We were joined at today’s press briefing by Office of Management and Budget director Peter Orszag, who acknowledged that today’s “pay as you go” proposal would only stop the government from making the deficit hole any bigger, not solve the problem of the hole .
TAPPER: If this is just stopping the hole from getting any bigger, when are you guys going to take on the serious pros -, the serious program of entitlement reform, so that you're no longer digging a hole at all? When is that going to happen?
ORSZAG: Well, what I'm trying to say is...
TAPPER: And health care is part of that.
ORSZAG: No -- and actually, just pause for a second…I've come from a world where Social Security reform was the sort of test of manhood in terms of entitlement reform. But let's just...
TAPPER: That’s what I’m saying.
ORSZAG: Yes, I know that.
ORSZAG: Let's just focus on...
GIBBS: Plus the fact that you're outlining hundreds of billions of dollars in Medicare cuts, he’d like to fast forward to some other program…
TAPPER: You’re the one who said that the hole is still there
ORSZAG: But let me just highlight...
GIBBS: Right, made bigger by the fact that we added a prescription drug benefit to Medicare that he just said would have been covered in...
TAPPER: So get rid of it.
ORSZAG: But let me make it...
ORSZAG: Let me make the point this way...
GIBBS: Are you proposing that as a --
TAPPER: I'm not the one that has legislative power.
ORSZAG: This is kind of fun...
TAPPER: You're saying Medicare Part D is a major deficit problem, so where's the proposal to take it away?
ORSZAG: Could I make this point for a second? Over the next two months -- two to three months -- we will be in the midst of a legislative process on the core fiscal problem the United States. If we succeed, just -- I mean, for example, here's a calculation for you: If we succeed in reducing the growth rate of health care spending by 15 basis points -- 0.15 percentage points per year -- that has a larger impact on the nation's fiscal balance than eliminating the Social Security deficit.
And so, what I'm trying to say is we need to be focusing on whether we are doing as much as we can to get that number down 15 basis points, 30 basis points, 100 basis points, 150 basis points.
And then, in addition, as the president has said, once we get -- once we address the biggest problem that we face over the long term, we do need to turn to other parts of our long-term fiscal imbalance, including Social Security.
But it strikes me as making sense to focus on the thing that is the core driver first, and we're going to have plenty of discussion over the next two months, about ways of trying to obtain a more efficient health care system.
TAPPER: So health care first, then entitlement reform.
ORSZAG: Well, health care...
TAPPER: Health care includes some entitlement reform.
ORSZAG: It includes a lot. I mean, again, if -- look, if health care costs grow at the same rate over the next four decades as they did over the past four decades, Medicare and Medicaid go from 5 percent of the economy today to 20 percent of the economy by 2050. That is the core driver of our entitlement problem.
If we succeed in bending that curve, we will have done more to improve the long-term health -- fiscal health -- of the nation than any other single thing we could do. Which is not to say other things aren't important, but what I'm saying is, over the next two months we have an opportunity, our best shot, at addressing that problem, and that's what we want to do.
TAPPER: Two questions about developments today. One regarding the Ghailani trial -- him being flown to the United States -- if any of the detainees who are brought to trial through the U.S. criminal courts, or even through military commissions -- if any of them are found not guilty, will the administration let them free?
GIBBS: Well, I'm not going to get into hypotheticals about...
TAPPER: Forget the military commissions.
GIBBS: I'm not going to get into hypotheticals about the court cases either.
TAPPER: Well, this is an important part of -- you're talking about a credible justice system; bringing these people to justice. You've spoken at great length about this -- the president has. If they are found not guilty, will they be found...
GIBBS: Well, let's discuss that if it ever comes to fruition.
TAPPER: But isn't that what is underlying a credible justice system? The idea that if you're found not guilty, you'll be free?
GIBBS: But I'm not going to get into hypotheticals about how certain cases may or may not play out.
TAPPER: So you're not willing to commit to freeing people if they're found not guilty?
GIBBS: I'm not willing to get into playing hypothetical games.
TAPPER: It's not a game, Robert. It's a question about the credibility of a justice system.
MAJOR GARRETT, FOX NEWS: Just the principle of it.
GIBBS: No, it's -- I'm not debating legal principles. I'm just not getting into the hypothetical back and forth of what happens on a case.
TAPPER: OK. So the Obama administration is refusing to say that if someone is found not guilty, they will be set free?
GIBBS: Jake, I am not going to get into the hypotheticals about specific outcomes of cases.
TAPPER: I'm not asking you to talk about a specific case. I'm talking about in general.
GARRETT: For all the detainees brought to the system -- into this system of justice, which this administration said can and has in the past handled adequately -- more than adequately, according to your talking points this morning, the terrorism cases brought before it in whatever venue -- if that justice system, which the administration says should be trusted, renders a verdict of not guilty, is that person released?
GIBBS: We will talk about what happens about a verdict when a verdict comes.
TAPPER: Well, then how is the world supposed to have any confidence that this new system of justice that you guys are ensuring is going to be the case with detainees, is actually credible?
GIBBS: We think the Southern District of New York has a very good record, as it relates to trying and convicting terror suspects.
TAPPER: I believe what your -- the facts sheet said this morning -- was that it has a 90 percent success rate.
GIBBS: I think 90 is pretty good.
TAPPER: I'm not questioning whether 90's pretty good. I'm asking you about the 10 percent.
GIBBS: And I'm, in this specific case, not going to get into those hypotheticals.
TAPPER: The other question I have has to do with the $68 billion that is going to be paid back in TARP money. Herb Allison, your nominee to be assistant secretary for financial stability, told the Senate Banking Committee, that, that money might be used to provide more assistance to troubled firms. Is that right?
GIBBS: Well, the money goes back into general revenue. I think the way the statute for TARP is written is that the amount obligated can't exceed the amount of $700 billion. The -- but again, this money goes back into general revenue. It's our obvious hope that additional money is not going to have to be used to stabilize banks. I think the result in the past several weeks, at the conclusion of the most recent round of stress tests, denoted that banks have been very capable at raising private capital in order to ensure that they meet regulator requirements for capital cushions.
TAPPER: But it could be used?
GIBBS: Well, it -- I certainly wouldn't rule it out, but I also wouldn't rule it in.