White House spokesman on going big, cutting deficit

White House press secretary Jay Carney called into the Radio Iowa newsroom early this morning (at 7:30 a.m. eastern/6:30 a.m. central) to talk about the proposals the president outlined last night during a speech to congress.  Here’s the transcript of that conversation:

Radio Iowa’s O. Kay Henderson: “While one Republican in Iowa’s congressional delegation struck a quite conciliatory tone after last night’s speech, the others struck a very hard-line, dismissing the president’s plan as ‘more of the same’ approaches that have failed to boost the economy.  What’s the plan for breaking the partisan gridlock, which obviously still exists, because the speech didn’t do it?”

Carney: “Well, Kay, you’re right that a speech does not change the political dynamic by itself and, in fact, the president’s plan for changing that dynamic is to channel the American people. He’s not asking congress to take this action because he says they should.  He’s asking them to take it because the American people demand that congress do something, that Washington that Washington function and take action — pragmatic, sensible, bipartisan action — to address what every poll in every state across the country will tell you is Americans’ primary concern, which is the economy and jobs.” 

Henderson: Robert Reich, an economist who worked in the Clinton Administration, happened to be in Iowa yesterday and he said that deficit spending is what government needs to do during a recession.  He suggested any cuts in spending should occur after some trigger is reached, like six percent national unemployment. Will that be the president’s approach when he details the spending-cut side of his proposal later this month?

Carney: “Well, no, it won’t be the approach in terms of a trigger related to unemployment. The president does believe, as most economists worth their salt believe, that you have to be careful in terms of contracting the amount of spending out there during tough economic times because you risk, by withdrawing too much money from the system, you risk throwing the economy back into recession. Now, the president in the much-maligned, understandably, debt-ceiling deal did with the Republicans achieve a trillion dollars in spending cuts.  That’s significant.  The proposal he will put forward a week from Monday on his long-term debt and deficit plan will mirror, in many ways, the grand bargain he was working on with the house speaker. And in addition to the trillion dollars in cuts, which are now law, he and the speaker were looking at the longer term which is the big drivers of our deficits and debt — entitlement spending and spending through the tax code — so tax reform and entitlement reform. He will address those in his presentation a week from Monday and he will show that we can do something even bigger than the $1.5 trillion in additional savings that the congressional committee has been mandated to come up with because he thinks, as he has all along, that we can go big. But back to your point, yeah, you have to do this in a sensible way. We need to take action to grow the economy and help it create jobs. That’s an urgent need right now and we can also and must take action to get our deficits and debt under control for the longer term because that will put this economy on sounder ground going forward.”