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  December 4, 2012

Congress Go Home - The "Fiscal Cliff" is a Scam Pt.4

James Galbraith: There is no emergency, the best thing for Congress to do is go home and let the new Congress deal with issues next year
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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

This is the concluding part of our series of interviews "Is the Fiscal Cliff a Scam?" with Professor James K. Galbraith. Professor Galbraith teaches at the LBJ School of Public Affairs at the University of Texas Austin, author of The Predator State and Inequality and Instability. Thanks for joining us again, James.


JAY: So in the conclusion of your article, the six reasons why you think the fiscal cliff is a scam, you talk about other discretionary federal government discretionary spending cuts that are called for in this agreement, and you say, well, don't do them. But don't we have to do them? We're certainly told that if we don't, we'll be facing more cliffs.

GALBRAITH: Well, I would hate to see the Federal Aviation Administration shutting down air traffic control, for example. I think that would be a highly damaging and completely unnecessary action. I would hate to see federal aid to education and to law enforcement go down. I think these things were put in there in order to ratchet up political pressure on the Congress and the president to make certain decisions this year, not because they're desirable in and of themselves—and I think nobody really argues that they are.

So then the right thing to do, once we recognize that the fiscal cliff isn't really a cliff at all, is simply not to have these sequesters. I mean, if you could wave a wand and get the various factions in the Congress to act in the public interest, they would simply say, we're not going to impose those arbitrary and capricious cuts on essential publicly provided services.

JAY: So in the short term what would you like to see Congress do?

GALBRAITH: Go home. In the next three weeks, it should go home. It should allow this Congress to expire. I mean, of course, if you could get the president's clean bill, that would take care of the middle-class income tax issue, and that would be great. But if you can't, you can do it in January. In January you will have a new Senate with two more Democratic seats, and you will have possibly Senate procedural reform, and you'll have the president free of any pressure for reelection, free of any artificial deadlines, you know, preparing a program for the next four years. And we should all look at this thing with a fresh view.

JAY: So then why doesn't President Obama say that? He could say, okay, we're not getting anywhere, go home, we'll deal with this next, but he's buying into this—I shouldn't say just buying in—he's helping create this mood that it has to be done now.

GALBRAITH: He is, but let's try and understand the president's position. The president, first of all, commands an enormous respect for having won reelection. This is a very important fact. Yet a year ago he committed himself to this particular fiction and this particular set of circumstances in the lame duck session. And so it's a little difficult, when you're in his position, to acknowledge that that was all basically a fraud on the public. And he's, I think, playing out a line which is consistent with what he said before. It's somewhat understandable.

Secondly, he's surrounded by people who have been pressuring him all along to go along with a grand bargain that would curtail Social Security, Medicare, and Medicaid. And it's certainly—if you take his statements at face value—for example, something he said during the first debate with Governor Romney, that he basically didn't have a big difference with Romney on the question of Social Security—I think we can be worried about what his true views on these matters are, that he may be inclined, if he can get sufficient political cover, to press for such an agreement in the next three weeks. And that would be, I think, a very damaging thing. And I think that should, if it happens, bring about a split between the president and the progressive forces in Congress, particularly the majority leader in the Senate, Senator Reid, who's been very, very sensible about this. And, of course, in that situation, those who wish for delay have a very strong position, because all they have to do is to keep a deal from being made in the last week or so of the year, at which point you're in the new Congress and you have got a new time limit.

So I think all of the cards here are really aligned, actually, in a fairly favorable way, for the moment, and the question of what should be done—because, again, the best thing to do is as little as possible [crosstalk] long-term decisions under extreme time pressure at the last minute.

JAY: Isn't part of the problem here, if all indications are and evidence is that President Obama essentially does agree with this idea, the need for austerity and these kinds of cuts—. You know, when he was first elected—we've talked about this many times on The Real News—he had this dinner with a bunch of conservative columnists where he promised when the conditions were right, he was going to take on entitlement programs. I mean, he seems to, you know, philosophically believe in this. It's not just that he's being forced to do something he doesn't want to do. It may be difference in scale—he wants a little bit of tax increase on the wealthy. But as you said earlier, you know, if he gets this little tax increase on the wealthy, then he can turn to these cuts and be the—you know the way Clinton bragged about being the president that brought welfare reform. He may be—see that as his legacy, that the grand bargain is what he wants.

GALBRAITH: This is all possible, but let's take an optimistic perspective. The president in his first term had to operate in an extremely difficult political environment, and as I said before, surrounded by people who were pressing him for these cuts in Social Security, Medicare, and Medicaid who basically saw agreeing to those cuts as the endgame of a political process.

Well, the political environment has changed. The president has won a decisive reelection with the support of a vast majority of the people who don't want to see Social Security, Medicare, and Medicaid cut. The Democratic Senate majority has gone up, and the new members are, you know, I think, progressive on these issues. So the president—as you say, maybe if the political circumstances made it possible for him to agree, he might be disposed to agree to this kind of a grand bargain, or as my friend Bill Black calls it, a grand betrayal; but come next year, the political circumstances will be less favorable to that than they are now, and so we might see the president taking a different view of his second term, a view which says he ought to be the president who brings the reality-based community back to Washington, who focuses our attention on our real problems and our deep challenges, and who turns off off the—you know, turns away from these lobbies—the Peterson Foundation and others—who've been constantly hectoring him on these questions. They, after all, didn't back him for reelection. They didn't. And so it would be perfectly reasonable for him to say, look, you made clear what your agenda is and who you wanted to lead the country, and you didn't prevail, and so I'm no longer in your corner on these questions on which you're not correct on the merits in the first place.

JAY: Well, we'll see, but, I mean, it seems to me President Obama does fundamentally agree with this. But you're right. If the circumstances in Congress change, he may not have the same kind of room or argument to make that he would have otherwise.

GALBRAITH: [inaud.] quickly say, you know, throughout his career in the Senate, Lyndon Johnson never backed a civil rights bill until 1956, and then he did, and people who thought he was anti civil rights at the time got a very big surprise. And then we know what happened in 1964 when the Civil Rights Act was enacted in 1965 and Voting Rights Act. Presidents are in situations that most of us really can't understand, and if they are true—fully appreciate, anyway, at the time. And if they are truly up to the challenge of history, they take the opportunities before them.

We have to say of President Obama that he survived one of the most difficult political environments ever to face an American president, survived it, and got into resounding reelection based upon what were essentially an assertion of progressive values. He now has a new direction, a new path open to him, and, you know, I would not be surprised if he decides to go down that path. He might not—might be—not be what he wants to do, it might not be what he decides to do, but it would be surprising if he did.

JAY: Alright. We'll find out soon. But in a word, your advice to Congress: go home.

GALBRAITH: Have a good holiday and, you know, stay calm, don't panic, don't be panicked, then come back in the new year and fix what needs to be fixed, and then move on to some serious business.

JAY: Alright. Great. Thanks very much for joining us, James.

GALBRAITH: Pleasure.

JAY: And thank you for joining us on The Real News Network. Don't forget we're in our year-end fundraising campaign. Every dollar you donate with this button over here gets matched until we reach $100,000. We're getting near the end of this campaign. We need some of you that haven't donated and watch to kick us over, put us over the finish line. Thanks for joining us on The Real News Network.


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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