Orszag Says Freeze Is `Start' on Reducing Budget Deficit: Video

Transcript

our President Obama will call for a three-year freeze on many domestic spending programs in a State of the Union Address tomorrow night but will it really in the deficit which the Congressional budget office predicts will hit $1.3 trillion blumberg's Chief Washington correspondent Peter Cook is at the white house now with the president's budget director Peter Carol thanks very much I'm joined by Peter orag who heads the Office of Management and budget here at the White House thank you for the time today appreciate it the president's got a lot on his plate tomorrow night in the speech but the news today is this three-year budget freeze on discretionary spending for most or many domestic programs how much of a difference this going to make well it will make a difference it's uh $250 billion over 10 years and what we are basically saying is look we can invest in key priorities for example in education but cut back on the things that we don't need and Achieve an overall freeze again not touching entitlements and outside of the security agency this is already drawing uh complaints up on Capitol Hill this is going to be too tough too auster to we're still in recession we need this federal spending to keep the economy moving again how do you respond to that well this year our focus is on job creation but remember and remember the timing here we're talking about the 2011 budget and then 2012 and 2013 as we go out over time we do need to make sure that job creation continues and that means investing in things like education and R&D but it also means bringing down our deficits so that we don't crowd out private sector activity at the same time you've already got people looking at these numbers and they say listen given the budget numbers CBO today saying 1.3 trillion in this fiscal year the deficit 250 billion over 10 years that is a drop in the bucket that is not very significant well it's a start and it's only one component of what we're going to be putting forward the full budget will be out on Monday it's very clear though that $250 billion uh helps and it's only one part of uh our overall deficit reduction efforts again as you go out over time all right if I'm one of these uh department heads right now at interior or Commerce or one of these agencies that could feel the the budget acts here um how are you going to pick and choose the winners and losers well they already know what their budgets are they we have this has been a month months and months of work uh working with frankly direction from the president and then working carefully with each agency some of them have increases some of them have reductions but we've worked cooperatively with them to come up with the total and what about again the outlook for this you need Congressional help to get this through we've already heard from some members of Congress including some from the president's own party who said they're not going to support this kind of thing they certainly need more details well they're going to get full details on Monday when uh hundreds of pages of budget documents will be transmitted to the Congress but do you think there is the political will right now in this environment again a recessionary environment for the Congress to impose this kind of of austerity well again we're focused on job creation and job growth this year but as you go out over time we can't afford to continue to uh spend money on things that don't work well or don't reflect our priorities and that's all we're saying to what extent is this action today this announcement from the president what we'll hear in the State of the Union a message not not only to a domestic audience that worries about spending run a muck but also an international audience those International governments who are financing our debt right now and worried about it well the president has been very clear from the first day he took office that we Face two deficits the jobs deficit and also the budget deficit and so you're hearing us speak about both priorities because frankly they're both issues and we need to be addressing both of them not only for uh domestic investors but for foreign investors too sure the political climate here we had the Republican party chair Michael steel said this is like going on a diet after winning a pie eating contest well I look there there are misleading analogies that can be thrown around I think the fact of the matter is it saves $250 billion over 10 years it is a constraint you would not be hearing the howls from uh Capitol Hill and from um some others concerned if it didn't impose constraint it does but again not in a blunt way not in a hatchet way we are saying some things will go up other things will go down but we think that we can live within a total constraint in which uh spending as a whole for these agencies is Frozen all right this is the discretionary part of the budget of course we've got entitlement progr we had an effort today in the Senate Senator Greg Senator Conrad both together backed by this President pushing for a commission a bipartisan commission to try and confront these issues it failed today in the US Senate what's the next step for the president is he going to move on an executive order to make this happen I think we will still have a bipartisan process we will still have a commission there are different ways of creating that Commission the important thing is that both parties come together and address this out-year deficit problem which is going to require a bipartisan effort is there a way to to force Congress to vote up and down or this because this has been the the criticism of of an executive order is that it doesn't have the same sort of clout that act get most of the way there but again the important thing is not what happens when the commission issues the recommendation it's getting the commission to issue the recommendation in the first place because that will reflect a bipartisan agreement among for example the commission members on what to do and that's what our Focus needs to be you've been up on the hill you headed as CBO this President this Administration does not believe the regular order in Congress lawmakers getting together can solve this problem on their own with the regular process no I what what we're saying is there needs to be a bipartisan process to get this done whether it's done through regular order or through some other uh Congressional procedure the key thing is both parties do need to come together and that is what we need to see happen over the next year let me ask you about healthcare because you've been right at the Forefront of the healthcare debate looking at the numbers crunch the numbers trying to bend that cost curve we're not sure where the healthcare debate's going to go of course we want to hear from the president on Wednesday night but uh is your own budget that we're going to see on Monday going to reflect a budget that includes a healthcare deal well you'll hear from the president tomorrow night you'll see that you'll see what comes out on on Monday what I would say is we need to get Healthcare reform done not only to help uh workers for example who are switching jobs so that they don't have to worry about getting new coverage or pre-existing conditions but also to bring down the deficit over time healthcare costs are the key key to our long-term fiscal future and unless we put in place the kind of infrastructure created by this these uh bills we will not be able to tackle our very long-term budget deficits is there any other move that we'll hear from the president you talked about again many components here tackling this issue are there that many other levers for this president to pull at this moment in time uh with regard to the budget and the deficit situation which uh again uh we heard Senator Greg Senator Conrad others on the floor talk about this uh unsustainable path well we we are on an UNS old path and I would say tune in tomorrow night and you'll hear the president of the United States talk about it all right and again in terms of these discretionary spending what's off limits to this President defense spending there are some on the hill already saying listen defense has to Bear some of this pain as well well and don't forget that with it we are at War and we need to make sure we're adequately funding our troops and I think everyone agrees on that but we are we are achieving efficiencies in the defense budget if you look back over the past year no one thought that we would succeed in cancelling the F22 for example we did that there are going to be additional efficiencies that are possible especially for example in the procurement part of the defense budget but while our troops are In Harm's Way we need to make sure that we're adequately funding them period let me just ask you one final question about this and about this whole budget process is this a unified White House unified economic team on this because we've heard at least some suggestion that maybe not everyone was on board with this decision no I don't I think I think we are unified we again face two deficits the jobs deficit and the budget deficit and uh we are all in the same place that we need to be addressing both of them and that's a difficult thing to do but it's absolutely necessary all right he's Peter orag he's the head of the Office of Management and budget for President Obama thank you for the time thanks obviously we have to tune in tomorrow night for a few more details on the president's efforts to try and re in the budget deficit that's the latest from here at the White House all right thank you so much our Peter Cook there down in front of the White House