September 14, 2012
DAVID GREGORY INTERVIEWS ALAN SIMPSON AND ERSKINE
MEET THE PRESS "PRESS PASS" VIDEO & TRANSCRIPT
September 14, 2012 -- In this week's "Meet the Press" PRESS
Pass conversation, David Gregory sat down with Alan Simpson
and Erskine Bowles, co-chairs of the president's fiscal
commission, to discuss their proposal for tackling the
Simpson and Bowles, widely hailed as serious thought
leaders on dealing with the country's economic problem,
had strong criticisms for both men vying to be President of
the United States for the next four years.
Bowles, a former Chief of Staff to President Bill Clinton,
chided Romney's economic plan saying "the
arithmetic just doesn't work." When asked if
Romney could justify his tax cut proposals, Bowles said "I
don't think he can and the math is easy to prove."
Simpson, a former Republican Senator from Wyoming,
handicapped the race saying:"Romney's chance will come from
Obama fatigue. ... Don't forget the great axiom of politics
-- people don't vote for anybody, they vote against. And I
think people are going to vote against Obama, which will be
to Romney's advantage."
A full transcript is below and embeddable video of the
complete interview is online here:
Still photos are available online here:
# # #
Full Transcript: PRESS Pass: Fmr. Sen. Alan Simpson (R-WY)
and Erskine Bowles
Co-Chairmen, National Commission on Fiscal Responsibility
Mandatory Credit: NBC News
DAVID GREGORY: I'm David Gregory and this is PRESS Pass,
your all-access pass to an extra Meet the Press
conversation. This week, the two men who tried to tackle
the country's fiscal crisis last year: Former Senator Alan
Simpson and Chief of Staff to President Bill Clinton,
Erskine Bowles. Their Simpson-Bowles Plan is back in the
Decision 2012 spotlight now. Gentleman, welcome to you
both. I said as we are coming in, it's like going to the
mall with Justin Bieber hanging out with the two of you
SIMPSON: We don't even know who he is.
GREGORY: But Senator, there's something to that. You go
around the country, you talk in great detail about what you
propose, what is the reaction you get?
ALAN SIMPSON: People are thirsting, thirsting for somebody
not to give them B.S. and mush. And Erskine and I give them
numbers. We just say, 'Look. Pull up a chair, we're here to
talk to you about math. We don't have Power Point, we don't
have charts; we just tell you where your country is.' The
trajectory of debt, deficit, and interest is the same as
the "PIG" countries, Portugal, Iraq, Iran --
BOWLES: Italy --
SIMPSON: Poland is still -- no I won't go there. It's just
sad. And we talk and we take questions, we don't filter the
questions; they can ask anything they want. They can be
from the unions, the AARP, the seniors, the teachers -- and
they'll give us a standing ovation. They're thirsting for
someone to tell them the truth about where their country is
going. And see a Republican and Democrat do that who really
care about each other.
GREGORY: But, you don't think we're getting that in this
debate? In this campaign season?
ERSKINE BOWLES: No, I don't think there's nearly enough
substance. To me, it's a real disappointment.
GREGORY: Why not? Why isn't there the substance?
BOWLES: Because it's hard. You know, the problems are real.
The solutions are painful. There's no easy way out, and I
think the candidates are afraid to stand up and say, 'Look,
we've got to make some tough choices. We've got to have
some shared sacrifice.'
GREGORY: Bottom line this: Simpson-Bowles proposed a way to
deal with the debt crisis, and what did it call for?
BOWLES: Basically what we want to do is, we want to reduce
the deficit by 4 trillion dollars -- we didn't make up four
trillion because the Number Four bus passed us on the
street -- 4 trillion is the minimum amount you need to
reduce the deficit over the next decade. Not the maximum
amount, not the ideal amount -- the minimum amount you need
to reduce the deficit over the next decade to stabilize the
debt and get it on the downward path as the percent of GDP.
We got 3 trillion from reducing spending, and 1 trillion
from reforming the tax code by broadening the base,
simplifying the code, eliminating this backdoor spending in
the tax code, and using about 90 percent of that money to
reduce income tax rates.
