AUTHOR: Fiscal Future, Site Administrator
Jan 10, 2011

TRANSCRIPT
Are the Debt Reduction Stars Aligned?
A Look at the Washington Horizon
November 30, 2010

Jenna Dorn: Good morning everyone. Welcome to the National Academy. I’m Jenna Dorn President and CEO of the National Academy of Public Administration. Welcome and thank you for joining us today for what is sure to be a provocative and fascinating discussion, and certainly a timely one, about the mood in Washington and the prospects for addressing one of our Nation’s most critical issues, America’s fiscal future.

The National Academy is please to host this important discussion on the eve of the release of the report of the President’s Commission on Fiscal Responsibility and Reform, which is due tomorrow. As an organization, we have been involved for a number of years, beginning in 2005 in real earnest in drawing attention to this issue, and have been privileged to work with public agenda on a number of initiatives, the MacArthur Foundation, and other highly-regarded organizations in identifying potential solutions that span the ideological perspective.

Indeed this morning’s event has been made possible by the support of the MacArthur Foundation. Our moderator this morning will be Martha Joynt Kumar. She’s the second lady in red. And she is a Professor of Political Science at Towson University and the author and co-author of several books on the media and the presidency, including the classic Portraying the President, the White House and the Media.

And indeed Martha is an institutional presence in the White House, known to all in the Press Corps and all of the inhabitants. She knows more — I would venture to guess, about the White House and their traditions, and their data than anyone in this town. Martha will be moderating our session this morning.

Ruth Wooden to her left, also in red, is the President of Public Agenda. It is a nonpartisan, non-profit organization devoted to innovative public opinion research and public engagement. A former President of the Advertising Council, Ruth currently serves as chair of the Board of Civic Ventures and is a member of the Boards of Research America, Teacher’s Count, Independent Sector and Demos, all good government, good not-for-profit let’s make a better America organization.

Ruth also served as a member of the Joint National Academy of Public Administration and National Academy of Sciences Committee on the Nation’s fiscal future, which was released about a year ago. Before joining our other panelists for the discussion, Ruth will be presenting the findings of a recent public agenda pole of DC insiders regarding their views on the national debt and deficit. We were privileged to host a similar session in the first of the benchmark study, and pole in the Spring, and so it will be interesting to see the movement when asked the same questions but on the public.

Also on our panel to our — the far –well, towards the window, so I won’t say toward the far right.

William Hoagland: With the red tie.

Jenna Dorn: With the red tie, I’m so sorry. Bill, you did not get the memo, I’m sorry, you cannot be on this panel.

William Hoagland: I wanted to be more hopeful. It’s very hard, though.

Jenna Dorn: Please don’t say that, we are hopeful. We’re looking to you for that hope. William Hoagland, Bill, Vice President of Public Policy of CIGNA, a global health services company. He’s also a Fellow of the National Academy as Martha is, and has served as the Director of Budget and Appropriations in the Office of the Senate Majority Leader.

For more than two decades, Bill was on the staff of the U.S. Senate Budget Committee serving as Staff Director from 1986 to 2003. He also served in the Executive Branch as the Administrator of the Department of Agriculture’s Food and Nutrition Service, and was the senior member of the Congressional Budget Office. Bill was a member of the Pew Peterson Committee on Budget Reform, which recently gave its report.

Finally, please welcome the man with the red tie, no, the man with not the red tie, Norm Ornstein. Norm is a long time expert candid, witty observer of Congress and politics. He writes a weekly column for Role Call and is an election analyst for CBS News. He serves as co-director of the AEI Berkings Election Reform Project and participates in AEI’s election watch series. He also serves as a senior counselor to the Continuity of Government Commission.

His many books include The Permanent Campaign and its Future and The Broken Branch. You’re going to be hopeful? The Broken Branch, how Congress is Failing America and How to Get it Back on Track, I get it. That’s great. We are so fortunate to have all of you today. I know that we’re looking forward to the conversation. Ruth, will you set the stage for our discussion?

Ruth Wooden: I will do that. Thank you Jenna, and thanks to NAPA for hosting this, this morning. The analysis I’m going to share with you today looks at the insider elite opinion here, what is finally referred to as “inside the beltway”. And it’s trying to look at how this particular audience answers the question about whether or not the stars are aligned on moving forward on debt reduction.

The research goals ask a set of questions always. So how does this group really see the problem of the growing National Debt? How concerned are they? Do they see probably solutions? Bill Hoagland is going to talk about some of the recommendations that have been put on the table, so you’ll hear more about the variation or the variety of solutions that have been posited out there. Then we turn to the political atmosphere. We have some thoughts here about partisan politics, but you’re going to hear a lot more about that from Norm.

As Jenna said, this is the second poll that we have done at Public Agenda with this audience, so you’re going to look over time and see you know what’s happened to this issue over time, and then I’m going to offer some thoughts about how the public sees this issue relative to the inside game. So this is a few questions about — a few statements about we did in the survey; we did a first run in February, March. And we use what’s known in the field as the Harris Beltway Influencers Omnibus. It’s really about the only game in town to interview this very tough audience.

It includes, as you’ll see later congressional aides. So they’re very hard to reach. So we use this existing mechanism and they go into the field twice every year. So we joined that Omnibus in February and then again as you see here in September and October, which as you all know was in the middle of a very contentious election season. We also this Fall added some questions to one of the public omnibuses, so I can give you some feel for what the Princeton Survey Research Associates had to say roughly at the same time.

And just so you know, we will be replaying the entire battery of the Influencer Survey, again in February. So we’ll have a full year, three data points over time, and that will obviously take in whatever happens between the election and February, probably right around the time that the President’s budget is put forth.

So these are some just quick points, methodological points that researchers want to make sure you understand before I tell you what the findings are. Influencers, the sample that Harris uses is a split sample of 150 we call them leaders, if this were a baseball games, these would be the players and the managers, and then 150 elites, and these are the devoted fans who kind of control the atmosphere out there. These are primarily people here in DC who are following public issues very closely. The sample of the public was 1,000, and then as I said the replay happened, you know in the middle of the election, and you can see the quick margin there.

So what is the quick take away of what we saw in this iteration of the pole? First and ongoing, this is not a surprise. Nothing changed very much, because the influencers continue to say that the budget is on a — thank you — an unsustainable path. And they worry about the long term implications. It’s still high, but you’ll see later that it’s not the on-fire issue yet among this group. We do see a significant urgency gap between Republicans and Democrats on the National Debt.

