Sens. Kyl, Durbin Talk Pakistan, Super Committee Clean Up

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With a silver Connecticut failing to make a deal to reduce the country's -- a number of spending cuts and tax increases.

Are set to take -- -- unless congress acts.

Joining us now are both the parties second ranking leaders in the senate Illinois Democrat Dick Durbin is in Chicago.

And Arizona Republican John Kyl who's in Phoenix gentlemen before we discussed congress in the -- I -- -- ask you both about the at foreign policy issue I was just discussing.

With the governor Huntsman and that is that the latest breach in relations with Pakistan as you both know.

In response to the killing of at least two dozen Pakistani soldiers of pakistanis -- you got us that the US and NATO have to stop.

Drone operations from one air base in their country and they're also coming off the two major.

Supply routes for NATO into Afghanistan let me start with -- -- senator Kyl what would you do about.

Well there's a lot of diplomacy that has to occur and it has to be tough diplomacy in the sense that they need to understand our.

Support for them financially is dependent upon their cooperation with us.

But it's not the kind of situation where you can just cut off all assistance because we do need their support in the region of our industry one quick story.

About two weeks before 9/11 2001 I was part of an intelligence committee trip to Pakistan.

And visiting with president -- you made the point that because we had cut off.

Relations before permit military support and other economic support before.

But the officer corps that was being -- was coming up behind him had not been educated in Great Britain or the United States.

As head he and his fellow senior officers and he was very concerned about the Muslim influence the radical influence.

Of those young officers as they were coming up the ranks he said that was a mistake.

Couple weeks after we got back we help to restore those military to military contact.

Well I mean that it's very it's very important to maintain the relationship.

From a long -- senator Durbin what should we do.

First -- deeply saddened the 2425.

Pakistani soldiers were killed.

By NATO.

Drones.

And I think we've expressed those condolences imagine how we would feel -- -- -- -- 24 American soldiers killed by Pakistani.

Forces at this moment secondly.

Keep in mind that as difficult as it is to find our way through this diplomatic morass.

Between the incompetence and maybe corruption.

In Afghanistan.

And the complicity of parts of Pakistan and our soldiers are caught right in the middle of this at a time when they're trying to bring priest in this region.

I think it's an argument from my point of view of moving us toward the day when our American soldiers come home.

This is a terrible theater that we have been unable to find a clear path toward reducing terrorism we've got to leave it to Afghan forces.

To meet the challenge and bring American forces home.

All right gentlemen let's let's go back to the -- -- and let's start with the items that run out.

At the end of this year not 2012.

Let's take a look at them.

This is unless they're extended first the payroll tax -- cost a 112 billion dollars to expand.

If that lapses a family making 50000 dollars a year will pay 1000 dollars more.

In taxes senator Durbin Democrats plan to bring this measure to extend the payroll tax cut.

-- this week but you're gonna pay for it by with a surtax on millionaires that may be a Smart political move.

There's no chance it's gonna pass.

Well it should -- I mean look at the bottom line here you -- thousand dollars think it's closer to 15100 dollars for the average family.

If we don't provide the tax relief the President Obama has asked for.

Failings are gonna see an increase in taxes -- or working families lower and middle income families and those at the very top who've enjoyed tax cuts.

That have been very very generous for a long period of time can afford a slight increase in their tax burden so that we don't add to the deficit.

Let's help the working families were struggling paycheck to paycheck and asked those who are the most well lost in America to pay a very small percentage of increase -- Senator -- Republicans are demanding.

And that's is the reason that that that the Democrats are putting up this millionaire's surtax are demanding that an extension of the payroll tax cuts.

Be paid for but but you haven't done that in the house for the bush tax cuts.

-- -- I won I would like to know why the difference between paying for one not paying for the other.

And what do you think of the chances for a deal before the end of this year because it runs out at the end of this year to extend the payroll taxes.

We'll have to deal with them with the unemployment insurance with payroll.