GREGORY: So all tax rates would come down?
BOWLES: All --
GREGORY: People would pay less taxes.
BOWLES: People would have lower tax rates. People wouldn't
necessarily pay less taxes.
GREGORY: They would pay more by eliminating deductions,
other loopholes and what not.
BOWLES: Deductions, credits, special deals that have been
cut with various members of Congress. But if you eliminate
all of those, we have 1.1 trillion dollars of annual
spending in the tax code and if you wipe those out and take
92 percent of the money to reduce income tax rates, and you
can reduce them to 7 percent up to -- 8 percent up to
70,000 dollars, 14 percent up to 210,000, have a maximum
marginal rate of 23 percent, you can take the corporate
rate to 26 percent, so we are globally competitive, and you
can pay for a territorial system so that 1.5 trillion
that's captured overseas can be brought back to the U.S.
And, most importantly to us, not only have you created I
think a very pro-growth tax structure and a globally
competitive tax structure, but we have about a hundred
billion dollars a year to reduce the deficit over ten
years, that's 1 trillion dollars. That's where 1 trillion
of our 4 trillion dollars of deficit reduction comes
GREGORY: If you cut taxes, does that lead to economic
growth? Does that put people back to work?
SIMPSON: I don't know. Well, all I know is -- (hits table)
whoop, boy that's a gong -- all I know is that you don't
have to quote 'raise taxes, so that you face the ire of
Grover Norquist, who's wandering the earth in his white
robes. You don't have to do that, you go into that tax code
and take out those tax expenditures. I have never been of
the opinion -- it's just my personal -- I would not have
voted ever on a reduction of taxes when we were fighting
two wars, when we were having a pharmacy bill, where people
don't even know what that baby's costing yet, but --
GREGORY: This is prescription drugs under Medicare?
SIMPSON: Yeah. And then they said, 'Well, the AARP helped
with that.' Well, why wouldn't they? They're the largest
pharmacy in the world. So, it's tough to watch the
movement, and the clobbering that politicians are taking
from every one of these groups -- I mean the realtors, I
mean, a million dollar home mortgage interest deduction.
What's that about? Give them five hundred thousand -- who's
using up a million -- then give everyone else a twelve and
a half percent non-refundable tax credit, which helps the
little guy. If everybody would quit talking about the
little guy and do something for the little guy -- and the
worse thing will happen to the little guy is going to do
nothing because inflation will kick in and interest rates
will go up and they're the guys that get hosed.
GREGORY: I want to get your reaction of this very specific
point. The argument is, for Mitt Romney in this case: We
cut taxes, that leads to economic growth, that's the Reagan
model, that's what should be employed here when you have 23
million people out of work.
BOWLES: What I believe is that we should cut tax rates,
that we should get rid of the backdoor spending in the tax
code, and we should use thevast majority of that money to
reduce rates, broaden the base, simplify the code, and use
part of that money to pay down these deficits. If we have
these deficits going forward, the overhang will be enough
to slow the rate of growth. Most, almost any economist will
tell you that when your debt-to-GDP ratio gets to 90
percent, the adverse effect on economic growth is somewhere
between one and two percent. That's why we've got to bring
this debt down, and to do that, you got to have a balanced
approach. If you try to do it all with spending cuts, what
will happen is you'll end up hurting the truly
disadvantaged. I think you'll disrupt a very fragile
economic recovery. Or, you'll have to cut things like
education, infrastructure, high value-added research, so
deeply that America won't be able to compete effectively in
what is today a knowledge-based global economy.
GREGORY: So let me talk about the President and Governor
Romney. I interviewed Governor Romney this weekend. I made
it clear to him, as I pointed out, he wants to extend the
Bush tax cuts, cut tax rates 20 percent beyond that, he
wants to increase defense spending, he also has rejected a
ten-to-one spending cut to tax height ratio. You've made it
very clear, his math doesn't add up; he can't balance the
budget with that set of beliefs.
