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No DC deal in sight: What happens on January 1?

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    Senators Ron Johnson and Pat Toomey weigh in on 'fiscal cliff'

  • Duration 13:37
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And this is a Fox -- -- earlier today in a pathetic last minute effort to avoid the nation falling -- the fiscal cliff president Arnold Palmer took a mini break from his busy golf schedule to summoned congressional leaders to the White House.

-- latest reports say that a last minute mini deal may be struck before the end of the year.

Now this deal reportedly would preserve tax cuts for the middle class and extend unemployment benefits.

The president he raced to the microphones and he said the following after this meeting watch.

I just had a good and constructive discussion here the white house with the senate and house leadership about how to prevent this tax like.

On the middle class.

And I'm optimistic we may still be able to reach an agreement that can pass both houses in time.

-- senators Reid and McConnell.

Are working on such an agreement.

As we speak.

I -- what you need to remember number want this whole fiasco was totally and completely avoidable number two.

Senate Democrats have not fulfilled their constitutional duty to pass a budget.

And over three -- long years that's all the thirteen hundred days and there obsession has been and continues to be ruthless politics.

All we're doing what is right.

For you the American people.

-- number three not once in that time as President Obama demanded that the senate do their job this is the height of irresponsibility.

And -- before the president's main focus has been to attack Republicans again and again -- Republicans they've done their job.

-- they passed a bill months a total -- this fiscal cliff.

Now that bill has been completely ignored by senate Democrats and by the president.

And number five the worst part of all there is nothing here that the president is proposing.

That deals with the real clear and present danger that America now faces that is reckless borrowing.

It's reckless spending generational theft that is now bringing America to the brink of bankruptcy.

This president is now borrowing 46 cents of every dollar he spends he has now given the country over six trillion dollars in new debt.

We have trillion dollar deficits as far as the eye can see.

And all he wants to fight for is higher taxes that will fund a mere eight and a half days of government.

Frankly nothing but a pathetic disgrace -- you.

The American people you deserve better than this you deserve a government that lives within its means.

He deserve a government that -- not obsessed with -- using your money to accumulate their power.

It's time for Americans to understand the simple truth -- what's going on here a truth by the way that an abuse of lead biased news media just ignores.

And joining us now with reaction as Americans on the brink we have Republican senators Pat Toomey and Ron Johnson senators welcome back.

My job.

All right let's first start with -- the meeting today senator to -- I'm told that the president was very.

Adamant in the meeting he didn't come off as original request was take.

To keep tax rates.

-- at the same for the middle class but everybody above 250000 dollars going up is that what you -- Well.

I haven't heard about specific elements of the conversation John I wasn't in the room loved what I did you understand.

From people who were there was that it sounds for the first time.

Like the president's actually engaged and actually would prefer that we not go over the cliff that this hasn't been -- Previously.

So the fact that -- Mitch McConnell is actually involved in meaningful discussions and negotiations is actually quite encouraging.

If something can't pass the senate with a lot of Republican votes it's not gonna pass the house either.

So I think for the first time we see some constructive engagement at least.

If I if senator Johnson I heard a little bit different story than than senator Toomey and that is that a lot of what we saw today what we're seeing today is really for show.

And the feeling of somebody else those in the room was the president made up his mind.

He wants to go over the fiscal cliff he sees a political advantage negotiating this in January what have you -- -- Brian I watched -- presents press conferences will disappoint as he installed because basically we were told is that it was a serious discussion.

And there was a recognition that.

From part of president Biden and senator Reid did they are going to have to craft he piece legislation that would give a great deal support for Republicans in the senate.

Because they realize that's the only way something's gonna pass in the house -- about -- must be encouraged by the fact that we're finally talking seriously.

That there's going to be some very serious discussions on tomorrow between senator McConnell senator Reid.

And -- you know another good piece of news is the debt ceiling was not even brought up so I think there's also recognition that.

It's way too late in the game trying full -- in.

Because an -- is try not to be a whole lot of us serious discussion about what we need to do to save entitlements.

I did this definitely true -- I heard the exact same thing he does not get a debt ceiling increase which is very important he doesn't get the stimulus that he originally.

Bargained for senator -- at one point you seem to support the plan B of senator -- which would be okay.

Tax rates would increase for those over a million dollars.

-- you all right you're a guy that's well known as a conservative in principle is not something you think hurts the economy.

Others though question what the president wants to -- is bad for the economy -- What concerns me is we're now three days away from a really bad law taking effect which is increasing tax rates on everybody.

Huge increases on capital gain massive increase on dividends.

This is very very destructive I see my mission in part to try to.

Absolutely minimize the damage.

Unfortunately.

Yeah I don't have the ability to repeal land line and the Democrats control two out of the three parts of the elected governments I'm gonna fight as hard as I can.

To minimize this damage but I I gotta be honestly I think I mean that we got a pretty pretty tough fun he and to deal with there.

And we can't just change that law by ourselves.

This seems to me senator Johnson three things that may be the president hasn't gone up number one -- the country goes over the fiscal clip on his watch.

The optics are not very good for him.

While it may think that there's an advantage cheer when the country sees its taxes go up.

Then he comes in as the guy that's the tax cutter.

But has he factored in the Republicans also have control of the budget with the debt ceiling.

Well yeah I think again the president is serious about this because I start I think he's -- -- -- the long term consequences.

If we do increase taxes that that's probably a good thing your shot.

We maybe -- do little celebrating here Democrats now are on board.

That 90% of Bush's tax cuts were a good thing for Americans are economies don't don't -- let's let's at least chalk that up as a win.

And I kind of -- to me right now unfortunately.

It is only present Obama is the one man they can sign a bill into law.

