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And hello again from fox and is in Washington.
With tax cuts and deficit reduction -- hot topics in Washington.
We're joined by two members of the president's debt commission.
Democrat Kent Conrad chairman of the Senate Budget Committee and from Dallas congressman Jeb -- and one of the new house Republican leaders and -- Welcome back to fox news Sunday night.
-- -- senator Conrad let me start with -- -- who voted for the deficit commission plan which would cut four trillion dollars by the year 20/20 from the deficit.
It didn't pass but you are the chairman of the Senate Budget Committee how much of this do you intend to put in you -- planned this next year.
And what -- the president has been and a what I think is really necessary now is that there be -- summit.
That involves the president you know and Judd Gregg and I first proposed.
This notion of a commission three years ago.
We designed it so the president's people were at the table that the secretary of the treasury was the chairman of the commission head of OMB was one of the eighteen.
Win we didn't get sufficient votes in the senate to advance that proposal the president.
By executive order created this commission that did not include his representatives.
I think if we're going to reach conclusion.
We've got to have leaders of the house and senate Republican and Democrat and the president or his representatives at the table and I think that's the next logical step and how much of this do you think.
Could get for -- I think a large part of it could get through luck.
I would prefer to even go further in deficit reduction in this package I think we need.
More than is provided for in this package but.
There's certainly a strong beginning.
This cut spending one and a half trillion dollars over the next ten years.
It has dramatic interest savings it puts social security and assault on course for the next 75 years.
And perhaps most important and fundamentally reforms the tax system in this country that is so broken.
By eliminating -- -- dramatically reducing a lot of the exclusions and deductions.
So that we can lower rates to help America be marked up.
Because that's a real quickly before every congressman canceling in have you told the White House about this idea of of of the summit or you just telling us now.
Now I've told them -- their assault and I've I've told.
The leaders in the house in the senate I've told.
The leaders of the commission then what's the president's.
I've not talked to the president but I've talked -- his representatives.
And they didn't give me a reaction but enough you think about where we're headed we gonna have to do budget resolution we're gonna have to do -- depth limit extension.
I think it is critically important for the country that we send a signal that we're gonna do something serious about this -- we are borrowing forty cents.
Of every dollar we spend that can't continue much longer.
The congress and canceling let me bring you -- knew -- were also a member of the panel but you voted against the plan.
What do you think of -- although having said that you say that you support of it all up major portions are but.
What do you think the idea of a summit bringing everybody together and try to get a -- and acted this year.
Well I would I would endorse the idea I'm.
Believe that the Republicans are ready to have a serious adult conversation -- anybody who wants to talk about saving.
Our nation from eventual bankruptcy me one good thing about the commission is number one I think everybody left agreeing there is a crisis.
The most foreseeable crisis in American history.
Second of all I think it was an adult bipartisan.
Conversation of which frankly there haven't been many.
And somebody like senator Conrad was a huge contributor to that next we clearly have have we have to have presidential leadership I hope we get it from from President Obama.
We need to do something.
Very very soon -- senator Conrad said we are borrowing almost forty cents on the dollar much of it from the Chinese and sending the bill to our children and grandchildren that cannot be sustained.
Congressman canceling out let's take a look at what happened on the commission because all three house Republicans.
Voted against the plan while all three senate Republicans voted for a senator Tom Coburn one of the people up there -- -- on that graphic.
-- such a hardliner on spending he's known as doctor no sad.
Pass the plan which would have if you -- by portend the -- -- that would have forced to vote up or down vote in congress this month.
To cut spending by four trillion dollars -- to take a look at what that Tom Coburn sat.
The time for action is now the threat is real it's urgent we cannot wait for another election.
We cannot wait until we get more of what we want.
The congressman didn't.
Here who waste a chance here -- two to back up your -- -- and force an up or down vote that -- maybe not been perfect.
But would have done substantial.
Made substantial progress.
In cutting the -- has said this month.
Well Chris number one the deficit is the -- spending is the disease.
There's a number of elements about this plan that I liked.
But at the end of the day it's still unfortunately represents a roughly two trillion dollar tax increase on the American people.
And does not fundamentally address -- key driver.
Of our national fiscal crisis and that is health care.
And so yes I want to do something since I've been working for eight years ever since I came to congress have cosponsored a spending a limit -- -- -- to the constitution.
I've cosponsored Paul Ryan's road map for America's future solutions.
That would ensure that the next generation.
Doesn't have to have a lower standard of living.
It's so let's not they acted to give senator Coburn is closing speech he probably -- given mine.
We just came to slightly different conclusions about this package and if I could Chris there's nothing magical about fourteen votes.
If the speaker in the senate majority leader want to bring this provision.
Before the congress they can't and I would encourage them to do it whether received eighteen votes for votes -- one vote they have the power to bring this to the congress today.
The senator -- I wanna pick up on some of the objections that congressman pence or -- house on this because they represent what a lot of critics cite.
Congressman canceling speaks for the new Republican majority -- takes over in the house at the beginning of the year.
First of all he says and a lot of Republicans say that this would.
This plan the deficit plan would have increased revenue two trillion dollars over the next -- -- -- -- Well I don't agree of that assessment it would have increased revenue.
By the commission's estimates by a trillion dollars.
Over ten years but how would it have done it would have done that.
By dramatically reducing tax expenditures.
Using the vast majority of the money to lower tax rates to make America more competitive including lowering the top corporate rate.
