Washington, D.C. – Democratic Leader Nancy Pelosi held a press availability today at the Will Rogers stakeout location in the U.S. Capitol following a meeting between congressional leaders and President Obama. Below is a transcript of the press availability:
Leader Pelosi. Good afternoon, just barely, but so. As you know, this morning the President held a meeting at the White House with the Vice President and the leaders of the House and Senate in a bipartisan way. It was an important meeting and it pointed out the clarity between the Democrats and the Republicans in the Congress.
We believe that we should build our economy from the middle class out, from the middle out. The Republicans believe in trickle down, that is the essence of our difference. We gather today because today begins the cuts, the mindless cuts that are a result of sequestration – across-the-board cuts that do not reflect priorities, but just reflect a blunt way to make cuts, which even the Chairman of the Fed has said that cuts of this size, made this quickly, lose jobs, slow the growth of our economy and – what were his exact words on the deficit, I don’t, I want to make sure I said his words correctly: “keeping deficits larger than otherwise.” So if the point is to reduce the deficit, growth is essential to that, mindless cuts made, what such a large amount in a short period of time do not reduce the deficit.
And so, the President challenged us all to look at all of the expenditures that, that government makes and whether it’s about entitlements, whether it’s about taxes, whether it’s about discretionary spending, and to see if we could come to some agreement on how we go forward. To govern is to choose, to govern is to choose, and when we want to subject our expenditures to the scrutiny that we should use so that we know the taxpayer is getting his or her money’s worth out of this and that the initiative is doing the job it sets out to do. We have to make judgments, is a particular initiative still a priority for us? Is it duplicative? Is it obsolete? Is there any wasteful spending? Certainly we have to always, with the oversight of Congress, subject initiatives to that scrutiny.
But we have to be careful about how we do it and across-the-board cuts is not the way to do it. For example, education – probably the best investment we can make in our future and our families. Education brings – nothing brings more money to the Treasury than the education of the American people. Early childhood, the President is advocating K-12, higher education, postgrad, lifetime learning, nothing brings more money to the Treasury than investing in education. So, cutting education does not reduce the deficit. In fact, innovation begins in the classroom. So cuts in education deter the growth of innovation and cuts in science do the same thing. So, are we going to say: “across-the-board, so we’re cutting science?” America’s going to continue to be number one and we must continue to be number one. We do not do that by making cuts in science.
The President mentioned infrastructure. Cuts in infrastructure. Ridiculous. We have so much deferred maintenance now and what we do know is that no maintenance is the most expensive maintenance and investing in infrastructure now creates jobs immediately as well as builds the infrastructure of our country which is essential to our economic growth. Products to and from market, people to and from work, broadband information at real time high speed – why would we cut those kinds of things? So, across-the-board cuts that do that are mindless.
The President mentioned tax reform, very important, we all agree, we all agree on a number of things – that we must reduce the deficit, that we must have tax reform, and that we must look at, again, another set – I talked about expenditures that are investments, we have to prioritize, to choose, some might be good, but they may not be best. And we, they may not make the cut, even though they are worthy, but we have to prioritize. Across-the-board cuts do not do that.
Next thing is we look at entitlements. Of course we want to look at how we can prolong and sustain, in a fiscally sound way, Social Security and Medicare, Medicaid, pillars of economic security for many of America’s families and certainly for our economy. So, let’s go to the table in an agnostic way and make judgments about how we sustain it. If the purpose, if the purpose is to prolong, to sustain for a longer period of time, in a stronger way, in a fiscally sound way, Medicare and Social Security, I think that’s what the American people want us to do. If to say Social Security has no place in a free society and we want to privatize it and Medicare should wither on the vine and we want to voucherize it, we’re not in for that. But, again, objectively, agnostically looking at how we can strengthen those, we should do that.
But the – so we’ve talked about two levels of expenditure: investments and entitlements. A third and very important set of expenditures that we have to subject to scrutiny are tax expenditures, tax expenditures. There are probably a trillion, a trillion dollars in tax expenditures that occur each year. We have a $3.5 trillion budget, about $1.1 trillion of it are in tax expenditures. Now, some of them are very worthy and support the middle class, for example the mortgage interest deduction, but some of them are wasteful and are special interest gifts to the special interests. And some of them are excessive for the middle class. And so that’s where we have to go to the table and say: “these tax expenditures are spending, they cost the taxpayer, what are we getting for them?” The Speaker has said there are hundreds of billions of dollars of tax expenditures to look at, Mr. McConnell has said that as well. But when they look at them they say the only way they will look at them is to lower rates. And we’re saying: “no, how about lowering the deficit? How about reducing the deficit by removing wasteful tax loopholes that are there for the special interest?” And some of them just, just excessive for the wealthiest individuals in our country and in our shared sacrifice we can’t seniors and children and families and all, and science and our future to make all the sacrifice and say that this is going to be sacrosanct.
