DAVID GREENE, HOST:
This is MORNING EDITION, from NPR News. Good morning. I'm David Greene.
STEVE INSKEEP, HOST:
And I'm Steve Inskeep.
A photo hangs outside the office door of House Democratic Leader Nancy Pelosi. It shows her as speaker of the House. She walks the hallway lined with cheering supporters. The photo was from just after the passage of the health care law in 2010.
Soon after that, Democrats lost control of the House, and she's had few such moments since. A new Congress starts today with Pelosi still in the minority, outnumbered by Republicans with whom she profoundly disagrees.
REPRESENTATIVE NANCY PELOSI: There are many members in the Republican caucus who do not believe in government. And bless their hearts, they act upon their beliefs. So day to day, we vote here on issues that eliminate government initiatives for clean air, clean water, food safety, public safety, public education, public transportation, public housing, public health, Medicare, Medicaid, Social Security. They don't believe in a public role.
INSKEEP: House rules sharply limit the minority's power to block the majority, yet Pelosi's Democrats have had moments of tremendous relevance. On New Year's Day, for example, most Republicans revolted against a compromised deal on taxes to avert the fiscal cliff. Democrats delivered most of the votes to pass it.
Pelosi did that, even though many liberals disliked the bill. They said President Obama accepted smaller tax hikes than he could have, and left his party vulnerable in coming budget battles. That's where we started our talk with Pelosi.
Senator Tom Harkin, as you may know, said on NPR the other day that he thought that it was a terrible deal, one of the reasons being that you lose a lot of leverage. He said, and I'll just read here: The president, he says, gave all of our bargaining chips away. I don't know what we - Democrats, he means - have to bargain with Republicans on now, because taxes are settled. What's Senator Harkin missing?
PELOSI: With all due respect to Senator Harkin - and I respect him enormously - some of us have a different view. We believe that passing this legislation greatly strengthens the president's hand in negotiations that come next. Secondly, it serves as a model for bipartisan cooperation, which I hope will be an example that we follow. It is something that legislation that passed Senate 89 to eight, and by an overwhelming vote in the House - well, overwhelming vote by House Democrats and some Republicans, but in other words, a strong bipartisan vote. So, hopefully, it puts some matters to rest. It isn't a perfect bill. I never voted for a perfect bill. I haven't seen one yet. So I understand the concerns that some have about what it doesn't do, but a vote for what it does do.
INSKEEP: Well, explain how it improves your leverage, because the point of view of someone like Senator Harkin is that Republicans were desperate not to be blamed for a big tax increase in the middle class. That's now settled. They're not going to be blamed for that. And now you go into this battle over spending without that club to hold over them.
PELOSI: Well, our first - and foremost - priority is protecting the middle class, and we did not think that going over the cliff was a good idea for them because they all came over the cliff with us. It was very significant in that it decoupled tax cuts for the wealthy and tax cuts for the middle class. It made permanent the tax rate of 39.6, which is very important in terms of producing revenue as we go forward. It enshrined, for the next five years, issues like the middle-income tax cut, the child tax credit, the American Opportunity Tax Credit for Education and Unemployment for the next year. And I think that that was a victory for the middle class, victory for our country and a victory for President Obama.
INSKEEP: But how does it work here in the new Congress? Because you have Republicans who will want significant spending cuts that you don't like, and they can make threats to shut down the government. They can make threats over extending the debt ceiling, as they did in 2011, and they said they want to do again. What leverage do you have to push back on them?
PELOSI: Well, I really do not think that the president's leverage - or those of us who care about the middle class' leverage - would have been increased by going over the cliff. So it's a decision that you have to make. As I say to my members, you have to weigh the equities. What are the pluses and minuses of going forward? And I think the pluses far outweighed the minuses.
INSKEEP: What should the president do in a month or two when that debt ceiling deadline - whatever it precisely turns out to be - nears, and Republicans are demanding large spending cuts in order to extend the debt ceiling or raise it?
PELOSI: Well, I think the president's been very clear that these are two really unrelated issues. Congress has incurred these responsibilities. We have to pay the bill. I myself would use the 14th Amendment to the Constitution. The president doesn't share my view. But I think that to the extent that the public is engaged in what these decisions are, the president's hand is strengthened for us to move forward in a way that does not question the full faith and credit of the United States of America.
INSKEEP: We should remind people, the 14th Amendment has a line about all the debts shall be paid.
PELOSI: That's right. Yes.
INSKEEP: You'd rather rely on that and overrule whatever Congress has passed requiring that there...
PELOSI: Yes, I would, but the president doesn't share my view. It doesn't overrule Congress. It says the debts will be paid. But the American people need to know in a very clear way what the choices are as we go forward. I don't think there's anybody in the country - except a few of my colleagues in Congress - who want the full faith and credit of the United States of America to be questioned. Even bringing up the subject a year and a half ago led to our downgrading of our credit rating - just discussion of it, even though we eventually did raise the debt limit. So I think it is a subject that we have to get to a wholesome place on. So it's not a hostage-taker.
INSKEEP: I'm wondering, even though there's such partisanship right now, when it gets down to the spending cuts side of this and seeking a couple trillion dollars over a decade, perhaps, to get out of the budget, is there actually a significant common ground? Is there some bipartisan support for reworking Medicare in some way, for restraining spending, for holding down defense spending, whatever else needs to be done?
PELOSI: Well, I certainly would hope so. The question, though, is what is your goal? If your goal is to strengthen Medicare and to strengthen Social Security and to sustain their strength over time, there's a way to do that that we can work in a bipartisan way.
INSKEEP: And save money?
PELOSI: And save - and sustain the program. In order to reduce the deficit - which is a very high priority for all of us - the size of our deficit is an immorality. We should not be heaping responsibilities onto the future, and that's why it was important to have more fairness in our tax code, and that's what we did passing the bill this week. But the finding of reductions, subjecting every federal dollar spent to harsh scrutiny as to whether the taxpayer is getting full value for the dollar is very important. And that holds true in defense, as well as on the domestic side. But it is important for us to remember that certain investments really create growth in our economy, which in turn brings money to the Treasury.
INSKEEP: Growth is the way out of this, you think - economic growth. Bring some more (unintelligible).
PELOSI: I think growth is very important. You cannot cut your way out of it, that's for sure. If you eliminated all of the discretionary - that means all of the spending that is not a part of entitlements, you still would only be partway there.
INSKEEP: You are beginning another Congress as the leader of the minority. You had hopes at one time of becoming speaker again. Do you still believe that you will speaker again?
PELOSI: I think that's probably the least-important question you can ask. I do hope that the Democrats will be in power again. I think events of this past Congress have demonstrated that when you had to get a job done, whether it was passing affordable health care, Wall Street reform that was so necessary, a long list of initiatives that were very positive and helpful to the middle class. So what it means to me personally, again, is unimportant. What it means to the American people, though, is important. And I certainly hope and will work very hard for the Democrats to win a majority again.
INSKEEP: Ms. Pelosi, thanks very much.
PELOSI: Thank you. Happy New Year to you.
INSKEEP: Nancy Pelosi is the House Democratic leader in the new Congress. She spoke in her office in the Capitol. We have extended an invitation to Speaker John Boehner to return to this program.