October 20th, 2013

Baker on Ted Cruz’s shutdown strategy

CNN’s Fareed Zakaria GPS features an interview with former U.S. Secretary of Treasury during the Reagan Administration, and former U.S. Secretary of State during the George H.W. Bush administration, James A. Baker, about our stagnant political dysfunction, and the future of the GOP and democrats.

Video highlights from this interview and the full transcript are available after the jump.

FAREED ZAKARIA, HOST, “FAREED ZAKARIA GPS”: James Baker was Ronald Reagan’s chief of staff, then Treasury secretary.  Than he was secretary of State under President George H.W. Bush. He joins me now from the Baker Institute at Rice University in Houston, Texas. Jim, thank you so much for doing this.

JAMES BAKER, FORMER SECRETARY OF STATE:  Thank you, Fareed. I’m glad to be with you.

ZAKARIA:  Tell me first, with your Treasury secretary and Treasury — and secretary of State hat on, what damage do you think this whole episode has done to the United States or can we bounce back?

BAKER:  Well, we can bounce back.  And a — and, uh, I’m convinced we will bounce back.  That’s not to say that this was not a harmful episode.  And it’s not to say that, uh, as far as I can tell, Fareed, there really weren’t any real winners here. My party, the Republican Party, I think, was a loser. But I also think that, uh, the president and the Democratic Party was a loser because the world saw us in disarray.  It really saw a failure of governance.   And it raised, I think, some serious doubts in the minds of people around the world about our country.

ZAKARIA:  The president’s argument is he had to do something to — to end this practice of what he calls holding the government ransom, of holding the full faith and credit of the United States ransom. Uh, and, you know, as somebody who spent a lot of them in the Oval Office, do you think that from a presidential point of view, uh, it — it sort of makes sense to — maybe to end this process of using the debt ceiling as — as a negotiating tool?

BAKER:  Well, if I were — if I’m wearing my Treasury secretary’s hat, which I wore for four years, I would love to see us do away with the requirement for increasing the debt ceiling. But, as a taxpayer and as someone who thinks that the greatest threat facing the United States today is this huge ticking debt bomb out there, the — that has been created by our continuing to spend and borrow without uh, restraint, then I think it’s something we, uh, we pretty much need to keep. I know you’re aware and your viewers are probably aware of the fact that when he was a senator from Illinois, President Obama, Senator Obama, voted against increasing the debt ceiling. He wasn’t willing to increase it.  He was ready to see us, uh, go into default. So this is a political exercise, uh, it — that occurs any time, uh, there’s a necessity of raising the debt ceiling. If you look at it from the — from the — from the chair of a Treasury secretary, you’d like to get rid of that. On the other hand, I think it does provide some restraint on the tendency of our government these days to, uh, enter into unrestrained spending and incurring additional debt.

ZAKARIA:  The — the president outlined, in his remarks after the crisis, three areas where he thought even though there were big disagreements in  the parties and there was polarization, there was a way forward. He said we can come to some agreement on a budget deal and he cited some of the things he’s already been willing to put on the table.  And Paul Ryan actually, in an op-ed, um, echoed that suggestion. He talked about immigration and he talked about a farm bill. How likely do you think it is that we’ll get a deal on any of these three things?

BAKER:  Well, I think there’s a good chance we might get a — some sort of a — of a deal on, uh, the farm bill.  We need a farm bill.  And  I would hope we would get a — a deal on immigration, because I think that’s a… that’s a — an issue that needs to be resolved and — and resolved in a bipartisan way.  Uh, I think, uh, my party, for instance, needs to understand that the demographics in the country are moving against us, and, uh, there’s no reason on God’s green earth why we should not get a healthy proportion of the Hispanic vote.  Hispanics believe in family.  They believe in work.  They believe in religion.  They believe in a – — some of the same principles and values that Republicans hold dear. And so we used to get a large percentage of that vote and we need to — we need to do everything we can to, uh, get back to that. We also need to get the votes of other — approach — seek the votes of other minorities, particularly Asians, but other minorities, as well, because, uh, we’ll need those votes — we’re going to continue to need those votes.  They’re an ever-growing, uh, voter blocs and if we’re going to win elections.

ZAKARIA:  On the budget, uh, Jim, the question is, uh, is there a deal to be had where the Republicans give — give in somewhat on — on some tax increases and the president gives in on both entitlement reform and spending cuts? That seems to be where there is a possible deal.

BAKER:  Right.  And here’s the — here’s my — here’s my view of that, uh, Fareed. The biggest problem we have, uh, fiscally facing the country today is this huge debt bomb, which has, uh, been created as a result of evermore, uh, government spending.  And much of that spending, of course, is not, uh, legislated by the Congress.  It happens automatically.  The entitlement programs keep spending automatically. We have got to get a handle on that somehow. We’ve got to get a handle on it. That’s what we ought to be focusing on.  But, yes, I understand the president and the Democrats will be saying, well, fine, if we’re going to talk about, uh, entitlements, then you need to be willing to talk about increasing revenue. The real way to increase revenue is to increase growth.  Uh, one of the problems that — one of the, uh, adverse effects of what we’ve just been through is that it — it diminished, uh, to some extent… various numbers are thrown out there, but some people say six tenths of 1 percent of GDP. Well, that — that restrains uh, uh, revenues coming into the government.  That’s the way to grow revenues, to grow the economy. Now, you talk about increasing tax rates? We’ve just been through a great big tax increase, uh, in January of this year.  We take — we raised taxes, at the president’s request and the Republicans, uh, went along with it, uh, by $640 billion. Uh, so the question is, how much — what — what’s the amount, what — how — all of that has to be negotiated. But you can’t just say that we will do an equal amount of re— of entitlement restraint, uh, for an equal amount of a — of — of additional tax increases.  We’ve already raised taxes this year by $640 billion. So these are all things that need to be negotiated.  And, yes, hopefully, there will be some way to, uh, negotiate a budget, uh, or — or a — a major fiscal reform package. Paul Ryan has got some terrific ideas.  Paul Ryan, frankly, in my view, is one of the upcoming stars of the Republican Party.  And he’s got the right idea.  And he’s extraordinarily bright. And I think — I am delighted to see that he’s the one representing my party at the table.

