March 27, 2011 -- AMANPOUR: Welcome to the program. The government is up and running today, after a frantic 11th-hour round of let's make a deal. National parks are open, federal workers will get paid on time, and so will the troops. It's a big relief to people here in Washington and of course around the country.
But the budget showdown that drove Congress to the brink of the shutdown is puny compared to the battles that lie ahead. As one Republican senator is warning, prepare for Armageddon.
Where this fight was about billions of dollars, the next one will be about trillions. This week, we saw President Obama assume the role of mediator in chief. The big question now, will he build consensus around reforming huge budget-busting programs like Medicare, Medicaid and Social Security? And does he have the will and the stomach for that fight?
Joining me now, the president's senior adviser, David Plouffe. He was the president's campaign manager in 2008 and now advises Mr. Obama on politics and policy from inside the White House. Thank you for joining us.
PLOUFFE: Good to be with you, Christiane.
AMANPOUR: So the president started this whole process a while back talking about spending increases. Friday night, he came out and called it a historic deal. But this cut so many billions, that must be a disappointment, a historic cut.
PLOUFFE: No, the president has been very clear that we need to reduce the deficit. And obviously because the last two years, we were on the brink of a great depression, that had profound impact not just on the economy and our people, most importantly, but also our fiscal situation.
So in order to -- because the president believes we still have to invest in things like education, research and development, technology, the only way to do that in this fiscal situation is to live within our means and to cut spending.
So it was a huge spending cut, as the president said Friday night, in some programs that he cares deeply about. But if we're going to compromise -- and by the way, compromise cannot be a dirty word, it's the way we're going to move forward in this country.
AMANPOUR: Right. But since he really was looking to, as you say, invest, and increase spending, why is he taking sort of a victory lap when this is something he didn't want to do in the first place, cut?
PLOUFFE: Well, if you look at his budget for 2012, which he announced around the State of the Union, it actually would reduce the deficit over a trillion dollars in the next 10 years. It would bring spending down to the lowest levels since Dwight Eisenhower.
So the president's commitment to spending cuts and deficit reduction is absolutely firm. But while we do that, we've got to make sure that we are not hurting our ability for our people to get the education they need to compete with people in Beijing and Bangalore, that we are investing in research and development, that we're investing in infrastructure.
So that's going to be his approach going forward. And I'll tell you, the president later this week is going to lay out in detail his approach for deficit reduction going forward. And I think his belief that it has to be a balanced approach, it has to be serious, it has got to put us on a firm fiscal trajectory that the country needs to grow economically.
AMANPOUR: We'll talk about that in just a second. But, again, quickly, the Senate majority leader, Harry Reid, called what the speaker was asking for just in February, $32 billion, he called it "draconian" and very painful. And now it's being called historic.
I mean, which is it? Is it draconian yesterday and historic today?
PLOUFFE: Well, some of the cuts were draconian, because it's not just the number. It's what composes the number. So in this budget deal, the president, Senator Reid, you know, we protected medical research, community health centers, kids on Head Start. We were not going to sign off on a deal that cut those things.
So the president was comfortable with the composition of this deal. That, again, you know, there were some tough cuts in there, things he believes in. But in these fiscal times everyone is going to have to make tough decisions.
So it was a historic deal for the American people. But here's the important thing, the president has spoken often about his plan to win the future for America economically. And what this budget does is preserve our ability to do that through education and innovation.
AMANPOUR: So many economists have said that at this particular time when you've got a fragile recovery, cuts in any way could harm that. Are you worried about this setting back the recovery?
PLOUFFE: I think if they're not careful cuts, yes, it could. And that's what the president said, listen, we can't take a machete, we have to take a scalpel, and we're going to have to cut, we're going to have to look carefully.
What you have to do is go line by line. It can't be some macro argument about big numbers. You've got to look at the details and make a judgment on each one, in terms of the impact on people, in terms of the impact on the economy.
And that's the approach of the president, we carefully approached it so that we can cut spending, we can reduce the deficit in the short and long term, but without jeopardizing our economic growth and without jeopardizing those things like education and innovation.
AMANPOUR: Big, huge battles coming ahead, and we asked in our intro to you whether the president has the stomach and the will for the huge fight ahead. Already in this budget showdown, he was perceived as coming in at the last moment. And many in his own party have talked about a lack of leadership.
Listen to what Senator Manchin just said about that.
(BEGIN VIDEO CLIP)
SEN. JOE MANCHIN III, D-W.V.: Why are we doing all of this when the most powerful person in these negotiations, our president, has failed to lead this debate or offer a serious proposal for spending and cuts that he would be willing to fight for? How does that make sense?
