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SEN. TOM COBURN (R), OKLAHOMA: Good to be with you, Brooke
BALDWIN: Let me begin with this.
We mentioned these meetings at the White House. And my question is, is the fact that there's a Democrats-only meeting happening now at the White House, does that, sir, signal to you that we have entered a new phase in these talks, these debt reduction talks, that the president is now starting the process of essentially selling your gang of six proposal to his people, that the process of the arm-twisting and the lining of support is under way?
COBURN: Oh, I don't know that you can assume that. It may be that he's going to talk to them about a short-term agreement that I think they announced an hour or so ago that they would like to do in terms of short-term extension.
You know, I can't tell you what they're going to meet on.
BALDWIN: So you don't think it's necessarily arm-twisting?
COBURN: No, I don't think so. I don't think so.
BALDWIN: Well, let me ask you, you mentioned the short term. Do you know, sir, when we say short term -- and I remember hearing from President Obama saying, you know, 90, 60, 180, kicking the can down the road not good enough for him. Maybe it is now. Do we know timeline, when he says short term, what that might entail?
COBURN: I certainly don't.
To me, short term would be, you know, 30 or 45 days. We still need to solve this. The real problem, Brooke, is we have to send a signal to the international financial community that we understand the kind of hole we're in, that we're willing to make the difficult choices, and that we can't have what each party wants, so there has to be some type of compromise to get there.
The best plan, of course, is to take the $9 trillion out over the next 10 years and put us on the road to really wonderful recovery and future prosperity for the country. That's probably not going to happen.
BALDWIN: I know you have floated this idea of the $9 trillion. But let's stay more in the ballpark. What is it, about 3.7?
COBURN: This one's 3.7. But let me make the point.
BALDWIN: Sure. Go ahead, sir.
COBURN: There isn't one international economist out there that doesn't recognize that for us to really get out of our problem, we eventually have to take $9 trillion out of our budget over the next 10 years.
So this is a start; $3.7 trillion is a start; $2.7 trillion of it is in spending reductions. A trillion dollars will be increased revenues of government through tax reform and the elimination of tax loopholes and tax expenditures.
BALDWIN: Let me stop you there, because I just want to make sure we're underscoring and italicizing some of the points you're making. We know that we have to pay down the debt by a mix, as you mentioned, of raising taxes, cutting spending, right?
So, from what I understand, and since you're on the gang of six, I'm glad to be talking to you, because you know the sort of nitty- gritty here. We have pulled together from some of our various sources that we're talking 75 percent spending cuts and 25 percent in increased revenues. Is that correct? COBURN: That's close. And it's increased revenues through economic growth and the elimination of tax loopholes.
BALDWIN: Now, in addition to opposing new taxes, House Republicans are saying, you know, don't touch the U.S. military. It's off limits. Does the gang of six plan envision $80 billion in Pentagon cuts as some of us have seen reported, $80 billion?
COBURN: Yes. That's accurate.
BALDWIN: What kind of reaction have you gotten thus far on the Hill from that?
COBURN: Not bad. Look, the Pentagon is -- you could cut a trillion dollars out of it over the next 10 years, and it'd still be at a level higher than at the height of the Iraq surge in terms of spending.
So, you know, for your listeners, to put things in perspective, the federal government's twice as big as it was 10 years ago right now, twice as big. So everybody out there that's having to live within a budget, making the hard choices in our economy today, know that if you have grown something twice in 10 years, you obviously can make some significant cuts in it without having any negative effect.
BALDWIN: Senator Coburn, let's talk about your role in the gang of six. Is it correct -- I mean, you bolted from the group. It was widely reported a couple of months ago -- returned recently when the gang agreed to cut an additional 100-plus billion dollars from entitlement health care programs. And are you rock-solid behind this new plan?
COBURN: Well, I'm rock-solid behind my plan. My plan isn't going to happen. So I'm rock-solid behind the plan that gets us on the way and this one does.
