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Special Report Online: 1/30/13

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    Where is the battle over spending headed?

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Log on to another edition of special report on -- I'm Brett -- -- I've been here before welcome aboard this where you can type in now questions or comments for the panel.

You don't see it on.

In the middle section here don't worry we're putting them in this past weekend he also -- vote in some of the polls throughout the next half hour.

And you can see the results throughout the show someone just typed in.

A cat would have already figured out how to start the -- yes you're right we -- a little delayed because the computer was not working.

How tough -- -- -- types Tim -- you'd be surprised.

How tough it is.

Sometimes it's very slow and -- and Ohio here we go.

Cheers Rick you guys are really -- let's bring in our panel Steve -- and Charles.

They don't understand sometimes computers are slow jobs there are expressing -- sympathy another not.

Patty from Virginia's has always the computer never you know she wants to make him make -- yeah.

Obama blaming Republicans I think it probably is the fault of the Republicans I think it's about -- -- management.

And Nancy in Alabama says you owe us eight minutes I mean she -- I hope you don't miss it here is -- This statement that's in -- -- getting -- refrain that we still.

Can't it's like a -- well let's talk about.

Which from Pennsylvania you're wasting time -- okay let's talk about the spending issue we didn't.

We didn't spend a lot of time.

On it because we wanted to get to the second issue but the united.

One of the things it's so frustrating sometimes covering Washington.

Is this dichotomy.

Of how there is such.

It's -- -- two worlds of of this place but there are the people who think.

Spending and deficits and debt are a problem.

And then there are people who don't think it's a problem and it's like two different realities.

Right and for people at home who are trying to make sense of what is real because somewhere there is truth.

You know I mean it's not like one side and the other side there is -- well.

Here's a -- that people who believe that depth deficits and debts and spending matter lost the election and this is Barack Obama's you at the very clearly has you.

And we won this is his attitude.

And we don't think that -- matter and this is really interesting to watch because.

Centrist Democrats and I've talked to a lot of them who were really.

Upset about the inaugural speech you think that Obama -- you know turning out to be the lefty that they didn't they were hoping he wouldn't be.

Date there's a lot of centrist Democrats who do care about spending and do you care about the debt and you care about the deficit.

But it's clearly the monitor has become.

Starting with the left starting with Paul Krugman in the New York Times is the cheerleader of this.

Is this this idea that it doesn't matter.

And in fact there's a and -- this these authors of the book this time it's different about the economic crisis they just came out with a new study.

That shows that -- economic growth of the twenty advanced industrial nations has been.

-- substantially.

By debt and so I mean this is something it's it is impeding the growth in this nation.

And and they're getting away they're also their fans are getting away with it because -- Obama thinks he's getting away with it because money's cheap.

You know we're borrowing this at at very low interest rates and there's a sense that we can keep borrowing and keep spending.

Because it's a -- Well here's -- -- this they say now is not time that the reason that the GDP is so low is because the Defense Department cut back.

And further cutting would be.

Further.

Detriment to the US economy.

Let me quote Mario Draghi the and chief European banker who said.

And the more you put this stuff off the more painful it becomes I mean it doesn't help you to put it off.

And yes there can -- pain in the short term.

But in the very not very long term your your growth will bounce back we've seen that in a couple countries I mentioned Turkey earlier Turkey.

Take some austerity -- measures is that common in Europe.

And and and that's growth is is bouncing back.

But it will be an -- like Simpson vols.

Yeah let me quote from the -- former senator Alan Simpson we've only done that's -- -- a tornado.

I love -- who definitely.

You know release him or anything to deal with our deficit debt for a -- and so.

You really this -- -- you have to do you have to do it and it comprehensive way you can't do this these you know these these automatic spending.

Cuts -- -- spending cuts you have to do and a comprehensive way which they did lay out and Simpson balls against the market's confidence.

That that could fit -- that shows that that we're getting our fiscal house in order and that and that it's gonna.

It's gonna help.

The economy I would take I would even take him in in this willing alleyway whatever spending cuts in this Willie Willie -- know anyway so long as they didn't leave us.

In and then strategically difficult position in terms of our our defense.