Taxes and and a lot of other items before the end of the year the problem here is that the payroll tax doesn't going to general revenue -- support Social Security.

And you can't keep extending the payroll tax holiday and have a secure Social Security.

That's the first problem the second problem is that but by taxing the people who provide the jobs you put off the day that we have economic recovery.

And job creation in this country and that's precisely what the democratic plan would do it would -- those people the small businesses.

Who we all acknowledge are the ones who create the jobs coming out of economic difficult.

And that we think would be a big mistake and so I -- I -- -- I'm a senator and a -- and job creation I may senator -- just a couple of short.

Are you saying no deal on extending payroll taxes -- But the payroll tax holiday has not stimulated job creation we don't think there is a good way to do it.

Before the end of the year we will have discussions about what we're going to do on all of these different programs.

That guy had that briefly senator Durbin.

I can't believe that.

At a time when working families in this country are struggling paycheck to paycheck when we need them to have the resources to buy things and our economy.

To create wealth and profitability and more jobs that the Republican position is still raise the payroll tax on working families.

I think that that that just defies logic.

What we should do is to help these working for him struggle through.

President Obama hasn't shown leadership on us and now the Republicans are walking away from lower and middle income families.

Because they don't want to impose a small small tax on the wealthiest people in America.

Listen we can save Social Security I agree with Jon Kyl let's be serious about it.

Let's pay for this payroll tax cut by imposing the slight increase in taxes on the wealthiest people and replenish the Social Security trust not.

Let me let me if I can senator -- I wanna give you a chance to respond about -- also wanted to ask you if you will briefly to respond to this.

Because.

Economists say there's a real impact if you don't extend the payroll tax cuts and unemployment insurance let's put it up on this grain.

Today estimate and again both of these run out January 1 that failure to extend the payroll tax cut and unemployment benefits.

Will caught GDP growth one to 2% next year and cost.

More than half a million jobs you you say you question the stimulant of the fact but reportedly is economist.

There's a real danger of congress doesn't extend both of those -- to throw the country back into a recession.

Are Chris I don't know who those economists are just read -- -- by art Laffer who is a respected economist who says that isn't true here's the problem.

When -- when you're in a recession here in difficult economic times as we are and you need to put people back to work as well as dealing with our deficit how do you do that.

You do it by enabling the economy to grow.

The best way to hurt economic growth is to impose more taxes on the people who do the hiring.

And as a result Republicans have said don't raise the existing tax rates on those who do the hiring.

Instead they -- I hope we can get into this explore the kinds of things that we did during the deficit reduction committee work.

To reform the tax code eliminate preferences credits and deductions or reduce their value significantly.

On the upper income taxpayers so that they end up paying more but not through a and that the tax increase on the rates either on capital gains dividends or on -- -- -- -- ask Gary let's pick up -- -- -- those -- you have the short term problem which is you've got to deal with these.

The payroll tax cut on unemployment insurance the AMT Alternative Minimum Tax the dot affects all of which run out at the end of this year you've also got the long term debt issue and I would like that.

To briefly address that -- sense and lot of people say that the presidential commission which the president basically walked away from.

Have the basic idea the right idea and and of course senator Durbin you -- remember that you voted for it.

Two aspects 201 they sat.

Let's lower the rates dramatically as low as 28% for the top tax write but let's eliminate that that the deductions the loopholes.

We'll take a trillion dollars in tax expenditure.

And we will contribute that to the -- trillion dollar fix of the dot reduction.

The flip side of that is -- that we wanna see a half a trillion dollars 500 billion dollars and entitlement reform.

Cutting some benefits raising eligibility -- is a mixed -- with -- -- senator Durbin would you go for all about again.

I can tell you that that is the basic guideline -- I see it.

To reaching the kind of stable growth situation creating jobs now.

And -- in reducing our long term deficit.

To paraphrase one of our former colleagues.

-- new Erskine Bowles and Alan Simpson I work with them on the committee.