And this is really a gap between the importance of this issue and the importance of the economic issue, that’s — it’s an urgency gap about what’s the most important problem out there. And we also see a potentially widening gap just since the first survey in February, on the outlooks for prospects for possible solutions. It will be interesting to note, because this is a difference between the people who are the inside baseball players and the fans they listen to; so there’s something that’s going on there among the people who sort of work at the ground level.

And we’ll take now a look at these sort of generalized findings in more detail. Not surprisingly, many things did stay the same. It’s only a six-month period. High majorities agree that the economy is going to suffer if we don’t get this under control, but really only one in ten, a small number really see this as the number one problem. And you’ll see later — am I doing that not again. I’m sorry. Oh, there we are.

Thank you.

One in ten name it as the biggest problem and as you’ll see later, those all have to be Republicans. I mean it’s — it’s definitely not a Democratic issue in terms of the most important problem. I always like to ask this group what do you talk about. You know after work with people you work with et cetera, and this is not the topic that this group talks about. This is not the one, they don’t really advocate, it’s not the problem they own themselves. And that’s you know kind of a good surrogate for you know the level of saliency that they hold with this.

And while they’re more likely — but they are more likely to say the practical approaches exist today to solving this problem. You can see movement here since the first survey, and I would argue that what you’re seeing here is the result of a lot of reports that have come out, not the least of which is the report of the Committee on Choosing the Nation’s Fiscal Future, the Pew Peterson Commission Report, there’s been a lot studies that have come out. So that’s probably what you see here.

But there is a growing gap that’s questioning whether solutions are politically possible. And this is a really interesting finding. Because what you see here is a difference inside this influential group. The people who work in government, the people who report on government are more likely….that there are — they strongly agree that there are pragmatic solutions, but then the elites are less positive.

So one of the questions, I think Bill Hoagland might want to talk about is do the insiders have a more positive sense that they can come to a solution here, politically, maybe because they anticipate a divided government which has to work harder at solutions, but that’s a hypothesis.

But what this gap does is it pre — previews the really big gap, which is the partisan gap. There’s a lot of numbers on this chart, but we put in blue the difference here, just to highlight exactly how big the partisan gap is. You look at the various statements, I’ll just pick the first one, say it’s very important to consider the Federal Budget whenever you’re making policy decisions. You’ve got more than a 52 point gap between Republicans and Democrats here.

Look at the bottom one, disagree that both cutting spending and raising taxes are necessary to reduce the debt. 50% of Republicans in this sample disagree with that statement. There was a survey done of voters after the election. It’s called the Pem Shone Berlin Post Election Survey of Voters, people who voted in this mid term election, and they asked them whether they could reduce the debt by spending cuts only, or a combo. And the combo number of Republicans, among Republican voters was only 20%. 76% believed it could be brought under control just by spending cuts. And the corresponding numbers for the Democrats are 41% who say just spending cuts, and 49% say some combination.

So the partisan divide in the influencer group is really mirrored by voters. You’ll see later that it’s mirrored but not quite so strongly among the general public, but among voters in this election, it’s very strongly partisan.

So here is a look at what I refer to as the urgency gap. What are the biggest problems in this country? And you can see in the difference between the economy and the deficit, the Republicans you know were pretty much the same; you know 33% to 27% in terms of the periods. But the Democrats had a huge decline in the rating of the deficit and a significant increase in the economy as the driver. And this is what it looks like over time. You know they started out pretty close, but the gap has really widened here, between the view of the economy being the most important problem facing the country, and then correspondingly the National Debt as the priority.

So you’re looking at a partisan divide that’s really about what’s the problem that has to be solved, and probably most likely related to the problem of getting the economy growing, you know the Republicans looking at cutting debt as a driver for economic growth, and the partisan side of the Democrats looking at you know stimulating the economy through whatever way, whether it’s jobs or stimulus or whatever.

Turning to public attitudes that we gauged; the public shares this influencer’s concern on the debt. I always urge you, when you’re talking particularly about the public to look at the people who say strongly agree, that’s usually the best indicator. If you put it all together, it’s kind of mush, but if you got more than half of the public in this survey saying if we don’t act to get the debt under control, it will overwhelm the budget and damage the economy. It’s pretty much — it’s akin to what we saw with leaders and elites.

There’s another question about China and whether they would lose confidence; again, pretty similar to leaders and elites, not as strong as this concern about damaging the long term economy.

An interesting question, you know you frequently hear in the course among politicians and political junkies that, oh, the public just doesn’t care enough. You know if they only knew they would be worried. And there’s a certain percentage of the leaders and the elites who say that, but the public is just as likely, or more likely to say that people generally — more Americans are not worried about this issue.

Let’s look at the partisan split inside the general public. And again, you know the difference — the column in blue is pretty striking. It’s not quite as striking as the influencer group, but it’s still pretty pronounced. When you see those kinds of gaps, it’s worth taking note. There’s clearly deeply held.

Again, I’m going to just make a note about what we heard from the voters to contrast this. Only 20% of the voters — only 20% of the Republican voters felt that you needed a combination of spending and revenue cuts — or revenue increases to balance the budget.

So you’ve got an urgency gap about what the problem is between Republicans and Democrats, and you have a mirror in the public of this partisan divide. You see some changes, there might be some hopeful signs about prospects for solutions among the inside baseball crowd who has to work on this issue. But I think there are some questions here that have to be addressed by my colleagues on the Panel about the opportunity to move forward here.

So what might be driving that potential gap between the opinion elites, you know what I would call the devoted fans and the crowd out there that seem to influence and the people who have to work on this inside the leaders as to prospects for pragmatic solutions do leaders, I’ve made my hypothesis, but I’m sure Norm has much more to say about this, might be that they have some sense the divided government is going to maybe force the hand to act. And while both Democrats and Republicans see the National Debt as a problem, the urgency gap is significant in how they define the basic problem.

So how does that affect the chances for change? And I would argue that the question to be dealt with is, the way these parties are looking at the balance between spending cuts and revenue changes, that that seems to be a really crucial issue here in terms of how the divide, the partisan divide actually might play out in terms of ultimate policy.

So I’ll stop there and I’ll turn it back over to Martha, and we’ll go from there.

All: Thank you very much.

Martha Kumar: Yes, thank you Ruth, that’s a very interesting study and it’s good to see that even though the major differences there are, that everybody understands that there’s a big issue, which is –

Ruth Wooden: That’s the first point.