But you know the one -- the -- you quoted Mary Landrieu earlier today and and her.

Some silly comment.

And taking a shot at fox but but there was a little bit of truth -- in what she said she should you know.

I'm not so worried about these discretionary spending program we can't cut from those anymore the real problem here is mandatory spending.

-- entitlements and I think there's a lot to cut from discretionary spending programs Republicans when they worked on a sequester set aside -- found 300 billion dollars worth of stuff to cut.

Just in a short term.

Set aside.

But she's right and her bigger point is right I mean it is all about structural.

Entitlement reform that's what matters.

All of the other stuff that we're talking about in many ways is -- -- and this this new studies Kenneth -- rough and I forget his co authors name.

It's it's scary because they have are you did not just this most recent paper but before have argued that once you read it did reach a debt to GDP ratio.

I'm 90%.

Basically you start to see real facts on the immediate short term economy of Boston GDP of up to 1% maybe more depending on how -- -- that is.

We're getting there.

In so it's not at all inconceivable that if we see continues growth slow growth.

That you -- you're going to be at the point to these numbers.

So it's not going to be enough this I say -- all it sort of in the context of what I assume the president will do I assume that he's not going to consider some kind of stimulus.

Approach -- this the -- this -- what he thinks you have to do when the account.

-- slow but did you charles' point earlier is what we we forget to factor in this how much the Fed has played in -- issue was economy how much they have pumped into the economy.

And so for a -- it has been all for the entire time and they haven't had to turn it off.

But if they see inflation coming down the pike and they see that they have to raise interest rates -- say what -- haven't done.

But they have to turn off the -- -- at some point.

Because if interest rates rise at an infraction -- even just a little bit then the interest that we pay on -- national debt.

Becomes overwhelming suddenly interest on seventeen trillion dollars becomes something that overtakes the expenditures that we pay for our government.

Every day.

-- an immediate cascade when she started to increase it then creates a vicious circle you increasing debt.

Increasing interest etc.

and it's just ruins.

But that's the point I think when you have the worst recovery since the Second World War that's over sixty years.

And you do it went all the spigots on you have the fiscal stimulus.

Unheard of deficits over one point one trillion dollars every year we've never been anywhere near that.

I think the highest in the bush years was less than half and that was the highest I think the average from the bush years.

There's about a quarter of that so you have this unbelievable -- on the fiscal side.

You've got the same thing happening on I mean on -- yes the same thing happening on the monitor.

-- you essentially have zero interest rates.

-- your printing money like crazy the buybacks.

And you still have a growth rate of about 2% then you know you're in trouble because of this keep slowing down again it's a cascade as you have no more weapons.

The idea that they're gonna increase and there's just incredible hypocrisy.

Obama in a -- -- saying that the Bush Administration was unpatriotic.

To running big deficits to do which -- a quarter of the deficits he's running and now he has he has -- no regard whatsoever.

I really don't know whether he believes what he's saying.

That it doesn't really matter or that he thinks because interest rates are zero they'll probably stay there he thinks for a while.

He can then you know do all the spending you want to create all these new entitlements he wants in the short time he has left.

And then you know like -- we've done a fifteen to leave the wreckage.

-- to whoever succeeds him probably a Republican I.

David -- and always has threatened a panel somebody has got to find a way to crystallized this discussion in the language for the everyday person -- David.

We did this series called the cost of spending which you can log onto our website.

On foxnews.com slash -- reports of five part series.

It starts to get to this discussion in kind -- every day way with graphics and kinda helps.

Explain some of this stuff in -- easy terms.

And I can I can actually talk a little sign that -- which is they've found that in the big problem it's bankrupting this country is Medicaid and Medicare.

Social Security to a lesser extent that what you got are people who we've got a huge boom in retirement people retiring.

And not enough workers coming up behind them to support that so those are called the entitlement systems.

And unless you do something to either reduce the benefits of those.

It.

You know -- restructuring and in a way I can reduce the costs reduce some health care costs.

Those entitlement programs are -- bankrupt.

-- bankrupt a country.

I would say that judging from the emails you are reading.