(END VIDEO CLIP)
AMANPOUR: How does that make sense, Mr. Plouffe? Why didn't the president get involved much earlier and really fight for what Democrats believe in?
PLOUFFE: Well, first of all, the president, as I said, in his budget for next year, laid out with great specificity how we're going to reduce the deficit over a trillion dollars in the next decade, bring spending down to the lowest levels since Dwight Eisenhower, at the same time protecting critical investments in things like education and research and development.
So the president has led. I mean, sometimes here in Washington, when people accuse you of not having leadership, what they mean is you're not leading a political fight. And the president's view is the country needs leadership that's focused on where do we find common ground so that we can win the future and continue to move the economy forward, not to look at every issue first through the prism of how do we get political advantage over the other party. The American people are sick and tired of that.
AMANPOUR: Talking about that, many of these big issues, whether it's the debt ceiling, whether it's real deficit reduction, will require huge -- real bipartisan coming together, not at the last minute to negotiate a deal like this time.
So what is his plan for that? And can he actually do that?
PLOUFFE: Well, you're right, Christiane. On any issue, whether it's going to be more deficit reduction, which we have to have, education reform, new energy policies and investments, nothing is going to happen unless it has got the support of members of both parties.
So we're not going to move forward together as a country unless we do it together, Republicans and Democrats, on behalf of all Americans. So I do think that should give us some confidence that this is the first big test of this divided government.
And, you know, the speaker, the president, the Senate majority leader were able to work together. Yes, it came down to the finish line. But you couple that with what happened in December on nuclear weapons, on tax cuts for the American people, and "Don't Ask, Don't Tell," it should give us some confidence that when our leaders really put the American people first, they have the ability to work together.
AMANPOUR: You know, you talk about specificity. And certainly Congressman Ryan has come out and put down a very specific plan for budget cutting. And, indeed, when it comes to the whole war of ideas, some in your own party are very concerned that it is the Republicans who have and are setting the agenda right now.
Look at what Congressman Anthony Weiner tweeted just now: "Our fight can't be just to stop their horrible ideas," he says, "don't we need to have our own agenda?"
So who is setting the agenda? It looks very much like they are right now. Would that be accurate?
PLOUFFE: No. That's not accurate. And, again, I think a lot of times in Washington people view this through the prism of political fights. So, you know, if you embrace spending cuts at all...
AMANPOUR: But this is a big substantive program that the congressman is talking about.
PLOUFFE: If you embrace spending cuts at all, somehow you're, you know, defaulting to Republican orthodoxy. We need spending cuts, we need deficit reduction. Listen, the president's State of the Union was a blueprint for the future, how we're going to win the future in this country.
So he is driving this agenda each and every day. So as we look at the next round here, the president is going to be very clear about his approach. It has to be a balanced approach. As he said, you're going to have to look -- certainly for the wealthiest in this country are going to have to contribute something.
We're going to have to look at how we get more health care cost savings. We already have a trillion dollars in deficit reduction over the last -- next 10 -- two decades with the health care act. We're going to have to look at defense spending. We're going to have to look at more programs here.
So it's going to have to be a balanced approach.
Now just to speak to the congressional Republican budget plan that was announced this week, you have to understand, the average millionaire in this country would get at least a $200,000 tax cut, while the average senior down the road is going to pay $6,000 more in health costs, the middle class is going to pay more, you've got a 70 percent cut in energy investments at a time of record gas prices.
So that's a choice, by the way. You wouldn't have to put all the burden on seniors and poor people and the middle class if you weren't giving the wealthiest in this country an enormous tax cut.
AMANPOUR: The president announced his reelection campaign this week, and somebody else has jumped in -- all but jumped in, Donald Trump. He says that he may run for president. He seems to doubt yet again about President Obama. He's talking yet again about the whole birth certificate issue and saying, "There is at least a good chance that Barack Hussein Obama has made mincemeat of our great and cherished Constitution."
So I know that you've answered all the questions on this birth certificate, but what do you make about -- what do you make of Donald Trump and raising this issue? Do you think it's going to be a big issue in the campaign?
PLOUFFE: I don't. I think I saw Donald Trump's kind of rise and some falls. And given his behavior and spectacle over the last couple of weeks, I hope he keeps on rising, because I don't think there is a -- there is zero chance that Donald Trump would ever be hired by the American people to do this job.
There may be a small part of the country that believes these things. But mainstream Americans think it's a sideshow. And what they want our leaders to do is focus squarely on the issues right in front of us, how we're going to keep growing the economy. We've had over 1.3 million jobs created in the last 13 months. We've got to keep doing that. How we keep our people safe. How do we make sure we're going to win the future by focusing on things like education and innovation.
