Aug. 23 (Bloomberg) -- White House Budget Director Sylvia Mathews Burwell, speaking in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, rejected delaying the health-care law as a way to get a budget deal with Congress and voiced optimism that talks with lawmakers would avoid a government shutdown.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the program with one of the truly influential people in Washington, the head of the Office of Management and Budget, Sylvia Mathews Burwell. Sylvia, thank you for being with us.
SYLVIA BURWELL: Thank you. Happy to be here.
HUNT: Let’s talk about what’s ahead. You’re in constant conversations with Congress. This week, 80 House Republicans said, in essence, let’s shut down the government. So did Jim DeMint. I know you don’t want to do that. What do you think of the probabilities that you avoid any kind of crisis like that in the fall?
BURWELL: I think we’re very hopeful that we can avoid -
HUNT: Hopeful, but do you think you will?
BURWELL: - a shutdown. You know, I think right now what we need to do is work towards a solution. One of the things - I’m not sure why the conversations are about things like a shutdown -
BURWELL: - when the conversation should actually be about the substance of trying to get something done.
HUNT: Try to find common ground.
BURWELL: That’s where we should go.
HUNT: Well, the Republicans at one point were saying you have to defund, you have to kill the Affordable Care Act. That hasn’t - that’s fizzled. That’s not going to happen. But their backup position now is, OK, let’s delay funding for a year. You’ve done that with some things anyway. So is that a grounds for negotiation?
BURWELL: You know, on the question of the Affordable Care Act and its implementation, it is a law that has been passed, it is a law that has been upheld by the Supreme Court. And right now, I think what we should be having a conversation about is whether or not you want to take those young people who are up to 26, who are already receiving their health care, off of that, whether or not you want to prevent the many people who, starting in October, can sign up for exchanges, getting on health care, and whether or not you want to turn us off the path that we are currently on which reduced health care costs.
HUNT: So not - not interested in delaying for a year?
BURWELL: Not interested at all in delaying what we believe is bringing people onto health care and continuing a path of reducing costs.
HUNT: Let’s talk about the sequester that’s going to cut deeper in the second year than it did the first year. It’s going to cut particularly deep in defense, as much as $20 billion more. Is it - is it your position that anything that you do for defense you also have to do for non-defense?
BURWELL: That is correct. The president has been clear on that point.
HUNT: So, therefore, if the Republican hawks, as we call them, come in and say, look, let’s do away with sequester for defense and a little bit for non-defense, that’s unacceptable?
BURWELL: What we need to do is fix both parts. And actually, when one thinks about issues like education and that type of issue, they are part of our national security, as well. But what we believe we should be focused on is the economy of this country, as well as our own national security, and fixing both pieces are what’s appropriate and proper.
HUNT: And you’d like to see a replacement for sequester, as a lot of people would, but it’s kind of hard to get there from here. But tell me, if you’ve come up - are you going to propose a specific replacement for sequester now, in time for the September talks? And just on a - not on a 10-year basis, because it seems that won’t fly, but is there a possibility of a one - or two-year replacement? And what would be the major components?
BURWELL: So I think it is actually starting, though, back with the larger proposal, because when the president’s budget came out, there was a proposal and a proposal that would both replace sequester, have additional deficit reduction in the out-years and in the long term, as well as make investments in things like infrastructure for the nation that we believe are both important short-term and long-term investments for the economy. That is the starting point; that is where we started.
With regard to where - we have put that out. We have had - tried to have conversations about that. We’re looking for someone to counter that proposal and have not had that yet. But what we do believe is we’re willing and open to have conversations on how others see us move the conversation forward.
HUNT: Well, are you interested - if you could get it - in a one- or two-year sequester replacement? And if you could get Senate Republicans to buy off on that, would the administration - we know the details matter, but is that at least an approach that you’re interested in looking at?
BURWELL: I think what we are interested in is any approach that can help us move the economy forward and keep us one the current trajectory of economic growth. And when one thinks about how we can do that, we can do that across a wide range of things. We’ve proposed the way we think we should do that. But we are open to conversations about how to do that.
BURWELL: I think there are any number of ways one can think about that movement forward, but I do think it is about the question of we set out principles about, we do want something that moves the economy forward, in terms of thinking about the short-term growth we need.
HUNT: And to do that fix, even one or two years, it has to have, what, revenues and we’d have entitlements in it, also?
BURWELL: What we have said all along is, when one is going to take care of these issues, a balanced approach - and that’s what you see in that larger plan that we had, and we believe one needs to continue on the path of a balanced approach.
HUNT: Am I hyping, Madam Director, when I say I think you’re amenable to a one- or two-year deal?
BURWELL: I think the question is whether we - I think right now, if there is something that was brought before us that could help us move forward in these conversations, we’d like to see the substance of that, and we would welcome seeing an understanding how people think that could be achieved.
HUNT: But you haven’t seen it yet?
BURWELL: At this point, no one has presented us with that.
HUNT: You said sequester cut into economic growth this year. Next year, you project economic growth of about 3.1 percent. Does that assume sequester will be replaced? And if it’s not replaced, how would it affect that 3.1 percent growth you project?
BURWELL: In the current OMB projections, we do not assume that sequester is - we assume that our budget - what we do is make the assumptions of our budget, and those assumptions include changing and buying out the sequester with longer-term changes.
HUNT: But if you didn’t do that, how much would that affect that growth?
BURWELL: Right now, what we see is estimates from CBO that are sticking along the lines of a 750,000 in terms of the employment numbers, and those are translating around 0.5 -
HUNT: Deficits are dropping. You see them going to under 3 percent of GDP by the year 2017. That’s lower than the 30-year average. First of all, is that good or bad for the economy? And, secondly, are we at the stage now where we can say deficits are not the prime concern, that they really may be a long-term problem, but really we’re much more concerned with economic growth?
BURWELL: I think we should be glad about the progress we have made on deficit reduction, in part. The part of that deficit reduction that is occurring in a way that we think is harmful to the economy, the across-the-board cuts that are the sequester, is something that we have not embraced and don’t embrace.
With regard to the question of what our core focus should be, as we think about these fiscal issues, I think right now thinking about the economic growth and employment is where our core focus should be. That doesn’t mean that one is not looking to the future and making sure you keep your eye.
HUNT: But the priority right now is jobs and growth?
BURWELL: The priority is jobs and growth. At the same time, we believe you can do both, and that’s what the president’s budget did. But, yes.
HUNT: Let me give a softball to the Harvard-Oxford girl from West Virginia. In 40 seconds, tell us what you’re achieving in the M, or the Management part, of your job.
BURWELL: Thanks so much. Right now, we have - thank you for bringing out the M part, which is actually very important to these budget issues, as well. Right now, we’re working on the development of a second-term management agenda for the administration and the president that will build on some of the successes, such as cutting our real estate - our commercial property bill by $8 billion. When we focus on this, we’re going to focus on three things, one, effectiveness, how the United States government delivers to its customers, the American people and American business, small and large, in the cities and states we work with.
No. 2, how do we make this government more efficient, those dollars get spent better? And the third is how to use management to help government be a part of stimulating the economy, faster permitting, getting open data out there, where we get small businesses and entrepreneurs to use that data to create apps and everything else.
HUNT: OK. Sylvia Burwell, thank you so much for being with us.
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