tv FOX News Sunday With Chris Wallace FOX News July 10, 2011 2:00pm-3:00pm EDT
sits down with members on both sides of the debt debate. don't miss it! i'm shannon bream. thanks for watching fox where more news is always on the way. >> we'll talk about the campaign and the scope of government with jim demint and also a stunning unemployment report sends shock waves down main street and wall street. we'll ask our sunday panel how damaging the numbers are for the president. all right now on "fox news sunday."
>> hello again, from fox news in washington, late saturday, there was a major development in the debt ceiling negotiations. speaker of the house john boehner issued this statement asking for a smaller package instead of the bigger brand bargain. "despite good faith efforts to find common ground, the white house will not pursue a bigger debt reduction agreement without tax hikes. i believe the best approach may be to focus on producing a smaller measure based on the cuts identified in the biden-led negotiations." white house communications director dan pfeiffer responded with this. "the president believes now is the moment to rise above that cynicism and show the american people that we can still do big things and so he will make the case to congressional leaders that we must reject the politics of least resistance and take on this critical challenge. joining
us now is the senate's top republican who will be a key participant in today's talks. senator mitch mcconnell. welcome back to "fox news
sunday." >> glad to be here. >> let's start with what happened and from your perspective, where do things stand now ahead of this meeting tonight at the white house. >> well, unfortunately, as the speaker said, they are insisting on the white house and congressional democrats, insisting on really big tax increases as a condition to do anything on the spending side. bret, we believe the president was right back in december when he signed a two-year extension of the current tax rates of raising taxes in the middle of this economic situation we're in is a terrible idea. i mean, just look at the unemployment figures last friday. all the arguments the president used in december still work today. there's an additional issue in addition to the unemployment at work here, it's what kind of government do you want to have? and if you look back the last two and a half years, you see the government running banks, insurance companies, car companies, the student loan business taking over our health care, trying to take over the
internet, increasing spending, discretionary spending 24%. increasing debt 35%. how big a government do we want? and we don't want to use this opportunity presented by the president's request of us to raise the debt ceiling to kind of breeze in perpetuity this much government. i don't think it's good for the economy. >> so is it big to you, a $4 trillion deal off the table? >> i think it is. because everything they've told me and the speaker is that get a big package, we require big tax increases in the middle of an economic situation that's extraordinarily difficult with 9.2% unemployment. it's a job killer. >> you mean, you mentioning the unemployment where they came out friday, 9.2% and the up tick, 18,000 jobs, only created in june and in your opinion, how much has that jobs report affected negotiations?
>> well, it ought to incentivize us to do a big package without raising taxes. but unfortunately, i think the president is not thinking the same thing he did six months ago when the economy wasn't -- didn't seem to be as bad as it is today and he was making arguments of raising taxes in the middle of this recession or slowdown, whatever you want to call it was a bad idea. >> before the development saturday, democrats were very upset that the white house was even talking about social security and medicare and medicaid, entitlements. putting on the table. here's house minority leader nan nancy pelosi. >> we want to reduce the deficit as we grow the economy. we are not going to reduce the deficit over subsidized tax cuts for the rich on the backs of america's seniors and working families. no benefit cuts in medicare and social security. >> so the question is can you get to even a smaller package,
let's say $2 1/2 trillion without touching medicare and social security? >> well, look, over 60% of our budget we don't even vote on. it's popular entitlement programs like social security, medicare, medicaid and interest payments. you can't do anything serious about our deficit without impacting the biggest percentage of the budget. and so i commend the president for putting medicare and social security on the table. he is correct in doing that. you can't have a serious deficit reduction program without dealing with those programs in the long term. in the out years. >> what do you say to democratic critics who say you republicans aren't coming to the table with a lot of gives? >> well, we are -- we have 9.2% unemployment and their prescription is to raise taxes? i mean, my goodness, who thinks
that -- the president didn't think that was a good idea in december. why do they think it's a good idea now? >> senator, the words we're using, shared sacrifice. balanced approach. >> those are nice words. but how do you get the economy growing which is the biggest way to increase government revenue. you do not get the economy growing by having a big tax increase. you get the economy going by incentiveizing the private sector. look, if you're in the private sector right now and trying to decide whether to expand, what do you see the government doing? proposing to raise taxes and borrowing, spending, overregulating, it's not a very reassuring message if you're running a business if you look at the federal government today. >> treasury secretary tim geitner is saying this morning that the white house is still going to try to get the biggest deal possible. what is the biggest deal possible? >> well, i don't know, but i'm for the biggest deal possible, too, it's just that we're not going to raise taxes in the middle of this horrible economic situation. >> would you agree to raise the
debt ceiling with promises for big structural changes to the tax code down the road? in other words, is there a mechanism that could tie a current deal to some future promise of the deal? >> well, we can't negotiate it here but let me say this, we believe that tax reform is long overdue and the president believes that as well. try to get the rates down, take a look of the preferences out. it's very, very difficult to do that in a week. it's an extremely complicated process. but we are in favor of that and we think we ought to get about it. but i don't see how you can do that in the context of our immediate challenge here which is to figure out what to do in response to the president's request of us to raise the debt ceiling. >> will the house republicans put forward their own debt limit proposal? >> well, i think we're going to continue to hope here that we can work out something with the administration. obviously, the other side, the other political side controls most of the government. they have the senate, they have the presidency, you can't get an
