Feinstein, Graham talk chances of 'fiscal cliff' deal

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And how -- again from Fox News in Washington.

Well it turns out the fiscal cliff is going to be a cliff hanger.

-- less than two days till the New Year's senate leaders are still trying to work out a deal to avoid tax increases on almost every American.

But -- a compromise will do close to nothing about our depth problem.

Going -- joining us now to discuss what kind of deal they will and won't vote for.

Senator Graham.

A couple of days ago you said you thought we.

We're gonna go over the fiscal left now we're in the midst of a lot of last ditch bargaining between the senate leaders Reid and McConnell.

What do you think of the chances for a small deal in the next less than 48 hours to avoid the class.

Exceedingly good.

I think people don't want to go over the cliff -- we can avoid it.

I think what -- we accomplished a political victory for the president hats off to the president he stood his ground.

He's gonna get tax rate increases maybe -- at 250 but -- upper income Americans.

And the sad news for the country is that we've accomplished very little in terms of not becoming priests are getting out of debt this still -- affect the debt situation.

It will be a political victory for the president and I hope will have the courage.

Our convictions when it comes time to raise the debt ceiling to fight for what we believe -- Republicans but hats off to the president he want.

Quick follow up is what we turn to senator Feinstein you're you're saying that you don't thank.

Some of your more conservative colleagues in the senate will filibuster or set up some procedural roadblock don't vote to avoid going over -- No but if McConnell can't get 60% of us to vote for this deal it will be hard for Boehner to get it -- that house.

And now want to vote for it even though I won't like it because the country's got a lot at stake here.

Senator Feinstein.

Is senator Graham right well we got to deal.

I think he's partially right.

You know yesterday two point one million Americans lost extended unemployment insurance.

And from this point on it's a lose lose my big worry.

Is a contraction of the economy.

The loss of jobs which could be well over two million in addition to -- people already on unemployment.

I think contraction of the economy.

Really would be just terrible for this nation.

I think we needed deal we should do a deal.

If Lindsay and I could sit down I think we could put that deal together I think the leadership is now working.

It will probably be an immediate deal in other -- it's not going to solve all the problems for ever.

But it's going to solve certain problems in other words.

Not only the unemployment insurance.

But doctors flew 30%.

On Medicare patients if that is in remedy it's called the doc fix that will probably be done.

The tax Extenders will probably be done.

And the number of other things that are instant.

The taxi they don't know I am definitely back that's right that that'll be that they'll be effects of that won't get this -- zillion more as -- that's exactly right let let let let me start.

-- focus on the tax rights.

That's been the biggest issue in this whole debate.

The president watts to extend that that the tax rates on families making less than 250000 dollars a year senator Graham is not acceptable.

Or does the -- -- Four when you do you you start did make the bush tax rates go white does that have to be higher some -- at 900000.

And how confident are you that the house which refused to it did set the market a million dollars will pass any tax rate inquiries if.

Democrats will have vote for the deal in the house they're allowed to vote for whatever the senate passes.

They'll be enough Republicans that Boehner needs a majority of the Republican Party.

In 2010 weeks to -- a tax cuts cost the economy was weak.

In 2012.

The first part of 2013.

We're not gonna extend all the tax cuts but the economy is weaker I don't understand economics but I do understand the politics the president -- Present campaign on raising race and he's gonna get a rate increase would you go for 250 -- though because she's willing to go for more and while when I'm not.

Fine for 500 because I know the votes are there for 4500 but in the house will the votes be there for 4500.

I think.

A majority.

980% of the dimmer the Republicans would have voted for planned -- he.

But when you have no Democrat she needed almost all Republicans this time around.

I think he'll get a majority of Republicans -- -- majority of Democrats in the house if you can get 60% of the Republicans.

In the senate.

So senator Feinstein is that the sweet spot 900000.

-- senate Democrats will accept not very happily but they'll accept well and I can get through the Republican controlled house.

You know the way Democrats feel is this president campaigned and won an election on 250000.

Additionally the polls reflect -- solid support for that certainly 60% of Americans believe that.

Now having said that elections matter.

So we believe that the 250000.

Threshold is the appropriate threshold the president did make an offer.

We understand -- 400000.

With a trillion in cuts accompanying it.

That was turned down by the house.

The time has come really to measure.

The absence of a deal.

Plus -- against the deal and I think both of us come down that we have to solve this immediate situation the danger to -- people.

To our military to our nation's security to our economic base is just too great.

Not to have a solution so.

You you know what makes this government work is compromise and it's when you don't compromise their stakes this -- -- enough as it.

So -- -- any long 400000 you can let it not happily addicted look I could certainly -- -- just ask the question and I'm gonna get asked where does the money.

