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or wherever you get your podcasts. host: house republican leadership last week came out with their debt ceiling plan, their budget and debt ceiling plan. we we'll spend some time this morning talking about it. richard storer is the director of the hermon center. bobby cogan is with the center for american progress. he is the director of their budget policy. welcome to washington journal. let's start with broadly how you approach issues of the federal budget and budgeting issues from a personal and from your organization? bobby, would you like to start? guest 1: yes. i wish these were my words, but

we have a limited amount of resources, so we are forced to pick what we care most about. we i'll have to prioritize. -- we all have to prioritize. we have a lot of good low income programs. we have stuff to make sure society can function. a budget should make sure we are taking care of people and that people are able to succeed and that we can invest in research and environment. host: richard, how do you approach things? guest 2: the values of the drafters of those budgets -- what is the appropriate role of government? we think it is appropriate that

the government be efficient, those critical -- beyond that we think that when the government gets larger and takes more resources the, people work hard to produce it takes us away from people's ability to build for their own futures and more than that we think that loss of income to people is more than dollars and cents. it is a loss of future productivity, things that not only create more money but promote a longer and healthier lifespan. we one-day system where the government only takes as much as it needs to sustain those necessary systems. host: on a statement of priorities, how do you see the republican plan is a statement on their priorities? guest 2: it is a statement that they believe in the american

people. they want to leave the american people with more control over what they produce, what they return so they can put more resources into innovation. it is cutting regulations that are needless. that is what i see as their plans, a statement of belief. host: it is -- does this give you a a clearview of the republicans' view of their -- does this give you a clear view of the republicans' view of their role in government. guest 1: there's a clear difference in the belief of what the government should do. 70% of interest payments go to people for their child or health insurance, medicare, medicaid, chip, acas payments.

where we disagree is whether we are giving too much to help people or whether we should be giving less. what the government spending is doing is largely going to people and making sure we have safe water. making sure that we have safe food. these are essentially really good functions of the government, and i don't think they should be cut. host: we got this from republicans last week, and the speaker, there have been some complaints that this was not a budget. the president has is skewed his budget -- issued his budget. this was not a budget. it was a plan. does it matter at this point? guest 2: we know already where the federal government is. i tellst us what the underlying

budget of the government is. this is a vision of where we are now. here is where we want to be. we spent enough money to write a check for more than 150% of the populi to every single person in america. how can we be spending that much money and still have a lot of the problems we have? a lot of that money is spent inefficiently. there are much more efficient ways to run these programs to provide that help for people. imparting question is -- the important question is not that that money goes to people, that it is taken out. it is a burden on people, even if the cash is getting back to people, it means stunted

production of goods and services. host: let's look at a couple of the topline details in this budget plan for our viewers and listeners who may not have the full details on it. the republican plan includes raising the debt ceiling into 2024 and would reduce spending to fiscal year 2022 levels. it would recover unspent covid-19 funds. it would also impose new work requirements for medicaid, requiring some 80 hours per month for some recipients. $80 billion passed under the inflation reduction act. it would block student debt cancellation and revoke clean

energy tax credits. bobby cogan, take any of those in their. what is it you find the hardest to take in that budget proposal? guest 1: the hardest is a tough question. the biggest one of those in terms of the deficit reduction is the first one you mentioned. the speaker said that it would reduce deficits by $4.5 trillion. i think that is high, but it is in the ballpark. taking government spending back to 2022 levels --the way it is stated makes it sound really reasonable. it is much more extreme than it sounds. it is pretty vague.

they are going to cap discretionary spending. it is a third of the budget. ot is -- it is nonmandatory spending. it is most of what we think of what when we think of the government. host: what did his plans say about defense spending. guest 1: it didn't. guest 2: it is a caps on discretion spending. what i would say is in the last 6 years, the dollar increase in annual discretion spending has outpaced to the dollar increase in health care programs. health care programs are the fastest growing mandatory programs, but every year when congress comes back to the well and drawl resources, they have managed -- and draw out

resources, they have managed to deplete -- if these programs had gone on an inflationary track, where would they be at? it is not cutting. it is getting back to that cleaving away. let's -- in many ways it is to send money back to their district. guest 1: discretionary funding i s about 6.1% based discretionary in 2017 and now it is 6.2%. it is growing 1% faster than the economy. immediately cut it. depending on what you want to be

