President Obama remains stuck in a double-barreled showdown with Congressional Republicans â€" over the government shutdown and over the need to raise the government’s debt limit by mid-October to allow the United States Treasury to meet its obligations.
Mr. Obama sat down for an interview with John Harwood of CNBC and The Times between meetings on the stalemate with Wall Street executive and the bipartisan leadership of Congress. What follows is a condense, edited version of their conversation.
I want to see if you can clear up a little confusion about your position on something. You’ve said you’re not going to negotiate the destruction of your healthcare plan, you’re not going to negotiate on the debt limit. Exactly what are you prepared to negotiate on,and when?
I’m prepared to negotiate on anything. I think it’s important for us to talk about how we create a budget that is creating jobs, encouraging growth, dealing with our long-term debt issues. The deficits are coming down â€" at the fastest pace since World War II. They’ve been cut in half since I came into office. But we still have some challenges in terms of our long-term healthcare spending on Medicare in particular.
So whatever the leadership wants to talk about, we’ve got a budget and we think we’ve got some good answers. We don’t expect 100%. But what I’ve also said is that it is not acceptable for one faction of one party in one chamber to say, “Either we get what we want, or we’ll shut down the government.†Or even worse â€" “We will not allow the U.S. Treasury to pay its bills and put the United States in default for the first time in history.†So the message I have for the leaders is very simple. As soon as we get a clean piece of legislation that reopens the government…
But no negotiation until after that?
Until we get that done, until we make sure that Congress allows Treasury to pay for things that Congress itself already authorized, we are not going to engage in a series of negotiations. And the reason, John, is very simple. If we get in the habit where a few folks, an extremist wing of one party whether it’s Democrat or Republican, are allowed to extort concessions based on a threat of undermining the full faith and credit of the United States, then any president who comes after me, will find themselves unable to govern effectively. And that is not something that I’m going to allow to happen.
Are there any circumstances under which you could make a budget deal with Republicans that does not involve new taxes?
It is possible for us to make sure that we are not increasing the income tax rate. That’s now behind us. I think it is very important for us to continue to cut out programs that are unnecessary, not working, some of them need to be reformed. It is important for us to deal with our long-term entitlement spending.
But I also think it’s important for us to make sure that we’re investing in the things that are going to help the economy grow. And I’ll just give you one specific example, and that’s our infrastructure. Every business relies on good roads, airports that function, ports that are working. And we are vastly under-investing in what is critical for our long-term growth. We’ve got to find a way to pay for that. I think we have to distinguish between income tax hikes, which they’ve always been adverse to…
Loopholes too? No revenue?
Well, I think that we’re going to have to close the loopholes in order to pay for those things that are going to help us grow. But the important point here John is that in the normal give-and-take between parties, that’s something that we should be able to solve. Keep in mind in terms of reopening the government, what Democrats have already said they’re willing to do is to vote for reopening the government at funding levels that the Republicans have established and that the Democrats don’t like.
So if John Boehner puts the Senate bill on the floor right now, that maintains the status quo, doesn’t increase government spending beyond where it already is, it’s far short of what Democrats think are necessary for us to invest in things like education and â€" research and development and all the things that are important. But what we’re saying is, we’ll put everything on hold, we can enter into robust negotiations around all these issues, Democrats won’t get 100% of what they want, Republicans won’t either. But that’s the kind of democratic process the American people expect.
Before the election last year, you thought there was a possibility your reelection would break “the fever†within the Republican Party. It didn’t happen. Do you see this moment as a chance, through this political confrontation, to break the fever now?
The interesting thing John is that the majority of Republicans around the country may disagree with me on a whole range of issues, but they also recognize that a democracy only works if everybody’s following the rules. That there’s going to be some give and take. And I think that’s actually true for a whole lot of Republicans on Capitol Hill.
