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JEREMY HOBSON: Now let's get to the budget cutting in Washington. A Republican plan that emerged yesterday would save $35 billion by eliminating dozens of federal programs and cutting funding for others. The proposal is already drawing some criticism. And it's only the beginning of a fight that's going to go on for weeks.
Let's bring in Diane Swonk, chief economist at Mesirow Financial. She apparently wanted to be there for the beginning of this fight in Washington this morning. That's where she joins us live. Hi Diane.
DIANE SWONK: Yeah I don't really like to listen to the politics around here, but anyways I am in Washington.
HOBSON: So $35 billion in cuts Maybe even more. A lot of republicans want it to be a bigger cut. Certain to be felt by all Americans. But how much would these cuts, if enacted, do to bring down the deficit?
SWONK: Well not very much. Unfortunately much of the focus right now is one the minutia on the short term things that we do -- with anything from discretionary spending to you know, cuts around the edges. The real elephant in the room is of course entitlement spending and our tax code. How can we make it better and how can we really make the decisions about our spending more efficient? How do we get to the core of that. It's something that Ben Bernanke underscores, and right now this is just sort of flirtations around the edges focusing on the minutia instead of the big picture.
HOBSON: So you're saying that what -- that law makers should just spend now and make cuts that wouldn't go into effect for years on things like social security and medicare?
SWONK: Well I think we could phase in some majors changes to entitlement spending that would be much easier for Americans to digest if they were phased in over time. And frankly the world is looking to us not to cut around the edges of our budget but deal with the structural budget problems we have and that is an aging population that we've made promises to that we can't afford to keep those promises given the current tax revenues that we're taking in and we need to deal with those issues which are much harder politically than the sort of cutting around the edges that we're seeing today.
HOBSON: Diane Swonk, chief economist at Mesirow Financial, thanks so much for your time.
SWONK: Thank you.