relative to -- i went to be relative to purchasing power -- if you would just essentially for population growth, it becomes more than $200 billion, and from there grow it only 1%. every single year, we would be falling further and further behind. by the end of the 10th year, -he- -- did not specify how edward work. it could be that everything is cut 30% -- how it would work. it could be that everything is cut 30%. huge cuts, bigger than any thing we have seen in history. it would be something hard to actually carry out. host: let me make sure our

viewers and listeners can get involved in our conversation with our guests. (202) 748-8000 is the line for republicans. (202) 748-8001, democrat -- (202) 748-8001 is the line for republicans. (202) 748-8000 democrats. and (202) 748-8002 for independents. in terms of the inflationary pressures on discretionary spending -- guest 2: those levels where the levels of spending just a few months ago before we did the last omnibus. it is not as dramatic as it sounds. even the flat nature, of

discretion spending the size of the economy a lot of those come at the expense of defense spending falling as a percentage of the economy over time, if you look under the hood of these programs, i don't think there is a reason why they need to grow ablated -- where is it going? it is staying in the hands of americans. host: can we turn to military spending? it would seem all of this, there would be increased pressure for military spending to increase. that is not even been addressed in this republican plan. in the last six years, defense spending -- guest 1: in the last six years, defense spending has grown every year. if you had to cap what mccarthy was proposing, and we took care

of our bets vis-à-vis the president has estimates, and we make sure we carry out our health plans, that would be the rest of the budget cut 91% -- 94% by the end of the decade. the cuts proposed are so big, there is not room for anything else. that puts money right back into people's hands. i you take away the moneyf that goes towards people affording rent, it is not clear to me that you have actually helped people. i get that money comes from here and it goes over there, but i personally believe the stuff the government is doing here to make sure -- it is also stuff like clean water and food safety. i think those are really good uses of the government. if we were able to do 94% less cancer research, think that is a bad thing. host: what is the end goal?

this is very temporary. the debt ceiling raised to march next year. what is next? what do republicans want to do next? how do they want to make this more long-term? guest 2: the attempt is to start saying "this is a better trajectory for spending." from a heritage foundation standpoint, it is critical -- it does not need to be arbitrarily grown. this is an attempt by republican leadership to be responsible with how we are using americans' money. the bill deals with infrastructure. those programs have been boxed out. in favor of programs that

distort the economy. the subsidies were talking about is part of the conservative plan to get rid of those subsidies which lead to more demand for welfare programs. we need to get back to an economy that is growing -- that is why, to get back to an economy that is growing. guest 1: i should have said this before, but i think part of the premise here is pretty flawed. congress can and should debate physical path. people want to talk about what will be the trajectory of our debt? this is couched in a debate of whether we should meet our legal obligations. host: the debt ceiling. guest 1: minority leader mcconnell has said of course we

must pay our debt. the issue behind all of this, the proposals are kind of there to say "if you do not do enough of these, we might force a default." regardless of what you think of the policies, that stance and structure is deeply inappropriate. host: do you have a fair criticism of that? guest 2: it has nothing to do with whether we default. the constitution requires -- if we set the debt limit, it means that the volume of government has to go down, but it still means the debtors of the government, the bondholders, social security as well have to pay back in full. it is a statement of prioritization of government spending. guest 1: the first thing is the

treasury had said that it does not think it has the capability of doing debt prioritization. currently, we cannot prioritize, in which case we would be defaulting on the interest. defaulting on our interest is not the only type of default. this would be lethal for payments to disabled veterans. host: it is not addressed in this part of the plan at all, but maybe i will ask later in the segment. one thing congress is kicking down the road is any reforms for the long-term health of medicare, social security, medicaid, which is no part of this plan or proposal. we have got callers.

we will go to mark first in las vegas, democrats' line. caller: i cannot believe anything the heritage foundation says. they are saying there is no significance to defaulting ? come on. how come the heritage rendition never says anything when about -- anything about trump's subsidies to farmers. how much have you paid t farmers because of china? why do republicans make everything so simple? build a wall. guest 2: thank you for calling in. the heritage foundation annually puts out 230 policy options, which is our budget blueprint.