Martha Kumar: Yes, so at least that’s a starting point. Bill, can you give us a round up of — because there’s so many groups out there that have had — had ideas on this from the National Commission on Fiscal Responsibility to a lot of private groups and then also individuals who have had their own plans. So can you kind of pull those together for us, and give us some idea of where they come together, where there are any points that are shared by all of them?

William Hoagland: Thank you Martha. First of all, let me congratulate the Academy for holding this discussion. As I look around the room here, a number of us who have labored in these vineyards over the years I see have — this is really not new in some ways. In fact, my first — my first job at the Congressional Budget office was to write a report for Alice Rivlin in 1977 about the risk associated in the year 2000 with an aging population, and since nothing has changed in that regard, it seems to me, we’ve had a lot of reports, we’ve had a lot of studies that now are coming out right now.

I guess I would say that — I would be remiss if I did not congratulate the Academy on this study that Steve and others worked on this, and in fact let me use that as a starting point. Because one of the things that I’ve noticed here is that the focus of this report and others was to set a goal of reaching a target which was 60% of GDP, I believe Steve by 2018. And then when the two Pew Commission reports came out, one about a year ago, Rising Red Tape and then the most recent one, again it set a goal of reaching 60% of GDP.

I want to make this as my first point is that from my perspective this is unique that we had kind of changed the benchmark for us who labored for so many years to get to a balanced budget. It’s not a balanced budget per se, it’s this 60% of GDP goal, which I would think for the people outside the Beltway, and even inside the Beltway, this is a little bit more of a difficult sell, what does that mean?

And then to add to the confusion here is that the goals set by the President’s Commission is not to get to balance, but to get to balance for the primary budget, which means you exclude interest; and another kind of strange concept. It’s everything shifted a little bit away.

Having said that, let me then move to I did work on the two Pew reports with Barry and others here, and I think they’re important reports but they really focus on the process, not the substantive policies necessary to get to meeting that goal, they set a process in place. And I think process is important.

But we’ve had, I guess my experience for the years on the Hill was process while important, cannot substitute for the hard decisions you have to make to reach those particular goals. We went through [0:24:54] as an example, it was a process. It failed after a while, simply because the process — I’m not suggesting that what has been put out by the Pew Commission won’t work. I certainly think it has the benefit, but you have to move on to then filling in the details if you like.

And in that regard, I can only go to the two studies — or two kinds of major proposals that are out there that as you say the co-chairman of the President’s Commission, Mr. Bowles and Mr. Simpson of course, put out what I would refer to in the old days, a Chairman’s Mark. That could be changing today, it will be voted on I guess tomorrow, but I think that’s our basis of comparison, I want to make it [0:25:41].

And then I also, I have [0:25:46] I’m going to have to send him a bill for the time we spent on this stuff, but the other one is that I not only worked on those reports, but once you work for a United States Senator, you work for him for life, and so I was on the bipartisan policy — bipartisan policy [0:26:06] right, the Domenici Rivlin Task Force that came out a couple of weeks ago with their report.

And that was made up of about 19, I was thinking as you were discussing this, Ruth, that there’s influencers, there’s elites and there’s has-beens. Those has-beens, a number of mayors and former congressmen, former senators, and former staff on that and non-elected officials of course which makes a big difference here, and they were able to get a consensus for the report.

So what are the major elements of those? Well, the first thing is to note that all of these proposals do not really kick in until the year 2012. There is still a recognitionable weakness of the economy here, but also and this will be the tough part is that it’s recognition that it takes a while to implement it and to enact the kind of legislation and so you’d have to have the first session of the 112 Congress to deal with all these. So all this kicks in 2012.

Except for one exception. And the one exception is that the Domenici Rivlin plan has a one-year payroll tax holiday as a form of putting money into the paychecks of the workers out there and then everything kicks in, in 2012. Now, what are the similarities?

Well, the first one is the usual one, freeze, freeze everything on the domestic side of the budget which makes up about the people in this room that know about it, oh about 18%, 19%. And you freeze it for four to five years, and both what the President’s co-chairs are talking about and what Domenici Rivlin talked about.

Now, I’ve been through freezes before, we got the President’s freeze yesterday on pay for two years. My problem — not problem, I mean it’s recognized as an issue, but the issue here is that it’s easy to say freeze, but then when you think about domestic discretionary budget, that is primarily what I think the average American thinks of when they think of as Federal government, TSA, the FBI, the DEA, you know the acronym list goes on, the National Institutes of Health, Transportation, Education. That is hard.

A freeze is hard for five years, four years, but that’s in all these plans and I sense that that’s probably the consensus [0:28:48]. It does mean that within that aggregate level, there will be some winners and there will be some losers, and some that would have programs that would just have to be eliminated. That’s on the domestic side.

The second thing both of these — most of these plans are doing is on the defense. They all freeze defense spending for four to five years and they allow for the phase down of our troops from 200,000 to 30,000 in Iraq and Afghanistan, and I find everything in this [0:29:21] as Norm knows is timing, I find this is going to be a hard discussion with the [0:29:27] and the rambling that’s going on in the Korean peninsula right now. You’re talking about freezes in defense. But that’s in all of these plans.

Healthcare; first of all, nobody is talking repealing the Healthcare Bill; people are talking about modifying the Healthcare Bill. And here is where things really start to get tough. In terms of the Domenici Rivlin proposal, the first major proposal, the major piece of this is to — something a lot of us policy [0:29:59] believe is important and that is to — though my current employer probably would not agree, is to do away with the employer-sponsored health insurance as an attached exclusion. To not — to do that — remember the great discussion about the Cadillac tax and they dropped that when it comes in, and start to phase out over time, it’s a big one. It’s an important one; I think from a policy perspective, it’s a good proposal.

To reduce Medicare reimbursement rates, but the big difference here is that the Domenici Rivlin plan would essentially change Medicare from a defined benefit plan to a defined contribution plan, and then essentially cap that going forward at GDP per population plus one. Interesting, it gets into the weeds here a little as an old budget analyst, when you look at the President’s guys are talking about, they’re talking about kind of a cap at the rate of growth of GDP, not adjusted for population, and I can tell you it makes a big difference whether you’re adjusting for population going forward.

The other point I guess I would make is on Social Security, all of them put Social Security on the table. The big difference is in most plans is whether or not you go after the retirement age, whether you further raise the retirement age, and clearly the co-chairman’s proposal from President’s two co-chairs, they are talking about raising the retirement age, I guess to — from 67 to 68 in the year 2050, and to 69 in the year 2075, modifications to the payroll, to raise that current exclusion, current capped at $108,000, move that up to $180,000 over a 38-year period.