accomplishment without some kind of bipartisan agreement and that's part of what the meeting tonight is about and we hope it will be successful. >> so what if there isn't a deal? >> well, we're going to go forward and i'll have more to say about that later in the week. >> is there a contingency plan? >> there's always a contingency plan. >> what does it look like? >> i'll let you know. >> i mean, for people out there, i mean,
do you believe the economy is in serious jeopardy if the debt ceiling is not raised august 2nd? >> nobody is talking about not raising the debt ceiling. i haven't heard that discussed by anybody. >> some are. >> not in the congress. yeah, nobody is talking about doing that. we're talking about trying to -- >> congresswoman michelle bachmann has said don't let them fool you, that the economy is going to collapse. >> we're talking about using this request that the president made of us to raise the debt ceiling as an opportunity to do something really significant for the country about spending and about debt and that, of course, would also be good for the economy. >> so you believe the august 2nd deadline, if the debt
ceiling is not raised by then, there would be serious economic repercussions. >> well, secretary of the treasury said we need to do this and we're using this as an opportunity to have a discussion about doing something about spending and debt. >> there are now even proposals up on capitol hill for, again, a clean debt limit increase. is that a possibility? >> look, we're going to try to use this opportunity to do something significant about deficit and debt to get our spending down, get us headed in the right direction and i don't think we would have been able to focus on this but for the president's request of us to raise the debt ceiling. >> as far as revenue increases, not tax rate increases, revenue increases, closing tax loopholes, senator kyle and house majority leader eric cantor came to some conclusions in that vice president biden meeting, the meetings led by the vice president, they said 150 billion to $200 billion in tax revenue increases.
would you be in favor of that if, let's say, a payroll tax cut is included in there? >> well, you're asking me a lot of things that are the subject of negotiations. what we're in favor of is a growing economy. and if you can get the private sector moving, bret, you can get the private sector moving, the government will benefit by that by greater revenue. i mean, the principle reason revenue is down now is not because we have rates that are too low. it's because we're in a very sour economy. when the economy goes south, government revenue goes south as well. we don't want to do anything. it keeps us from getting out of this economic trough and that will, of course, produce for revenue for the government. >> there are a number of republicans who are worried that you're going to "cave" too early and presidential candidate, texas congressman ron paul is worried about a deal that promises things down the road. he said this. the democrats pulled a similar maneuver during ronald reagan's
presidency, taxes went up but the cuts never came and in washington if you hear about a so-called deal, you can be sure the taxes will come but the cuts never will. agreeing to this scheme by the white house will be betrayal by the voters who put republicans back in charge of the house in 2010. >> i agree with that, by the way. i think he's absolutely right. one long term spending reduction you can count on is when you make entitlement changes that we don't vote on every year. they hold up. when reagan and tip o'neill fixed social security which lasted for a generation back in 1983, it lasted for a generation, we didn't go back and revisit it every year because we don't vote on entitlements every year. they're on automatic pilot. so i agree with congressman paul. i think he's right about that. but i do think long term entitlement changes do hold up and ought to be a part of any deal that we make. >> so without this wall of the debt ceiling, does the prospect of that start to diminish? if you don't have this back stop
that you're pushing up against. >> well, it's helpful. i mean, the president's request to raise the debt ceiling is the reason we're having these discussions so it's been helpful in that sense and i hope it ends up being productive in the end. >> i'm sure you're aware of the politics of all this. democratic operatives are trying to sell a couple of story lines. one, if it does not get raised and the economy falters, it's your fault. republicans walking away from the table and two, that republicans want a sour economy and bad economic numbers. i received an e-mail with a list of quotes on it. republican candidates and leaders saying that bad economic numbers help the republicans' chances in 2012 and on that e-mail is one of your quotes from last year where you said the single most important thing we want to achieve is for president obama to be a one term president. how do you respond to those democratic lines of attack? >> well, that is true. that's my single most important political goal along with every
active republican in the country. that's in 2012, our biggest goal is to have this country straightened out and we can't get the country straightened out if we don't do something about spending, about deficit, about debt and get this economy moving again. so our goal is to have a robust, vibrant economy that will benefit all americans and that's why i think this debate that we're having right now is so important to our country's future. >> the treasury secretary also saying there's no credible way to get the congress more time. they have to act -- you have to act by august 2nd. is it possible that you will push forward and i know we're getting into negotiations here, a shorter deal that doesn't even take you past 2012, that perhaps is dollar for dollar and only gets you part of the way but is dollar of spending cuts and, you know, maybe get you one way. >> good try but those are all things that we were talking about. you and i can't resolve it this morning. i wish we could. >> last question and it's another topic.
