MSNBC "The Rachel Maddow Show" - Sequester

Interview

MADDOW: Congresswoman Kaptur, as somebody who is in the middle of
this thing -- first of all, do you agree that is what is driving the
misperception of the underlying factors here? And secondly, do you think
that anything could be done to avert this problem before Friday?

REP. MARCY KAPTUR (D-OH), BUDGET COMMITTEE: I think in terms of
political strategy on the part of the Republicans who are being so
obstinate and uncompromising, they`ve managed to move the debate from jobs
to sequester. I`m not sure all members of Congress could define sequester.

It means automatic cuts with no thought. The meat ax just falls wherever.
But they`ve managed to shift to a different turf, and, therefore,
we`re not arguing about how do we create more jobs in this country?

Because with a 7.8 unemployment rate, you`re not going to balance the
budget. We have to cut that by half.

Jared tried so hard in his own career and service to the people of our
country to do that. So they`ve shifted the debate. And we`re on their
turf. We need to be talking about economic growth and how what they`re
proposing is actually going to cause more unemployment.

Do you know that just in the defense area -- and I`m the first
Democratic woman in history to serve on defense appropriations, if you can
believe that, and it`s 2013 -- we will likely see over 734,000 civilian
Defense Department employees furloughed with a 20 percent pay cut over the
next 22 days? And --

MADDOW: That`s immediate.

KAPTUR: That`s immediate.

MADDOW: Three-quarters of a million people over the next few weeks.

KAPTUR: That`s right. They are going to cut become on gas purchases,
purchases of clothing for their children, food. This goes directly to the
bottom line of growth in this economy, and it`s going to be a damper on
that growth.

MADDOW: Jared, from an economic perspective, the prescriptions that
we have heard like Congresswoman Kaptur just explained and like the White
House has been explaining, about what`s going to happen if this goes
through, is that kind of rapid not paying too much attention to details
contraction that we will see starting Friday if this happens, would it have
a significant negative impact?

KAPTUR: Not only would it, but it already is. Remember, the
sequester is fiscal contraction on top of fiscal contraction. The
expiration of the payroll tax holiday has already taken over $100 billion
out of the paychecks of working Americans this year. Now, I`ve looked at
estimates of economists across the board, nonpartisans who argue that put
it all together, add the sequester on top of it, and you`re talking about
growth that`s about a percent and a half slower this year than it would be
otherwise.

Let me just read you a quick quote from somebody today up on Capitol
Hill. "Moreover, besides having adverse effects on jobs and incomes, a
slower recovery would lead to less actual deficit reduction in the short-
run." Now that`s not Karl Marx or Chairman Mao. That`s Ben Bernanke.
He is saying not only does slower growth hurt us in the way the
congresswoman is mentioned, growth in jobs, it actually is
counterproductive if your goal is truly deficit reduction.

MADDOW: So the deficit is getting smaller. We`re setting our hair on
fire about the deficit as if it`s getting larger. And in order to show the
seriousness of how on fire our hair is, we`re going the make our deficit
problem worse.

KAPTUR: Exactly.

MADDOW: Woo-hoo! Governing (ph).

KAPTUR: And we`re going to put a damper on growth. We`re going to
put more people out of work. And there will be more suffering where there
needs to be recovery.

MADDOW: What do you see as the way out of this? In Congress, you --
since the Republicans won control of the House and were sworn in 2011,
we`ve had these repeated trips to the brink, whether it`s the debt ceiling
fights or the government shutdown fights and now this sequester fight. All
of them coming to the 11th hour, all of them self manufactured crisis, that
weren`t imposed from the country without, but were designed crises.

KAPTUR: Right.

MADDOW: How do we get out of it?

KAPTUR: Manufactured crises. Well, we get out of it politically when
people go to the polls in 2014, we need a Democratic house. But what`s
happened is that gerrymandering in a state like Ohio has been so severe
that a state that voted 50/50, half for President Obama, half for Governor
Romney actually is only sending 4 out of 16 members on the Democratic side
of the aisle.

So, it`s 25 percent. We could have an additional four members just
from Ohio that would be more representative of how -- what our population
actually is. But we don`t have a representative House because of the
gerrymandering that happened.

MADDOW: Does the Democratic Party have a plan to fix that? I mean,
the Republicans have -- are very overt and very proud of how they have been
able to use redistricting, use gerrymandering to get more seats than they
were due by the number of votes that they have. They brag about it. They
say this is one of their great successes of the last election cycle.
Do the Democrats have a plan to counter it?

KAPTUR: Well, I tell you, Chairwoman Debbie Wasserman Schultz has
talked about this. She has talked about what we need to do to prepare for
the future. And I know that those who are paying close attention are very
aware of how unfairly representative the House currently is.

MADDOW: In terms of what is about to happen and what we are on the
self-imposed precipice of, Jared, how -- when you said that damage has
already been done and that more damage is coming.

KAPTUR: Right.

MADDOW: How much of it is reversible? And what would be the best way
to reverse it?

BERNSTEIN: Well, first of all, it would be great if policymakers
would at least take a do no harm, a Hippocratic Oath, that says, if I were
pulling levers, I would implement job measures of the type the president
introduced in the jobs act, the type that Congresswoman Kaptur is
constantly banging up there. I actually don`t think that`s very realistic
right now.

So, my first argument could be to do no harm. Just put these kinds of
spending cuts off until the economy is firing on all cylinders again. Now,
let me be precise, I`m not implying that this fiscal drag that we have
talked about, sequester, the other cuts we`ve mentioned, it`s going to
throw the economy into a recession. But too often, the discussion is we`re
in recession bad, or we`re not in recession good.

No. The fact that growth is already slow and it`s going to be slower
means that the unemployment rate is going to be stuck where it is. I mean,
the congresswoman said we`re talking about the loss of hundreds of
thousands of jobs. When the GPD starts growing below 2 percent, which is
what will happen if all this stuff goes through and sticks, we`re not going
to be growing fast enough to absorb new people coming into the job market,
to provide opportunities for the currently unemployed.

So it`s this kind of persistent slog that just eats away at families`
living standards.

MADDOW: The whole -- it`s not just stop digging. I really feel like
in a way it`s stop punching yourself in the face.

BERNSTEIN: Exactly.

MADDOW: It`s self-inflicted and wanton and it makes no mathematical
sense. Tada!

Congresswoman Marcy Kaptur, Democrat of Ohio, Jared Bernstein, Center
on Budget and Policy Priorities and an MSNBC and CNBC contributors -- thank
you both so much for being here.

BERNSTEIN: Thank you, Rachel.

KAPTUR: Thank you.

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