Sen. Cornyn on Debt Talks

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And hello again from Fox News in Washington.

At the nation celebrates the fourth of July holiday weekend it is getting to be crunch time in the capital and a high stakes battle for increasing the debt ceiling.

Here to discuss where negotiations stand is a member of the senate Republican leadership John Cornyn.

Senator welcome back to FOX News Sunday morning.

All right on Friday the Treasury Department reiterated what it -- already told us August 2 is the -- we exhaust are boring authority under the current debt ceiling.

So let's recap of the president had to say this week about Capitol Hill whether they're doing their job.

And a bit of your responses well.

When they decide they're not happy -- The fact that at some point you've got to make a choice they just all sit back and say well you know the president needs to get this done.

They need to do their job to -- go to Philadelphia tonight and raising money wise and what -- -- call.

Senator McConnell.

Speaker Boehner.

Which minority leader Pelosi.

The majority leader -- into his office and sit down and do his job.

Left at Philadelphia fund raiser that you mentioned -- the president said this deal -- get done quote on the back of an envelope and he said there's no political will so.

Who's not doing their job.

Well let's see his envelope.

I haven't seen it the president's own fiscal commission bipartisan fiscal commission made what I thought it was a sobering.

-- but important.

Report back to last December called moment of truth.

The president ignored it in his state of the union his own budget grows the debt by trillions of dollars over the next ten years.

And all he seems to do is to attack those who are trying to make responsible proposals to solve this problem.

So well the only way this is gonna get done is with the president of the United States and fortunately now.

It's been kicked upstairs to the only guy -- can make the deal and that's the president along speaker Boehner and -- for now.

Well Nancy you're here because of course the senate cut its fourth of July recess short.

There have been some skeptics about whether that's gonna make any difference one of them is your democratic colleague senator Barbara Mikulski here's a bit of what she had to say she said just being here to quote.

Huff and puff and hope we can -- the deficit away is just posturing out even you have expressed doubts that this is gonna make a difference -- -- any more optimistic.

Well the only people who can cut the deal at least initially the president speaker Boehner and and -- Mitch McConnell.

But you know -- and it's got to pass the House of Representatives and then it has to get at least sixty votes in the senate.

And we're running out of time but this what we were unconcerned about as the president by not seriously putting a proposal forward.

But rather just criticizing those who have.

Were running up against this deadline and they're gonna try to presented as a fait accompli nobody's gonna have time to read it -- consider the implications of it.

-- and so you have to pass through the economy's going on the troops that's just -- -- some on Capitol Hill have said absolutely no way -- -- both for anything that involves a tax hike.

The top Republican in the senate Mitch McConnell -- said that house speaker John Boehner has said that.

You have phrased it a little bit differently when we talk about tax expenditures things like loopholes and breaks -- -- -- fruitful area for discussion.

So would you consider that a tax hike -- raising taxes how do you define what we're talking about what that revenue.

I think it's clear that Republicans are opposed any tax sites particularly during a fragile economic recovery the last thing.

That employers need is further disincentives to not hire people.

And that's what -- higher taxes would mean.

Now do we believe the tax reform is necessary I would say absolutely there's not enough time to get this done between now on August 2 but it ought to be the first thing we turn to.

To try to make our tax code more rational -- could bring down rates eliminate the tax lot of tax expenditures -- -- polls and actually make her.

Nation more competitive internationally.

Arts and just to be clear talking about closing some of those tax tax loopholes making changes to the tax code you don't consider that raising taxes.

Well it's not raising rates not only to be cute about the language but up.

What what I think we ought to do is bring that rates down.

To make it revenue neutral.

So as you eliminate these tax expenditures if you bring the top rates down.

That's revenue neutral that's not raising taxes do you think you'll be able to get other rank and file Republicans on board with that way of viewing the issue of revenue.

Well -- I think so I mean I think the again the president's own fiscal commission.

Recognize our tax code is riddled with a lot of special interest loopholes and and and provisions that really don't make any sense anymore we just had a very important vote about the ethanol.

Subsidy which voted we voted overwhelmingly to repeal that.

And I think there's now a deal being worked out to phase it out maybe in -- more.

Sensible way but yeah I think there's this is what fruitful area for us to work on an a in a bipartisan manner I personally.

What about defense spending how far would Republicans be willing to -- that arena.

Well the main reason the federal government exists in my view is to protect our national security.

And so when Leon Panetta was confirmed as the Defense Secretary.

I asked him about the Clinton Era tax hikes into the spending cuts in defense.

Worried of course that there would be those -- -- cache of peace dividend during a time when America is still at war at least replaces.

And he seemed to say that he was very sensitive to that now there are things we can do to make the defense.

Department.

Pentagon more.

-- run more like a business for example better financial management procedures actually.