And without him agreeing to sign a bill everybody's taxes go up so we are kind of in a position of how do we limit the damage.

And I think that's re doing that -- continue to talk about what we need to do is grow our economy and that's something president bombing hasn't shown any.

Interest really -- -- -- -- frustrated.

I'm -- in his first -- -- -- right center and -- until -- this is a little bit been frustrating as we watch this.

Frankly reckless irresponsible.

That.

Political positioning going on.

This really doesn't deal with the problem and this is really important thing to the American people to know as I said in my opening commentary.

This -- fund the government if -- he gets the increase in taxes on the so called wealthy and small business.

That funds the government for eight and a half days America act has sixteen trillion in debt and were out of money again and why isn't the president.

Why are we really discussing the spending issues that seem to matter a lot more.

I the reason is because unfortunately we've got a law that goes into effect on January that raises taxes and we got to try to prevent as much of that as we can.

Look you're absolutely right if the president got the full tax increase that he campaigned for.

That would solve 8%.

Of the deficits projected for the next ten years.

And the president refuses to so much -- offer an idea about what he's gonna -- about the other 92%.

So this is ridiculous that we spent all -- time talking about how much damage.

The other side is -- -- insist on inflicting to the economy instead of talking about how do we get on -- sustainable fiscal path that we can have strong economic growth.

And the prosperity that that we ought to -- and that our kids deserve so I agree completely this -- all been misplaced.

I want to get this behind us do the best we possibly can on the tax side and then focus on the real problem here which is spending.

Senator Johnson I know I I'm told that it sequestration will go through regardless of what may be mini deal might happen here.

Is that a good thing even though a lot of that money apparently will come from defense in your opinion.

Well hopefully that's one thing they can iron out is trying.

Replace some of the defense sequestration cuts with other limitations and -- any other areas that got -- a good thing.

But yet you -- shot at one point you do need to make is we just blew through the two point one trillion dollars worth of debt ceiling increase from last August.

In seventeen months.

I mean that is an astonishing fact and so what I think we need to -- -- once -- this tax issue behind us I think we'll get it behind us hopefully the next couple days.

But then we need stars past and present what is your plan.

Senator Harry Reid are you gonna pass a budget.

Because I really do believe that the -- president and Democrats really have no intention.

As result have no plan to limit the rate of growth in government they have no plan to save social security and Medicare.

And we need to start putting political pressure on them to show the American people plan.

The -- -- past two budget since I've been here.

They both includes some proposal to save Medicare the Democrats have not done that.

And this is really where where we start turning the messaging on them start demanding I think the American people have a right to know.

President Obama how you gonna solve the other 92% or 93% of that deficit what is your balanced approach he talked about on the on the campaign trail all the time.

Yeah that's a good points and senator to me how is it possible maybe can help me out -- help the American people out.

This don't know what their taxes are gonna be just a couple of days and and now we're counting the hours.

How is it possible the US senate does not pass a spending bill which constitutionally this -- to pass.

It over three years -- over thirteen hundred days and then lecture house Republicans and did their job.

I don't get better we get to that point in this argument it seems a little strange it's.

It's incredible song I mean it really is it is an absolute obligation.

I look it would be -- common sense obligation on the part of congress to have a budget even if it weren't required by law.

But it is required by law.

And yet the senate Democrats are still refuse to produce a budget.

That's a big part of the reason that we're in the mess we're -- we don't go through the normal process of figuring out how much we're gonna spend.

Establishing the guard rails putting the limits on the size of our deficit figuring out how we're gonna reform -- big programs.

None of that happens and then we find ourselves back up against the wall with a situation like we're in now it's a complete abdication of responsibility.

-- -- senator Johnson wouldn't dealing with everything but what I say we need to be dealing with which is reckless spending reckless that.

And reckless deficits.

-- -- overstate the case if I say that America really is on the brink how dangerous is this for the country.

In the long term we keep going down this -- -- kicking the can down the road.

What's extremely dangerous I -- shot just couple facts mean from nineteen -- to 1999.

The federal government's average interest rate was five point 3% in order to accommodate all -- -- spending.

-- -- paying about one and a half percent if we just revert to that bad mean that average borrowing costs.

When America as a farmer -- nation that would add more than 600 billion dollars per year.

Did you start interest expense suspension is right -- -- the reason we're in the situation this brinkmanship this last minute.

Negotiation behind closed doors continue you know is that continues its because there really hasn't passed a budget.

It would get reconciled with the house budget.

And now except.

The whole framework of how the committee structure would go to work and start debating his issues in public so the American people could actually see what the issues -- -- we're grappling with the and they can -- away in terms of public opinion terms of what we need to do to save social security and Medicare for future generations they should all be gone through regular order we did -- far better position.

But that's about the case because -- Obama doesn't.

-- serious budget.

Us.

Senator to me how Alice is gonna work because the speaker -- -- try to pass a plan B.

The president of the meeting today is insisting on raising taxes on -- small businesses and individuals over 250000.

But yet.

He wants to work through the senate but how does this get through the house.

When they couldn't get it with a -- I don't know where this threshold might end up in these negotiations mind my suspicion is that.

That is perhaps one of the topics that's under discussion and the second point I would make that I think a part of the reticence on the part of many of the house Republicans to vote for us this this package that was on the and on the table last week is because they were afraid of what what happened to one account over the senate.

If of that mystery or disappears because there's a reasonable package that can attract a lot of Republican support in the senate.

Then I think the prospects in the house improved dramatically I don't know we'll have to see it all depends on what's in the deal.

But that's a scenario that I think sponsor.

All right gentlemen thank you both for spending time happy new year to both the appreciate -- with -- happy -- have you here --

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