The — as a part of the Domenici Task Force, Domenici Rivlin Task Force, I have to tell you this was a major discussion, and we ended up not changing the retirement age, but adjusting benefits once you reach retirement age for retirement age at 67, for longevity, a slight reduction of the benefits going forward.

And then finally, so there are similarities here. Then taxes, I think the one consistent theme I see through all these proposals is we have to reform the Tax Code, eliminate deductions, some of them very controversial. Eliminate credits and what we refer to as tax expenditures in the budget, just wipe them out. And wiping them out by a trillion dollars on an annual basis in total is substituted for by, if you like; the selling point is to reduce the number from six brackets down to two.

Similar — there’s a lot of similarities involved with these. Reduce the corporate tax rate down to 27% to make it consistent with OECD across the board and then the real kicker in the Domenici Rivlin Commission’s Report was we could not hit, after doing all of that, we could not get to 60% of GDP by the year 2020.

Yes, so it has a 6.5% — a lot of guys would like me to say this is a deficient reduction tax, a national sales tax phased in, only could we get to 60% with additional revenues after doing all that.

So in summary the — I think that all the major proposals and this will be inconsistent with some of your material out there, is that we try to reach a balance. You cannot do this just on the [0:34:26] side, you can’t do this just on the tax side. You can’t grow yourself out of — so it has to be balanced. And so my rough calculation is that what the two chairmen have put out is about 70% of their getting to their goal, was on the spending side, and 30% was on the tax side; whereas in the other major proposal, the ones that are again non-elected officials and has-beens where we had about 55%, 45% in terms of our spread.

And let me just conclude by saying it’s all math. Those of us in this room that have been through this so many times, you can do it on paper. That’s not the issue. The issue could [0:35:12]. But there is — there’s an equation here, as like I think there’s a time [0:35:18] put out last week in one of those articles, Kline, the math is, the equation is 218 plus 60 plus one. 218 the number in the House of Representatives necessary to pass legislation, 60 of the United State Senators to overcome a filibuster and one to have the President’s signature. That’s the real math is here, not so much what I just went through with all these [0:35:47].

Martha Kumar: Thank you very much, Bill, it’s very — very useful. Norm, can you tell us about the politics of all of this over the past — past few sessions of Congress and also with the President?

Norm Ornstein: I can Martha. And let me say I try — I’m trying very hard to be optimistic. But it’s hard, and it’s especially hard because as you listen to Bill, you realize that if we had a fully functional political system, operating at peak capacity, looking back over our history, this would be excruciatingly difficult to do, and made more difficult, because you’re not just talking about this long-term plan to reduce deficits to a manageable level. You’re also talking about doing something in the short run to make sure that we don’t slip into deflation and depression. And the risk, I believe, is still considerably greater than the larger buzz or the elite group that Ruth has surveyed, understand or feel; particularly, given the weakness and the fragility in Europe.

So how do you accelerate a package of stimuli, and then break dramatically to make sure that you don’t go off a cliff further down the road? In the past, I’ve likened it to Evil Kinevil having to go to 200 miles an hour to cross the Grand Canyon, but then just a few hundred yards beyond is the Snake River Canyon, and you’ve got to brake pretty dramatically there. That’s in a fully functional political system.

I’ve been in Washington for a little more than 41 years now, and I would say flatly that it has not been as dysfunctional in the past as it is now, and as it has been for the last couple of years. And the absurdity of that dysfunction in very related ways came through in two events or two dynamics of the last two years.

The first and they rival in terms of their absurdity, I believe, was when the Healthcare — Health Reform Package came up and in their zeal to make sure that it could not pass, Republicans drew a line and said we’re going to protect every dime of Medicare spending from now into perpetuity.

And that continued, just before the election, John Boehner came over to my institution to give a speech which was a very thoughtful and reasonable speech about how both parties had made big mistakes in running the House over the last decade, and some changes that needed to be made to bring transparency and fairness there. And then we got to the question period, the second question was about health reform, and he said we’re going to kill it dead. And one of the first things that we pledge to do, is to eliminate those 555 billion dollars in Medicare cuts that are part of the health reform package.

Well, you know I sat and listened to him and one of the things that struck me immediately was whatever happened to the Republican complaints during the Reagan years when Democrats talked about cuts, and they said none of these are cuts, they are reductions in future growth. Well, that distinction is lost now.

But the second is, how are you ever going to grapple with deficits in debt if you start by taking Medicare off the table? The second, of course, was the absurdity of seven original co-sponsors of the Comrade and Gregg Deficit Commission which of course had at least theoretically more teeth than the President’s Commission voting against their own Bill on the floor, John McCain not only voting against the Bill he had originally co-sponsored, but saying that he would never serve on such a Commission if it were created, because it might raise taxes as part of a package.

So that tells you something about a mindset that is so focused on making sure that the other side doesn’t get a victory, that all these principals that are articulated here go right out the window. Now this is a dysfunction that weeds across to both parties.

And of course the third absurdity is that the most responsible fiscal plan from the two parties, is one that would increase the hole we’re in by three trillion dollar over ten years, and that’s the Democrats insistence on making permanent all the tax cuts for those below $250,000, as opposed to a four trillion dollar hole before we even begin to dig out from the nearly impossible problems that we have otherwise.

Now, let me talk for a minute about another gap that Ruth had mentioned that is one of the most interesting political ones out there now in the public. We have seen surveys that have asked people whether they now believe that the people we’ve elected to come to Washington ought to compromise and work together to solve the problems of the country, and a very healthy majority of Americans say yes.

Parse it out and it’s about two to one Democrats and Independents who say yes. What we were saying in this election, and it’s the same thing that they said in 2006 and 2008, throw the ins out, bring the outs in, because Washington is broken, they’re not working together to solve the problems. And this time it was a different set of ins, but an almost equivalent number of Republicans say no, we didn’t elect them to compromise. We elected them to stand on principal. And I suspect if you parse that out further into those who are most likely to vote in primaries, that the numbers would be more like 90 / 10. And that means you have a continuing centrifugal force. I will guarantee you that every Republican Senator up in 2012, there are only 10 of them, but those 10 make the difference between getting to 60 and not.

Look, our thinking every day about what happened to Bob Bennett and what happened before that to Arlen Spector that caused him to leave his party, not because he came to a revelation on the road to Damascus, but because he knew he couldn’t possibly win a nomination on the Republican side. It turns out he couldn’t on the Democratic side either. And Lisa Murkowski who may survive, but none of the 10 who are up in 2012 have a write-in law that is as generous as Alaska’s happens to be, or want to go through that process in any event. And so it’s hard to look at this and believe that we will be able to work through that dysfunction.

