Fox News "Fox News Sunday with Chris Wallace" - Transcript

Interview

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WALLACE: It's getting close to crunch time for Congress to act on raising the debt limit or let the country go into default.

Joining us to discuss what happens next are two key senators: Democrat Kent Conrad, chairman of the Senate Budget Committee, and Republican Lindsey Graham.

Senators, welcome back.

Before we get to the budget, you have seen our report and I'm sure read about it, the report that NATO airstrike overnight did not kill Muammar Qaddafi, but killed his youngest son and three of his young grandchildren. Not confirmed by NATO.

Senator Graham, perhaps as a member of the Senate Armed Services committee, you can confirm or not something in that regard -- but in any case, someone who has called on President Obama to take out Qaddafi. Your reaction?

SEN. LINDSEY GRAHAM, R-S.C.: Well, I think this is a good move by NATO to go after the source of the problem. If you want to protect the Libyan people, go after his inner circle. Do two things -- support the rebels, give them better air cover, get American aircraft back in the game to diminish Qaddafi's military, but also put pressure in Tripoli.

In my view, wherever Qaddafi goes, he is the legitimate military target. He's the command and control source. He's not the legitimate leader of Libya. And the way to get to this to end is to go after the people around him and his support network. So, I support what NATO is doing. It'd like to have a "pour it on" approach to get this over with.

WALLACE: Now, I know it's against the law to target and assassinate foreign leaders. This doesn't fall under that?

GRAHAM: In my view, he is not a foreign leader. In my view, he's a murderer. He's killing his own people.

He's acting outside of international law. He's bombing civilians. He is not the legitimate leader of Libya. He should be replaced, the president said.

And I think NATO's construct of protecting the Libyan people would allow them -- NATO and us -- to use Predators to go after his inner circle, his commander and control. And I totally support what they're doing and I'd like the do more of it.

WALLACE: And him.

GRAHAM: To me, yes. He's the source of the problem. He is not the legitimate leader of Libya. He should be brought to justice or killed.

WALLACE: Senator Conrad, as a member of the Senate Intelligence Committee -- we'll get to your role as budget chairman in a moment -- your reaction?

SEN. KENT CONRAD, D-N.D.: Look, Qaddafi has got to go. I said repeatedly, I think you go after the pillars of his power. And the pillars of his power are the regimens that are controlled by his sons, the mercenaries that he's brought in from other countries, his money, and his tribe.

Those are the four pillars that sustain Qaddafi in power. I believe all of those should be targeted and aggressively gone after. You can't allow him to continue.

WALLACE: And when you talk about the pillars, do you have any problem with going after him personally?

CONRAD: Well, we have legal issues I'm not an expert on. It is stated policy that we are not targeting an individual. But we can target the pillars of his power. And those are what I've described and what I would endorse.

GRAHAM: The fact is that I support what NATO did. I thought this was a good use of the mandate. This is the way to end this. Thousands of people are subject to dying the longer this takes. No one in the world is going to regret Qaddafi being replaced, however you do it.

So, I want to thank NATO for expanding the scope of the operations and I wished we act earlier. But we're on the right track of supporting the rebels and going after the inner circle. Everything around him needs to be subject to attack.

WALLACE: OK. Let's go to the budget. Senator Conrad, you are part of the so-called "gang of six," bipartisan group, three Republicans and three Democrats in the Senate trying to work out a compromise on the budget. There was a lot of speculation that you'd come out with a plan this coming week. Now, there seems to be a sense that it's not going to happen this week.

Have you hit a roadblock?

CONRAD: You know, we've agreed not to talk about the status of our negotiations. And so, I'm going to be good to the commitment I have made to the others that we not talk about those negotiations. But I can say we've made enormous progress in that group. And I hope that we are able to announce an agreement soon. If we don't, we're simply not going to be relevant because this debate marches on.

WALLACE: Well, that's the thing I was going to follow up with. You have said that if you don't do it soon, and as I said, there have been a lot of talk about this week, you're going to be irrelevant to the process. How hopeful are you that you're going to be able to come up with a compromise in time for it to be part of the debate?

CONRAD: I'm always hopeful. I'm an optimist.

Look, I have spent eight months on the commission, the fiscal commission. I have spent five months in this negotiation. I would haven't spent all of this time if I didn't think there was a serious chance of reaching an agreement.

WALLACE: Senator Graham, one of the big issues -- and we were just talking about it with Michele Bachmann -- is what to do about Medicare.

And let's put up the differences. Paul Ryan's GOP budget plan calls for $389 billion in cuts and would turn Medicare into a voucher plan. President Obama would cut $200 billion by having an independent panel find savings somewhere.

Question -- according to the polls, most voters think that Republicans are in effect by this -- if they follow the Ryan plan, taking away for seniors some of their health care.

GRAHAM: Here's what I tell the public. You have can't balance the budget unless you deal with entitlements. Ronald Reagan and Tip O'Neill showed us the way forward. The "gang of six" is creating the dynamic that leads to solutions. When President Obama tried to overhaul the health care system in a partisan way, it cost his party. When President Bush tried to reform Social Security and couldn't get one Democrat, it failed.

