There's only one small hurdle left to raise the debt ceiling and stave off an unprecedented default: passing the legislation.
No easy task.
Rep. Bill Owens, D-Plattsburgh, told me today that he's likely to vote to approve the measure, though he said the plan wasn't balanced (in his estimation, an unbalanced plan is better than a default).
The plan cuts $1 trillion immediately, and then between $1.2 and $1.5 trillion based on the recommendations of a "super" committee of Congress.
It includes no "revenue raisers" (tax increases) and exempts programs like Social Security and Medicare (though if the "super" committee can't agree, Medicare could get cut).
What follows is a transcript of a conversation I had with Mr. Owens on his position on the plan. It was conducted this morning at about 10:30. It's been edited for length and clarity.
Times: How will you vote?
OWENS: I'm likely to vote to approve it. I'm still going through the information that's been provided. But on balance, right now it looks to me like it's something I can approve. It doesn't have everything in it that I would like to see. Some things I have some concern about. But when you measure this versus default, you come down on the side of voting for this.
Times: What did you want to see in the plan that wasn't there?
OWENS: I have stated fairly clearly that I believe there should have been a revenue component to this. We need to be doing something. Every serious economic says you can't get out of the deficit without increased revenues. Simpson-Bowles, for example. The Gang of Six. It's the position of the Alice Rivlin (former Clinton-era budget director) commission. We have three relatively-speaking independent bodies that are saying you have to have this as an element, otherwise it's not serious deficit reduction plan.
Times: What's in the plan that you don't like?
OWENS: When you have a situation where you don't know what the next set of cuts will be because of the way this is set up, that's always of concern. We're not looking at something that says, "Here are all the cuts." We don't know what that commission will recommend.
Times: You've been calling for compromise. Is this a compromise? What did the Republicans actually give up?
OWENS: Well. That's an excellent question. In my view, the answer to that is, it's a partial compromise. I think that the Republicans wanted to put in as an absolute condition a provision related to a balanced-budget amendment. That was in effect excluded. It only gets there after a series of events occur. I think, although it's not clear to me, Republicans would have wanted larger cuts. I think the big issue in terms of the compromise piece is the failure to include any revenue. From the Democratic position, I think we've protected Social Security, Medicare, and certainly our troops at Fort Drum. We've accomplished some things that are very important. We have this bill or default. Do I like it completely? No. That's part of the compromise process.
Times: Do you think that the way that House Republicans were able to dictate the terms of this debate was extraordinary?
OWENS: Again, you're making the assumption that they got what they wanted. I have to see how their caucus responds to this. We don't know what the response has been. They may not perceive that they got everything that they wanted. A large part of that goes to, from what I've read in the newspaper, there's some concern on the part of the tea party-supported group in the House Republican caucus, that they did not get enough in the way of cuts. I'm not sure if the perception on the other side of the aisle is that they were successful. Certainly, from what you read in the polls, the American people do not believe that our friends on the other side of the aisle were successful by not being willing to compromise.
Times: How did it happen?
OWENS: Unfortunately, I think what happened here was, we got ourselves into a position where that particular tenet of Republican philosophy was carried through, even though the vast majority of Americans believe we should be increasing revenues and we should have a balanced approach to deficit reduction. In that aspect, I think Democrats did not do well in this negotiation.
Times: Is it a “balanced” plan?
OWENS: In my view, it's not. It is not a balanced plan.
Times: How could it have been a balanced plan?
OWENS: There was many ways you could have achieved some balance. Balanced means that you do have some revenues. That, in and of itself, makes it balanced. But as you negotiate and you compromise, what Democrats were successful in doing was protecting Social Security and Medicare. Sometimes in that process you have to do tradeoffs. That was the tradeoff decision. Am I completely happy with it? No
Times: If the "supercommitte" can't come to an agreement, Medicare providers could see cuts. Can this be construed, then, as a vote to cut Medicare?
OWENS: Clearly, the idea here is, for Republicans, they're very concerned about military spending. For Democrats, they're concerned about Medicare and Social Security. What you're trying to do is balance the potential pain in hopes that you will cause people to negotiate a reasonable compromise. That's not a bad negotiating lever. Is there risk to it? Absolutely. But when you balance it in that way, you put people in that position where they have to make tough decisions. Otherwise, a program they think is important may get cut. That spurs people to do the right ting.
Times: What impact could the military cuts — $350 billion in the first round, and even more if the supercommittee can't agree — have on Fort Drum?
OWENS: I don't think it's going to have much impact on Drum, if any. Most of this is going to come out of weapons systems development. Let me go back and say that (Defense Secretary Robert) Gates in January said he could find 150 billion in savings. It was his belief that it wouldn't have any effect on the military. Go back and look at what he was proposing. There's a significant piece here that can come out of that $150 billion and not affect Fort Drum or the troops. It can be taken out of administrative and development of weapons systems, making them more efficient.
Times: Should the final plan, with the supercommittee's recommendations, include revenue raisers (tax increases)?
OWENS: I think if we look at the bill itself, it clearly would indicate that the committee has the ability to bring revenue enhancement to the table. But that only becomes applicable at the second tranche. The initial legislation doesn't provide for revenue enhancement.
Times: The supercommittee has a 50/50 Democrat to Republican split. Tax increases are possible, but are they likely?
OWENS: I think it depends on who those members are. Obviously, we've had, in the Simpson-Bowles proposal, in the Gang of Six, we had Democrats and Republicans vote in favor of increased revenue. That, depending on who the people are, yes, you could bring it forward.
Times: How does Congress raise those revenues?
OWENS: I think that there's a number of ways you can do that. I've supported allowing the Bush tax cuts to expire. I've also believed we can reduce it by reducing tax expenditures. The tax expenditures are $1.1 trillion a year. Even shaving 10 percent off tax expenditures, you'd be picking up 110 billion a year. You could get 150 billion from taxing the wealthy. That's significant revenue.
Times: As the "supercommittee" hashes out the rest of the cuts, are there any sacred cows?
OWENS: The sacred cows, in my view, are Fort Drum, clearly a sacred cow. Social Security, Medicare. That doesn't mean that you can't become more efficient at what you do. What it means is, you should not be taking money out of programs. There are many things we can do to be more efficient.
Times: What about agricultural subsidies?
OWENS: Those are, in fact, scheduled to be reduced, according to the provisions that I've looked at. Much of the agriculture community is indicating that, in our district in particular, the greater concern is with milk prices than with the subsidies. That's not a big issue in the district. The bigger issue is milk prices.
Times: Philosophically speaking, is this the death of Keynesian economics?
OWENS: There's risk. One of the great problems I have here in dealing with my colleagues is that, people are unwilling to accept the fact that there is potential risk in proceeding in either direction. There's risk to cutting government spending – putting economy back in recession. There's risk in allowing the deficit to continue to grow. There's risk, the outcomes of which are to a large extent unknown. People have tor recognize there is risk. One of the things I dislike about folks like (liberal New York Times columnist Paul) Krugman and folks on the right is they don't talk about the fact that there's an equal level of risk on both sides of this. Our job is to take the information in and make the best judgment we can about what the risks are. To deny the risk is, in my view, wholly inappropriate.
Times: Who do you want to see on the supercommittee?
OWENS: I don't have specific names that I would give you, but I think it should be balanced with people with different perspectives. Democrats shouldn't put up all people who have a progressive leaning, if you will. Republicans shouldn't put up people who have an ultra-right conservative position. The commission should be balanced. It should be people who are capable of listening to information and coming to a decision based on that, not ideology.
Times: Given the way things have gone so far, is that possible?
OWENS: I am hopeful. But not confident.