So that is what they want us to focus on. That's not leadership, that's kind of a sideshow behavior.
AMANPOUR: On that note, Mr. Plouffe, thank you very much indeed for joining us.
PLOUFFE: Thanks for having me.
AMANPOUR: And we're joined now by Republican Congressman Mike Pence. He's from Indiana. He's a Tea Party favorite and who we saw earlier vowing to shut down the government if Democrats wouldn't agree to steep budget cuts. And also we're joined by Congressman Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee. He's dealing with some angry colleagues this morning. Congressmen, thank you both for coming. Welcome to "This Week."
You've been all over the air for the last 12 minutes talking about shut it down if it didn't go right. Will you vote for this deal?
PENCE: Well, first, Christiane, let me say, I've been battling runaway federal spending under both political parties ever since I arrived in Congress. I, for one, want to celebrate the fact that we are now debating on Capitol Hill less spending...
AMANPOUR: Will you celebrate with your vote?
PENCE: Well, less spending, instead of more spending. And what I was saying repeatedly at the rally that you just clipped and on the floor of the Congress, was that House Republicans needed to pick a fight. And I think John Boehner fought the good fight. I think he drove a hard bargain here. I want to see the details. But from what I know, it sounds like John Boehner got a good deal. Probably not good enough for me to support it, but a good deal nonetheless.
AMANPOUR: You won't support it?
PENCE: Look, this country's in trouble. We've got -- we were asking for a 2 percent cut in the budget. And that ended up being too much of a cut for this administration and for liberals in Congress.
AMANPOUR: But you say you won't support it, yet Speaker Boehner did a good job. I mean, what happened, do you think he's -- he folded too early?
PENCE: Well, I said -- I said John Boehner -- well, look, I cannot bring myself to be critical of a basketball player that gets two on one all night. I can't bring myself to be critical of John Boehner, who has squared off against the White House and liberals in Congress, who couldn't accept a 2 percent budget cut, and who dug in and were willing to shut down the government to continue to send $1 million a day to the largest abortion provider in America.
AMANPOUR: We're going to get to that in a second. Let me ask you, if Congressman Pence is not going to vote for it, are you going to vote for it? Do you think it will pass on your side?
VAN HOLLEN: Well, Christiane, you may not be surprised to hear this, but they're still sifting through the areas where they are going to make cuts. You can't find anybody today, actually, who knows exactly what cuts we're proposing until probably the end of the day today, maybe early next week. So I'm going to reserve judgment.
But the unfortunate part about this entire situation is that Mike and his colleagues threatened to shut down the entire federal government, which would have huge economic dislocation and disruption in the country, in order to pass a bill that, at the end of the day, doesn't create one job.
Now, there is some good news in the deal. The good news is that the Republicans have demanded deep cuts in education. They've demanded cuts in cancer research and other research to find cures and treatments to diseases. And instead of focusing just on a narrow slice of cuts that they were demanding, we were able to expand the area of cuts and prevent some. So that's good news.
But even today, while they say we've got a deficit problem, and we do, and we need to do something about it, they don't want to get rid of the subsidies to the oil and gas companies, and they continue to want to give the folks at the very top big tax cuts.
AMANPOUR: So you've described it. But the bottom line is, I mean, you have come close and you have basically said you're not going to support it. Right?
PENCE: Well, look, I want to see the language in the bill. I think John Boehner got a good deal, but it's probably not good enough for me to support it. Right.
AMANPOUR: OK. So I think you're saying you're not going to support it. What are you saying? Are you going to support it?
VAN HOLLEN: I'm going to look, Christiane. We don't know yet what the cuts are. In other words...
AMANPOUR: How long is this going to take?
VAN HOLLEN: Well, the vote will come up this week. They'll probably put the cuts on the Internet, I hope, so that everybody can see them.
AMANPOUR: Will it pass, do you think?
VAN HOLLEN: I think this will pass. And I'm very determined to work with my colleagues to prevent a government shutdown, because it will have huge disruption in the economy. That's the seesaw that we're living with here. But, look, these guys took this to the brink, not only to do something that won't create a job, but to impose their own right-wing policies on the country.
No, we can disagree about a very controversial issue, and we do. But using this budget process to impose that position on the country, and threaten shutdown to shut down the government.
AMANPOUR: I was going to ask you that question. Why did you need to do that at this time? Why muddy the water, since you were really about money and about spending cuts?
PENCE: Let me say, first off, it's nonsense to say that Republicans were willing to shut down the government over this. Speaker John Boehner made it clear that the policy issue, including my amendment on abortion providers, had been negotiated, at the time that -- I think it's in The Washington Post this morning.