one of them, you were talking about farm subsidies, we proposed cuts to that. we do not play favorites at the heritage foundation. the only people we are looking out for are the american people. we're talking about real people's lives, real people's livelihoods. that is, what we put forward a government that works for the people and that leaves people as free as possible with as much as what they worked to produce as possible. that is what we believe in. that is what has built this country. host: the heritage foundation, you can read some perspective on this at heritage.org, 8 things to know about biden's fiscal budget from bad to worse. let's go to benny in ohio. benny is on the republican line.

go ahead. caller: i was wondering if either one of the gentleman could tell me how much the united states plays -- gentlemen could tell me how much the united states pays on illegals, and where in the budget are they trying to hide that money? host: bobby, would you like to take that? guest 1: i don't know of the top of my head how much the dear g -- the doj has. we are making sure we have immigration judges. that is largely within the department of justice. one thing i would say is that immigrants make america much richer. we probably an agreement there. immigrants are contributing to

society. they increase the workforce, they increase demand. i will say strongly that america has made stronger by the fact that people want to come here and want to be part of the country. host: let's go to newport, richie, florida. caller: thank you, washington journal, for an unbiased platform. i have one thing for both of the gentlemen. richard, we should separate social security from the budget, and it should go back to the way it was. my question to richard is do the social security payments that we pay in our deductions every paychecks hide any of the debt

that we have? and bobby, i have a couple real-life examples i would like you to comment on. my ex-sister-in-law was getting $800 for childcare and $350 for being an ex-drug user. she would buy drugs with that. another example is my other sister-in-law had a client that came in for problems with their respiratory system and they gave him a $2000 check to live on the beach so he could breathe easier. could you guys comment on those things, please? host: we will start with richard certain. guest 2: thank you for calling

in. everything that you pay in to both social security and medicare go to those programs, however, there is a $52 trillion unfunded liability from social security and medicare. part of that reflects what people pay into texas. it hides a deeper truth, which is that money that we take people from these programs is invested in the federal debt. you may look at your 401(k) retirement accounts. that money is invested in the market. that is -- socials -- the rates of return are effectively zero. any rate of return you make on that is text pearman a taken from someone else. that is why we have that 52

trillion dollars unfunded liability. the conversation we are having about the debt ceiling today, social security would not be touched by it. to the extent the treasury says we are not going to prioritize payments, that is the treasury department holding hostage the entire american economy. host: bobby, if you would like to respond to the caller. guest 1: i appreciate the question. without knowing the patient, i cannot speak directly to it. it does not follow my understanding. if you have long-term disabilities, you can be on it. i don't think it is doing childcare or drug use. i cannot speak directly to it.

social security is a program that pays out based on how you paid in. if we go over the edge we would find out whether the treasury could prioritize payment, but right now there is no legal dictate on what would happen if we go over the edge, because we do not go over the edge. why would we decide to not meet our legal obligations? we do not have a law that says "if we decide not to meet our obligations, this is how it would work." if we could find a way to prioritize some programs, it means it comes at the expense of everything else. if we could prioritize, which it is not clear we have the operational, capability to do it but if we could prioritize social security and interest

payments, and some months you would still not be able to do that. one of my colleagues looked back in the last year. in some of the months, you just couldn't. in some of the months, we do not bring in enough money. it is not a viable plan. even if it worked for those, it would end up destroying everything else. those are payments to disabled veterans, the money to make sure our food is safe. what the government is doing is useful functions and if they are not able to make the payments, then we all suffer severely. host: i have to move on to donald in michigan. democrats's line. caller: good morning,, c-span. i would like to thank c-span for everything it does. on the debt ceiling i think, it

should be stopped, playing politics with the debt ceiling. the bills were created last year. the debt ceiling is always raised, regardless of who is in office because we have to pay our bills. we have to show the world that our economy is strong and reliable. mccarthy is playing games trying to make the republicans look like they are getting something done. the cuts he is proposing her to the irs. we have boomer babies retiring that need to be replaced. he wants to cut medicaid, medicare, food programs. everything he is cutting, but i