There are a lot of Republican senators and congressmen, some of them who’ve publicly said, “We disagree with the president on a whole host of issues. But what we shouldn’t be doing is shutting down the government, hurting our economy, having 800,000 federal workers who have no idea whether they’re going to be able to pay the bills at the end of the month, and certainly what we shouldn’t be doing is- creating a potential financial catastrophe if the United States defaults.â€
The last time there was even a threat of default back in 2011, we know that the economy did not grow, it went backwards during that quarter. As a consequence, we got downgraded. And that’s not something that any of us should want to repeat. We’ve got to take that off the table.
As you try to appeal to those other Republicans you think you could work with, I wonder about your tone lately. I have heard from you an increasing amount of exasperation, an edge â€" even mockery sometimes. You said recently, “I keep hoping a light bulb goes off.†And it gives the impression that you think that your Republican opponents are either craven, or stupid, or nuts. Is that what you think? And if you think so, does it help your cause to let people see that out loud?
During the course of my presidency, I have bent over backwards to work with the Republican party. And have purposely kept my rhetoric down. I think I’m pretty well known for being a calm guy. Sometimes people think I’m too calm. And am I exasperated? Absolutely I’m exasperated. Because this is entirely unnecessary.
We have a situation right now where if John Boehner, the Speaker of the House, puts a bill on the floor to reopen the government at current funding levels, so that we can then negotiate on a real budget that allows us to stop governing from crisis to crisis, it would pass. The only thing that’s stopping it is that John Boehner right now has not been willing to say no to a faction of the Republican party that are willing to burn the house down because of an obsession over my healthcare initiative.
They’ve now voted 40 times to repeal this, 40 times.
A law that passed the House, passed the Senate, was signed by me, was ruled constitutional by the Supreme Court â€" that as we speak is being implemented, that is already benefiting millions of people who allow their kids to stay on their parents’ plan till they’re 26, that are providing rebates to families because their insurance companies have to treat them fairly, that are making sure seniors are getting cheaper prescription drugs.
And I am exasperated with the idea that unless I say that 20 million people, “You can’t have health insurance,†these folks will not reopen the government. That is irresponsible. If and when they vote to make sure Congress pays our bills on time so America does not default on costs its already accrued, then I am prepared to have a reasonable, civil, negotiation around a whole slew of issues. And that’s reflected not just by my words, but by my deeds over the last four years.
Wall Street’s been pretty calm about this. The reaction has been, “Washington fighting, Washington posturing, yadda, yadda, yadda.†Is that the right way for them to look at it?
No, I think this time’s different. I think they should be concerned. And I had a chance to speak to some in the financial industry who came down for their typical trip. And I told them that it is not unusual for Democrats and Republicans to disagree. That’s the way the founders designed our government. Democracy’s messy
But when you have a situation in which a faction is willing potentially to default on U.S. government obligations, then we are in trouble. And if they’re willing to do it now, they’ll be willing to do it later. One thing that I often hear â€" is, “Well, Mr. President â€" even if they’re being unreasonable, why can’t you just go ahead and- do something that makes them happy now?†What I have to remind people is that what we’re debating right now is keeping the government open for two months. We would then be going through this exact same thing in the middle of Christmas shopping season. Which I don’t think many businesses would be interested in.
One thing that I know the American people are tired of, and I have to assume the vast majority of businesses are tired of, is this constant governing from crisis to crisis. So in that sense, do we need to break that fever? Absolutely. We have to stop doing that. Let’s get a budget that allows people to plan over the long term, that allows us to deal with our fiscal problems in a sensible, reasonable way, even on an issue like healthcare. You know, if they want to give me specific suggestions around how we can improve delivery of health insurance to people who need it and people with pre-existing conditions, I’m happy to talk to them about it. But I’m not going to do it subject to the threat that somehow America defaults on its obligations.
I think Wall Street can have an influence, CEOs around the country can have an influence. I think it is important for them to recognize that this is going to have a profound impact on our economy and their bottom lines, their employees, and their shareholders.
Oftentimes, when you’re outside of Washington, the default position both for ordinary voters, for businesses, for the press, is to say, “Eh, you know, this is the usual squabbling. Both sides are acting like spoiled children.†This is not one of those situations. We’ve got a group of folks who think that they can hold America hostage for ransom that they can’t win through an election.