the obama administration transferred this terrorist suspect, somali suspect to the u.s. to try him in a federal court after interrogating him on a u.s. naval ship. you've spoken out about this. the administration continues to argue that there are solid charges that can be brought in federal civil court and the attorney general appears convinced this is still a way forward. what's the next move in this stand-off? >> i agree with chuck schumer. chuck schumer agreed -- opposed trying ksm in new york in a regular civilian court. i'm sure he must surely oppose bringing this terrorist to new york. by the way, they're going to try a couple of foreign terrorists in kentucky, in my state, whose fingerprints were found on ied's in iraq. these foreign terrorists are enemy combatants. they should be taken to guantanamo, they should be tried in military conditions. new legislation that we passed just three years ago precisely for the purpose of dealing with foreign terrorists. these are not american citizens. we just found with the caylee
anthony case, how difficult it is to get a conviction in a u.s. court. i don't think a foreigner is entitled to all the protections of the bill of rights. they should not be in u.s. courts. they should
be at guantanamo and before military commissions. >> senator mcconnell, thank you very much for your time. interested to hear what happens tonight. >> i will, too. >> coming up next, we'll talk with a key house democrat about the line in the sand. some in his party are drawing over potential changes to entitlements. at bayer, we're re-inventing aspirin for pain relief. with new extra-strength bayer advanc aspirin. it has microparticles, enters the bloodstream faster and rushes relief to the site of pain. it's clinically proven to relieve pain ice as fast. new bayer advanced aspirin. is actually finding choices the whole family will love. five flavors of chex are gluten-free, including the honey nut flavor. and it's nice for me to be able to syes" to something that they want to eat. [ male announcer ] chex cereal. five flavor gluten free
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xavier becerra. welcome to "fox news sunday." >> thanks for having me. >> i'll start with the same question i started with senator mcconnell. where do you think things stand before this evening's meeting at the white house? >> i think they're where they've always been, that is the leaders have to come together and get this done because once again, the american people probably get it better than the politicians. this will affect them more than the politicians. their mortgage, the opportunity to get the student loan paid for their kids to go to college, to get small businesses to get the line of credit they need to expand. all of this impacts their ability to do well and so i think we're where we were before, get it done. >> you're pleased with the news that, perhaps, it's going to be a smaller package than originally proposed? >> well, i was never pleased that we linked in such a way that you threatened the full faith and credit of the u.s. government. this issue of a debt ceiling increase with the need to come
to grips with our budgets. we need to do both. but to say you can't do one without the other is to take us to the brink and we see this now occurring where, apparently, speaker boehner could not get the votes in his republican conference and we are now at the stage where the markets tomorrow will tell us what they think about this and the american people have been telling us for quite sometime. >> congressman, there was a pretty big pushback by your democratic caucus to the white house when word came out that social security and medicare and medicaid were on the table. >> well, think of it this way. the negotiations began with the president saying let's all come together, the leaders and discuss a negotiated settlement here. everything has to be on the table. but pretty quickly, my republican colleagues said everything can be on the table except taxes. that doesn't seem fair. the american public gets it there has to be shared sacrifice. the american public gets it that there are some folks,
millionaires who haven't been paying their fair share so the american public poll after poll shows have said let's let everyone pay a price so we can have some gain in the future. no pain, no gain. >> congressman, you were on the whole simpson commission and you voted against the recommendations at the end but during the meeting, one of the meetings, you said this -- as you just said here "i don't want to leave the table because i started off that very first day of saying everything must be on the table." what you just said. but as the negotiations in the debt ceiling increase have continued, you said this week "i don't see why i would support any plan that would cut benefits to seniors to pay for the reckless fiscal policies that led us to these massive deficits." that seems like a big change. so now there are some things that are off the table for you. >> as when i was on the fiscal commission and when any proposal comes before me for a vote, i will take a look. as much as i believe that social security shouldn't be on the
table because social security hasn't contributed $0.01 to the deficit that we face today nor $0.01 to any of the national debt. the $14.3 trillion so why should social security, why should seniors have to pay to balance the budget through social security cuts? but it should be on the table. i would fight to take it off the table. but it should start off on the table and then what should remain on the table are the things that really drove us into these deficits and most folks know what drove us into these deficits. when you don't pay for two wars in iraq and afghanistan and you borrow all the money from china, you're going to have to pay for that at some point. >> mentioning social security. in the president's deficit commission report, they say, among other things, without action, the benefits currently pledged under social security are a promise we cannot keep. do you think changes need to be made to social security for future generations or not? >> absolutely. you said the operative word. future generations. we're not talking about balancing the budgets today for