ZAKARIA: We’ll be back in a moment.  More with James Baker, including his thoughts on his own senator, who is of course Ted Cruz.


ZAKARIA:  And we are back with James Baker, one of the legends of American politics, former Treasury Secretary, former chief of staff, former Secretary of State. What do you think about the man representing your state?  “The Houston Chronicle” just waxed nostalgic in an editorial about Kay Bailey Hutchison, almost suggesting they wished they had never endorsed Ted Cruz, uh…

BAKER:  Well…

ZAKARIA:  — for that job.

BAKER:  — you…

ZAKARIA:  Do you think Ted Cruz represents the — represents your views in the Republican Party?

BAKER:  Well, I’m not sure that he represents my views in the Republican Party. But I’m not going to sit here and dump all over my junior senator, particularly given the fact that he worked for me in 2000.  He was a very fine lawyer in that recount battle we had in Florida.  And he was a good solicitor-general for the state of Texas. Was he wrong on this most recent episode, in my view? Yes. It hurt us. It didn’t gain us anything.  We kicked the can just three months down the road.  We didn’t accomplish anything.  It didn’t take a, uh, a, uh, rocket scientist, in my view, to figure out that if you don’t have the Senate and you don’t have the White House you’re not going to be able to defund ObamaCare.  It was a maximalist position, had no chance of being a — accomplished, and therefore, I think it was a mistake. And, uh, I think it was Senator, uh, John McCain, if I’m not mistaken, who said it was a fool’s errand. And I’m not a — I’m not disinclined to — to disagree with that.

ZAKARIA:  What do you think should happen, uh, with — now that the can has been kicked, then next time around this happens? Mitch McConnell says you know, you’re — two kicks of a mule and you — you’re meant to learn.  The second kick, you’re — you’re not meant to learn much, meaning by that, we shut down the government once in the mid-’90s.  It didn’t work.  We shut it down this time.  It didn’t work.

BAKER:  Um-hmm.

ZAKARIA:  Do you think those threats should be off the table? How should the Republican Party approach the issue of, uh, the — this — this next time…

BAKER:  Well, here’s…

ZAKARIA:  — these, uh…

BAKER:  — OK, here’s…

ZAKARIA:  — this same issue comes up?

BAKER:  Here’s what I think.  The — for the next time. First of all, I would hope we would abandon this, uh, this idea of adopting a maximalist position on defunding ObamaCare by shutting down the government. The way to defund ObamaCare is for us to get out there and win elections, win control of the Senate in 2014 and the White House in 2016 and keep the House. And then we can repeal ObamaCare and we should.  It’s a horr — It’s a horrible law, in my opinion. And — and, you know, one of the adverse effects of what we’ve just been through is that we didn’t get to see all of the problems that are taking place with respect to trying to implement that law.  They — it’s — it’s a disaster.  And — but that was all overshadowed by what we went through. So what should we do next time? Don’t take a maximalist position on defunding ObamaCare, but be tough in terms of fiscal reform by — be — hang in there tough to get some — some, uh, spending restraint, not necessarily to shut the government down, although I would say this.  I don’t think there’s anything wrong, uh, with a — with hanging — hanging tough on the debt limit.  Every, uh, the — a lot of times, a party out of power does that. It’s — it’s, uh, customary.  It does give you leverage.  Uh, if the administration doesn’t control the House of Representatives, they ought to expect

that they’re going to have problems getting the debt limit increased.  And if the president is going to adopt the attitude that he won’t negotiate an increase in the debt limit, even though all presidents have before, in — and he has himself, in 2011, I think he’ll pay a political price for that.  That’s different than saying I’m not going to, uh, negotiate on the defunding of my, uh, signature health law.

ZAKARIA:  But as a political matter, um, you — you’ve — you’ve played this — this game in Washington better than most.  The president does seem to have won.  I mean the Republicans dropped, what…


ZAKARIA:  — 15 points in the polls…

BAKER:  I agree with that.

ZAKARIA:  Uh, the president…


ZAKARIA:  — dropped a little.  The Democrats dropped a little.  And ObamaCare actually edged up a little.  Net-net it doesn’t — it seems to have helped the president.

BAKER:  Well, I don’t think it’s helped the president, when you, uh, I don’t — the president’s numbers have come down.  The Democratic Party’s numbers have come down, uh, and — and, uh, the view or opinion of a — of America has come down.  And now, look, he’s the leader of the country.  Uh, 87 percent today think the — you take a poll, 87 percent say we’re on the wrong track.  A — only a few teen say we’re on the right track.  That’s not good for the leader of the country. So I would not argue that this is a win for the president.

ZAKARIA:  James Baker, always a pleasure to have you on. I hope we can come back to you very soon.

BAKER:  Thank you, Fareed.