So we have a proposal that would have been better with sequestration, Mr. Van Hollen’s proposal, which cuts spending, which has a revenue piece, and which does not deter growth and does reduce the deficit. We haven’t been able to bring it up, we’ve brought up, tried three times in the last two months, and the Republicans – I don’t know what they’re afraid of? This is the marketplace of ideas, are they afraid that some of their Members might vote for it?
As we go forward it has to be with a commitment, as the President said, to the American people, to the middle class, and not for us to be not opening our eyes to the fact that if this is going to happen, it has to be shared sacrifice, that we have to look at domestic discretionary spending, entitlement spending, and tax expenditures, that’s where the big money is, that is what remained untouched in all of this discussion and that is a place where I think we can find some area of agreement.
With that, I’d be pleased to take any questions.
Q: Leader Pelosi, the President suggested that he could support a CR while you continued to talk about replacing the sequester. The CR that the House is voting on next week does include some flexibility for defense budgets for the rest of the fiscal year, but not for non-defense agencies. Will Democrats vote for that CR?
Leader Pelosi. I haven’t seen it. Have you seen their CR? I haven’t seen their CR.
Q: Well, you know it’s coming out and you know that it’s…
Leader Pelosi. Well, I don’t know what it is so I can’t tell you if anybody’s going to vote for it because we don’t know what it is. But I will say this, as the President said in his press conference, we came to agreement on the Budget Control Act, which said that there would be a certain level that this, that our appropriations…
Q: It keeps that level.
Leader Pelosi. Well, when we see that then I can tell you what it is because it’s a, it’ll be curious to me if at that level the Republicans can produce the votes to pass it. But certainly we don’t want to have a shutdown of government. I think some people may have thought sequester meant shutdown of government, no it means more like hold hostage all things you care about so we can have across-the-board cuts. In fact, we’ve already – can you hand me that – other stuff this morning with…
[An aide hands Leader Pelosi a piece of paper]
A, I’ll just describe it to you this way – this memorandum notifies you that the Department of Justice proposes to furlough to, no earlier than 30 days from receipt of this notice, we recognize the difficult personal implications and financial implications of any furlough, no matter how limited it remains. And that’s what this furlough is about. So the furloughs are already going on, now they will have an impact on people’s lives and individually and the rest and that’s really important and it has a tremendous – as many of you were there yesterday and saw the impact sequestration has on women, taking a big hit from this, in addition to other cuts that have already happened. But it also has a tremendous impact on our economy, again, losing jobs, deterring growth, and not reducing the deficit.
Q: Given how far apart the parties are on what should be part of a bigger deal to replace sequestration and deal with the deficit, how hopeful should people at home, or people who are facing furloughs right now, how hopeful should they be that a deal can be eventually be reached to replace the sequester and stop these furloughs and even just basic governing in terms of preventing a government shutdown?
Leader Pelosi. Well, my own hope springs from the American people. I think the more they know about what the choices are that have to be made here, the clearer it will be to our Republican colleagues that we cannot have a situation where no, as these absolute statements, no revenue, it’s all going to be cuts. Keep in mind that we had $1.6 trillion already in cuts, $1.2 in the Budget Control Act, another $400 billion in different legislation that was passed in the last Congress. So, my hope also springs that, from the fact that we should be able to focus on the tax expenditures. Big money there. Big money there and we cannot have a situation where one party is saying we’re going to protect those wasteful tax giveaways to special interest, but we’re going to stop Meals on Wheels for seniors.
I don’t think the American people will tolerate that.
Q: Do you think that it’s likely any kind of deal can actually be reached between you all?
Leader Pelosi. Yes. Yes, I think so.
Q: What gives you that?
Leader Pelosi. I think the place that we can go is to accept – we, sir, as I say, what are the three categories? The categories are: domestic discretionary spending, we’ve already cut a lot of money from that, over a trillion dollars, as I mentioned. We've already done that. We’re always ready to find more if we can, that does not impede growth as cutting, cuts in education, infrastructure, science and innovation would impede growth – but to see if there is any wasteful spending, duplicative, obsolete, or just not, as I’ve said, a priority in light of the realities that we have in our budget. So, there may be some spending cuts we can find there.
We always are ready to strengthen Medicare and Medicaid and Social Security, as I mentioned. So, let’s go to the table to do that if our goal is to strengthen them, not if our goal is to destroy them. So, again, the more the American people are aware of what the choices, the more hopeful we can all be. But in terms of actual dollars, the sequester – the tax expenditures, they are, listen to the word: “tax expenditures,” they’re spending, there’s a recognition by the term that they are spending, we are spending money, the taxpayer’s dollars, we are spending money to give tax subsidies to Big Oil in order to drill to the tune of $38 billion in incentives for them to drill in a period of time when they will make a trillion dollars in profit, not in income, but in profit. So what incentive do they need to drill more than a trillion dollars in profit? And the list goes on.
So, I do think that there is a recognition, there’s money to be had there and that is a place where we can try to bring into focus and into balance what we’re trying to do.
Q: Leader Pelosi, the President said today that he is prepared for some tough politics within the Democratic Party over entitlement reform, are House Democrats prepared to work with him to make some deeper cuts in – so he’s saying indexing benefits, or raising eligibility age for Medicare?