Now, I think there’s another factor here, and it’s another set of public opinion data that we should talk about, which is that even for those people who believe that this is the most serious problem facing the country and we’ve got to deal with it, and even for those who believe that we’ve got to deal with it on the spending side, basically I think you have a group of people who are so disdainful of Washington, believe that all of the idiots that we’ve elected have so messed things up that in fact all you need to do is get rid of the waste, fraud and abuse.

None of us will be touched by it, and those deficits will melt away. Because when you ask people whether we should deal with this by touching Medicare, or touching Social Security, or touching defense, you get healthy majorities who say no, that’s not what we mean by cutting spending.

Now a part of that interesting dynamic, getting back to the compromise gap that I talked about is that what drove Republicans to their great victory in November was much more a group of older voters and the decline in participation compared to 2008 among younger voters. Those older voters want change. They want those spending cuts. Start to turn to Medicare and Social Security and they’re going to be the first ones to say that’s not what we meant by change.

And of course those older voters are among the strongest opponents of the health reform package that passed, because their attitude was we’ve got ours, you want to take something away from us so that they can get theirs, never mind that. So all of that leads one to be less than optimistic about the future here and the last couple of days have not helped any.

I saw that you know the President is, even as we speak, getting ready to meet with the Joint Congressional Leadership and then presumably to have the once postponed for no particularly good reason, other than that Mitch McConnell wanted to speak to the Federalist Society Dinner in the family quarters with the Republican leaders. And Eric Cantor, the soon to be majority leader, said about the meeting this morning with the Joint Leadership, well — he didn’t say, you know they’ve got some ideas, we’ve got some good ideas, let’s come to a meeting of the minds and solve the problems. It was I hope the President understands that what voters were saying is “stop it.”

Now, exactly what that means and what you stop remains to be seen. But it follows on the heels of course of Mitch McConnell’s famous statement that the number one goal — political goal is to make sure the Barrack Obama is a one-term President. I’m not going to tell you that this is a one-way street in terms of irresponsibility. Because one of the first things that I’m sure Democrats will do as we now look at Social Security, the easiest area among the big programs to deal with, because that is an erythematic problem.

The one place where I would disagree with Bill is that the Healthcare issue is much less an erythematic problem; it is as he knows far more complicated. And you can talk all you want about cutting Medicare, unless you put some sort of a cap in place, a system that is so complex as ours that is half public and half private, where you make changes in one area, and the seventh of the economy employed in this sector, who are very smart people, find ways to adjust in other areas and the balloon expands there.

It’s not easy to find ways to cut the growth of healthcare spending, but Democrats who want to recapture the majority of the House in 2012 recapture their momentum or mojo in the Senate against all odds with 23 of their own up to 10 Republicans are going to demagogue the hell out of Social Security. It worked for them in 2006, and of course at this point too, the idea that let’s deal with Social Security as a good faith way and then to turn to all of these other things is simply a non-starter.

So where then do we have any glimmer of hope? One, I do believe that these two plans have changed at least to some degree the dialogue and the framework of our discussion in a positive way, because it’s not just the freezes that are the easy way out. And frankly in most cases an unworkable way out. You can talk about freezing discretionary domestic spending, which lasts until the next hurricane, or the next oil spill, or the next disaster, and then you’ve got to start to take a chunk out of programs.

Where are you going to take them? Out of the CDC? Well, what if the next disaster is some kind of epidemic? Out of the animal and plant inspection service? Of course part of our dysfunction is, we can’t even get a sensible food safety bill through when we have millions of people or at least over a million people dying of food borne illnesses each year. Are you going to take it out of the TSA? That will last until the next terrorist attempt or attack. Are you going to take it out of the FBI? Well that’d be great for terrorism as well.

And the same with freezing defense, because we’re not only talking about the potential of a disaster on the Korean peninsula, we’ve got fragility in many places of the World, and we know that we still are spread way too thin in terms of our active armed forces, and at some point, we’re going to have to replenish the National Guard and all the equipment that’s been taken over to Iraq and Afghanistan.

There are ways of providing more discipline and defense, but when I look at the reaction in both parties to Bob Gates’ proposals, and you know who has more credibility in this area in both parties than Bob Gates? It’s not a particularly pretty picture either. But we have changed the dialogue away from, not just freezes, but a little bit away from the absurdity of a focus on earmarks which save no money, but just change who makes allocation decisions and other small, but symbolic areas.

And there is at least now, some realistic discussion of sweeping tax reform that could potentially get support from both parties. And it would be a good thing to move in the direction of major tax reform, not just reforming corporate tax rates and taking the income tax system and doing what we have tried to do before, succeeded to some degree in 1986, broaden the base and reduce rates, but maybe even moving to other taxes that would be more appropriate. I would like to see a carbon tax and perhaps and a some form of [tape skipped 0:50:37] a tax perhaps to replace the payroll tax or a good portion of it, or the income tax, and make for a better tax system.

With all of that, however, even making significant changes in the tax system, and I come back to something else that Bill said, it’s — you can get bipartisan support perhaps for eliminating the deduction or a portion of the deduction for health insurance plans, but when the Obama Administration and Congress — the Democrats in Congress try to do this in the smallest way with those Cadillac plans, not for everybody, but for the high end, they met with massive resistance and basically deluded it to the point of almost meaninglessness.

Then you’d have to take on the mortgage interest deduction. Now, it may be easier to do that now, given the housing crisis, but you’ve got to be a little bit skeptical. How we overcome a public belief that we can make these changes without creating more than very minor flesh wounds in all of us with a partisan dynamic that blinds people to the realities of the problems because it’s a War of the Roses, and you’re more intent on destroying the other side than you are in solving problems or even helping yourself; given the need as well to solve immediate problems is daunting.

And I would make one final point, and that is particularly important for an audience of those interested in public administration. Governance itself is going to grow increasingly difficult. The President’s proposal to freeze federal pay for two years was really an attempt at triage to keep much worse things from happening. But how people can navigate through an environment where we can’t even get an extension of continuing resolution for two weeks during a lame duck session, where once we do, we’re going to have trench warfare every two weeks, and people are not even — those who are trying to make programs operate, are not even going to know whether they can operate at last year’s budget levels for the course of the year, much less under a more adverse environment.