future generations. we're doing it because if we don't do it today, the person who has to pay that mortgage tomorrow will find interest rates will have shot up. we're trying to take care of past debts. remember, the debt ceiling vote is about past debts. it's not about future negotiations. social security will be good for the next quarter century. we should do something to make sure after that quarter century, we're not paying $0.78 on the dollar in deficit. >> last year, for the first time since the 80's, social security paid in more benefits than it took in in payroll taxes. >> true. >> correct? >> true. >> correct me if i'm wrong, the social security trust fund is a pile of iou's from the government that it was taken from congress' past that have borrowed money and spent it on other programs. eventually you have to pay that back, is that not accurate. >> this is the best way to explain this to you. do you have a wallet? >> not on me.
>> let me pull this out. $5 bill. this is just a piece of paper. but it says $5 on it. let me show you something else. this is a $50 savings bond, my daughter got it when she was born 16 years ago, both of these are pieces of paper. this is a treasury certificate and this is a dollar. bowe of them rely on the full faith and credit of the united states to be covered. if i try to cash either one of these in, it's only because the federal government says you can count on getting paid. that's what social security has to the tune of $2 1/2 trillion. so when people say that social security has no money, they're saying to you that for the last 30 some odd years, politicians have been stealing the money out of social security. it's there. ask china. china has these as well and they expect to be paid. social security expects to be paid and by the way, you and i expect to be paid. >> but with 10,000 baby boomers retiring every day for the next 19 years, and with people living longer and social security trustees report says the program will not be able to pay fully beginning in 2036, eventually,
you're going to have to deal with this program and you have the white house saying why not now? >> and we could. but you have to do it in the context of strengthening social security, not trying to pay for deficits that social security and social security beneficiaries had anything to do with. that's the difficulty that democrats have with republicans. republicans want to put social security and medicare on the table. you just heard senator mcconnell say we need to put the two programs on the table to deal with deficits and debt of today and democrats are saying wait a second, whoa. every day, an american works when he or she pays out of that paycheck, it's going to social security and medicare. why when it's a paid for system should it now have to pay for deficits that were caused by bush tax cuts to the wealthy, unpaid for wars in iraq and afghanistan. that's the big rub. >> so you're against any changed consumer price index, a changed cpi, consumer price index change
which is essentially adjusting benefits for what the bureau of labor statistics says is overstated inflation. you're against that? >> if you -- are your parents still alive? grandparents still alive? >> sure. >> ok. do they have the same health care costs that you do? they don't. seniors have higher health care costs than someone your age or my age. what's going to happen if you change the cpi as the back door to social security. why? because when you and i are nimble enough still to make a consumer choice to say not buy a mercedes-benz and buy the ford -- the more -- less expensive ford vehicle, a senior can't decide. i need to find a substitute for health care. i need health care and so changing cpi does exactly that. it changes seniors to lower benefits which is unfair for them. they worked for those social security benefits. >> are democrats resistant to this in part because they've enjoyed the political success with the medicare issue, for
example, in new york 26 that it's a powerful political issue heading into the election oochl at public has made social security and medicare a powerful issue because the public still believes in medicare and in social security and in medicaid, i should say, as well, the public is the one that's telling all the politicians keep your hands off our social security and medicare but at the same time, let's be prepared to strengthen the programs into the future because we see in the out years with the baby boom generation, we want to deal with social security to make sure it's continuing as strong as it is today and on medicare, you want to make sure you lower health care costs so medicare can continue to provide benefits to seniors. >> last question, 30 seconds here, do you think this is going to push up against this debt ceiling limit. how do you think this comes to an end? >> if we're smart, we'll agree that we will not jeopardize the full faith and credit of the united states. never have. during the bush administration, seven votes to increase the debt
limit. republicans voted for it. they should play politics this time around. >> you mentioned seven times the bush administration. then senator obama said this. increasing america's debt, domestically and internationally, leadership means the buck stops here. instead, washington is shifting the burden of bad choices today on the backs of our children and grandchildren. america has a debt problem and a failure of leadership. americans deserve better. he voted no against increasing that debt ceiling limit back then. was he wrong? >> what he's saying is what he's saying today and yesterday and that is let's resolve the big issues that we have before us because we can't just continue to raise the debt ceiling limit, what we do have to do is get our house in order. but let's do it in ways that are balanced and the way the american public would do it if it was sitting down at the kitchen table of congress. they wouldn't walk away from the negotiation. they would sit there and get it done because they have no choice. >> thanks very much for your time. >> thanks for having me. >> up next, senator tea party jim demint and what he makes of
>> good to be with you. thanks for having me. >> where do you think things stand ahead of tonight's meeting at the white house over debt ceiling limit raise? >> well, bret, i'm afraid i'm not optimistic. i think the president has been gaming republicans and he's been talking about this for six months and the only proposal he's sent us is his budget to raise the debt $10 trillion so it's hard to take him seriously here.