From 35% to 28%.
Which most economists say would help us be more competitive and help us create more jobs so let me ask you about the other aspect and this is a criticism you hear from -- a lot of people.
Is that this bill didn't get serious about these single biggest cause of government spending.
Which is health care.
Well I I really respectfully disagree on that as well first of all we've just -- -- Health Care Reform bill that is gonna reduce.
The deficit well you know -- this there's a disagreement about -- known I don't know there's no disagreement by the official score -- which is CBO I understand they say that the Health Care Reform bill will reduce the debt by over a trillion dollars over the next twenty years.
It needs to have more done and this bill this proposal from the commission does more first of all.
It deals with the most important thing most economists tell us which is to change the tax treatment of health care.
Phasing out the deduction the number tax.
The tax exemption let me let me just because we are gonna run out run out of time here and I -- -- get -- taxes that congressman canceling your response.
Both on the revenue side and also.
About that at the health care.
Well back to the commission planned it depends on whose baseline you use which is Washington -- for who set of assumptions.
The commission decided to use the president's assumptions we respectfully.
-- agree -- believe that it represented two trillion dollar tax increase.
-- that as it may yes health care continues to be a contentious debate -- In Washington I mean I think it is instructive that the Congressional Budget Office that probably gave the health care plan.
It's most glowing blowing score.
Did not change their long term cost estimates and if you talk to the actuaries at the centers for Medicare in Medicaid Services.
They actually say it will increase the national health care bill.
And so until we change the architecture.
Of the health care plan.
That was recently passed by congress -- reform Medicare.
For future generations.
Grand -- all the grandparents.
You just don't get there from here I don't see any road to physical fiscal sanity.
Without doing that and although this -- of the commission does many great things right now with respect to trying to flatten the tax code.
Save Social Security for the next couple of generations it's fatal flaw is its failure to deal with the single largest driver a fiscal insanity and that is our health care process.
Gentlemen let me move to the other big subject and Washington right now while the deficit commission and -- on -- we're talking about the debt crisis and cutting the deficit.
There -- negotiations going on between the president and congressional leaders of both parties.
About a compromise plan that would greatly increase the deficit let's put that up on the screen.
Extending all the bush tax cuts.
Would at a 115.
Billion dollars to the deficit just in the first year but the president is now threatening -- -- -- unless congress also extends other tax cuts for lower income families.
And small businesses and extends jobless benefits for another year and the cost of all -- would be.
150 billion added up and we're talking about another 265.
Billion dollars in more -- the first here.
And as much.
As 800 billion over two years senator Conrad even watching and those are big numbers I know we got -- the weak economy.
Nine point 8% unemployment -- of Friday for the last month.
Would you support that compromise and how do you.
That square the idea of adding another quarter trillion dollars to the deficit at the same time you're trying didn't.
Reduce the deficit.
Because what's clear is we've got to think of this economy in two different ways the short term in the longer term.
In the short term.
I think it's imperative that we extend the tax cuts at least for the middle class.
Because the economic consequences of a failure to extend the tax cuts have severe.
We could see economic growth cut in half.
If the tax cuts especially those from the low.
For the middle income people are not -- we could see economic growth cut in half next year so.
It simply got to be done but that doesn't.
Take away from the fact we -- have to pivot and have a longer term plan to control the debt and bring it down at it congress are canceling.
As I've laid it out where you would to have an eight temporary extension.
Of all the tax cuts but you would also extend at least three year jobless benefits and also some of the if you well Obama tax cuts that were in his stimulus plan.
Could you accept that compromise.
Well we'll have to see -- the negotiations.
Unfold but I think our position is quite clear.
And we don't want no tax increases -- nobody.
Now that may be poor grammar but it's great economics ultimately the cost of government is what it spins.
Not what it taxes we have a spending problem in Washington.
The cost of government -- average 20% of the economy in the post war era in over the course of the next generation.
It's due to double.
We don't need any more taxes number one.
Taxes are already baked into the system under CBO's.
Analysis they're going to increase roughly ten to 12% over the course of an -- -- -- night but it's -- and it's due to double yes.
Congress -- let me ask you one last question because we're just almost out of time.
There there are some people who say -- luck with your Republicans are saying -- are gonna extend unemployment benefits for people who are out of work and I've been out of work for months.
The government has to cover that.
But they they don't have to find a way to make up for that the difference when you're going to extend all of these benefits which is rather all of these bush tax cuts which is gonna cost a lot more I ended I take your point.
That that look allowing people to keep their money is -- cost but it does have an effect on -- or is not a cause but it does have an effect on the deficit.
Well I agree but again the deficit is the -- spending is the disease and -- fundamentally reject it.
We're talking about tax cuts what we're talking about is prevailing.
Tax increases something that even keynesian economist -- warn against in this particular economy.
I mean we have to have spending restraint not tax increase on December.
Give the final fifteen seconds that senator Conrad that in other diseases that is the disease the disease is a runaway debt the fact is spending is the half sister 125 years as a share of the economy or fifty years.
Revenue is the lowest it's been as a share of the economy in fifty years you've got to work on both sides of the equation if you're going to reduce deficits and control that all right we're gonna happily with us senator Conrad congressman and selling.
Who want to thank you both so much for coming in today to discuss the challenges you're facing.
Good luck to both of you gentlemen.
Have a good day Jeff thank you.
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