And I don’t know how anybody in any organization can operate without knowing what your budget is going to be. How can you make personnel decisions? How can you allocate? How can you operate under those conditions? I’m less worried about the problems of morale that come with a freeze in pay and then increases in health co-payments and the like, than I am about just simply the problems of trying to govern, and we’re going to have bashing of government that’s always been easy for people in politics to do, increase pretty dramatically as well. We’ve seen it of course with the TSA and the new procedures.

I thought the best cartoon of the year was one that juxtaposes somebody saying water boring, that’s like a you know a fraternity prank. What’s the big deal? And then I’ve never seen a violation like these new TSA procedures. The same people hold those views, but if that’s going to happen with the TSA, you can just imagine what will happen in Darrel Isis Committee and in other places as we look down the road.

So it’s not only going to be a difficult picture in the fiscal environment, but NAPA is going to have it’s hands full trying to make sure that we can continue to govern the country, in as we can’t solve those larger problems.

Martha Kumar: Thank you very much. I’m ever the optimist and hoping that there is some way that we can grab hold of this time period where there does seem to be more public awareness of the issue. And I wonder if you all could think a moment or two that you think would make the difference this time in really getting hold of the problem and doing something about it?

Ruth Wooden: From the public standpoint?

Martha Kumar: Well, just from any –

Ruth Wooden: Yes, so you can look at it.

Martha Kumar: You could look at it from any standpoint.

Ruth Wooden: Only one thought I wanted to add in terms of sort of public sentiment and it’s related to some work we did, you know trying to get people to look at the facts, if you will, on the fiscal future; was there — you know you put out the projections of what’s going to happen, the dire projections of what spending looks like unsustainable, et cetera. And the general sense that we saw in talking to the general public about this was they don’t believe the government’s projections. They’ve seen them be wrong so many times that they can just check out. I don’t believe that this is going to happen.

What we found, at least in this topic that would at least ground the discussion was not the trend data, with one exception. The trend data on the aging longevity issue, as one woman said, you know absent a plague that kills people over 60, this is going to happen. You know we’re going to have this big increase. But the only one that got people started you know being reasonable about coming to the middle was the pie chart of where the money goes.

You know because after you listen to everybody you know canceling the NASA program, or foreign aide or whatever, they got to look at that. I mean that is the one that decides where the money goes and can at least be a grounding for the discussion that the math doesn’t add up. And they are clueless; they’re really clueless about where the money goes. And the politicians are doing very little help inform that, you know that they — there are rather basic excuses in many of these. So anything that can demonstrate you know where the money goes, how much of it’s interest, for example.

William Hoagland: Martha, I’m usually am the one up here with the gloom and doom after hearing Norm, so let me try to see if there’s a silver lining in any of this.

Is there any way, I’ve looked at your slides, slide eight, is it possible you can put slide eight up, and while she’s doing that, just let me say I see — I see — that unfortunately, maybe this is kind of a backward way of getting to what you’re looking for. I guess that’s not the one I was looking at, but there was — you had a slide that said that the percentage who strongly agree, solutions were not possible because of powers in politics.

Ruth Wooden: That’s it.

William Hoagland: That’s it?

Ruth Wooden: That’s is, this is within the influencer group, the –

William Hoagland: Well, there’s something in that I took a silver lining out of that. Look at the leaders, as has-beens, the Norm Ornsteins and the Bill Hoaglands of the World are up there and I presume –

Ruth Wooden: Right. No, that is the one where I hypothesized that they sense that something is going to change within their work environment.

William Hoagland: And to the extent that the leaders are saying it’s possible, and then I would juxtapose on top of that a little process, we do have an issue coming, Norm mentioned the issues that are going on in Europe, I think there is — it’s not exactly comparable, but when you start to see, this will come quickly. I think most people would analyze this and say, when it hits us, it may be 18 years out, it maybe 18 months, but when it comes, it will come fast and that may be triggered by one of these little things we have to go through every so often, and that’s raising the statutory debt next Spring.

And the juxtaposition of that action along with this attitude may force, it seems to me, some form of compromise in the middle. Now my guess is, Steve mentioned it, and Mary had suggested it, it may be on what I think is kind of a cover and that’s process, not policy. But at least you have an event coming that could help with forcing some form of a movement in this area.

Ruth Wooden: We were clearly anticipating that there was going to be some changed conditions. And remember it was in the middle of an election, where they’re anticipating political change in the composition. That, to me, is one of the most interesting findings here that they’re — I don’t know whether people prefer to work in a divided government, when you’re inside the game or not, I don’t know.

Norm Ornstein: I do think — I think what explains this is that those who are involved believe that when you yoke the other party with some share of responsibility, that’s going to force them to the table, as it did in 1996. Although people have this — often have this rosy notion of what happened.

Remember 1995 was one of the nastiest and the most brutal years that we have had. You had Newt Gingrich setting himself up as the alternative President. We had investigation after investigation. Then we had a debt limit driven shut down of the government. And it was only when Newt over reached with some petulance, and the shut down of the government caused low back, that we got a different reaction.

That different reaction occurred because Newt still had enough creb with his progeny that he could go to them and say I’m a historian, it’s 40 years since we captured the majority of the House, it’s been 68 years since we won a second consecutive term, if we want to do that again, we’re going to need accomplishments, we’re going to have to work with this guy, and they went along with him.

Now, what would put me more in the camp of the red group up there is I’m not at all convinced that John Boehner has that street creb with these followers; nor that the followers believe that their goal ought to be to retain a majority in the House. Remember that a third of the Republican majority is new this year. These are freshmen who do not come in, many of them, as pragmatic politicians in any sense, or Republican partisans. They’re there on a crusade.

And so Boehner, who has already anticipated some of these things, who has talked to his troops and said we’ve got to be adults here. We have to increase the debt limit, doesn’t necessarily have people who are nodding their heads in agreement. And keep in mind as well, that when Boehner before the election anticipated the problems with extending the tax cuts, gave a talk in which he said, actually talked to reporters and said, you know I don’t want to compromise on this at all, but we don’t hold all the cards in this deck, and we’re probably going to have to compromise on taxes, extend all of them, but not all of them permanently.

And two days later, John Boehner’s other leaders, the young guns, his number two, Eric Cantor, Paul Ryan, Kevin McCarthy promoting their book which barely mentions their top leader were on the Today Show and were asked about that Boehner statement, and Eric Cantor smiled and said oh no, we would never accept a dime of tax increase at any time, at any way or in any form. So he was happy to cut the legs off from under his leader.