We've got a fairly hostile audience yeah pronounce it feels like they're throwing tomatoes -- -- yeah that's Erica and I.

Whether -- Medicaid Medicare quite.

What's really interesting to me is when you kind of Trace it back is how the White House started taking this conversation off the table.

Back in August 2011.

Over their debt ceiling fight.

They -- that out you know you think.

The new Treasury Secretary.

Former chief of staff actually made sure that that was not part of the conversation.

Going into the the fight in December -- so.

They have made the political calculation that they're not gonna.

They're not gonna touch Medicaid Medicare and it'll be interesting to see the state of the union if he.

If he does I really know what he's done in the past is usually gives sort of he acknowledges the problem and then -- you know skipped right by you know.

-- -- -- we've heard from the president mean going back as far as meeting before when he was campaigning as Charles mentioned.

But also when he was newly elected he said he's an easy now to see his back and forth with Paul Ryan and others.

Our problem here's Medicare it's unsustainable -- he acknowledges the problem he just says they never offered anything close to a solution the only time in the -- team.

Hinted at it as we've discussed here nauseam is when he's in the -- -- suppose -- supposedly in these behind the scenes discussions with Boehner.

And I think there's real reasons just two to question whether they were ever serious about that and I think.

They can throw that out there know that Democrats in congress we're never gonna let them do anything like that and I don't think that they've ever been serious about actually.

Performing these programs that are making the countries abroad I.

-- there's really -- sense and Charles.

-- talked about under.

That.

You know for the white house Press Secretary to come out with a statement saying blaming Republicans for the GDP.

You know being did today and then for the House Minority Leader to put a statement.

Type statement saying basically the same thing.

That's pretty bold in in political terms.

What.

Yet.

It kind of goes by without even -- mention except for this network.

And we're you know an atmosphere almost where at 60% approval rating and -- an inauguration that just happened that.

That's the world in which.

We are living.

Look I think Obama's writing very high he wins the election he wins that showdown fiscal cliff.

Here it's easy interviews with CBS.

You know sixty -- that supposedly is -- really hard tough show.

And -- approval numbers are up.

And what he's been doing since Election Day is trying to campaign.

Every issue the beside the fiscal issues.

As -- for the opposition party for the Republicans.

To oppose his program.

Is somehow.

Illegitimate unpatriotic.

Essentially saying our -- -- willing to compromise the other side is it is the function of the opposition.

To a -- that's the point.

Having a two party system.

And the Republicans are arguing all of the issues and immigration and our views on guns are doing on -- And deficits exactly -- ought to happen.

But you have Obama as you so even in the inaugural address saying essentially I -- in -- national interest the only 100 about -- and Republicans.

-- you should only in power and politics.

And partisan advantage and they do not care about the nation.

That's the premise of all of his arguments and -- Straw amendments.

So far as the eye could see and he does it without any -- which I find rather remark.

Patty from Virginia -- I don't know -- -- managed read the comments and make moderate the panel.

Try hard -- Tom are any of my comments going to show up to yes they are.

Linda wow Obama zero to 60% now yes he is in recent polling.

And Carol.

You save Medicare Medicaid needs reform tell us how now how would you do it I'm so tired of saying.

He needs to be fixed but never how would you fix it well here's here's a couple of ideas that have been talked about.

Who is against.

The effort.

Two sets.

Guidelines -- to money like.

To stipulating -- Medicare to two pricing on salaries.

You know like.

What they've tried to do with the administration is trying to do to try to squeeze money out.

By essentially reducing what hospitals and doctors -- again on the on the hospital somewhere else was and and the -- side which will simply.

Kill Medicare.

Because at some point a doctor is not gonna accept the patient we already had a report from CBO that says that if these cuts are made to the hospital.

16.

Of them on the line of business so this is sort of -- -- -- -- -- you know we're really not earning.

The old folks what -- hurting other doctors and hospitals in the end of doctors and hospitals have to be the ones who know the old folks and if you kill them.

That's not going to solve the problem so what Republicans have offered for Ryan and others.

He's you do try to introduce competition because it's now monopoly which makes sense and every other endeavor in life.