did not hear him say " let's raise taxes on the 1% and corporations that we gave texas to every time we have a republican in office -- taxes to every time we have a republican in congress." guest 2: the debt ceiling is about future spending. it is about spending that has not happened yet. that debt ceiling increase allows the government to spend more money. i meanst it is necessarily taking that purchasing power -- it means it is necessarily taking that purchase power away from americans. what does it mean for the american a government to consume greater and greater percentage of white americans produce. it is because of the government

taking the cash out of the market, meaning private industry, homeowners cannot get money for student loans or to expand business opportunities. the government is choking the economy by doing that. the other important thing to keep in mind is the economy is representative of the value it produced in american views. it is about what americans work hard to produce. when the government takes those resources, when we text corporations, those taxes are not felt by the wealthy -- tax corporations, those taxes are not felt by the wealthy. they are felled by the rest of us. -- they are felt by the rest of us. host: can i ask you about peace you did on the debt ratio,

bobby? a piece you did recently, tax cuts are primarily responsible for increasing the debt ratio. were talking about the tax cuts under the trump administration. they came under the george w. bush administration. how has this led to where we are with the debt ceiling? guest 1: it is a little bit nonoverlapping. i was writing about the debt ratio. they are in the same vein here. i wrote it to be topical. there are two points to the argument. part number one is if you look at the effects those tax cuts have had on our long-term debt, they are big enough that without

for them, debt climbing as a portion of gdp for forever. host: that is revenue that is not -- guest 1: revenue that otherwise would be collected. that is fine. someone might push back and say "aren't we bringing in more spending?" if you look at the last time we were projected to have debt be declining for forever and you compare our spending levels our spending is lower than it was there. spending is lower than it was projected to be. host: spending -- are we still feeling the residual effects of covid spending. guest 2: four sure.

to that point as well -- for sure. to that point as well, spending has diminished as a portion of the economy. we have spending programs that will spend into oblivion. we are scheduled to reach 200% on the gdp. it is certainly possible to strangle the economy, to take enough tax revenue to balance -- what is it like to live in that country, to have a country where the economy is strangled because the governments takes more and more resources. in my mind, that is just strangling the economy and taking from americans. guest 1: we are a super low tax

country when it comes to other rich nations. the spending is due to demographic issues and increasing health costs, but they were not set to go up 80% of the economy. in that scenario we would still be a really low tax country, significantly below the european average. we are not imagining w -- we are not taking every cent americans are making. guest 2: the revenues are slated to grow with the growth of the size of the spending of the government, but it is not just the rate. it is how the taxes are done.

the countries are talking about a move to mostly flat consumption systems. our tax system is designed go after the engines of the economy that afford opportunities. host: we are talking about the debt ceiling plan offered up by house republicans senator mccarthy last week. let's go to greg on the line in huntsville, alabama. caller: 3 quick topics for you. health care -- it has fascinated me how poor of a job we have done on the health care act. the problem is 29 million americans are paying more for those policies.

wseems lik we are being way overcharged. i would like to know where all that money lands is that to the insurance companies? whose money does that land in -- whose pocket does that money land in? they are going to put 6% of their budget towards customer service with an average wait time of 8 minutes with one out of 10 people being actually serviced. what a business model! we are going to confirm that guy? are you kidding me? we are taking 41% of that budget and putting it towards enforcement. that sounds like a shakedown to me. it does not sound like an improvement of the agency.

it sounds like a shakedown from the agency. it does not sound like the top earners are getting rich off of using vindman award things of that nature -- venmo and things like that. let me solve immigration for you. i m a republican. -- i am a republican. i love immigrants. build a wall. put a bunch of doors in the wall. when you walk across the border, here is your tax id. host: we will start with you, bobby. guest 1: thanks for the question. there is no doubt that the u.s. over pays for health care. we are paying too much.