And you know that’s an environment that seems to me makes it exceedingly difficult to feel a little bit more optimistic, at least in the short run. I do think that some of these new members in part because they’re not beholden to their leaders, might be open to dealing in ways that they don’t believe compromise their principals, and that’s where the optimism on tax reform comes in. But in the larger sense, it’s just hard to see how even divided government now reduces that dysfunction over the next year or two.

Martha Kumar: If the public is going to be a pressure here in the way that it is not in the past, one of the things that Ruth was talking about is the lack of awareness of what the current situation is. And also they have different views and one of the Pew surveys they found that the number — percentage of people saying the government is doing too many things was 48% and the government should do more to solve problems with 43%. And you know how we’re going to be able to deal with that different view.

Plus people just don’t know where the money is going. That only 39% said in the list of Medicare interest on debt, only 39% said that most money was — of this group was on the fence. There were 15% that thought Medicare was the largest. But at the same point, the press has been doing more. There is much more of an interest in — in the issue.

In the survey that — Pew does a weekly survey of the news media, what percentage is spent on what issues? And from November 8th to 14th, when Simpson and Bowles were speaking, 15% of the news hall was on the economy and half of it was on the recommendations of Bowles and Simpson. So you’re having more of a discussion in the media, which is going to be critical for — for the public awareness. But at the same time, news organizations have not put the same kind of attention on budget reporting that they once did.

You — at one time you had a lot of reporters that spent a great deal of time following the budget, but that is — as they’ve been doing cuts, that has been one of the areas I think that has been cut. But let’s go to the — our audience here and see what questions there are.

William Hoagland: Martha, could I say before you go to the audience.

Martha Kumar: Oh sure.

William Hoagland: I hear what you say, but I have to get my blind out of the way. I still think the American public has been more interested in Mamma Grizzly and Her Dancing Cub than they have been in fiscal policy issues. And unless they read the Wall Street Journal, the Financial Times, the economists and understand the interaction here, and understand it’s the economy but they don’t — but they’re not linking the fact that the debt and deficit is the economy and influences it. Until they can see that linkage, I think we will have a problem.

Norm Ornstein: One suggestion that I would make, and I’m probably going to make it to people in the White House as well, is I think it would be very useful at this point for the President to do a Ross Perot, and that is with hand made charts, because you can actually in very understandable terms explain what the budget, what the components are, what the link is between revenues and spending, where the tough choice have to be made.

If you can put that out there and he would be the best person to do it. The second person would not be Ross Perot, maybe it’s Warren Buffett operating in a similar fashion that to start with here, we have to reduce the ignorance gap and make people realize that some of these small areas of discretionary spending have little to do with the budget. And that even within the discretionary domestic spending area, there are things that nobody in his or her right mind would want to cut and that we need to increase.

And that a significant part of it is the National Institutes of Health, the Centers for Disease Control, the TSA, the FBI, the Air Traffic Control System, a whole lot of things that are critical to keeping the economy moving, and keeping us healthy. Until you begin to realize that you’re going to have to make some sacrifices across the board and not just take it out the easy way, I don’t think we get anywhere.

Ruth Wooden: You know recently there was a column in the New York Times, David Leonard [1:08:58] it was really — he said we should be talking about economic growth here. This conversation has been on you know raising taxes or cutting, spending, but the — you know the numerator here can make a big difference, and you know for what it’s worth, whether you agree or not, when the Republicans talk about no tax increases, they do make the link to how it drives economic growth.

It doesn’t seem — that issue about economic growth seems to have slid under the table here, you know it’s clearly worrisome, listening — you know it may be very much as worrisome as you say it is in terms of slipping back, but it seems to be out of the discussion here, because it would require some kind of investment or stimulus or whatever. I don’t know what — I don’t what to say about that.

Norm Ornstein: Yes, and of course part of the problem is, and part of my frustration at the notion that we ought to be making all of these tax cuts permanent is we’ve had these tax cuts for 10 years, and look at where we are right now. It’s not as if they have exactly driven growth. There are tax changes that can drive growth, but that’s not what we’ve been talking about, and of course, they would rebel totally against the notion that what we should be doing is a stimulus.

Now, I do think one other area at least in the short run of hopefulness is I could see a bipartisan agreement on a stimulus package that would include an infrastructure bank, public, private and you take the decisions for priorities out of the hands of Congress, so you’re sort of answering earmark question along with a payroll tax holiday, you might be able to get some agreement on that. But that’s not going to do anything to solve the longer term problem.

Martha Kumar: Bill, how do you think that you can get the kind of public awareness that you were talking about, that Norm thinks that it involves Presidential leadership, is it Presidential leadership?

William Hoagland: Oh, I think it is — I think it is entirely — well, not entirely, but if the President of the United States is willing to even go so far as to risk maybe his next election, but if he’s willing to lead all these studies, all these plans, all these Commissions will go nowhere without Presidential leadership. He has to step up to the plate. And I think that’s it.

The other way he’ll get the American public’s attention unfortunately is we’ll have a crisis, we will have — it will come some day, it may be 18 months, it may be 18 years, it will come, when we cannot support this level of debt and just like Ireland, just like Greece, all of a sudden that 50% of foreign investors who purchase our debt will say “the hell with you, we’re out of here, we don’t trust you.” And then we’ve got a problem. That will get their attention.

Martha Kumar: I notice in the Pew surveys, that it was about 50% of the public wanted to see the President lead on the issue. And that was different than the earlier time periods, where in the Clinton administration; I think it was like 36%. So it was the highest of all of them. So the public too expects that. Well, now let’s go to some questions.

UF: I guess I don’t know what leadership means in this, because the [1:12:39] President [1:12:40] because as far as I can tell having a post election comments are stopped going your way, do less, you know — continuing the Democrats were complaining he wasn’t leading enough in healthcare, I mean over [1:12:52] Hillary [1:12:55], so I’m not sure what that means.

Martha Kumar: Well, the education I think that all three want to see more of an education role by the President on it.

UF: Well, are they going to believe him? You said people don’t believe government numbers, if he puts up pie charts, I’ve been putting up those kind of pie charts for 20 years, and –

Martha Kumar: The repetitiveness is what it will — [cross-talk 1:13:19].

UF: I would say in the US Today is where you need the pie charts and whatever the online stuff that people might [1:13:29]. But that’s where you — and I guess the other thing I wanted to ask more specifically is that I understand that that [1:13:37] provides a nice focus, but if you want to precipitate the crisis you could in fact play serious games with the [1:13:46], that is one thing that will affect the priority in the United States. And within the amount of debt we are rolling over every month, the ways Treasury has to usually stretch out, now buy them almost no time, so I guess the question is how can you use it without in fact triggering a problem?

