In an exclusive interview with NBC’s Meet the Press, House Speaker John Boehner said there is no easy way to stop the budget cuts -- known as the “sequester” -- that began taking effect Friday night, and voiced uncertainty over how Washington can solve the overall fiscal problems that have consumed the nation’s politics for more than two years.
In an exclusive interview on Meet the Press, House Speaker John Boehner weighs in the economic impact of the sequester and whether or not it will hurt the country's economy.
“I don't think anyone quite understands how it gets resolved,” Boehner admitted in his interview with NBC’s David Gregory.
Boehner explained his strategy in the Republicans’ tax-and-spending standoff with President Barack Obama, saying that he didn’t want to “arbitrarily pull out a couple of tax expenditures” just to raise the revenue needed to avert $85 billion in spending cuts which are being made this year.
The president and many of his administration officials have warned of dire consequences to government services and national security if the sequester happens as planned. But to avoid them and reach a deal, the president wants new tax increases, something Boehner and his fellow Republicans have insisted are off the table.
The spending cuts – which were intended to spur a bipartisan “grand bargain” on deficit reduction, entitlement reform and tax increases -- are part of the 2011 Budget Control Act which Obama signed into law.
Boehner voted for the law and urged his members to do likewise.
But now that the spending cuts are beginning, neither Boehner nor Obama wants them to continue. Yet they have been unable to reach an accord on an alternative measure.
Larry Downing / Reuters
Speaker of the House John Boehner, R-Ohio, speaks briefly after a meeting with President Barack Obama at the White House March 1, 2013.
Boehner insisted that Obama should abandon his effort to get more tax increases and instead focus on spending.
“Every American, in these tough economic times, has to find a way to balance their budget. They've got to make choices,” Boehner said. “They expect Washington to live within its means and to make choices as well.”
He said, “It's time for the president and Senate Democrats to get serious about the long-term spending problem that we have.”
And he noted that if Obama has a credible alternative to the sequester, “why wouldn't Senate Democrats go ahead and pass it?”
Obama has insisted that any plan to replace the sequester must include new tax increases, for example by changing the tax treatment of corporate jets, and by ending tax preferences for oil and gas producers.
But Boehner said Obama had already gotten his tax increase in the deal that he made with Republicans in December. “The president got $650 billion of higher taxes on the American people on January the first,” Boehner said. “How much more does he want?”
Boehner did say that a comprehensive tax reform law would be a way to spark growth. That, in turn, would produce more tax revenue for the federal government.
In an exclusive interview on Meet the Press, House Speaker John Boehner gives David Gregory the details of what went on for both sides during the sequester negotiations.
“American family's wages aren't growing,” the House speaker said. “They're being squeezed. And as a result, we've got to find a way through our tax code to promote more economic growth in our country. We can do this by closing loopholes, bringing the (tax) rates down for all Americans, making the tax code fairer. It will promote more economic growth.”
Obama said Friday it may take some time before members of Congress agree to bargain with him on how to replace the spending cuts.
He told reporters that he hoped that “after some reflection, as members of Congress start hearing from constituents who are being negatively impacted… that they step back and say, all right, is there a way for us to move forward on a package of entitlement reforms, tax reform, not raising tax rates, identifying programs that don't work, coming up with a plan that's comprehensive and that makes sense.”
He said, “It may take a couple of weeks. It may take a couple of months” before that happens, but in the meantime the spending cuts will dampen economic growth and hurt federal workers who are furloughed and federal contractors who lose work.
“It's going to mean hundreds of thousands of jobs lost,” he said. “That is real. We're not making that up. That’s not a scare tactic, that’s a fact.”
But Boehner said, “I don't know whether it's going to hurt the economy or not. I don't think anyone quite understands how the sequester is really going to work.”
The speaker said the House would pass a spending plan this week to fund the government through the end of the current fiscal year, which ends on Sept. 30, and that in his conversation with Obama at the White House Friday, the president had agreed “that we should not have any talk of a government shutdown. So I'm hopeful that the House and Senate will be able to work through this.”
Following Boehner on Meet the Press, Obama economic advisor Gene Sperling said Boehner ought to be willing to consider at least $400 billion more in tax revenue increases over the next ten years as part of a larger agreement on deficit reduction.
Sperling said Obama has already agreed to require higher-income Medicare recipients to pay higher premiums for their coverage than they now pay and has agreed to change the formula for Social Security benefits, which would in effect reduce benefit increases over time.
These were difficult concessions for Obama to make, Sperling said.
In the face of congressional Republicans charging that Obama and his aides have been exaggerating the effect of the spending cuts – with one House Republicans calling their effort “Scarequester” – Sperling said, “Nobody ever suggested that this harmful sequester – which the speaker himself said would be devastating to national security – was going to have all its impact in the first few days.”
But he argued that the spending reductions will “hurt a lot of communities that rely on military spending” and hurt public education.
As House Republicans begin to see the impact he said he hoped they “will choose bipartisan compromise over this absolutist position.”
He noted that on Saturday Obama made phone calls to both Democratic and GOP senators to form a “caucus of common sense” and support an alternative to the spending cuts.