Key lawmakers on 'fiscal cliff' threat
Can Congress compromise?
- Duration 14:23
- Date Nov 11, 2012
Can Congress compromise?
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We are now just 51 days away from the fiscal class when 644.
Billion dollars in tax hikes and spending cuts.
We'll kick in next year unless the president and congress make a deal.
We've invited for congressional leaders will be at the center of any compromise to discuss what's possible and what doesn't.
Senators Bob Corcoran Kent Conrad and congressman Tom price and Chris van Holland gentlemen.
Welcome back -- FOX News Sunday -- -- you'll hear senator -- let me start with you.
How real is that cliff can Washington figure out a way in just 51 days to cut trillions from the deficit.
Or you gonna just got an extension and kicked the can down the -- While certainly help we can can -- we all know what the issues are Chris we've had to drive runs already.
Nothing has changed.
And -- open at least wolf those substantially down the road toward solving the problem people are inflating the fiscal -- with fiscal reform.
And I know can't nine -- others Tom have been working for a long time own fiscal reform.
But what I think we don't need to lose our problem is the fact that that's what needs to be solved so I'm hopeful.
When I listen to the speaker when -- -- the president.
I think there's room I've said from day one key to solving this is Medicare reform if we can agree to Medicare reform.
I think the other pieces will fall in place.
Now senator cover this talk about among Democrats about going over the cliff letting all the tax hikes kick in letting all the spending cuts -- and and blame it on the Republicans.
Well I don't know where you're hearing that certainly don't hear that from me I've spent five years trying to put together a package and a bipartisan way.
To get us back and a sound fiscal course.
And I think it's very clear that we have a near term problem.
We've got to make sure that we are doing everything we can to strengthen economic growth.
And we have a longer term problem.
That's an unseen unsustainable fiscal course for the nation that requires.
Which is about -- -- talking about fundamental reform we absolutely needed in our entitlement programs Medicare Social Security.
We need it in the revenue side of the equation and I should hasten to say the Social Security -- I don't think should be part of a deficit reduction package.
But we do need to address Social Security because it's headed for insolvency as well.
All right we're gonna talk about entitlements and spending in a moment but let's talk about taxes which has gotten most of the attention congressman -- Holland house speaker John Boehner offered a compromise.
This week in which he said yes I'm willing to put more revenue on the table -- and closing deductions.
Not through raising rights can you accept a compromise.
As part of this whole deal that doesn't raise the bush tax rate on the wealthy.
Well here's the issue how much revenue rhetoric -- we gonna generate as part of a balanced package and I take my lead on this from Simpson -- and their framework.
And in their framework they assume the amount of revenue as if you started tax reform from 839%.
Rate that's part of their built in assumption.
So I think I'm all for doing tax reform the issue is from what starting point and I think that the Simpson -- starting point.
Which assumes that revenue from 39%.
Is the right way to go to get the knicks that they got.
In hitting their deficit reduction target but what it if what speaker Boehner were saying.
Is that he's truly willing.
It's what we consider Congressional Budget Office horrible record.
Then we can begin to work with one another if what he simply saying is what.
A lot of Republicans used to say.
Which is we're just -- lower rates on the wealthy and that's -- somehow generate enough and -- was clearly talking about about closing loopholes and adoption but but Grover Norquist doesn't think that argument that you're not as -- -- but the jury's out still on this I thought that's -- let me just -- the -- was good.
I think the jury's still out on exactly what substance of what he -- and maybe in the others may be up to clarify but he's he sets up in a very artful way.
Which different people heard differently but I would ask you directly -- you -- -- -- yes and now.
Are you willing to except.
More revenue if it doesn't mean that the bush tax -- house to be rescinded for the wealthy and it rises from 35 to 39%.
If they can make the math work.
I think the issue is the math so -- why I think the starting point should be going back to Clinton error rates and then proceeding with tax reform.
As the speaker may have been talking about if he was generally talking about eliminating revenues.
