Jeremy Hobson: Congressional Republicans are heading to the White House today for a meeting on the nation's debt ceiling. Yesterday, the House of Representatives overwhemingly defeated a bill that would have raised the national credit limit with no spending cuts attached.
The Treasury Department says Congress has until August 2 to reach a deal -- or the nation will default. The man leading the bipartisan negotiations is Vice President Joe Biden.
And we're going to talk now with his former Chief Economist Jared Bernstein, who left that job in April to join the Center on Budget and Policy Priorities.
Jared Bernstein, Good morning.
Jared Bernstein: Good morning.
Hobson: Well first I want to ask you: how do you expect this debt ceiling thing to play out?
Bernstein: I expect the negotiators to resolve the debt ceiling -- that is, to increase it -- sooner than later. I get that there's a big scrum going on around this, of course, but ultimately, the imperative of doing the right thing for, not only our economy but for the global economy, I'm optimistic that that will prevail. But sooner the better, man.
Hobson: Do you think that if we do get a deal on the debt ceiling soon, it's going to come along with big budget cuts that are big enough to put the economic recovery at risk?
Bernstein: I certainly hope not. One of the most important things is that you don't enact the kinds of measures like aggressive spending cuts in the very near term that could offset a recovery that's still pretty nascent, that's still really trying to reach escape velocity.
Hobson: Until recently, you were right in the middle of the economic power circle, as the chief economist to the vice president. Why did you leave that job?
Bernstein: I was frustrated not with what was going on inside the White House -- it's the debate going on outside the White House that I have found really very misleading. Lots of assertions and claims made that are factually upside down -- the notion that you can aggressively cut spending in the near term and that won't hurt the economy; or that if you raise anyone's taxes at any time, any amount, that will crash the economy; or that you can privatize or voucherize a guaranteed medical security and somehow how people will be better off. So one of the things that I hope to do on the outside is help explain on a factual basis how things could work better.
Hobson: Jared Bernstein, former chief economist for the vice president, now with the Center for Budget and Policy Priorities. Thanks so much for joining us.
Bernstein: My pleasure, Jeremy.