The Pentagon is incapable of producing -- audible.

Financial statement -- that congress so they have to do about 2017 but they're not on -- path to do it now that's the kind of thing we can do to make it more efficient.

To eliminate waste but we can't we -- our national security.

What about some comments of former President Clinton made last night about this he's urging President Obama not to blink on this issue.

Of compromise with the Republicans and he also said if you won't move on issues of revenue.

That's in what should come together sort of a mini deal may be a debt ceiling extension -- gets -- through six or eight months is there an appetite on the Republican side to do that.

Well the problem with a mini deal is we have a maxi problem Andy's got big problems are gonna go away if you cut a mini deal while it does is -- -- The moment of truth.

And -- lights and better now -- them but if we can't then.

We'll take the savings we can get now on we will re litigate this as we get closer the election.

Are right in addition to dealing with the actual content and negotiating this deal there is a bit of a PR battle that's involved here -- well.

Senate majority leader Harry Reid has had a lot to say about what is standing in the way of getting something done let's take a lesson.

The main obstacle and I want to be very clear.

The finding common ground.

-- Republicans.

Stubborn insistence.

On plus protecting taxpayer funded giveaways.

Corporations and individuals who don't need to give -- The president has also.

Range this choice earlier this week as kids going to college or tax breaks for corporate jets and -- something he says the American public is an easy choice for them so.

What is the GOP planning to do with their strategy for dealing with that PR side of this battle.

Well senator Reid has.

Newfound religion when it comes to tax reform and were willing to work with him and Democrats to do that.

Again the problem is I don't know whether we can get it done between now and August the second but it should be something we we do.

I think the American people understand that raising taxes.

Grows the size of the federal government if there's one thing that I think -- totals on November 2000 tennis that they want.

Government to get smaller not bigger that they feel governments become far too intrusive in their lives whether it's.

The Obama care whether it's -- Dodd-Frank financial.

Regular -- of so called reform bill they just feel like governments grown too big.

So -- way to get government smaller more rational is to cut spending not to raise taxes so I think we win.

All right how much has this turned into a political debate.

Senator Chuck Schumer had -- -- say about that the GOP may be using the economy and the struggle of the average American out there to their benefit.

Simply for 2012 here's his accusation.

It's becoming clear that insisting on a slash and burn approach may be part.

Of this plan.

It has a double benefit for Republicans.

It's ideologically tidy.

And it undermines economic recovery which they think only helps them in 2012.

-- pots are excellent that.

Well that's that's certainly false.

-- just no basis to it you know.

The president and his party -- doing a pretty good job of undermining the economy is it is with unemployment nine point 1% much higher than any other parts of the country.

With people with capital sitting on the sidelines in -- with the taxes you're gonna get increase whether regulators are gonna over reach.

Or what the costs of obamacare are going to be to their business so.

Look we're Americans first not members of any political party want to do what's right for the country.

But that kind of rhetoric doesn't technically advanced the ball.

Senator Schumer also was asked about a very it interesting concept that's bubbled up with some.

In academic world and and -- -- as well this idea that the president may be constitutionally allowed to ignore the debt -- and continue issuing debt.

Because of a phrase in the fourteenth amendment here's what he said when he was asked about a quote.

It's certainly worth exploring I think it needs a little more exploration and study you're not I'm not only a lawyer but you've been a judge who sits on the bench as well.

How would you rule -- that legal debate.

That's crazy talk.

It's not acceptable for congress and the president not to do their job and -- say somehow the president has authority to then.

Basically do this by himself.

We ought to sit down and work together and it shouldn't take this formal press conferences like the president gave last week where he was essentially the school -- A scolding congress for not getting its job done when in fact he's the one who has not stepped up and given us a proposal would like to see what is proposal -- and -- stood in the light -- day.

Not in secret behind closed door negotiations over the spring and on the American people the last moments -- know what it's this take or leave it or else there's financial calamity.

That while we have you when ask you one quick foreign policy question -- well this week the senate will likely vote on me.

Bipartisan resolution that authorizes what the president has done in -- there some caveats there.

It comes to notably on Tuesday will -- -- favor of it.

I'm gonna vote against proceeding to this particular resolution but I have an alternative resolution that I think we need to consider.

First of all we need to consider what's the goal of the mission in Libya I think that the goal should be to.

Depose Qaddafi.

The the president likes to say well that's our political goal but not our military -- well those ought to be unified and -- we need a plan from the president.

Not just -- handoff to NATO.

And say it's their problem not mine.

And then we need to once the American people understand what the goal is and the means to achieve that goal that I think will become unified behind behind this effort.

It's an -- and thank you for your time thanks for spending part of your fourth of July weekend with us sanction.

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Sen. Cornyn on Debt Talks

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