William Hoagland: You know this, but I have a sense that the way this plays out a little bit in the 112 Congress is that Mr. Ryan will be Chairman of the House of Representatives. Mr. Ryan has a plan, I mean he’s been publishing it for three or four years, he will put a budget resolution together quickly that reflects that plan. The subtle point here inside the beltway as most people don’t realize is that once the House of Representatives passes that budget plan, it may not have tax increases in it or tax cuts, but once they pass that plan, then they’re automatically will be an increase in the statutory debt [1:14:57] a Bill is kicked off and sent to the Senate, it’s called the Get [1:15:01] or Haster. And once — so the House will not have to vote on debt [1:15:09] but the Senate will. And it’s at that point where I think the issue is joined in the United States Senate, where I have a [1:15:16], alumni of the Senate, I have a little bit more hope that we can see bipartisanship giving the numbers in the Senate [1:15:23].

Norm Ornstein: Well, one of the more interesting features of that and I agree with you, but Paul Ryan’s plan has a grand total of 16 Republican co-sponsors. And I’ve had some really fun conversations with Republican members of the House over the course of the last year, when we would talk about they’re being designated as the party of no and the party without ideas and almost to an individual, I would say I don’t know what people mean by that, look at Paul Ryan, he’s come up with a plan.

And I’ve said, so do you support that plan, and then they change the subject, because of course that is a serious plan, although the numbers don’t add up there either as it turns out, but it is a serious plan that understands that you’ve got to tackle Medicare, Medicaid and Social Security, and he does it in a free market fashion, but he does it in a fashion that’s so transforms those programs that it is very unlikely if they get much further that they would bring significant public support, and that’s why he doesn’t have the co-sponsors.

And none of the members of the leadership, including the young guns have co-sponsored this plan. So if Paul Ryan puts together a budget that’s based on his plan, it will be fascinating to see whether it gets the votes in the House –

William Hoagland: It’s much easier to vote on a budget resolution that has — that is not as specific as the legislative — I think he can pass a budget resolution. He may not be able to pass the underlying implementing legislation.

Norm Ornstein: Yes, but I’m very skeptical that you’re going to get a budget resolution passed this time.

William Hoagland: Out of the House?

Norm: Out of the Senate that is in any way comparable to the House.

William: And then that triggers the process [1:17:13] because then this will be the second straight year going back that we haven’t processed — the process will have collapsed.

Martha Kumar: Do you have anything? Next question. I know Tim, Tim Clark you had the –

Tim Clark: Norm, I have a question, you partly answered this, but [1:17:37] too, so here we are at the National Academy of Public Administration where we’re [1:17:46] government management and public administration.

What are people in government, and I’m thinking — well, mainly the federal government, but I know Neil Pearce is interested in state and local government too, and there are huge fiscal problems there, what are they to think about this whole debate? And how is it going to affect them, the — as we go forward, Norm did partly answer that question.

How should they be prepared for it as they do their work at senior levels in government? How should they react to what’s coming down from these commissions? Is there anything that they can do? Or are they simply passive victims, if that’s one word I might use of what looks like a very austere climate going forward?

Norm Ornstein: Tim, let me add one thing that I didn’t mention in my initial comments which is that there’s a I think an even bigger gap here. The failure of the Obama administration to get its act together on the nomination and confirmation process is going to have serious repercussions for governments over the next two years.

They finally managed to get the lion share of the top two tiers say of the political appointees in place, but they have failed miserably at moving people forward in the second two tiers. So we know what happens, the natural rhythm of these things is large numbers begin to leave after the first couple of years. And if it works well, you’ve got people at the third and fourth tiers who can move up from Deputy Assistant to the Assistant Secretary level, from the Assistant to the Associate or Deputy Secretary level, and so you don’t miss much of a beat.

Here what’s going to happen is, you’re probably going to get an accelerated pace of those leaving, because it’s going to be so nasty, and there’s nobody to move up to replace them, and can you imagine this Senate may be — we’re starting to see some Senators talk about perhaps streamlining that process, maybe now that as we look towards 2012, and both parties think they’ve got a shot at the White House, you can streamline it a little bit, but getting those nominees through is going to take a lot of time.

So if you’re a career person, you’re going to be in many cases operating in a vacuum with a lot of political pressures. The Inspectors General being pushed by ISA and others [tape skipped 1:20:26] other instances of fraud and abuse that in most cases will not be fraud and abuse, as you’re trying to run a program. And you don’t have the political leadership to be able to help you there either. And a President who is also going to turn more of his focus to the Executive Branch, that’s going to make it harder.

And actually to add one thing to what you said about the state and local level, some of these new Republicans governors coming in and they want big victories there and new state legislators coming in are going to face immense pressures, particularly since it doesn’t look like we’re going to get an extension of unemployment benefits. My guess is that plays its way all the way down to continuing pressures at the healthcare level, more people will be showing up at emergency rooms, they’re going to look to the federal government to bail them out on Medicaid, even as they’re trying to deal with the continuing problems of balancing the state budgets under their constitutional limits.

And there won’t be any money coming from their friends in Washington. And they’re going to have, and of course they’ve got state legislatures now that are going to be trying to cut even further. It’s going to be a real challenge to those state and local government employees as well, and of course you’re going to see this continuous relentless assault on public employee unions.

William Hoagland: Tim, I just want to, being a retired federal civil service retiree, and having spent 33 years in government service, I have a tremendous respect for federal employees. I am nervous and a little bit sad about the first thing you do is you go after the federal workers. And they are on the line here, but my sense is just to be very practical about it, there will be pressures here, and it’s going to put a lot — it’s going to put a premium on those career, as well as civil servants, and as managers in terms of the resources to be more productive, efficient, work with less, it’s going to really require that somehow we also attract — try to attract new blood into our civil service, both at state and local level.

And I think this is going to put a premium on good managers within the civil service system. And to work within these constrained budgets that we’re going to be dealing with. I don’t think there’s any way out of it. I have a son who works as a Wild Land Firefighter in Talus, New Mexico. And he was home for the holidays, and boy I just dropped him off at the airport this morning, and he said, “Dad, I’m not going to get a pay raise, and I’m a firefighter.” And I said, “Well, it looks that way.” He said, “Well, Congress will overturn that will they not?” “I don’t think so, Peter.” It’s tough.

And oh buy the way one small thing, Norm. In the weeds, there is a raging debate on the Healthcare Bill. It is possible employers can make the argument that Medicaid could be shifted to the exchanges –