I was looking at poll data on the healthcare law. Very, very popular among African Americans, marginally popular among Hispanics, very unpopular among whites. What are the implications for the country, on this issue and many others, of politics that are polarized not just by party, but by race?
When you break out what’s actually in the Affordable Care Act, it’s popular among all groups. If you ask the ordinary person, “Do you think it’s a good thing that insurance companies have to let young people stay on their parents’ plan until their 26?†“Absolutely.†“Do you think it’s a good idea that- insurance companies have to spend 80% of premiums on people’s healthcare and not on administrative costs?†“Absolutely.â€
“Do you think it’s a good idea that people with pre-existing conditions should be able to get health insurance?†They say yes.
So the challenge we have with the healthcare law is similar to the challenge we’ve had in our politics more broadly. And that is that there have been caricatures of what we’ve been trying to do. There’s always been some levels of polarization in our politics. Those have gotten wors, in part because of gerrymandering. So members of Congress have no incentive to reach out to all groups. Partly it’s gotten worse because you got these super PACs who are coming in and financing advertising that stirs up polarization. And the media has gotten more polarized.
But I don’t think when you look at the healthcare law specifically that it’s an issue that’s going to break down in terms of race. The majority of folks who are uninsured in this country, even though they’re working, and will be helped by the Affordable Care Act, the majority of them are going to be white, not African American or Hispanic.
Does the shutdown at all affect the vetting of your potential Fed nominee, slow that down? A lot of people have said, “Why is he taking so long on that appointment?â€
Well, keep in mind that Ben Bernanke is still there and he’s doing a fine job. And this is one of the most important appointments that I make other than the Supreme Court. So no, the shutdown is not slowing down the vetting.
The person I’m going to be appointing will end up being somebody who reflects the fed’s dual mandate. They’re going to be making sure that they keep an eye on inflation, that they’re not encouraging some of the bubbles that we’ve seen in our economy that have resulted in bust. But they’re also going to stay focused on the fact that our unemployment rate is still too high. And ordinary workers out there still need an economy that’s strengthened, aggregate demand that’s strengthened, so that we can end up putting more people back to work with better wages.
Pope Francis said the other day, without changing the church’s positions, said the Catholic Church had become too obsessed on issues like gay rights and abortion. What do you think of the pope’s remarks, and do you see any broader applicability beyond the Catholic church?
I tell you, I have been hugely impressed with the pope’s pronouncements. He seems somebody who lives out the teachings of Christ. Incredible humility! incredible sense of empathy to the least of these, to the poor. And he’s also somebody who’s I think first and foremost, thinking about how to embrace people as opposed to push them away - how to find what’s good in them as opposed to condemn them.
That spirit, that sense of love and unity, seems to manifest itself in not just what he says, but also what he does. For any religious leader, that’s something a quality I admire.
I would argue for any leader period that’s a quality that I admire. And so to bring it back to the issues here in Washington, no party has a monopoly on wisdom. I think that a lot of folks in the Republican party who disagree with me are good people who love their country and love their kids, want what’s best for their communities.
But part of the genius of the founders was that they were able to set up a system where even when there are profound disagreements, we can work those disagreements out in a sensible, civil way. And ultimately the experiment in self-government continues.
The fight that we’re having right now is not about the healthcare law, it’s not about a particular budget â€" what it has to do with is do we continue with that process where we have elections, the majorities are determined, there’s some protections for minorities in the system, but we are able to strike compromises and then move forward. If we can’t do that â€" this country’s too diverse, it’s too big â€" what you’ll end up seeing is more and more the polarization that you talked about that’s not healthy for our politics.
It’s also not good for our economy. The biggest strength we have as a nation, I think, is precisely that diversity and our capacity to get everybody energized and moving. And that creates a dynamism in the economy and the whole thing kind of holds together. If we start getting more and more balkanized, then we end up having some of the problems that other countries have had in the past. That weakens us and that has an impact on our standing in the world. That’s something that we need to avoid, and we need to get that settled right now.