Leader Pelosi. The, the – when I sent my people to the, my, our Caucus sent our representatives to the table, whether it was the Biden, whether it was Simpson-Bowles, whether it was Supercommittee, whatever it happened to be, when they went to the table they went with the confidence of our Caucus that we had shared values and that we trusted their judgment and their knowledge about what could be accomplished. Everybody knows that we, we don’t have one government rule, that there would have to be compromises. My guidance to them was to be agnostic, put it on the table, does it do the job? Does it create growth? Does it reduce the deficit? And that’s how they went to the table – open, they bumped into a wall of closed – no, no revenue. Well, you can’t do it without revenue. And that’s the point.
I think that we can persuade our Caucus that a, in a balanced, big, bold approach that has revenue, that has reform of the tax code as well as of making judgments about entitlements as we go forward, but you cannot do it in isolation. You can’t say to seniors and to other: “you’re paying the whole price and these others are getting off scot-free.”
So, it has to be balanced in it. But, no, I – the House Democratic Caucus will not be an obstacle to our reaching a big, balanced, bold agreement. And, again, we supported the President and the initiative in the summer of 2011, our Caucus stood with him. We didn’t like some of the particulars of it, but in light of what – you weigh the equity against what do you get for it? You get growth in our economy, which lifts everyone up and so, again, but you can’t do it one-sided where it just drags one side down, exalts the wealthy and the special interest and say: “see how open we are.” I’m, I’m optimistic that something can be done, but the judgment is are the Democrats ready to go to the table to recognize we need some more spending cuts, we need to prolong and sustain, in a fiscally sound way, Medicare and Social Security, we want to see some movement on the other side in terms of the, their sacred cows, which are tax breaks for the special interests, tax giveaways for special interests, and excessive deductions for the wealthiest people in our country. That’s why in the Van Hollen bill, we say: “you can take deductions, but you can’t take them to a point where they have you paying, you wealthy person paying a lower rate than the people who work in your office.”
Q: Madam Leader, you held up the Justice Department letter a minute ago, have you been informed at all about the mechanics of the sequester? How it will work? How it will play out? How people will be notified? How it will affect Congress?
Leader Pelosi. Well, this is one manifestation of it. I guess for me the saddest part of it, is because when I signed, when I signed onto the Budget Control Act which again, I didn’t like, but it was something that we had to do.
Would you happen to have that with you?
[Leader Pelosi looks to an aide for a piece of paper]
But I made sure that there were certain things that were exempted from sequester, Medicaid, well, [the list] is in my purse actually because I brought it to the White House with me. I – Nadeam you don’t have to do that anymore. Somebody else can get my purse.
Q: He’s a good Chief of Staff.
Leader Pelosi. What was the question?
Q: There are mechanics, the mechanics of how this is implemented.
Leader Pelosi. We tried to protect as much as we possibly could because it, across-the-board cuts are brutal, they’re senseless, they’re mindless, and nobody ever thought, never ever thought that, that they would happened. They’re so brutal that it’s like well, everybody will cooperate in order to make this happen, but, again, trickle down, protect special interest, the high end individuals, that was a priority more for the Republicans than to avoid these mindless cuts.
So we made some protections in the bill just in case. But the saddest thing that I heard because it means so much to all of us was that some psychiatric nurses, some psychiatric nurses who are meeting the needs of our returning vets with PTSD and they have to be furloughed. I just only heard this anecdotally from some of them, but nonetheless, wouldn’t – that’s not what the American people think is the right priority for our country.
[An aide hands a piece of paper to Leader Pelosi]
So here are some of the things that we tried to protect to alleviate for the damage that would happen – Social Security, all veterans programs, but this, what I just described to you are civilian employees, the President describes civilian employees who teach our children on our military bases when he talked about those furloughs that are hurtful, all refundable income tax credits – these would before low-income, Earned Income Tax Credit, child tax credit, to name two that are important to America’s working families. Medicare, CHIP – Children’s Health Insurance Program – food stamps, TANF, black lung, SSI, it’s just in a category of insurance, child nutrition programs, Pell Grants, and then some other initiatives. But there’s a few of the ones that we tried to protect, but the fact, and even with that, the impact on America’s working families is, is something that could have been avoided. Again, loses jobs, impedes economic growth, does not significantly – and reduce the deficit as it would otherwise be reduced. And it should have been avoided, but the fact it hasn’t been is unfortunate, but I think it highlights the fact that we must work together to get this done.
In terms of the particulars and the mechanics of all this, people will be getting their furlough notices and the rest. But you will see that unfold and it will probably be different for different agencies. One of the things that we really have to do in terms of defense, is that we have to work together to enable our defense and national security sector to be able to reprogram so that the harm that can be done to our national security can be mitigated. That doesn’t mean we don’t think that at some point we should be reducing the defense budget, but that’s more related to what is our mission? What is it’s cost? How do we do prioritize that? That’s not, this is not the way to cut the defense budget, to have a meat axe, across-the-board cut that harms our national security needlessly and I might add again, mindlessly.
Thank you all very much.