STEVE INSKEEP, host:
At this time of economic stress, many people are expressing alarm about the political leadership of the world's largest economy. When Standard & Poor's downgraded U.S. debt it blamed what it called political brinksmanship, among other factors. Former Republican Senator Alan Simpson is not surprised.
Was the downgrade right?
Mr. ALAN SIMPSON (Former Republican Senator, Wyoming): Well, they said they were going to do it. And then all you had to do is look at the horror story of those last two or three weeks before they put together this package which doesn't get you there. And whether there's credibility in Standard & Poor's isn't the issue, and it didn't matter whether it was right or wrong, it left a terrible impact.
INSKEEP: Simpson co-chaired a presidential commission last year that offered a plan to reduce long-term government debt by shaving programs, reworking the tax code, raising more money. The commission was supposed to give Congress political cover to make hard decisions that Congress was not making on its own. Its findings were dismissed. Now Simpson is watching. As part of the debt ceiling deal, Congress is setting up its own special committee.
Mr. SIMPSON: Yeah. If they - and if they just went back, I mean what was the purpose of 18 of us sticking it out for 10 months and being very specific in a 67-page report as to what you would do to stop this automatic pilot of the entitlements. And forget whether you call it Obamacare or Jack Benny-care or I don't care - it won't work. And if we are - if we and this government and these congresspersons are in thrall to the AARP and Grover Norquist, we ain't got a prayer.
INSKEEP: I should specify that for people - the AARP is, of course, very suspicious of changes to Medicare or Social Security, while Grover Norquist is the man who gets lawmakers to sign a no-tax pledge - nearly all Republican lawmakers to sign that. That's who you're talking...
Mr. SIMPSON: ...to sign that during the roses and wine days 20 years ago and holding it over their head. And now it's getting caught. He'll be irrelevant in a couple of years. Because if you can't get rid of these tax expenditures, which are just loopholes - they're really spending by any other name - if you can't get rid of those and then get a better tax rate, broaden the base, lower the rates, get spending out of the code - all of that is in our plan.
INSKEEP: Could the S&P downgrade, whatever people think of it, serve as a wake-up call, as Tyler Cowan, the economist, called it on this program yesterday?
Mr. SIMPSON: Well, indeed. I enjoy reading Krugman, but I think he's nuts about the right wing - it kind of loses the saliva test when he thinks about the, quote, "right wing" or the Republicans in the House, I guess. But anyway, the unfunded liability of the United States at every level is 61 trillion bucks.
INSKEEP: Krugman, Paul Krugman, in that column you're referring to, writes about what he calls Republican extremists. Haven't you also made statements in recent weeks expressing concern about the refusal of some in your party to compromise?
Mr. SIMPSON: Oh yes. The word compromise is not a filthy word. If you can't learn to compromise an issue without compromising yourself, then you shouldn't be a legislator.
INSKEEP: Senator, let me ask about another complexity of this situation. We have obviously a weak economy right now. The stock market seems to be responding to that as much as to the S&P downgrade, and there's even concern about going back into recession. How does that complicate the demand to reduce deficits at this time?
Mr. SIMPSON: It's a tough one. But in our plan, again, I just tell people before you call me and raise hell with me and bitch and moan - and the worst, nastiest letters I get are from people over 70 who aren't even affected. The teeth in our plan doesn't really go into effect until 2013, because we realize the fragile nature of this recovery.
INSKEEP: Given what we've said, though, what have you thought about people who have been saying in recent weeks that we're just going from one event to another, that focus is on the federal budget and distracts, in some people's view, from the fact that millions of people are out of work right now?
Mr. SIMPSON: It's terrible. People are hurting all over this country. You can go back and you can extend the unemployment. I don't - that's up to Congress, but whatever you do, start paying for it.
INSKEEP: Is it going to be just really hard for this political system to make long-term choices to save money at the same time that the short-term imperative seems to be to keep the economy propped up or at least that cutting spending too quickly or raising taxes too quickly precipitously might damage the economy further?
Mr. SIMPSON: Well, those things are all real. And it's a smart-aleck Western phrase - you say it's going to be tough, it's going to be like giving dry birth to a porcupine. Now, that's where it is. And it's going to be nasty and if it doesn't get nasty, it won't get done.
INSKEEP: Former Senator Alan Simpson, co-chair of a deficit panel last year. Thanks very much.
Mr. SIMPSON: Thank you very much. You bet. Transcript provided by NPR, Copyright NPR.