And on other issues like Social Security you raise the retirement as you raise the rate at the age at which you become eligible.

People are now live so much longer win the programs -- instituted it is insane to stay.

At sixty unified which is what FDR chose at a time when life expectancy was 62 weeks now -- I'm talking about him that this case where this is not popular.

You know raising their retirement and under fifteen people would realize this is not going to be around it it's not right but it's not it's it's not popular in his -- and to me this president is somebody just.

Does not want to make difficult.

Bold decisions when -- -- popular.

I mean even in his second term when you relax and we don't we -- this guy I was gonna come man and he went just great legacy -- -- -- yeah.

It definitely put any indication that this means testing here you and the rich yeah all right yet who are going to hit at such -- I -- -- of the work camps are.

And I was I was saying come on -- -- -- little more about Mike's salary.

And I write all the way to Chicago -- -- I know.

Your guess there were warmer.

Can't Wisconsin saved me means testing I instruments -- On in congress is against means that what do you democratic republic of people -- -- -- house Democrats would oppose means testing.

You've had house Democrats speak out against means testing.

I think it's something that could ask if the president got behind it why -- they distanced us.

Because they don't want to shrink the programs they want the -- then they want to operate under the fiction programs can continue.

Basically the way the Democrats -- -- partisan Democrats have frame the issues is this.

Despite you -- you have these evil rich people.

Who would be not getting right there are you Brett could -- be the first thing going to be the first compromised if there ever is a compromise but I don't think there's going to be a compromise because basic the other house Democrats in particular.

Who have said in these negotiations and elsewhere.

That they want Medicare to continue as it exists math.

The -- vs you know Paul Ryan's premium support program the problem is it's a faulty premise Medicare will not exist as it exists -- period ended discussion in fifty years there will be nothing like the Medicare that we know right now it won't operate.

Anywhere near that way and so what you had -- -- -- -- basically these two competing ideas.

Both of them trying to control costs one is the president's top down government control.

-- which is going to be setting prices and and going to be tinkering with.

Everything that Medicare will be doing payments to providers everything Medicare is going to be doing.

I pebble will -- -- -- a fifteen experts and congress then unfortunately I think one of the many flaws in the system.

Is going to have input into that system they can override the decisions of this board they can be taken agree with them and then later nullify them.

So congress is gonna still be catering to interest group politics.

In the context of obamacare and the iPad on the other hand you have this Paul Ryan program which is -- supports.

And as an attempt to change the incentives Paul Ryan.

Medicare.

Or out of these decisions and further -- took it to -- or something closer to a free market system.

With my incentive that that more closely resemble health savings accounts but.

And then me and -- about -- -- yet any exposure is the utter hypocrisy of liberals.

You would think dead liberals are the ones who want to redistribute income.

Help the poor and you know have the rich quote unquote -- pay their fair share.

So with Medicare.

So security and all these programs if you -- to means to tennis which means that the rich will get -- Warren Buffett who will get less than what he -- today on his Medicare and -- reasonably extra money for the future and for the poor.

That that would be completely compatible with the philosophy of liberalism.

But they oppose it and the reason is they've always held that these programs -- stadium and Medicare.

If you start to means test which you would think they would support.

Then -- think it starts to look like a program that's only for the poor.

And -- become like welfare and it will lose popular support.

And thus they want to keep it exactly as is even if -- -- heads over a cliff of insolvency.

And even if it rewards the rich and away which they should not want to reward.

As simply a way to make it continue popular it is -- it's against their own beliefs but they don't care and nobody has called them on.

I understand that keeping it universal has the word they use.

Will will embed the political support for France for the everybody -- and having obtained here and it again.

I think further enhances their ability to go to voters -- say -- we are the ones we're protecting the -- these programs for middle class and this was also mean this was let's just give people the benefit of -- -- here but.

Originally back when the original Clinton health care proposals were.

-- -- Stanley Greenberg and others had done polling and suggested basically we even if you wanna be of a permanent long term party he said this the Democrats.

You need to create a new middle class entitlement this would do that.

Wyoming Jim says he's zero for thirteen in Cameron's getting posted over several weeks on from Forte he's -- -- food -- The -- one for thirteen.

