TAP Talks to Bill Richardson

Ezra Klein: The first thing I wanted to talk about was your support for a balanced budget amendment. Tell me why you think the country needs one.

Bill Richardson: We have a $9 trillion debt, and this fiscal irresponsibility is threatening not just important programs, but America's kids -- there's not going to be any funds to spend for important social programs like health care and education. My view is this: Look what happened with infrastructure, look what happened with the fact that the war has taken most of the discretionary spending -- $450 billion -- so there's no funds to repair bridges, there's no funds to deal with college loans for kids, no funds to put more into Medicaid for the states. What I would do, and if you look at this -- are you a young guy?

I'm pretty young.

You recall in the Clinton years when we took that very tough vote to balance the budget in the Congress. We won it by one vote, I was the whip, and it basically eliminated the tax on the rich -- the 2 percent at that time. That sent a signal. The budget over a two-year period got balanced. We created 20 million new jobs. We even had some extra funds to put in the Social Security trust fund. We funded a lot of domestic programs…

It seems to me that what you're saying militates for smarter spending priorities and fiscal responsibility, but not necessarily a constitutional bar on countercyclical spending. I think that's where I'm getting a little bit confused. It's never struck me as an accident that the people who pushed the balanced budget amendment in '97 and historically -- Newt Gingrich, Orin Hatch, Trent Lott -- are not people who want the government to be more free to spend on social investment and the safety net. And it seems to me that when you force any new spending to be followed by a tax increase right off the bat, you substantially limit your ability to spend on those programs. You've seen in the states, yours and the others, that as soon as the economy goes down and revenues drop, the programs that help the poor -- Medicaid and SCHIP -- are the first to get cut.

My state's in very good financial condition. This is what I'd be for: Of course you can't have a constitutional amendment to balance a budget amendment during a recession or during a war. What I would come forth with is a constitutional amendment -- and I'm not backing off, I firmly believe this -- that over several years I would take into account potential recessionary problems -- obviously you couldn't do it during a war as crazy as this one is -- that would put us on a constitutional path to balance the budgets. States balance budgets, we have to balance budgets -- governors -- or we're impeached. We have line item veto authority, why shouldn't the president?

I guess that's what I wanted you to answer. Doesn't that create negative outcomes in the states? Don't we always see that when revenues go down in a recession, they have less flexibility to increase spending to handle with the crush of individuals who need subsidies and government programs? When I survey social programs across the country, it looks to me like any social program administered by the state rather than the federal government gets shredded during a recession. And so you're saying that during recessions, your amendment would have an out.

You don't do it when there's a national recession or a war. I've always had that position. I voted for the balanced budget, and I don't recall it being by Hatch. There were Democrats for it, too.

Hatch was the author.

There were some prominent Democrats for it too, as I recall. I can't remember because it was in the '90s. So what I'm saying is we're $9 trillion in debt, there's no money for education, Medicaid is getting cut, there's not even money for children's insurance because this guy is spending so freely that he's eliminated discretionary spending, he's jeopardized -- because of his priorities in the military -- Social Security and Medicare.

What I would do is -- look, I'm a pro-growth Democrat, I'd try to stimulate the economy, grow the economy. Invest in renewable energy, invest in biomedical. I am pro-growth, and I'd use the tax code to incentive business. I think we need to go green, and the way to do that is invest in green buildings and green vehicles and solar manufacturing and shifting the country away from fossil fuels. But on the balanced budget. I have to do it as a governor, and my economy is in good shape. So I just believe that fiscal discipline -- when you have a balanced a budget you get good results. You get enough funds for domestic programs because your economy is moving in the right direction. But yeah, you gotta have enough safeguards so if the country all of sudden is in a recession or in a war the balanced budget restrictions and mandates are flexible.

You said something there that I've heard you say before, that I've always wanted to ask you about -- you said you're a pro-growth Democrat. Can you name some anti-growth Democrats for me?

No, I'm not going to do that. But I know some.

But you use that term frequently, and I'm always curious what you're actually contrasting yourself to. What part of the party, or what strain of economic thinking, do you count as anti-growth?

I'm not going to specify. I just believe that it's important that we not preclude options to incentive the economy in the right way -- to give tax cuts to the middle class, to give incentives to renewable energy companies to make them grow. I'm not for the Bush tax cuts, I'm not for the 2 percent.

Do you think it's possible we need to raise taxes in this country?

Well, you would raise taxes by getting rid of the Bush tax cuts, and I'm for that, but I'd replace them with tax cuts for the middle class. I'd have a tax cut for entities that pay over the prevailing wage, that treat their employees well, that let their employees join unions, that create a green economy. I'm for using the tax code to incentivize. The key is tax fairness.

Do you believe the total level of revenues right now is sufficient for what you want to do? You feel that we have a base level of funding right now coming into the government that is sufficient for what you want to do?

No. Obviously, no. But I would have some middle-class tax cuts. So you'd have more revenue. You'd also have more revenue with the $450 billion from the war. You'd have more revenue -- I said this at YearlyKos -- if you got rid of congressional earmarks.

I wanted to talk with you for a few minutes about health care. Do you want to give a capsule description of your plan?