To eliminating use loopholes -- -- -- -- -- price that the president made one offer.
On Friday which is let's.
Extend the bush tax cut writes for the 98% of the people that are making less than 250000.
He says I'll sign it -- -- take -- look.
Let's not wait.
Even as we're negotiating a broader deficit reduction package.
Let's extend the middle class tax cuts right now and I've got them braves signed -- bill right away.
Now Democrats say that you and I talked about Republicans won't accept that because you want to hold.
The tax cuts for the middle class hostage until you get what you want on tax cuts for the -- Chris what we want our our real solutions house Republicans want real solutions and to us that means that you've gotta have economic growth.
A tax increase never created a new job in this country and so what we need is economic growth and vitality -- the economy rolling get those jobs being it being created.
That means yes more -- -- -- -- -- yes -- let me -- -- -- because I would ask you directly would you accept this piece -- let's just pass the tax.
That extension of the bush tax cuts for the 98% of people under 250 it doesn't make any sense to us to raise taxes on job creators at this time of economic challenge.
The equation is revenue and spending.
And we can increase revenue without increasing the tax rates on anybody in this country we vibe we can lower the lower the rates broaden the base.
Close the loopholes as as as you've discussed put in place pro growth policies and energy and health care and in the regulatory policy.
And then address the spending.
And the spending that has to be addressed as is Medicare Medicaid and so you're right they're running in December just so I can clear this up you're not.
-- seem to be -- I'm gonna close some of those loopholes and use some of that revenue not just kind of wrote you some of the revenue from closing loopholes.
To cut the deficit he looks up and not enough I think that's that's the formula that's that's the way that we can reach agreement and I think that's what many of us are saying.
-- you can be -- -- a little closer you broke it's actually taking some of the money the tax expenditures.
And did it through loopholes.
And giving and using it as a deficit -- -- as long as you close the loopholes he is you limit the deductions and limit the credits you can lower the rates and broaden the base that's the that's the formula for a solution.
That's a real solution.
So senator worker you have a draft plan that you've been circulating to a number of members in the senate is there a deal here.
I think there -- and -- -- the yin and Yang of this this week we know there has to be revenues and I think.
But I haven't met a wealthy Republican or Democrat in Tennessee.
This not willing to contribute more as long as I know we solve the problem so.
The king of revenue we understand and I think there's a very good pro growth way of putting that in play so you're actually getting revenues from people like me and other folks.
That make above -- dollars.
But what you have had that is true entitlement reforms and get people know we saw the president Obama's forgot that's senator Conrad I mean is there.
The basis of the deal here no it's not that raising the bush tax rates but it is is tax reform we close the loopholes that will that work.
It could look at I think the the reality of -- Simpson which I was a part of actually lowered rates but raise more revenue and -- did it.
By closing off preferences success and exclusions deductions.
And it equalized capital gains and dividends -- other tax -- if you really wanna go.
To where many of us think the tax code is unfair.
You've got people who are paying very close as an effective rate of the top rate of 35%.
People who are much much wealthier.
Paying an effective rate of thirteen or 14%.
That's really unfair how does that happen -- -- largely happens because there is a twenty point differential.
Between capital gains and ordinary income 15% for capital gains and dividends 35%.
For ordinary income that differential really I don't think is justified.
OK let's get and I know you've been camping at the bit to get to spending and entitlement reform which clearly has to be part of any deal.
Congressman van Holland a year ago August when.
Boehner and Obama were involved in these debt.
Talks -- the grand bargain that -- -- the president put on the table raising the eligibility age for Medicare and slowing the cost of living a job.
And for Social Security.
Could -- accept them.
Well I'd have to look at the overall deal congress and -- -- he made some significant reforms to Medicare to achieve some savings.
There is -- complications on this issue which is the Supreme Court decision that said that some states don't have to cover people on Medicaid.
Could leave Watson individuals in that a group age group.