What was clear here, this administration, and liberals in Congress were willing to shut the government down to continue to fund abortion providers in this country. And that's the bottom line. Why would I fight for it? Let me explain.
I'm pro life. I don't apologize for it. I also think it's morally wrong to take the tax dollars of millions of pro-life Americans and use it to fund abortion providers.
AMANPOUR: But you know the federal funds don't do that?
PENCE: Well, look, in February of this year, the Pence amendment passed on a bipartisan basis by 240 votes. It denied federal funding to Planned Parenthood of America. I've never advocated to reduce funding to Title X. They tried to make this about women's health. It wasn't about that.
Let me share with you, though, this fact. Planned Parenthood's clinics focus mainly on abortion. In 2009, Planned Parenthood performed 977 adoptions, 7,000 prenatal, 332,000 abortions.
VAN HOLLEN: Facts, facts.
AMANPOUR: Because I want to move on.
VAN HOLLEN: The facts are that not one penny of taxpayer money goes to Planned Parenthood or anybody else for abortion. And what Mike and his colleagues tried to do was use a funding bill, a spending bill, to impose changes in law that should be debated, but not as part of this...
AMANPOUR: No, I need to go forward now, because you made your position clear, sir, you made it clear. I understand where you stand on this. I understand this. What I want to know now, is you have a huge fight coming up. You have got the debt ceiling. You've got a potential catastrophe, if you believe Timothy Geithner, the Treasury Secretary.
What's going to happen there? What needs to happen for you to vote yes to raise the debt ceiling, the amount America can borrow?
PENCE: Well, look, I will not support an increase in the debt ceiling without real and meaningful changes in spending in the short-term and in the long-term. We've got to change the way we spend the people's money.
Again, we have a $14 trillion national debt. The president sends the budget to Capitol Hill that will double the national debt in the next ten years. And simply expanding the credit card is not the right answer.
AMANPOUR: On this issue, how will that fight be fought?
VAN HOLLEN: It will be hugely dangerous for the Republican colleagues to play a game of chicken on the debt ceiling. You would see an economic catastrophe if the United States defaulted on its debt.
Now, the budget proposal that they're bringing forth will require increases in the debt ceiling for years and years to come. So for them to say we're not going to support an increase in the debt ceiling on this. And then put a budget on the floor that will require it is just irresponsible.
AMANPOUR: One of the questions I asked David Plouffe was about who has the ideas. Congressman Ryan has put forth a budget that many people are saying is a good attempt to deal with this. When are we going to hear -- and are you frustrated that there isn't one detail on your side -- although, again, David Plouffe said the president is going to put more details out this week.
VAN HOLLEN: Well, the president had a budget. And we, the Democrats in the House, are going to have an alternative budget this week as we debate it.
The problem with the Ryan plan, the Republican plan is it's totally unbalanced. That's what the co-authors of the fiscal commission, bipartisan fiscal commission said, because what he does is he takes deep cuts, he ends Medicare. He ends the Medicare guarantee for seniors. He's going to require seniors to go not private insurance market and they'll have to eat all of the rising costs of health care, while they provide big tax breaks for millionaires, and the corporate special interest.
That is just not the priorities of the country. And I think it's wrong to do that.
AMANPOUR: Do you think, Congressman Pence, and this is the last question, there will be some bipartisan compromise? Because, on the big issue, it has to be bipartisan crafting.
PENCE: Well, let me say, House Republicans under Paul Ryan's leadership have offered a vision to put America back on a pathway toward a balanced budget. It deals with issues in entitlement. It reduces the national debt. For Americans 55 or older, we're not proposing a single change in Medicare. Chris knows that.
What we want to do for Americans under the age of 55 is make sure they can participate in the same health plan that members of Congress do.
VAN HOLLEN: That is not accurate.
PENCE: This is going to be a big debate...
VAN HOLLEN: Members -- no members of Congress...
PENCE: ...there's no repeal -- there's no repeal of the Medicare guarantee.
VAN HOLLEN: Members of Congress have what is called a fair-share deal. We do not bare the entire risk of increased costs. They are asking seniors to bear risks, they are not asking themselves...
PENCE: Members of Congress have the same premium support system, Chris knows that.
AMANPOUR: We will be watching this, debating it...
VAN HOLLEN: There's a fair share guarantee. And Mike should check the law, because they're ask seniors to absorb the entire risk of -- the higher risk of increased costs. Members of Congress do not bear that risk in the same way.
AMANPOUR: We are certainly going to bring this up with our round table. And we'll keep talking about it, because this will be the issue ahead. Thank you both very much indeed for joining us.
VAN HOLLEN: Thank you.