we have seen health care grow faster than inflation and faster than the economy for years. it is a big problem. where is it going? it is going all over. we have more expensive drugs, we have more expensive specialists, we have more expensive insurance. we are getting worse outcomes. it is true that nominal costs have gone up, but the rate of growth has declined significantly and do you have seen this in projections of future health care costs. it has been going down and down and down. that is progress in the right direction. we saw the actuarial value, what you are getting for your dollar, increased. there is a long way to go on it. host:, health care, irs or

immigration. do you want to touch on any of those? guest 2: absolutely. health care and education happened to be the two sectors the government's most heavily involved in. when the government gets involved in a sector, it muddies the waters and makes it harder to coordinate. you get less efficient use of resources. the money is only as valuable as the real goods and services you get for it. what you get is not more stuff going to people. you get more waste, slower growing economies, that means that money is not being stretched as far. one thing on the irs, the irs

put out a document last week saying what they're looking to do with those $80 billion. there documentation, all of that money for customer service they will run through by the end of 2024 and that is when, they are going to ramp up the enforcement activities. those being up -- audits will be going after low income and middle income families. many are welfare beneficiaries. they will also be going after small businesse.s they said themselves they would go after complex entities. that is a fancy term for small businesses with one or two locations.

guest 1: to the extent that it could be a small business, if i am doing my own thing and i make my own llc and i am making $2 million a year, i can be a small business. the other quick thing, i will say about health care and education is we are getting causality potentially mixed up here. is it a worse thing because the government is in their or is it the government is in there because it is worse? host: our next caller is thomas. caller: thank you for the opportunity. i m 66 and i have been an unaffiliated voter all my life 0 -- i am 66 and i have been an

unaffiliated voter all my life. i struggle with the republican party. they seem to only be concerned with the debt when they do not have complete power. the perfect example to me is the first two years of the trump administration where they had the presidency, house, and senate. they did not pay the bills. they were spending their way to prosperity. when they do not control those branches, then they are very fiscally conservative and i do not believe that is genuine. host: it is richard's turn to start. guest 2: i share that complaint about a lot of conservatives in d.c. i was ai former congressional staffer. i i have always worked to reduce the size of government.

there are a lot of people on both sides of the aisle that believe the right way to get there is to spend more taxpayer money. i am proud of the heritage foundation for always pushing to give that money back to the people who earned it. there are a lot of people who malign the trump tax cuts adding to the deficit, but they grew the economy, they gave that money back to people. it is not just about the debt. it is about what the government consumes. trump tax cut bill is the same size as what we lost from covid. inc. about how much worse the pandemic would have been had we not had the growth we had. guest 1: i want to get to the

caller's first point. under the trump administration and the widen administration, -- biden administration, all three had bipartisan support. when we have a democratic president that is when it becomes an issue. that is the underlying issue or that is how i interpreted it. the other thing i wanted to say, i think i have now forgotten. guest 2: the only reason -- the only reason we lost as much as we did is because we had a huge monetary and fiscal response. guest 2: when republicans have control of the house and the senate, we see lower spending.

it doesn't have to be a showdown over an agreement. host: political question for both of you from jimbo in california. " consider the idea that mccarthy does not have the votes to raise the debt ceiling." guest 2: i think it is well settled law that when it comes to paying back the deficit, pingback social security, you cannot prove -- paying back social security, you cannot prevent the government from paying those back. those are kind of where that separation is. guest 1: i hope we will not find out. i hope we will not have to find out. it will be disastrous if the united states government deliberately does not meet its legal obligations.

it is not clear to me of social security would be considered a bondholder. social security would be protected under that. guest 2: all of the social security assets are u.s. debt. host: on to dallas down, pennsylvania -- dallastown, pennsylvania pennsylvania. go ahead with your question or comment for our guest. caller: i have 2 simple topics. number one is every time republicans have control of the budget is they attack the same issues. 2 examples -- children's lunches, they want to cut education, they want to force

people to have babies. bringing children into the world, but they don't want to take care of them when they are here. why do you never hear them going after these corporations making billions they're getting? all of these billions of dollars in taxpayer subsidies, the whole company. all of these -- on top of that because of our tax law, donald trump said that he would get on the irs and shrink some of these laws down that you could fill out your taxes on postcards. never happened, and yet all of these companies do not do taxes. the last time the republicans were playing this game with raising our debt ceiling, what happened to our credit r ating? it dropped from aaa to aa.