So, Medicare has to be reformed. I like what Ryan did. He was brave. He was -- in 2022, you will have a chance to buy health care with the government support. On Medicare, if you are over 55, it doesn't -- it doesn't affect you.

But, at the end of the day, his plan is not going to make it through the Senate. If we have a vote on Paul Ryan's plan, we're not going to get 60 votes.

Now, the truth is President Obama's health care reform is not going to make it through the Senate. If they can't come up with something, I don't know what we do. But I do know this: Medicare is a great program that is going to fail and bring the whole country down with it, like other entitlements if we don't do something.

WALLACE: Senator Conrad, you say the Ryan plan, when it comes to Medicare, is -- and the word you used is "draconian." But isn't telling what the president would do, an advisory panel, to come up with unspecified cuts in the future, isn't that a cop-out?

CONRAD: No, I don't think it is at all. I think it's exactly part of the solution. We're going have to do more.

But, look, when I referred to Representative Ryan's plan as "draconian," what I was speaking of is, right now, a senior pays about 25 percent of the cost of their health care. Medicare, 75 percent. Representative Ryan's plan would flip that.

Over time, the individual would have to pay 68 percent of the cost. I mean, that is a shredding of the social safety net. I just think that's extreme.

GRAHAM: Can I -- 75 cents of every dollar paid for Medicare services comes out of the general treasury. That's extreme. Bill Gates should not be having his Medicare payment subsidized, nor should Lindsey Graham or Kent Conrad.

We've got an unsustainable system when it comes to Medicare. What Paul Ryan did, he saved it from what I believe to be a complete failure over time. If you can get a better way to do it, do it. But just criticizing someone who is trying to fix a problem doesn't impress me. You've got a better alternative, put it on the floor and let's vote on it.

WALLACE: OK. I want to talk about the most immediate problem, which is the debt limit, would sometime in the next two months is going to come up and you're going to have to deal with. Both of you say that letting the country go into default would be draconian -- I mean, rather, that's the last one -- would be catastrophic. But both of you also say you're not going to vote to raise the debt limit unless there is some plan to deal with and to cut the deficit.

So, let me talk about some of the alternatives.

Would you support, Senator Conrad, an automatic cap on the deficit? Which is what -- not spending, but on the deficit, which is what the Senate Majority Leader Harry Reid is talking about. Would you support a cap on spending? Which means that you're not talking about tax increase, you're talking about spending cuts. Or do you need to see actual cuts to vote for an increase in the debt limit?

CONRAD: What I've said and said repeatedly is I'm not going to vote for any long-term extension of the debt unless there is a credible and serious plan to deal with the debt.

WALLACE: Is a cap a serious plan?

CONRAD: I don't know. I've not seen the details of it, so I don't know how it works, I don't know if it would work. But what I have to see is a comprehensive plan.

I want to see the revenue system reformed, a fundamental tax reform. I want to see the spending side of the equation dealt with.

Look, we are -- right now, the revenue of the United States is the lowest it's been in 60 years as a share of the economy. Spending is the highest it has been in 60 years as share of the economy. So, we've got problems on both sides of the equation and they need to be addressed.

WALLACE: Senator Graham?

GRAHAM: The way to fix the money problem coming to Washington is to create more jobs in the private sector. If you raise taxes now to try to solve our budget problems, you are going to destroy job creation.

The reason we have such low revenue coming in is because the economy is still suffering. So I will do nothing that will hurt job creation.

The game is to turn around the ship of state in entitlement reform. I do believe that the debt ceiling is an opportunity to provide leadership that has been missing in the past, to prevent America from defaulting on the debt , provide leadership now. Kent has the got right construct.

WALLACE: OK. We've got about two minutes left, and I want to ask you two questions about GOP politics, Senator Graham, and then we'll get you guys out of here and to the rest of your Sunday.

Forty percent of Republican voters in a poll say they are not satisfied with the current field of potential Republican candidates. One, are you, or would you like to see some new faces get in the race?

GRAHAM: Well, I think the more choices the party has, the better. But to win the White House, you have got to win Independent voters who are center-right. But we've got to find a candidate who can play in states all over the country. We ought to have a candidate who can get the Independent voter in our column. I want the most conservative candidate who can win Independent votes to capture the White House. And that person may not have even been in the race yet. But we do have some good choices. I'm not that negative on the field.

WALLACE: OK. One choice, possibly, Donald Trump. Pushed the birther issue hard, and this week -- and we're going to talk about it with the panel -- made a speech. You are overseas, so maybe you missed it, in which he delivered a string of f-bombs.

Do you take Donald Trump seriously as a presidential candidate?

GRAHAM: People in South Carolina are going to weed through the field. And they're going to look at the entire candidacy being offered by the individual.

There's a lot of things Mr. Trump can be proud of, but some of this rhetoric and this focusing on the president's birth, I do not think is the way for us to win the White House. Most Americans don't want their president to go around saying the f-word. So Mr. Trump has a lot to offer, but he will have a tough sale in South Carolina.

WALLACE: We're going to have to leave it there.

Senator Graham, Senator Conrad, we want to thank you both so much for coming in today. Gentlemen, always a pleasure to talk to both of you.

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