, they've now created a situation that if they don't give the Republicans something face-saving to walk away with, they're going to look like, oh, they weren't genuine about the negotiations. And so they've created a--they've helped participate in creating conditions for some kind of big cut.

FERGUSON: No, I entirely agree that the White House is operating to sort of puff up the deficit-cutting frenzy. And, you know, I have to say, Paul--I've said this to you before, but sometimes the best thing to do is just be a broken record, when it's--. These guys have to raise $1 billion for their reelection. They're not planning to raise that from poor people.

JAY: "These guys" meaning the Obama team.

FERGUSON: The White House has to raise close to $1 billion just to sort of try to stave off the Republican--Republicans will have to do that, too, but I will guarantee you, despite all their troubles right now with trying to find a nominee and the sort of search for a rational Republican, you know, that is sort of like a big Easter egg hunt and it's not Easter and there may be no Easter egg there, but eventually they'll get a Republican nominee and just like, you know, even McCain, when he finally got the nomination, suddenly a lot of cash poured in. I've done some discussion of this before. The Republican money will be there, and the Democrats need an awful lot, or so they think, since they're not going to run on issues that actually appeal to the population. And so they are clearly fixing, I think, to do very substantial budget cuts. I hope that they will not include Social Security. They should not. I mean, all the noise that's been made about how Social Security belongs in some kind of general entitlements reform is just foolish. I mean, there's just no reason to tinker with that program. You know, it's safe until at least even not to 2036. If some of those growth estimates were slightly off, there might be no reason to tinker with it at all. That's one that nobody should touch, but they are, nevertheless. You can see on the Democratic side folks sort of nibbling ever closer and closer to that. [crosstalk]

JAY: And the Republicans were crowing the other day about Medicare is on the table, they said.

FERGUSON: What's that?

JAY: I said the Republicans have apparently, a couple of days ago, were saying Medicare actually is on the table.

FERGUSON: Well, now, yeah, talking about social--Medicare--. Look, they have to do something about medical costs, but their fundamental issues there are pretty straightforward, and they don't have anything to do with just setting some kind of rigid spending limit. What you need to do, clearly, is let the government use its bargaining power to force pharmaceutical prices down. That is worth not billions but trillions of dollars over, you know, years going forward.

JAY: Which, unfortunately, is exactly what President Obama told pharma he wouldn't do as part of his whole negotiation process.

FERGUSON: That's right. No, no. Yes. Correct. But that's an easy move. You could also get rid of the insurers and save a ton. You could let the folks do their public option to give some real competition. I mean, you can already see the way many insurers are merging under this, figuring that, you know, size beats everything else. No. They need--I mean, the problem with medical costs is--you know, it's a familiar one of either antitrust, make the market be a market, and if you can't, then you're going to have to regulate it, and seriously. I mean, most of the rest of the world, the advanced industrial countries, do better than the US on this. You know, they pay less, and they get generally better health outcomes.

JAY: Well, I think instead of health care reform, what we get is WrestleMania. Thanks very much for joining us, Tom.

FERGUSON: Yup. Okay.

JAY: And we'll continue to cover WrestleMania in Washington as this deficit debate continues.

End of Transcript

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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