there's a lot of things we need to do we've talked about reforming social security, medicare, the tax code. i along with many other republicans have introduced legislation over the years to do just that. what we really need to do, bret, is recognize that the main problem here the thing that's affecting our economy and jobs is an overbearing government that's spending too much. it's borrowing too much, it's creating too much debt so thousands of americans and many republicans in congress are uniting around the idea that we will give the president his increase in the debt limit in return for some reasonable cuts in spending this year. some caps in spending over the next 10 years. and his agreement to send a balanced budget amendment to the constitution, to the states for them to ratify. we can't solve the social security, medicare, tax issue this week. we can agree it's time so stop spending more than we're bringing in. >> do you think the country
faces default or major economic consequences if the debt ceiling is not raised by august 2nd? >> no, i don'ts. i think secretary geitner has been irresponsible and playing chicken little here. the fact is we'll pay our debts if it's the last dollar we have. there's enough assets to pay the benefits of those programs for several years. other programs can be funded from tax revenue. certainly would be disruption, bret, but this is not a deadline that we should rush and make a big deal and do something that cuts benefits from seniors without giving them better choices. what we need to do, bret, is the problem of spending and debt and agree to stop spending more than we're bringing in. not this year. not next year but led the states decide sometime over the next six to 10 years, bring our
budget into balance. 49 states have to balance their budget and they have to make the tough decisions every year. we never make the tough decisions because we don't have to balance our budget. >> senator, i'll talk about that in a second but on the august 2nd deadline, speaker boehner said this friday, "while some think we can go past august 2nd, i frankly think it puts us in an awful lot of jeopardy and puts our economy in jeopardy risking even more jobs." you disagree with the speaker? >> well, if the president and secretary geitner have not planned for contingencies and we've sent them letters to tell them they needed to there will certainly be disruption but the president is required by law to pay our debts. he's required to pay social security and medicare. i know he's going to try to frighten seniors and frighten other americans that something terrible is going to happen but we're willing to give the president an increase in the debt limit. but democrats in congress are going to have to work with us on some reasonable cuts and give the states the opportunity to vote on a balanced budget
amendment. this is not asking too much right now. we're not asking them to make radical cuts anywhere but to agee with us that the american people and the states should be able to finally decide if we're going to balance our budget. >> we've been talking about this financial cliff before, not just in the past few months. here's another quote for you. "the full consequences of the default or the serious prospect of default by the united states are impossible to predict and awesome to contemplate. denigration of the full faith of the united states would have substantial effects on the financial markets and the value of the dollar." that is from president ronald reagan in november of 1983 issuing a warning in a letter to then senate majority leader howard baker. your thoughts on that? >> well, bret, it would be catastrophic to default. and we shouldn't default. but we're not gonna default and the president's obligation is to pay those bills and if they have to have contingency plans to make sure other functions of government go on, again, we want
to give the president his increase in debt limit. we need to make it at least one of the last times, bret. this is the fourth time he's asked for it. each time we get promises of change. we're not getting any change. >> you mentioned passing the balanced budget amendment to whatever deal comes out here. here's what your colleague, republican senator john mccain said on the floor about that. >> in order to avoid what would be disasterous consequences for our markets, our economy as a whole and our standing in the world, i encourage my colleagues to lay aside at least temporarily their insistence that amending the constitution be a condition of their support for a solution to this terrible problem. >> so that's a nonstarter for you. pushing that aside. >> well, senator mccain is a co-sponsor of this balanced budget amendment. and we're not holding this debt ceiling hostage to actually implementing a constitutional amendment. that would take years.