BOWLES: I don't believe he can, and I think the math is
easy to prove. But let's give him his due. You know, we
also want to reform the tax code. You know, we want to
broaden the base, simplify the code, and get rid of the tax
expenditures. He's only getting rid of the tax
expenditures, or so he said so on your show last week, you
know for the the top income tax payers. You know, that
doesn't, if you just eliminate those tax expenditures and
it don't affect the middle-class, then you're not going to
generate enough money to reduce income tax rates by 20
percent, especially when you also make at the same time the
argument that you're not going to touch tax preferences for
capital gains. The arithmetic just doesn't work. You do
have -- when you broaden the base and simplify the code,
you got to get rid of these tax expenditures, for all
taxpayers. To claim it's just from the upper-income people
-- just not enough money there.
SIMPSON: Let me tell you the real one. If anybody thinks
we're hollowing out the defense budget, the only thing
being hollowed out is your brain. Because we are now at
about 750 billion in defense, and the top 15 countries on
earth, including Russia and China combined, are 540
billion. Who is -- where are we? We asked the Defense
Department, 'How many contractors do you have?' And they
said, 'Well it's quite a range.' What is it? It's between a
million and 10 million. You won't find a guy on the street
anywhere in American say 'What do you do?' 'Well I'm a
defense contractor.' And these are the guys knocking down
300 now or 500, or military -- I'm a military guy, was in
the military, I've done mine. But this is madness. You
still have Department of Defense schools, 61 of them in
America, sitting a bus ride away from public schools. Who
is kidding? They have the health care plan for only 2.2
million people, and the premium is 470 bucks a year, and no
co-pay, and takes care of all their dependents and costs 53
billion a year. And you mess with that -- I'm a member of
the VFW, lifetime member -- in the American legion you will
BOWLES: David, you know, I've got plenty of problems with
President Obama's plan. But to stick with Governor Romney's
for a second, if you -- the very reason that having a
balanced plan was at the core of our commission's
recommendations: that if you have a revenue-neutral plan,
like Governor Romney proposes to have, and you generate no
revenues for deficit reduction, no money for deficit
reduction from revenues --
GREGORY: That's what revenue-neutral means.
BOWLES: Yeah that's what revenue-neutral means. And you're
going to increase defense spending by 1.8 trillion dollars,
and you're going to reduce the deficit by 4 trillion over
ten years, that means you have to cut everything else by
5.8 trillion dollars. That's the arithmetic. And therefore,
the cuts you have to make in the income support programs,
that really take care of the truly disadvantaged, and the
cuts you have to make in education, and infrastructure, and
high value-added research, that are so important for
America to be competitive in this global economy, are just
too deep. And unnecessary. That's why we wanted to have a
balanced plan that took 1 trillion from revenue, and we
were very clear, we wanted to make the cuts across the
board -- whether it was defense, non-defense, or
entitlement programs. You know, we wanted to have everybody
have a stake in the game. A real shared sacrifice.
SIMPSON: We want to make sure we've irritated everyone in
the U.S., and there's still some pockets out there that we
haven't hit but we'll get to them.
GREGORY: But talk about President Obama. He's taken a lot
of flak for not really taking Simpson-Bowles and running
with it, leveraging support in the country for it and using
against opponents, Democrats and Republicans alike. There
seems to be more momentum around reviving Simpson-Bowles in
some fashion. But talk specifically about what President
Obama proposes, and where you think it doesn't add up.
SIMPSON: Well, it wasn't surprising to us -- I think it was
a little surprising to Erskine -- that he walked away from
our proposal, just stepped away. And the reason he stepped
away, his base would've sheared him like sheep. They
would've said, 'Look, you didn't do Guantanamo, you said
you were going to do that, you said you were going to do
this, and now you're talking about doing something to
precious seniors and entitlements.' Well let me tell you:
unless you deal with health care -- and forget what you
call it -- it's the single largest driving force of where
we're headed, over the cliff and that's it. And if he had
voted for that his base would've ripped him and more
importantly at that time, December of 2010, the Republicans
would have voted against to en masse. They would've said,
'My God, Obama voted for this thing, and so we'll just now,
to show him, we'll all vote no.' So on we go. And President
Clinton's been a big help to us. I know that he would've
agreed if Erskine said, he just said, 'you've got five Dems
and five Republicans, one Independent, 60 percent of the
commission I would've wrapped my arms around it and taken
it right into my heart.'