Keep posting that you would improve -- -- I want to get quickly to.

Israel and Syria and Egypt and I know quickly is tough for a subject like that.

There was a strike on a convoy.

Inside Lebanon.

Today.

-- Israeli strike on that convoy the Syrians also say that military.

Facility.

-- medical a facility where just outside Damascus was struck.

That had -- -- -- -- and arming the rebels.

And there are some people saying that could be -- chemical weapons facility.

There's all kinds of stuff happening with -- -- -- Syria Lebanon and Egypt which is Charles I tell you what it does not look like it's.

It's holding together well.

Your thoughts on average.

You nationalist like to be -- -- -- in Israel.

You've got Syria exploding with chemical weapons that could wipe out.

Have to city and who knows who controls it who knows I think I if there was an attack on a convoy.

It would have been either chemical weapons although it's it's more likely than it would have been any aircraft extremely advanced Russian any aircraft stuff that could.

Threatens Israel's control of airspace.

Over eleven she got chemicals weapons.

Floated around in Syria jihadist to a sort of leading the rebellion -- C it has but I would 50000 rockets.

Also in the north to get around developing the nuke.

And you know saying essentially we want to wipe out Israel and you got to Egypt which was the bedrock.

Of security which is in complete the turmoil.

-- led by the Muslim Brotherhood it's not aggressive now because it's in such disarray.

And -- used to be Israel's strongest ally.

In the region it's now -- turn against Israel of course you've got to Gaza which looks almost miniscule and unimportant in comparison.

But it's a nightmare and what's amazing -- to me.

The Israelis actually carry on every day.

And have -- thriving society and economy in conditions that I think Americans would find extremely tough so at the minimum I think.

They deserve our sympathy for how complicated and dangerous.

-- situation.

You know the same time Egypt.

You know there -- a lot of people on here saying.

Why are we sending F sixteens and other aid to Egypt in the middle of but looks like -- destabilizing situation with the Muslim Brotherhood.

There are a lot of people asking about the motives and head of the Muslim Brotherhood in in that region.

-- let me and I just want to add to it Charles just said rightly about Syria and and -- Hezbollah's.

Role in trying to keep aside and power is a really.

A frightening and and ugly partnership.

And have the possibility.

That chemical weapons or.

Advanced conventional west -- weapons are changing hands from Syria to Hezbollah.

I think hat was high on the minds of Israel the Israelis as they struck.

The terms of Egypt.

No more C.

-- in his.

Power grab -- -- -- bad back in November.

Continues to resonate.

And yes we're giving them would we give them a massive amount of military aid.

There is talk that -- -- actually was in line for some sort of economic support.

Particularly an IMF loans but he blew it with this power grab.

He blew by acting.

In continuing to act almost like the military when they were in control of Egypt.

And the sad thing is they were going in the direction for awhile -- where American companies were actually talking about investing mariners talked.

Possibly down the road a free trade agreement.

There is definitely this IMF.

Aid coming in as long as he did some structural changes -- -- economy is in tatters.

But did the political moves he's made -- shower the waters on that and made even more unstable.

-- -- going to have a a big piece on this on the Muslim Brotherhood in the Middle East tomorrow special report.

Foreign policy has a really long and deft piece this week on this topic worth reading.

Because it really goes and Steve two questions that perhaps the US is kind of -- -- so it's yet it I think that's a couple things that piece it's a very at peace I agree with you.

It suggests that our assessments at the time of the fall of Mubarak may have been overly optimistic mine included.

Even though I think the United States had no choice but to -- Call for his ouster and -- encourage it.

-- -- it was clear is going.

But it also brings suit to light some myths about the Muslim Brotherhood now.

That are useful in debunking as we try to figure out what the heck to do next over there I mean one of the reasons that.

They may not have except there are reluctant to two work with the IMF -- is because it's against.

Certain interpretations of Islam to pay interest and they don't wanna be in a position where they have to pay interest and so.

As the economy is is falling into the toilet they may be making these decisions based on something that.

I -- doesn't to me doesn't make any logical sense and we just don't understand that you know I I think that this is from big picture.