And what was proposed by the Republicans on the super committee was not even close to the Bowles Simpson proposal.

What we've got to do is establish the basics.

Two dollars in cuts for every dollar in revenue.

Now let's do this in the thoughtful way that creates jobs now does not handicap or damage Medicare and social security and Medicaid in the long run.

And creates the kind of approach that is balanced we didn't get that out of the super committee and.

They think -- -- -- you were five -- -- -- -- -- -- strive to let me just ask you directly.

Because up one of the big hang ups -- the bush tax cuts would you be willing because of some balls basically forgot about the bush tax cuts a sad.

You know what we're gonna lower all the rights and the top right maybe down to 28%.

But we're gonna get a trillion dollars in tax expenditures are you willing to site.

Forget about -- ending the bush tax cuts will lower -- dramatically.

If we got these tax expenditures.

No don't Chris you have to look at it in the total contacts and I'm not dodging your question.

The bush tax cuts are overly generous to the highest income Americans.

Going back to our earlier point we don't want -- disadvantage those who were working families the middle class families across America.

Let us put tax reform together it gives them a fighting chance there was a commitment in the gang of six there was a commitment and Bowles Simpson.

To at least -- about improving the progressivity of the tax code.

That means giving working families a fighting chance I hope we can establish that as one of the principles and future deficit reduction.

Senator Durbin and senator Kyl I wanna go out this would you -- a slightly different why.

Because there's narrative out there that that you and other members other Republicans on the super committee.

We're scared of an outside player and that's Grover Norquist and is is anti tax pledge and that basically you just wouldn't give on the bush tax cuts.

Norquist a couple of weeks ago.

Said that he would have to -- you Intel line I wanna put up what he -- and I repeated what -- said.

So I call Kyle what did you say what do you mean how can we work together on this -- -- -- Adopting the tone of a teacher scolding a second grader as you recall the conversation.

Two questions one.

Is that story true and two are you and other Republicans somewhat somehow -- By Grover Norquist and his anti tax plan.

Answer both questions is absolutely not.

And the proof in the putting is the fact that the so called to -- plan which Republicans all six of us.

Offered to the Democrats would specifically have raised tax revenues it -- raised 250 billion dollars.

More than that the tax reform that would be necessary to reduce the rates and -- applied that to deficit reduction Grover was not happy with that we did it anyway.

And this is the point would be -- Bowles Simpson commission said race whatever revenue you can.

And apply it to reducing rates we did that in the in the to -- planned by reducing the value of all these.

Tax credits and deductions the kind of things you spoke of to -- -- scored by this is the Congressional Budget Office.

Would have reduced -- to -- to 20% and every other rate by a 15% their percentage points.

As a result of which that we could accomplish both goals.

What you can't do is raise more than 250 billion dollars and that's why.

That was the amount that we raised above that necessary to reduce the -- finally senator we are much better in the -- plan.

And that we've got only thirty seconds left to answer this.

An awful lot of people's sight you know we talk about Grover Norquist a lot of people say that President Obama was missing in action during the key negotiations.

Here.

Was not a failure in leadership by his on his part.

Not at all those of us who know the -- realize that with Vice President Biden the president made an overture which.

Congressman Eric Cantor walked out on toward deficit reduction.

And twice the president negotiated directly with speaker bailout comes out of our direction -- -- -- -- very -- and why last summer.

The point I'm making news this was a congressional undertaking and the Republicans made it clear that if President Obama weighed and it would become another presidential issue.

They don't want to give the president any credit for achieving things.

We knew that if he came into the super committee negotiations.

It wouldn't be constructive on the Republican side but we know where the president's stance.

He wants substantial deficit reduction but first get America back to work.

I don't know we're gonna have to leave that they are thank you both so much for coming in.

Will stack on top of -- story it obviously isn't going away.

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Sens. Kyl, Durbin Talk Pakistan, Super Committee Clean Up

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