BALDWIN: Your plan being the $9 trillion?
BALDWIN: The whole thing, it appears to be dependent upon rewriting the tax code. So how do we do that? How do we make all these other changes? How do we avert this, you know, potential default in 13 days and how do we do all of that in an orderly fashion without something getting hoodwinked, i.e., the American people?
COBURN: Well, I think you could have a short-term extension. You could pass something similar to this that was satisfactory to the House, maybe with more spending reductions that would pass the House.
And you could say we will give a conditional debt limit increase based on these things happening. And if these things don't happen, then we're back to where we are today. So you can't get hoodwinked. Nobody's going to vote for something that they don't think the process is going to happen. And so it has to be tied with some real pain. If, in fact, you don't make these changes to the tax code and reductions in spending, then all deals are off. So I think we can accomplish that. It's going to require some trust, but it's also going to require a lot of verification and a condition that any massive increase in the debt limit is only going to happen when this is in place.
BALDWIN: You, sir, are the gold standard among, you know, some conservatives. And just as the president -- and, perhaps, you don't necessarily say he's selling it this hour to Democrats -- perhaps he is. You and I are not in the room.
Will you be selling and can you sell to the House Republicans trillions of dollars in revenue increases when those folks have been saying time and time again, sorry, not moving a penny?
COBURN: Well, it's not trillions.
And the net effect of it will be no increase in taxes because the AMT is totally eliminated. So, if you were to do it on just what the law is today, not a baseline or anything else, what you would say is there will be about $1 trillion in increased revenue come to the government through economic growth associated with lowering the tax codes.
But there will also be $1.8 trillion that won't come to it through the elimination of the AMT.
BALDWIN: But if you don't see -- will House Republicans see it the way you just described to me?
COBURN: Well, I think -- first of all, Brooke, there's another point. The House has already passed a debt limit extension. They passed it last night. And what they said is cut spending, cap it for the future, and pass a balanced budget amendment. We're going to be on that. My hope would be that we pass that this week.
BALDWIN: But we all know, sir, that won't fly through the Senate.
COBURN: Well, I'm not sure everybody knows that. I hear that said all the time.
If that doesn't happen, then the American people ought to ask the members of Congress who don't vote for that, why is it you don't want a balanced budget amendment? The balanced budget amendment is the only long-term thing that's going to secure your freedom and cause the government to live within its means and not sacrifice the future of the generations that follow us.
So the question ought to be asked is, why not? And so I'm not sure that that's the case yet. What I would tell you is I think cut, cap and balance is a great prescription. Actually, it's better than anything else that's out there, other than the $9 trillion, to actually getting us back to health.
BALDWIN: OK. Well, let me just take you back, though, to your gang of six plan, just so I'm hearing you crystal clear, because a lot of Americans, you know, are wondering and sort of sitting with bated breath hoping that we don't hit default in 13 days.
So if the president agrees to some sort of, you know, short-term fix and we do not default in 13 days, the plan that you have come up with will serve as a basis for that short-term plan and that you all will come back together after that short-term plan has expired for a longer-term fix? Am I hearing that right?
COBURN: Well, I'm not sure our plan will be the basis for the short-term agreement. I think there may be a short-term agreement because the time necessary to come to an agreement probably is going to be difficult.
BALDWIN: Is too quick.
COBURN: But the second thing that you have to consider, any plan has to pass the House. And so it's probably got to have to have more spending reduction in it than the gang of six has to be able to get the votes in the House to pass.
BALDWIN: If only to be a fly on the wall at 5:00 Eastern in the White House with Mr. Boehner and Mr. Cantor and Mr. Obama.
COBURN: Well, I'm sure they have got some flies in there that we could -- you could probably put one of those little microscopes -- microphones on there for you.
BALDWIN: We will see what we can do.
Senator Tom Coburn, I appreciate the time. Thank you so much.
COBURN: See you. Bye-bye.
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