Gene Sperling on 'This Week'

Good morning, and welcome to "this week." Washington fails. I should somehow do a jedi mind meld and convince them to do what's right. It's about taking on the spending problem here in washington.... See More

Good morning, and welcome to "this week." Washington fails. I should somehow do a jedi mind meld and convince them to do what's right. It's about taking on the spending problem here in washington. Sweeping cuts in spending. How long will they stick? Wh impact will they have? Answers today from our headliners, includinwhite house aide gene sperling who tangled thiswieek th legendary reporter bob woodward. It was said very clearly, you will regret doing this. Plus, our powerhouse roundtable on all the week's politics. stunning change for the catholic church and in week's biggest surprise -- the guy is awesome. Dennis rodman meets kim jong-un. No american has spent more time with north korea's dictator and he joins us for his first interview. You heard that right. In the week's most surreal encounter, one of the world's most notorious basketball players spent quality time with one of the world's most dangerous dictatorsm and dennis rodman is here to share what he learned about kim jong-un in just a bit. But we begin with the budget battles that have crippled the capitol. President obama signed the order on friday to execute those $85 billion in across-the-board spending cuts, and with both sides locked into their positions, it looks like those cuts are here to stay. For more on what that will mean we will begin with the president's top pick adviser, director of the economic council gene sperling. Good morning, gene. Thanks for joining us. Thank you, george. It's very clear from speaker boehner, the leader of the senate republicans, mitch McCONNELL THAT THE REPUBLICANS Are not moving on taxes. So does that mean these cuts are going to be in place for the rest of the year? You know, I certainly hope not, george. These were harsh cuts that were put into place to be so harsh on defense and national security, on education, on, you know, things that matter to children in our country, and most of all to jobs that it was cons to be so harsh that it would force both sides to come back to the table and negotiate on the type of bipartisan compromise. But that's not happening. -- That everyone knows we need. Well, you know, george, it hasn't happened yet, but I will tell you something. This is not a win for republicans. You know, republicans are supposed to be for stronger national defense. This cuts our military preparedness dramatically. They're supposed to be for border security. These sequester cuts will mean enough reduction in hours that would be the equivalent of 5,000 border patrol agents being cut. They're supposed to be for long-term entitlement reform. This does no long-term entitlement reform. AND WHEN I TALK TO CEOs ACROSS The country, they tell me th this is leading them to put projects that would create jobs on hold and think it will hurt their small ness suppliers win for anyone. The only win, ou can call it that, this gives is those on the republican side who are willing to let all this harm be inflicted just so they can stand by this principle that there should not be one dime of deficit reduction that should ever come from closing loopholes or deductions. That's just an unreasonable position. As you know, the republican leaders say that's not the only option. They say the administration could cushion the blow of these cuts if they wanted to. Here's senate republican leader mitch McConnell just the other day. The president is ready to make it bi as hard as possible, all to send a simple message to the public, you want to control washington spending, america, fine, let me show you how much I can make it hurt. Why not take the kind of flexibility the republicans are offering? Because I think that as you've heard, independent economists say from the chairman of the federal reserve ben bernanke to the independent congressional budget office, there is no way that you can move the deck chairs around in a way that will not cost our economy, as cbo projects, 750,000 jobs. When you have those type of harsh spending cuts in such a short, concentrated period of time, it's like saying to somebody, you can cut off three of your fingers, but you can have the flexibility to choose which ones you want to cut off. If you're cutting $42 billion from defense, you're going to dramatically hurt operations and maintenance and our military training. If you have to cut as much as is required on the domestic side, you could eliminate head start, the fbi and the national science foundation, and you still would not get there. Now, you know, if they want to talk about real flexibility that would allow the president to actually reduce the deficit in a way that didn't hurt jobs and, most importantly, to be able to reduce loopholes, corporate tax expenditures, tax expenditures for the well off in a way that didn't hurt jobs, that would be one thing, but what they're saying is the only way that we can do cuts are in very harsh devastating ways that would cost 750,000 jobs and that their flexibility does not include the ability to ask for one dime of revenues that lower the deficit from corporate loopholes even though, george, it was only ten weeks ago that speaker boehner said that we could reduce the deficit by up to $1 trillion from exactly this type of tax reform that closes loopholes and reduces tax expenditures. As you know, gene, even the president's allies have accuseds administration of hyping the pain caused by these cuts. Here's new york city mayor michael bloomberg. I'm going to lay off my employees today unless you do something. I'm going to -- we're going to close the hospitals down. We're going to take all the prisoners from jail and put them on the streets. Spare me, I live in that world. I mean, come on. Let's get serious here. And at least twice this week the administration got caught exaggerating the impact, the president claimed the capitol janitors will get a pay cut. It was said that was premature at best. Arne duncan couldn't back up a similar claim that he made about teachers getting pink slips. So how do you respond to critics who say the administration is engaging in scare tactics? will not get as much overtime. I'm sure they think less pay they're taking home does hurt but I think the real issue is that this is, as the president said, a slow grind. When this sequester goes off, yes, it's not going to hurt as much on day one but, again, every independent t agrees, it is going to cost our economy 750,000 jobs just as our economy has a chance to take off. George, you could bring ceo after ceo on your show who would tell you that this type of uncertainty and dysfunction in washington is forcing them to hold back projects that they would be doing that would be creating jobs. They're worried it's going to hurt their small business suppliers and as -- and my belief is that as this pain starts to gradually spread to communities affected by military spending, to children who need mental health services, to people who care about our border security, I believe that more republican colleagues who are concerned about this harm to their constituents will choose bipartisan compromise on revenue raising tax reform with serious entitlement reform. They'll choose this bipartisan compromise over what is an ideological position that every single penny of deficit reduction going forward must be on the middle class or seniors or our children and that there can't be one penny that comes from closing loopholes or tax expenditures. That is not a position that the public supports. It's not the kind of bipartisan compromise we need to move our country forward. Before you go, I have to ask you about this strange sparring match you had with bob woodward of "the washington post" this week. I guess it began with an e-mail exchange about an article he wrote in "the washington post" saying the president was moving the goalpost on the sequester and I guess you had a heated conversation and in an e-mail you apologized for it and then went on to add this, you say as a friend, I think you'll regret staking out that claim. Woodward seemed to take it as a threat. Listen. It makes me very uncomfortable to have the white house telling reporters, you're going to regret doing something that you believe in. I read all the e-mails. They seem pretty civil on all sides. Do you have any idea what made woodward so uncomfortable, and have you all spoken about it since and cleared this all up? You know, george, I've known bob woodward for 20 years. We've had a veryendly and respectful relationship. I think virtually everybody who has looked at my e-mail to him and his reply to me thought those e-mails reflected that degree of respect and politeness and the e-mails were fundamentally substantive. I was -- I was arguing a case as to why I believed the president asking for balance is consistent with where things have been for the last several years, so all i can say, george, is that bob woodward is a legend. I hope that him and I can put this behind us -- and I think, most importantly -- so you haven't talked about it yet? You know, I haven't talked to him yet but I hope to. I hope we can put it behind us because I think we both care about the policy issues we were debating and think that's where the focus of our national debate should be, not on our e-mail exchange. Gene sperling, thanks for your time this morning. Your time.