TEXT OF INTERVIEW
The White House has made it no secret it's focus these days is getting Americans back to work. And Congress will soon put its own plan on the table. Former Labor Secretary Robert Reich is with us
this morning to talk about how it'll all play out on Capitol Hill. Good morning, Bob.
Robert Reich: Good morning, Steve.
Chiotakis: So what can we expect in a jobs bill, and when can we expect it?
Reich: Well I suppose some combination of aid to small business, a new jobs tax credit and more spending on energy and infrastructure. The Democrats want to have a bill enacted before we're too far into the gravitational pull of the mid-term election next year so they can look like they've been doing something about jobs.
Chiotakis: Look like?
Reich: Look, we're probably talking here about maybe $100 [billion] to $200 billion. Sounds like a lot of money, but state and local governments, which cannot under their own constitutions run deficits, are running a huge anti-stimulus program right now -- cutting their budgets, raising their taxes this year and next to the tune of about $350 billion. Bailing out the states and cities would have a far bigger impact than anything else the federal government could do right now.
Chiotakis: But even so, Bob, where's the money going to come from, the federal money?
Reich: Well, the White House says it's saving $200 billion from TARP, the bank bailout, and will just apply some of these savings to the stimulus. It's a neat argument, Steve, but doesn't really hold water, because that $200 billion could easily go back to reducing the budget deficit.
Chiotakis: So the real question, then, is how much deficit spending?
Reich: Exactly. And the real problem for the Democrats is they haven't been able to get across to the public that short-term deficit spending to get jobs back and the economy moving again will actually reduce the long-term budget deficit. Because obviously, the sooner people are back earning money and businesses are back making good profits, the faster tax revenues will rise. Most of the public doesn't really distinguish between short-term deficit spending, which really is necessary now, and long-term deficits, which are worrisome.
Chiotakis: Former Labor Secretary Robert Reich is Professor of Public Policy at the University of California Berkeley. Bob, thanks.
Reich: Thanks, Steve.