It's the following principles. One: everyone's covered, no matter who you are -- universal health care. Two --

Through a mandate, correct?

Yes. Everybody shares through the mandate. Two: no new bureaucracies. Three: Everybody who has a health-care plan and is satisfied with it can keep it. In other words: Choice. Then you deal with three areas: cost, coverage, and care. This is what I would do: First you allow everybody to participate in the congressional plan. Anyone can participate in it to get health care. Number two: Medicare is reduced to 55 and over, today it's 65 and over. Three: You get a hero's health card if you're a veteran, and you can get care outside the VA system, but you also help the VA system. You also have basically a sharing of responsibility between the state and the federal government and that is that the state assumes more of the SCHIP programs, the kids programs and working families, and the federal government assumes more of Medicare, prescription drugs, and the disabled.

Why do you want to further put SCHIP under the control of the states?

Because they can run it more efficiently. We already have bureaucracies that do it and states will deal with the shortfall better than the federal government. I'm not saying you terminate the federal funding for Medicaid, but when states have extra revenues they generally put it in Medicaid and I think the states are better in terms of keeping the program strong than the federal government.

I would also expand Medicaid for low-income people, and obviously the SCHIP program, which Bush is threatening to veto. And then you have what is called a sliding scale tax credit that basically, for those individuals and businesses that can't afford health care, they get the sliding tax credit. But that's cash, that's money up front, it's not like a tax credit, it's like a financial voucher to help you pay for health care. Then you focus on how do you get rid of the 31 percent that is administration and overhead and HMO fat and insurance rip-offs. Thirty-one percent of the 2.2 trillion in our health care system is administration and overhead. So what you do with that is number one, you shift that 31 percent to direct care by doing the following: by requiring insurance companies to pay 85 percent to direct care rather than what they generally do, [which] is keep most of it for administration and overhead. Secondly, you force Medicare to negotiate over prescription drugs, which it can't do today. And then you gotta have a very aggressive program on prevention and do some of the things like what I've done in New Mexico, like get rid of junk food in schools, have healthy breakfasts for every kid, mandate phys ed, increase immunizations, do more research in cancer, in autism, in Alzheimer's, do stem cell research, fund efforts to find cures to diabetes, and focus more on wellness than we do. I think it would take a year to pass in this Congress and, with a good Congress, three, four years to implement.

Why haven't you opened Medicare to all or created a public insurance program?

Medicare for All is single-payer. I'm not ready to accept it yet. I want to be convinced that government will run it efficiently. That's my concern. Then you're also forcing people -- there are a lot of people that are satisfied with their health-care plan -- they may not think it’s efficient, they may feel it's underinsured. I just don't want to force people into being part of a Medicare system they don't want to be.

I'm not saying one should abolish private insurance. Why don't you let anyone buy into Medicare? Why don't you allow them to choose to use public insurance?

I'm allowing 55, today it's 65 and over, so I'm saying it's from 55 and up, so you're increasing the number of people that can buy into it.

The second thing you said was that it would pass Congress in a year. You were in Congress in '93 and '94. What do you think, what are the lessons of it for you? What is in the back of your mind that you will do differently, that will make your plan successful?

Let me start by saying that I was for the Clinton plan then, and I pushed very hard for it. What you need is to craft a very, very achievable plan, to get enough of a coalition to support it. And by that I mean Democrats and some moderate Republicans backed by a huge public interest lobby that is willing to fight the HMOs and the health-care industry. You've gotta build a coalition, and what I think is key is you gotta give people choice. Medicare for all would have zero chance of passing. And I'm a realist, and I'm a doer. I used to be the deputy whip in the House. You have to push what's achievable, and I believe I can get it done. I'm a negotiator, I would personally get engaged in negotiations with Congress to do this, and you gotta build a coalition.

I think the Clintons had a good plan, but it was just too complicated. Remember this guy Ira Magaziner, brilliant guy, who conceived of the plan, and he came to the Congress -- I remember putting a group together for him -- and he started talking about poll gates. And then you remember the Harry and Louise ads where they depicted all the bureaucracy and all the poll gates you had to get through to get it done ... so the simpler the better. Now that's one area where single-payer interests me. It's simple, the administrative costs are about 3 percent. My big concern is whether the government can run it efficiently having seen how bureaucracies run health care as a governor. That's my big hang-up. If I can be convinced, I might support it.

Do you think that the private sector has shown itself able to run health care efficiently?

No, no, not all, no. In fact, no, the amount they take in overhead. No, they've bureaucratized as much as the government. They're padding their wallets with not spending enough on direct care, and I'm really concerned the HMOs have blocked the traditional doctor-patient relationship. By all means, no.

I really appreciate you taking all the time today.

Did you get enough on the balanced budget? I want to be sure you understand my thinking. That I am for it, I think we should have it, but you've gotta be realistic, you gotta space it out, you can't do it during a recession, but I firmly believe you get more for social programs with a balanced budget than you do without it. All right?

Sure, thank you very much.

Click here to read Ezra Klein's take on his conversation with Richardson.

Thanks to Sam Boyd for help with transcription.

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