And so that's of a major complicating factors we move forward but look I'm willing to look at and I think.
Democrats clear the president is willing to look at everything major entitlement reform well we yes we yet.
Everyone has a different meaning and -- patent reform after all of the Affordable Care Act made some significant changes and savings.
As part of the Medicare program of course during the last campaign there -- -- there were lots ads blasting.
Democrats for what was some serious reform with respect to Medicare the difference being that we look for.
Savings with by changing incentives with in the program as opposed to savings to Medicare simply by transferring those cost.
On the beneficiaries that is not the way to go that kind of voucher plan in my view congressman per.
Ice that it brings -- obamacare speaker Boehner was asked this week whether the the Republican drive to.
Kill Obama care is dad here's what he -- It's pretty clear that the president was reluctant obamacare.
Is the law of the land.
Question do most house Republicans do you.
Agree with speaker -- that repeal of obamacare with this election -- his reelection is -- Now as a physician I can tell you that the reason we're we're not opposed to that the president's health care law because of the election were post -- it's bad policy is bad for patients have a process like.
We absolutely must get a handle on the spending in this country and in order to do that it has to be through Medicare reform Medicaid reform -- -- reform.
All three of those programs under current law are destined for failure so we need fundamental reform so that we can save and strengthen and secure these programs for this generation.
In future generations that's what real solutions -- Election and is that I guess who has don't have the majority in the house but you you lost the election in the presidential level.
You're not gonna kill Obama care for the next four years I think what the election -- is that they that they the American people don't want unified government here in Washington they want divided government.
Which means that we've got to get together and solve these remarkable challenges that we have but they have to be solved with -- real solutions.
They can't be solved with things that don't solve the problem and that's what we've been doing in this town for years and years that's not with the American people want -- right.
Let me go to the two senators to -- this because -- come away from this.
There's a little.
But a lot of the same old arguments -- -- up.
Are we gonna go over the Clifford -- not.
But it's not because.
When I gotta get down that road going to come out as a let nobody out of the collapse what I think would be a travesty for our country is the reason we don't know over the cliff as we totally kick the can down the right I mean I.
But we again we know what all the problems are we've been -- to -- runs there's nothing new.
Let's make a huge down payment on this problem.
And then let's this is going to take years of war.
So so look I'm not optimistic I don't know that this Canadian here and you think that there as the basis for a deal.
I think there's the basis for the deal -- that I think finally.
Democrats are willing to accept and I don't mean this the door to -- But I think they know that Republicans really are willing to put revenues on the table if we can -- -- and -- pro growth -- and there's -- way of doing that and you -- the walk out of Washington -- that it -- morning.
Laid out 750 day in an easy way of getting there so.
There's a way of getting there on the revenue side the real question is can we come to terms on the entitlement side -- -- why when you deal with entitlements.
You really don't do any thing that deals with the economy in the short term so it's a very best way.
Trillion dollar problem exists right now with Medicare unfunded liabilities.
That's where the focus needs to be we can get to the appropriate revenue mix if we do that senator Conrad you -- a lame duck in the lame duck session and -- As your final -- before you leave office.
Is -- the basis for a deal here I analytically.
I absolutely believe there is.
-- -- settle every detail.
In these next few weeks what you can do is agree -- a framework agreement.
That sets out for -- committees of jurisdiction.
How much they need to say how much money needs to be raised.
What we can also do -- have a significant down payment.
So the markets understand were serious about this what we could also do is have a backstop so that of the committees of jurisdiction did not perform.
There would be a real consequence.
That was the physical play -- was supposed to happen here the difference is the fiscal cliff was designed not to happen that is the sequester across the board cuts one point two trillion defense non defense.
Was designed to be so -- nobody would accept it.
What we need to have as a back up -- something that would actually be good policy.
If the operating committees didn't act I'm gonna have to leave it there thank you all for coming and it will be watching every step out of the next 51 days good --