it would take states two or three years to ratify. after that, it would be five years before this was implemented so there would be plenty of time to do the things we need to do to save social security and medicare, to fix our tax code. those are things we can't do in a couple of weeks. but what we're asking is to give the american people in the states a chance to decide if the federal government should over the next few years bring our budget into balance and bret, a fifth grader can tell us. if the problem is debt, then we have to stop spending more than we're bringing in. that means we have to balance -- >> sorry. >> we have to balance our budget. >> i apologize. if we look at recent polls, latest fox news poll about a balanced budget amendment, 72% to 20%. most voters favor overwhelmingly this amendment to the u.s. constitution but the sentiment is reversed if having a balanced budget amendment means major spending cuts to entitlements that's 61-31 against or major tax increases, 62% opposed so critics say this could backfire
and really limit options on any government in a crisis. >> well, bret, i don't think that we ultimately are going to need to take anything away from existing seniors. in fact, i don't think we should. there are a lot of less expensive choices for social security and medicare that i think younger workers would take in a hurry. younger workers would much prefer a 401k style plan for social security and a lot of them would like to keep their own health insurance when they retire. this would save the federal government money and give people better choices but these things we're going to have to work out over several years. and we need to have good open hearings in congress. we're not going to do it in the next couple of weeks. but we're also not going to do it, bret, if we don't agree that at some point in the future, we need to balance our budget. that's what we need to do first. i have to do it in my home. i had to do it in my business. you have to decide what your budget is. then you decide what -- what you can do, what you can spend money
on. right now, this is irrational just to decide everything you want to do and then how much we're going to borrow to make that happen. >> senator, only 12 senators have signed on to your cut cap and balance plan. eight presidential candidates have including mitt romney, former massachusetts governor, you reported him in the 2008 south carolina primary, tea party favorite congresswoman michelle bachmann has not signed on to this. what about that? and will you endorse a candidate this time around? >> i will probably endorse but it won't be until the end of this year, first part of next year. i want to see what these candidates are doing. well over half of the republican conference in the senate is co-sponsoring the cut, cap, balance bill. the pledge is one thing. the bill is actually the real thing here as far as what we need to do. and i'm still encouraging people to sign a pledge. that's the commitment to oppose the debt limit and unless we get real spending cuts and a
balanced budget amendment but you're going to see over the next week, bret, the large majority of republicans in the senate and hopefully in the house sponsor a bill that gives the president his debt limit increase, contingent on real cuts and sending a balanced budget amendment to the states. if any presidential candidate doesn't take the balanced budget seriously, i don't see how they could add anything to washington right now except more debt. >> have you taken a presidential run off your table? >> yes, i have. >> that's simple. senator demint, thank you very much for talking to us today. >> thanks, bret. >> coming up, i'll ask our sunday panel what the new unemployment numbers mean for the economic recovery? and the president's political future. [ male announcer ] this...is the network -- a living, breathing intelligence that's helping people rethink how they live. in he, the planned combination
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>> sooner that the markets know that the debt limit ceiling will have been raised and that we have a serious plan to deal with our debt and deficit, the sooner that we give our businesses the certainty that they will need in order to make additional investments to grow and hire. >> i think the situation that we face is pretty urgent, as a matter of fact, i think i would describe it as dire and we have three really big problems, we have a spending problem. we have a debt problem. and we have a jobs problem. >> president obama and speaker boehner draw battle lines ahead of debt negotiations scheduled at the white house today. now, it's time for our sunday group. brit hume, fox news senior political analyst, mara liasson of national public radio, steve hayes of the weekly standard and fox news political analyst juan
williams. brit, let's start with the unemployment number out friday. and what it means for the president, what it means for this situation. >> well, i think it was a real game changer in terms of the debt negotiations. it hardened positions, i think on both sides. republicans against any kind of tax increases and democrats against any sort of major entitlement reform that you heard echoed in the interview with congressman becerra today which meant that the possible big deal that the speaker and the president have been talking about kind of evaporated although word of that came apparently from the phone call from the speaker to the president but i think that's where we are. and i also think, bret, as we look to today's talks that i'm not sure what will be resolved but i think republicans do not think that time is on their side. they're terribly afraid as we get closer to the announced deadline that letters will go out to frighten the dickens out of social security recipients, perhaps, or others and that
