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Can Congress Solve Upcoming Economic Challenges?

Nov 8, 2012
Originally published on November 8, 2012 10:46 am

Transcript

RENEE MONTAGNE, HOST:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, HOST:

And I'm Steve Inskeep. Good morning.

House Speaker John Boehner says he's ready to work with President Obama on a looming fiscal problem. Republicans kept control of the House on Tuesday, though they also lost seats. Now they have weeks to negotiate over the scheduled higher tax rates and spending cuts known as the fiscal cliff.

The complicated question here is how to rework the budget and tax code to reduce the deficit without excessively damaging the economy. Tom Cole of Oklahoma, who's a deputy whip, a member of the House Republican leadership, is on the line.

Welcome back to the program, sir.

REPRESENTATIVE TOM COLE: Hi, Steve. Good to be with you.

INSKEEP: Speaker Boehner was understood yesterday as publicly saying Republicans can accept tax code changes that bring in new revenue - in effect, tax increases - as part of a larger deal. Is that what he meant?

COLE: Well, he certainly meant we could accept new revenue. That's actually been the speaker's position all along. It was in the summer of 2011, where we nearly got a grand bargain. And I think that remains that today. What he wants to avoid, clearly, is tax rate increases that will damage the economy.

INSKEEP: And so when you say new revenue, you don't just mean that reworking the tax code might make the economy grow, which would bring in more taxes. You mean some people would actually pay more taxes because they lose deductions or something like that? Is that what you mean?

COLE: Well, it's hard to speculate on the exact contours of a deal. You know, we're actually in one of those situations where you either trust your negotiator or you don't. And frankly, I trust John Boehner. He's got a whole career at finding the middle ground and negotiating reasonable compromises. So I think we need to let the president and the speaker sit down and work through this.

The reality is they're going to be doing a lot of this over the next four years, because the president's going to be the president, the speaker's very likely to remain the speaker for that entire time.

INSKEEP: Meaning you don't think everything is going to be resolved by December 31st, here.

COLE: It may not be. But if we had a framework that both sides agreed on, I think that's what the markets are looking for. Can these two sides work together, find common ground? If it takes them a little time that's all right, as long as we know they're moving toward a resolution and each side can deliver.

And frankly, you know, again, the president is going to be the president for four years. But John Boehner's going to be the speaker almost certainly as well. So given that and given the fact that they came close before, I think there's a reasonable chance they can find common ground.

INSKEEP: Let me ask another thing about taxes. The president, of course, won re-election calling for higher tax rates on the wealthy. He said the wealthy should be able to pay a little more. He said that again and again. And in exit polls that I saw, even many voters for Mitt Romney said they favored higher taxes on the wealthy. Can you accept that as a general principle, that the wealthy should pay more?

COLE: Well, I think we need more revenue. I can accept that as a general principle, although, we need less spending as well. And, again, remember that same electorate re-elected a very substantial Republican majority to the House of Representatives, which had a different position than the one you just outlined. So, again, we all want to close the deficit. We all think economic growth is the key to that. We all know that raising tax rates is not helpful in that regard. The president himself could've done this in 2010 and chose not to.

So, again, let's be creative and find ways to generate that revenue without crippling tax hike cuts. And, again, you've got to give the negotiators a little room to sit down and a little time. But I know that the speaker will approach that in good faith. And I think the Republican conference will support him.

INSKEEP: Is there an argument for just going over the fiscal cliff, particularly on the spending cuts side? Since you are concerned about the deficit, Congress actually has approved restraining spending, including defense spending. Is there a case to be made for just standing pat?

COLE: I don't think so. And, look, I think we need a sign that people can work together. I do think further spending reduction is good, but just doing it in a ham-handed, across-the-board manner, I think, is very irresponsible and frankly, in this case, particularly damaging to defense. That's what Secretary Panetta has told us. That's what both sides agree on.

So, again, I think the American people sent us here to work together and find common ground. And they elected people with different views, but with the idea they can find ways to solve problems. So I'm confident in the speaker's ability to do that. And, you know, we'll see if the president wants to do that as well.

INSKEEP: One other thing, Congressman. The president said in interviews before the election that once he won, if he won, he thought Republicans would be willing to work with him.

And I noticed that in his victory speech the other night he didn't - he didn't talk about grandly expanding the scale of government or the things that he's been accused of wanting to do. He talked about reducing the deficit. He talked about tax reform, things like freedom from foreign oil, as well as immigration.

It may be wonder if actually there's quite a lot common ground here between the president and the Republican Party.

COLE: Well, there certainly can be some common ground. Again, we all want energy independence. We all want a reduced deficit. We all want a faster-growing economy. So the objectives aren't that far apart. And again, the devil is always in the details in these sorts of things. But the two sides need to learn to work together, because they're both likely to be here for at least four more years.

We're not likely to lose a majority at the midterm in the second term for the president. So political reality being what it is, let's find ways to work together. I think that Speaker Boehner will be very creative at that. He signaled that. We'll go from there.

INSKEEP: All right. Congressman Tom Cole of Oklahoma, thanks very much for joining us this morning.

COLE: Thank you, Steve.

INSKEEP: He's a House Republican deputy whip. Transcript provided by NPR, Copyright National Public Radio.