BOWLES: There are three problems that we have with
President Obama's plan. You know, again, he meets our
challenge of at the core being a balance plan. But, on the
revenue side, we think there's a better way to generate
that revenue rather than raising rates. We believe getting
rid of this backdoor spending in the tax code and using
GREGORY: Explain what that means to people who don't really
BOWLES: Getting rid of these deductions, these credits, and
these special interests deals that have been made to reduce
the revenue, the taxes that people have to pay. I'll give
you an example: We take in 1.3 trillion dollars in income
tax -- 1.1 from individuals, 200 billion from corporations.
And people wonder 'How can it be so relatively small? We're
spending 3.6 trillion, and, you know, how can it be so low
when our nominal rates are so high?' It's because we have
all these deductions and credits in the tax code that add
up to 1.1 trillion. So we're only taking in 1.3, because
we've given away 1.1. What we said is: Wipe those out, and
then use 92 percent of that money to reduce income tax
rates, and 8 percent of the money -- or about 100 billion
dollars a year -- to reduce the deficit. That's where we
get to 1 trillion over ten years. We think that's a better
way to raise the revenue.
Secondly, we don't think President Obama has gone far
enough in his reduction on entitlement spending. He's got
about 275 billion dollars worth of cuts to Medicare and
Medicaid. I give him a lot of credit for actually standing
up and saying 'I'm going to make these cuts.' But, if we're
going to slow the rate of growth of health care to the rate
of growth of the economy, or to GDP plus one, which some
people want to get to, you know, then we're going to have
to have much higher cuts. We had 475 billion dollars in our
plan, we too would have to go further -- we're the first to
admit that. Secondly, neither the President nor Governor
Romney do anything about Social Security. Social Security
is 900 billion dollars cash-negative over the next decade.
You know, what we said is 'we have to make Social Security
sustainably solvent.' And neither one of them addressed
that in their budget. And therefore, you know, when you
look at those problems in President Obama's plan -- both on
the revenue and the spending side -- we think he's going to
have to make some compromises to get us to the promised
SIMPSON: You think what we have to do with Social Security
is bizarre, and we're saying give the lowest 20 percent 125
percent of poverty, kick 'em up; give the seniors older
than 85 a kick up; do something with the cost of living
allowance; and do something when you've got, you know, 10
thousand a day turning 65 and you've got to get in there.
We have a situation now which is so absurd; by doing
nothing the trustees, who are very vital Republicans and
Democrats of good intellectual capacity, are saying if you
don't do something, in the year 2033, which is 21 years
away, you're going to waddle up to the window and get a
check for 25 percent less. And when we said you've got to
raise the retirement age to 68, by the year 2050 --
BOWLES: 40 years from now.
SIMPSON: The AARP said, 'How will people able to prepare
for that?' And I said 'I think they can make it, I know
they will. They've got brains, and they'll figure that
out.' I mean, it's nuts. Absolutely nuts.
GREGORY: Let me ask you both: the advantage of your
tackling this issue is that you are both above the
political fray - and probably happily so because of how
dysfunctional Washington is - but you've both been in the
partisan trenches as well. So Senator, let me start with
you. Handicap this presidential race for me because that's
going to be critical to the outcome of what you care about
getting done here.
SIMPSON: Well, first just let me say that I'm the only
living politician who, while he was in office, had a
hearing on the AARP. They never forgot that, they said,
'We're just a genial group of people living in a little
shack down here.' Their lease is 17 million a year; they
won't let people in the building because it's got too much
mahogany and brass in it.
Handicap the race. I think that Romney's chance will come
from Obama fatigue. I quoted -- I made that little
statement months ago. He's on all the time, he's saying the
same things, he's saying it to a chosen audience, Axelrod
and the guys are telling him what to say, and when he
doesn't say it, Axelrod says it, or Plouffe, whoever, it's
a real organization. Man, give them credit; they've got
cells in every precinct in America. So, I think people --
don't forget the great axiom of politics -- people don't
vote for anybody, they vote against. And I think people are
going to vote against Obama, which will be to Romney's
advantage. And then of course Karl Rove is out there, and
he's got a lot of scratch, he's got about 400 million
bucks, and he's going to throw that stuff on the screen
like a great big blob.