Let's say is 400000 that people above 400000 pay thirty now right they which -- roughly going to be about 600 billion dollars.

And -- -- mask at home.

Senator Graham what are we going to do with the money with us.

Well.

What what you say is that this is added.

To make up the deficit that everyone has been discussing also is marketing -- goes for -- -- -- we are not new spending you know you get down to another thing.

Which was a very bad idea and that's sequester.

And whether sequester goes into effect or not but that's the 800 pound gorilla I would.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- All we've been talking about the frankly all the -- and has been talking about for the last month has been attacked side of the Clinton.

That's about the spending side of the class there's still as part of the -- a 110 billion dollars -- Right automatic cuts defense cuts domestic -- what's gonna happen -- not with this that you've got regular address that lets you know what's called -- -- -- How about Leon Panetta last night at 730 during dinner secretary of defense yes and he -- -- have been told that there's not going to be any thing in this deal to avoid sequestration going in effect.

This is the failure -- the super committee to found one point two trillion dollars in cuts for the debt ceiling increase.

Half of the one point two falls on defense we've already cut -- 89 billion.

He says if we do this will be shooting the Defense Department in the head and we'll have to send out 800000 layoff notices the beginning of the year he's worried to death.

That if we don't fix sequestration we're -- -- the finest military in the world a time when needed the most.

And this still doesn't cover defense cuts on top of the ones we've -- so.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- She tell me all the 600 billion goes on the deficit I hope that's true but that's only five or 6% of the -- that when it comes to defense spending.

The only reason I would vote for this deal with sequestration was not included is trusting people like Diane to work with me.

To make sure it never becomes a reality post January -- senate.

A -- and in a bigger sense even if you get those automatic cuts which are a 110120.

Billion dollars -- the -- Even if he got those the deal that you're talking about.

Does not reduce our national debt because extending the bush tax cuts -- 9899%.

Of Americans it'll actually increase.

The debt by trillions of dollars over the next decade so the question is what are you guys gonna get serious about spend it.

Well we're getting serious about spending we've all already cut spending between the CR.

And the Affordable Care Act to we've cut spending.

A trillion trillion dollars plus now there's an argument over how much but let's say it's a trillion and a half dollars having said that.

I think there is a commitment to cut spending if you do it by virtue of sequestration.

It falls.

Regardless.

Of priority.

On things that are very high priority that should not be cut.

I think you either either have to postpone sequestration.

Or you have to take a portion of it.

Mark Zandi for example has suggested.

That you do 55 billion.

Which won't have that much of -- retardation on the economy he estimates that in about a point and a half if we do nothing.

We -- 3% of GDP.

Because you withdraw from the economy.

Over 700 billion dollars -- -- -- is a problem for America if that -- -- happen.

I don't get too much into the weeds here although obviously it's a substantive subject but.

After the -- the next big step is when we reached a -- -- which we're now told by Treasury Secretary Geithner is going to be probably around the end of February 2 months.

Assuming that you get this deal you turn off the bush tax cuts for their their laps of the bush tax cuts for 90% of Americans.

Are Republicans gonna go after the -- hard on spending as part of bargaining.

On this -- -- and the president's -- I'm not gonna negotiate on that and.

Why here's what I'm -- to do if you took every penny that the 600 billion and put it on the deficit.

It's about six or 7%.

And I don't believe all of it will go on the deficit that when we raise the debt ceiling in August of 2011.

We -- two point one trillion dollars we spent that much money in seventeen months.

Why would raise the debt ceiling again unless we address what.

Put us in debt to begin with.

I'm not not erased the debt ceiling unless we get serious about keeping the country for coming grace saving Social Security Medicare so here's what I would like.

Meaningful entitlement reform not to turn Social Security into private account.

Not to take about your approach to Medicare.

But -- the age for Social Security CB act changes in means testing.

And look beyond the ten year window I cannot in good conscience raise the debt ceiling -- -- addressing the long term debt problems of this country.

And I will not.

And senator Feinstein you've heard the president Obama's site we gotta get out -- -- but we're not gonna start trading debt ceiling increases responding cops.

Well I I think the key to what Lindsay is saying is that you don't affect people.

At this time who -- on these programs that you do it in a way that it's way in the future so that.

Long term the programs are essentially changed and more constricted.

Now that's not entirely popular on my side.

But it's realistic I think.

I think this is a very hard time for people.

And we need to get by this and we need to have a robust economy again.

And it can happen I'm convinced if we solve this and move down you can do those things that enabled -- programs to be.

Solvent in -- on an extended basis without impacting people directly now senators when you take a quick break here but when we come back.

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Feinstein, Graham talk chances of 'fiscal cliff' deal

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