they're going to need to do something. what it will be remains to be seen but i know for a fact that the two leaders of the house and senate republicans do have a plan in mind and they're want goi -- not going to tell you what it is but we'll find out soon enough. >> mara, the president's secretary saying they will try for the best deal possible. >> i think the biggest deal is the $2 trillion get you through the next election deal which is the deal they were talking about in the biden negotiations and then i think the president and the speaker did try -- tried something bold and creative and ambitious which is to not kick the can down the road and try to make a big deal that would really solve the deficit problem by doing the three things that everybody has always felt was needed. tax reform where you get more revenue while lowering tax rates, entitlement reform and real spending cuts. and it didn't work. i don't think, you know, boehner couldn't bring his -- bring the votes along for that. >> tax reform in a debt limit
-- >> that was the sticking point. you couldn't figure out how to guarantee tax reform that takes many years in something that has to be done in two weeks. that was the big problem. now we're back to the medium term deal and i think the question there is the president's bottom line is it has to be big enough to get you through the next election. he doesn't want to do it again before then and can you make it revenue neutral and i think if you are going to close loopholes which the democrats want, you could have an extension of the employees' social security tax cut that the president wants and that would balance it out. >> steve, this is not an easy jump, either to get the smaller version. >> it's certainly not. and if you look at the number -- just look at the numbers in the house in particular but also in the senate, you have to get the votes to pass this thing, whatever this looks like, whether it's $2 million or $2 trillion or $2.5 trillion but john boehner said in his statement that the president is operating on good faith. these are good faith negotiations and i just don't see a lot of evidence to support that claim. if you look at what the president did, if you look at
what the white house did, he insisted on tax hikes that republican leaders had already ruled out and that could not pass the house of representatives no matter what. my view is that the white house actually wants to push this to the brink, maybe even beyond august 2nd. i think they believe that they have more flexibility than tim geitner is saying publicly because democrats want an issue. they want to be able to talk about the disruptions that they're causing by pushing this, they want to be able to send those letters that brit mentioned because the white house has no argument on the economy. it's been 2 1/2 years and the stimulus didn't work. they need an argument and i think right now, this is an exercise in attempting to get some blame sharing. >> so juan, you agree with brit, that it was a game changer friday? >> no, i don't think that it -- i mean, i think a lot of these things were in place before friday. i think that everybody saw it was terrible economic news. but what i think is going on here is to my mind, and it's
taxes for not only the rich but for the very rich. they're saying we refuse to raise taxes, to make taxes the part of a deal and violate what congressman becerra called a notion of shared sacrifice so to me, i'm just puzzled by it. i mean, i think the job numbers indicate we have to do something. it's made the democrats now more persistent in the idea that whatever deal comes along has to include some kind of new stimulus spending. imagine the republican reaction to that given they've been down -- >> you're not going to get stimulus spending but might get an employee payroll tax cut. they're saying stimulus. >> what could be less stimulative on raising taxes on anybody? >> how is it that now the very rich is everybody. the very rich is small business. it's not true. >> the president himself back two years ago next month in august of 2009 made the argument that raising taxes in recession, even on the rich, was "the last thing you want to do."
these are president obama's words. how does it make sense to raise taxes on anybody right now? >> because, we are trying to cut entitlements because we have a huge debt problem. we need, in fact, to raise the debt ceiling to a point that nobody thinks is rational. everybody thinks we have to cut spending. the democrats are proposing, i think, $2 to $3 in terms of cuts even taking on something so risky for democrats, social security and medicare in exchange simply asking that there be some responsibility on the part of republicans to say yes, people who have made -- have become prosperous in this land of opportunity are also going to share the pain. >> although, juan, to push back democrats on friday after the leak about the entitlements being on the table was pretty strong. >> correct. well, you know what? democrats are in the minority in the house. they feel like no one is paying attention and everybody is playing ball right now along the tea party line and the tea party, i don't think they're interested in governing. they're interested in campaigning. they keep talking about what people -- >> let's get back to the major players here.
i don't quite agree with steve about what the white house strategy is because i think that they -- that the person who would benefit most from the kind of big deal where you solve the entitlement program going down, you know, years into the future would go down to the president's benefit enormously and would take the debt and spending issue basically off the table because would be a bipartisan deal. it would give the president a talking point he does not now have about how he's done everything he can to solidify the nation's fiscal situation and give confidence to the markets and all the things that might begin to get the economy moving. and make no mistake about it. a growing economy would do more than any tax increase on this economy could possibly do to raise revenue. that's what we really need. >> who allowed the bush tax cuts to be extended? wasn't that president bush? i mean, president obama in service to the economy which the republicans said is necessary for the economy to go on. >> that was his position six months ago. what's changed?