View of this is that as President Obama is pushing for you know.

An assault weapons ban that's unlikely to capacity and may not even have much effect based on history if it does -- he's pushing for.

Same sex immigration.

I mean he's pushing all of these issues.

And he's got his domestic policy agenda he waited out -- second inaugural we'll hear much much more about it didn't the State of the Union Address.

And I am convinced that this is going to be a second term that we'll be focused on foreign policy because it has to be.

If you look around the world particularly in that region.

You're seeing so much instability either on the surface and in places like Syria help or slightly below the surface and it's inconceivable to me that back with that level of instability and this level of American disengagement.

We are not going to have to go -- and it's try to solve what problems we can solve try to prevent what problems we can prevent and it will be the president I think being pulled reluctantly into these places.

It -- uninterested yes.

Disease in the day.

I agree I think he's determined to be a domestic president he wants to change America he's the new -- are.

This is why he's here he doesn't care about -- and his entire objective in foreign affairs used to keep the world today.

And he doesn't know what to do when Egypt and he just -- favorite food the -- I -- the better.

And -- -- -- at Davos last week which you would think would be a fairly Obama friendly crowd.

There was so much frustration that there isn't leadership.

Coming particularly in the Middle East there was a lot it is as someone said you can't put a pause button on this stuff play going and then just do domestic work.

There are.

A lot a lot of US allies.

Many people I've talked to in recent months who are.

Really scared and what's about.

US presence and the lack of it and the vacuum that's been created in the the presence of Iran and what it will be in coming months.

There really scared and they don't know really how to read this administration's second term they don't over how to read.

Hagel and Kerry they don't know how to read.

Where they're going to go.

They actually see -- they see a signal of disengagement even further and they wonder if that's possible because they see this engagement.

This is from seniors or people that countries that we should be very close -- it was the largest signal of complete.

This engagement.

Because he's to the left of Obama certainly -- around.

Iran is on the march to -- the other daily news yesterday before we that the -- intercepted a weapons shipment.

Into Yemen to support the rebels we know the Iraq the Iranians are supporting them operate rebellions.

They are heavily supporting Syria.

I side keeping him alive heavily supporting Hezbollah supporting the -- -- Has Hamas in Gaza.

And infiltrate -- and you're sort of undermining everything they can.

And the United States is completely passive that's what they see are willing I have enough to.

Suitable and prediction Super -- We have or vote that -- we'll see how we match up here.

Yeah I was flying.

We have the Baltimore Ravens yes it play in the San Francisco 49 -- and I saw Harbaugh that's not baseball.

I now have so I'm doing is a big -- this -- the biggest ever -- effort Harbaugh brother -- that's right they had their deeply involved.

I would say given the ravens'.

Record on the road winning -- wild card and what they're very strong defense.

I give the ravens.

By three point.

Well okay yeah well little known fact Charles and I are actually neighbors in ravens territory -- And our purple I'm gone purple -- opportunity to be nice to be on the -- -- right.

The 49ers are gonna win I don't think it's gonna actually be close I think the ravens.

I like the ravens for a lot of reasons I don't think the ravens defense is is good this year as it has been in the past and the 49ers offense is.

-- I can attest to sadly from having been in San Francisco when they destroyed my Packers.

Very very good -- I'm gonna go -- the 49ers as well.

Maybe my falcons.

And clearly.

-- coach Harbaugh will win the -- everybody at home said foreign r.s 58% to 42%.

So that's what's -- front runner.

-- says thank you much for intelligence in broadcasting.

A lot of people have been here before welcome aboard we'll see you next time it.

-- nine minutes and 33 seconds for whoever that I was you gave us -- wasn't.

Fancy fancy extra time she -- us we'll come after you for that minute fifty Nancy next week you owe us.

How we gonna get that I don't know anyway.

Next -- I'm not here I'm playing in the AT&T pro am at Pebble Beach.

-- so tune in Thursday and Friday on the Golf Channel Saturday on CBS and if I make the cut some day CBS.

When -- try to not hit it in the Pacific Ocean.

We'll -- okay.

See you control room.

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