guest 1: i.obviously agree -- obviously i -- i obviously agree we should not be playing games with the debt ceiling. saying that if you do not get enough of your demands, you will threaten the full credit of america is reckless. i want to emphasize the point nicholas made. lot ofa what the government does -- a lot of what the government does is really important. providing money so schoolkids can eat is great. those are good things that make america stronger. we can have a debate over whether those are good or brad program -- add programs, the

debt ceiling is -- or bad programs, but the debt ceiling is not the place to do that. host: you have seen a few debt ceiling fights in your career history. is there a way to make this stop, to end the debt ceiling negotiations or does it have to become a permanent part of our political fighting on capitol hill? guest 2: in response to our last caller as well, i think one of those who has made this worse is you increasingly had corporation's bylaws. being pro-free market is not being pro-victim. it is about a level playing field for everybody. the large amount of companies simply buy a legislator or the law that they want.

he wants to get rid of tax subsidies for companies. i don't mean the republican side, i mean full conservatives, the belief in an even playing field. we noticed that there are very few places where you can get your voice heard. the debt ceiling is an indispensable tool for the government people against of the abuses of companies thatb want touy legislator -- that want to buy legislators. if you want to get back to a congress who is fighting for an even playing field, you need to get to a situation that represents those values. guest 1: i cannot disagree more.

we are one of only two countries who have a fixed dollar debt limit. countries do not do it this way. if we want to change the skull path of america, we debate -- the fiscal path of america we should debate every month. we will do it again this year. using that as hostage in this debate is not ok. there is no way in which we should default on our debt. host: on to mike, independent line, crescent city, florida. caller: this question is for mr. stern. why do we keep giving these tax breaks dwell of these corporations? we are supposed to be -- breaks to all of these corporations? we are supposed to be a free market economy.

i am 75 and i grew up in the 50's, 60's and 70's. the tax rate was over 70% and the corporations paid it. do something for the american people and to stop blaming the democratss for the problems you guys because. guest 2: thank you for calling. i will say this, in the period you were talking about, the tax on the people who made the, most was 70% but for most people the raid was much lower. moreover, the tech system was set up less to penalize investments in new jobs and the creations of goods and services. there are 2 types of tax breaks people talk about. one are the subsidies

mccarthy wants to get rid of. the other is what the trump tax cut did, which levels the field for everybody. it is not about cutting corporate tax rates. it is about cutting how those taxes are borne by the american people. it reduces profits, it reduces the investment capital that goes to other businesses, or it reduces worker pay, or increases consumer prices. those taxes on the wealthy are felt by the american people. guest 2: on corporate taxation, if you take everything that has been said the u.s. used to have a strangling tax system. i don't know how you can hold

that at the same time and believe we are also the best innovators. those things do not naturally go together. quickly on the green energy credits, the point of those is to help greenify the grid. if we believe that climate change is a problem, this is to help businesses by clean energy -- businesses buy clean energy. the idea of pulling that away, is bad for our long-term. host: on to my goal in florida, republican line -- michael in florida, republican line. caller: our nation has become a socially bifurcated society. why could we not black gronk --

block grants specific state and then let the states decide where they went to allocate the money or if they want to raise taxes in their own state to pay for something, or just cut the spending in their states in line with what the people want? guest 2: to address your point first, i agree entirely. block grant the states. we should just cut federal spending at the american level. s state government can raise taxes -- state governments can raise taxes with their constituent and feel free to do that. the extent that climate change is a problem, the u.s. has been innovating out of that. you have said earlier how can the u.s. to the most innovative

country in the planet with regulations. we have a lower tax rate than most countries in the planet. whe we weren a powerhouse was when those regulations were even lower. you had said earlier about reversing causality. the causal relationship of supply and demand, creating demand takes resources out of the hands of manufacturers. host: bobby cogan? guest 1: guest: that is precisely where we want the government to go in and say this is not being captured. i appreciate the question.

i think there is a fundamental disagreement and what we think the role of government is here -- in what we think the role of government is here. i believe social security should be everywhere in the country. i believe they should still receive disability benefits even if a state does not think so. if we believe there should be no federal government or federal spending, that is tough to take. i would say i respectfully disagree. i think it is important we help people. the government helps lift 48 million people out of poverty every year. i think it makes america stronger. host: bobby kogan is the senior director of federal policy at the