>> he did it! >> now he wants to go back on that? >> right now if you want the big pick, if you want to take on entitlements, social security, medicare, let's talk about it. let's have an honest discussion. >> didn't you hear what i just said? i said he's for it. i think he wanted to do it. i think it would be a tremendous benefit for him that he did. that's my point, didn't you hear me? >> how he gets there from here is the question we are going to answer that question with more fireworks. after the break. and the panel. back in a moment.
>> now we're back with our panel talking about the debt ceiling negotiations that will be ongoing at the white house. mara, the question is how you get to the cuts of $2 1/2 trillion. the vice president's meetings didn't seem like they had specifics to get them to those cuts. >> well, what we've heard is they identified about $1 1/2 trillion. i don't think you can get to $2 1/2. maybe you can get to 2.
but the idea is at one point they were talking about making up the last $400 million with revenue increases like closing loopholes on corporate jet owners which is pennies, on oil and gas companies but republicans said we're willing to close loopholes but they have to be revenue neutral. it makes you think, ok, they want an extension of the employee tax cut. put that in. then that reduces the whole number. they were having trouble getting to the $2 trillion deal. that's why they made the problem bigger and went for the bigger deal. i think they went back to square one, it's going to be really, really hard to get that deal. >> what if house republicans came forward and said dollar for dollar, we'll match you. say $1 trillion in cuts, we'll raise it $1 trillion so you get to that number. and it doesn't take you past the election in 2012. but it gets you past this moment. the president has said he would veto that but in a bind, up against the wall, what about that? >> there's some question as to
how much you need to raise the debt ceiling to get past it. that's a little fuzzy. i think you'll see from the republicans, they're going to take this and say we're going to own this and we're going to drive this process and i expect house republicans to put up some kind of a plan that would both attach raising the debt limit with some kind of their own spending and deficit reduction plan. something that would be maybe a light version of paul ryan's path to prosperity, something along the lines of cut cap and balance. i think this is all being discussed and hashed out right now but i expect house republicans if the negotiations don't go well tonight, to take this and say, we're going to do this which would make harry reid and the senate saying we're turning this down and make the president veto it if he's going to do that. >> let's be clear, mostly house republicans don't want to vote on raising the debt ceiling period and they don't want to vote on it twice so if they have to bounce back and forth, that's not attractive for a lot of
these negotiations. >> look, if any kind of a debt ceiling increase passes with attached spending cuts and no tax increases, it's a big win for republicans in the long term scheme of things. look where we started. we started with the president who didn't want the bush tax cuts to stay in effect. after the election, he gave on that. he wanted the continuing resolution for the rest of this year, the spending bill for the balance of this year to pass without any spending cuts. he didn't get that, swallowed $40 billion in spending cuts. some now and some in the future. he wanted a clean debt ceiling. no spending cuts or anything else attached to it. one way or another, he's not going to get that. and he's going to have to swallow some more spending cuts so what republicans holding one house have been able to do is to leverage what they could find to whip these must passed bill, that's a win for them. it would be a real win for a president who has a great big
deal accomplish entitlement reform. that seems out of reach. >> congressman becerra didn't answer this but democrats like this political issue on entitlement? >> if you look at the result of the effort to make cuts in medicare, it has gone to the benefits of democrats. you look at the special election that took place, i think going forward, it's given democrats some hope that they could even recapture the house because seniors who have been a reliable voting block for republicans now see that, in fact, republicans are willing to take on something like medicare and take it away from them in a serious way. now, let me just say -- >> all exempt. all the currency is exempt! >> wrap it up. >> let me quickly add, republicans wanted something done about entitlements. they wanted spending under control. in this deal, they had the opportunity to make history and republicans have been the ones who have turned away from it. i think it is regrettable and i think it's really abdication of
adult responsibility. >> does it get done? >> i hope it gets done. i don't know how they get to the $2.5. >> i think the white house pushes that to august 2nd or beyond. >> i think the united states will not default. >> no default. >> thanks, panel. don't forget to check out our panel plus where our group picks right up with the discussion, fiery discussion at that, on our web site foxnewssunday.com. we'll post the video before noon eastern time. that's it for today. see you monday at 6:00 p.m. eastern for "special report" on the fox newschannel and chris wallace returns right here on the anchor chair on the next "fox news sunday." have a great week.