Excerpt on CBO report
JUDY WOODRUFF (Newshour): And what is more exciting to talk about than the Congressional Budget Office?
So, this week , there was a sobering report from the Congressional Budget Office, David, in which they warned the country could land in another recession if Congress does a couple of things, lets these -- doesn't let these Bush era tax cuts expire, and if there are serious cuts made in government spending.
And there are members of Congress who want both of these things to happen. So what do people think is really going to happen there?
DAVID BROOKS, New York Times columnist: Chaos, decline, apocalypse.
(LAUGHTER)
DAVID BROOKS: You know, it's all going to happen. . .
RUTH MARCUS, Washington Post columnist: Have a nice weekend.
(LAUGHTER)
DAVID BROOKS: Yes. Right.
No, the weekend will be fine. It is only going to happen in December. It will be after the election. And all these things come due, tax cuts, spending. All these automatic things start happening. And we hand this incredibly knotty problem on to a Congress which is unable to do the easy problems.
So dealing with a tough problem is going to be tremendously difficult. And so, is there any reason to be other than despairing?
I think there is a couple. And, again, this is silver lining land. One is, I think the Republicans have decided that what happened last summer wasn't good for them. They have taken the country to the brink. They are a little more chastened. They're a little more flexible on the idea that tax revenue, not tax rates, but tax revenues, should be allowed to rise, so long as the money can be thrown into the debt.
And so that is some flexibility there. But if you had to bet long-term will we do what we need to do, all these different things to get sort of a fiscal balance over the next year, I certainly wouldn't bet on that.
JUDY WOODRUFF: Congress going to come to its senses?
(LAUGHTER)
RUTH MARCUS: Well, I don't think anybody should ever bet on that.
But David said that Republicans seem chastened. You certainly couldn't tell it from the comments of Speaker Boehner, who seems more than willing to do a replay of the disastrous, from my point of view, economically, and also disastrous politically for Republicans, replay of the debt ceiling showdown last time around , a year ago.
And what's going to happen is, all of this Taxmageddon, as we are calling it, is going -- because of the timing of it, we will probably kick the can down the road from the lame-duck, for maybe six months into the next Congress. And guess what? That is going to coincide with, collide with hitting the debt ceiling yet again.
So the CBO -- I just -- quick thing on the CBO report. CBO used the R-word, which is very, very scary, recession. If all of these things come to pass, they said, the economy would be in recession in the beginning of 2013.
JUDY WOODRUFF: Which is what got everybody's attention.
RUTH MARCUS: Which got everybody's attention, but in some ways, that wasn't really the message that CBO wanted to send, because, yes, that would be a very bad outcome.
But the second thing they said is that the alternative, if you filled that entire fiscal cliff and cushioned it, and you just dug the debt deeper, the debt hole that much deeper, that would also be a terrible outcome, just later.
And so they have been begging in their very quiet-sounding CBO language, please, members of Congress, you need to both avert the fiscal cliff now and come up with a plan that markets can understand that you really have to fill the debt hole later on.
Whether Congress can manage that. . .
JUDY WOODRUFF: So -- but, David, Congress this year is watching the election. Not a lot is going on over the summer. So does a warning -- does something like this that is said in the late spring, does it really have an effect?
DAVID BROOKS: Yes, I think they are taking it seriously. I know the Republicans are. They take the debt extremely seriously.
And how much they want to move is a matter of internal debate. So, publicly, Ruth is absolutely right, John Boehner is lining down these stark markers. Underneath, I really don't think those stark markers exist. I think there is some room for flexibility. There is some feeling, we need more revenue.
Now, the question is, you have got to disguise the revenue increases in a comprehensive tax reform. And the Republicans really want to do a comprehensive tax reform. They think it would allow them to secretly raise a lot of revenue, but also it would be good for the economy, it would create growth, more jobs, more tax revenues.
Democrats are -- and especially the Obama administration -- a lot less persuaded that tax reform would be a great thing. They don't think it would produce a lot of growth. They think, politically, it would be extremely tough to get rid of some of these big deductions.
And so it's very interesting to me to talk to people in the Obama administration and hear them being very tepid on the whole idea of comprehensive tax reform.
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