GREGORY: And does a President Romney, Senator, does a
President Romney stand up to conservatives the way you
think he should to hammer out a compromise, to get closer
to the ideal of Simpson-Bowles, a balanced approach to
balance the budget?
SIMPSON: Put it this way: he was governor of Massachusetts,
so I think he can figure out anything. That's the one state
that voted for him to govern out of all the 40-, 50.
GREGORY: Mr. Bowles, handicap this race for me.
BOWLES: There are not many things that Al and I disagree
on, but I think it's now become a choice election, I think
the Obama campaign has done that, and I don't think Mitt
has given the American people the substance in his response
to convince them that they ought to make a change today,
that he can do a better job in managing the economy. And I
think the President has more paths to victory than the
Governor does. So I think the President will be
GREGORY: What is your level of confidence in a second Obama
term or a first Romney term that these issues get dealt
with in a way that really begins to resolve this crisis
that we're in?
BOWLES: Well, first of all, I'm frightened that we're going
to breach this fiscal cliff, and we're going to --in what I
would call -- really bet the country, and take that high a
risk. And I think that could lead to really horrible
economic results. I met with the President and I've met
SIMPSON: He wanted to take you to the woodshed, and you
took the axe.
BOWLES: Yeah I did take the axe. And you know, as you said,
I don't have any political fear, I don't want any jobs up
here. I don't want to, you know, Alan and I are not looking
to feather our nest. And I'm confident that after the
election he's prepared to negotiate with the Republicans
and come up with a plan that falls within the framework of
what we've talked about.
SIMPSON: I believe that too.
GREGORY: Do Republicans change their view about opposing
him en masse if he prevails for a second term?
SIMPSON: If they don't begin to deal honestly with things
without the hysteria and using emotion, fear, guilt, and
racism, and everything else, they will be a party that
won't make it through. I mean, when you have 82 guys in the
Congress who didn't come to limit government, they're there
to stop it. I mean, I always say it to them, especially to
guys who are over 65, you know, holding up with their
fragile -- and I say, 'first thing we want to get rid of is
your Medicare, because you see that's a government
program,' --'This is nuts, get rid of the garbage
collection for God's sake.' What do they think the world
runs on? It runs on taxes. But you can't get there by
taxing people, you can't get there by cutting spending, you
can't get there unless you use a balanced approach. If they
don't, you know, the word "compromise" does not mean you're
a wimp. You learn to compromise an issue without
compromising yourself, and if you haven't learned that,
you're not human. You've got to compromise in marriage,
you've got to compromise when you're dealing with a car
dealer -- everything you do in life is a compromise, a
negotiation -- that's madness!
GREGORY: Tough words for your own party, including using
racism against this president. You think there's a real
part of the Republican Party that does that?
SIMPSON: No, I think there are people from either party who
use it. That is out there, and anyone that thinks, you know
-- because of political correctness -- I have a definition
for that which I'll not share with the general public --
but political correctness is madness. So you have people
who say 'Me, racist?' Let me tell you, I know Democrats and
Republicans who are seriously racist, but they don't want
to be tagged like that, so they say 'I've never had a
thought like that.' I think half the rage in the world
comes from screwballs like that because that stuff just
comes to the surface like a fissure through a volcano. So
don't blame Republicans for the racism. We've been
traveling the South and the West -- let me tell you, it's
out there, and it is not --
GREGORY: But you said that the Republican Party is using a
lot of things, including racism --
SIMPSON: They all use it. I should have clarified: every
party uses a deft blend of emotion, fear, guilt, and racism
to pass or kill a bill. That's what you do. That's how you
operate. That's how you pass a major bill. Immigration,
anything, you name it. Emotion, fear, guilt, racism. No,
don't tag it with the Republicans.
GREGORY: Alan Simpson, Erskine Bowles, the fight continues.
Thank you both very much.