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We will turn now to Senator John Kerry, also of the supercommittee, of course senior senator of Massachusetts.
And, senator, let's start right there. How do you respond?
SEN. JOHN KERRY (D-MA): Well, I'm glad we're starting right there because what Jon just said is patently not true. We just cut $917 billion without one dime of new revenue. He knows it. We just did it. We cut $550 billion in the healthcare act from Medicare. We didn't raise--I mean, you know, this is just nonsense. Look, David, if, if this weren't so, so serious I, I might laugh. But, you know, the United States of America is in a position right now in Europe, financial system crumbling. You asked about a downgrade a moment ago. The downgrade may--they may look at the $1.2 trillion of sequester, but Jon just talked about how they're not going to do that sequester. He just talked about how they're going to get out from under it. There is a real threat that, not only will there be a downgrade, but that the market on Monday will look again at Washington and say, "You guys can't get the job done." And just the political confusion and gridlock is enough to say to the world, "America can't get its act together."
MR. GREGORY: And--but is there a path for something to get done, or is...
SEN. KERRY: Absolutely.
MR. GREGORY: There is. And what is that?
SEN. KERRY: We, we could have a deal--in the next two hours, we could have an agreement, a solution to this problem. We could cut $1.2 trillion, and we could do it tomorrow morning, we could put it before the nation and get this job done. And there are only two things blocking us from doing that. One, and I've heard this from Republicans in the Senate and in the House who say to me, "The calculation politically has been made by many that they think they're going to win the Senate, win the presidency, and they want to wait until next year and just write their own deal." And the second and most significant block to our doing something right now, tomorrow, is their insistence, insistence, insistence on the Grover Norquist pledge and extending the Bush tax cuts. Now we are not a tax-cutting committee. We're a deficit-reduction committee. And everybody out there has said to us, "Go big. Do $4 trillion." We Democrats put a $4 trillion deal on the table, and it included huge, hard, though, horrible reductions on the sacred cows and things that we have been accused of not being willing to do. We put it out there. I've had demonstrations outside my offices in Boston. I've had people screaming at me because we'd even dare to think of doing this. But they went--they wouldn't accept it. They wouldn't accept a $1.3 trillion cut, $1.3 trillion revenue.
MR. GREGORY: But you just heard him talking about the Toomey plan, Senator Toomey...
SEN. KERRY: Yeah.
MR. GREGORY: ...tax reform. Yes, it will lower top rates, but because you close loopholes and whatnot, you heard Senator Kyl say it would raise revenue.
SEN. KERRY: All right, let me...
MR. GREGORY: I mean, Senator Durbin said it was a breakthrough. Senator Durbin said it was a breakthrough.
SEN. KERRY: Well, let's talk about--yeah, and Senator Durbin then retreated from that when he saw the numbers. Look, Grover Norquist said this of the Toomey plan. He called it a unicorn, and then he laughed and he said, "And as you know, unicorns don't exist." The Toomey plan, first of all, doesn't exist on paper. It's an idea. I was at the meeting when it was put out there. We got excited. We said maybe this is a way to get something done. So we actually went to CBO. We had the numbers looked at from joint tax committee. And guess what we came back with? It is regressive. It is regressive and reaches down into middle America and requires them--listen, now, even if you strictly limit--if you strictly limit the deductions the way that Senator Toomey suggested, you don't get enough money, David. You can't get to a 28 percent, which loses you a huge amount of revenue, and wind up with the money that you need to be able to fill the gaps. So the final thing, as most--this is the most important thing of all. The Toomey plan is the--still results in the biggest tax cut since the Great Depression. It would be the biggest tax cut since Calvin Coolidge, and we all know how that turned out. Now, we didn't come here to do another tax cut to the wealthiest people while we're asked fixed-income seniors to ante up more; people on Medicaid, who are poor, to ante up more.
MR. GREGORY: All right. But this is where I want to tell you, because the question of the Democratic commitment to taking on entitlements is something that the other side of the aisle says is not there in the way that you say it is. Now, I want to challenge you on this point. You were on this program back in August...
SEN. KERRY: Challenge away.
MR. GREGORY: and this is what you said about the debt, the debt deal at the time.
(Videotape, August 7, 2011)
SEN. KERRY: And the real problem for our country is not the short-term debt, we can deal with that. It's the long-term debt. It's the structural debt of Social Security, Medicare and Medicaid measured against the demographics of our nation.
MR. GREGORY: In The Wall Street Journal, editorializing, the conservative Wall Street Journal...
SEN. KERRY: Right.
MR. GREGORY: ...editorial page wrote this on Friday, "How can Democratic leaders defend deep reductions in the military and cuts in the domestic programs they say are vital `investments' when they block reforms that would reduce the growth rate of the major entitlements, which even under the House GOP plan would still grow by more than 50 percent over the next decade? Sooner or later Democrats must confront the reality that their unwillingness to slow entitlement spending will require shrinking everything else the government spends money on."
Senator, my reporting tells me that, in fact, Republicans offered Democrats to means test Social Security and Medicare as part of this discussion that would actually hit the rich, and Democrats said, "We don't want to do that."
SEN. KERRY: Not true. Not true. We accepted. We not only accepted that, David, we put every single sacred cow on the table. They know, they know that they could have had many things. A lot of us, you know, hate to even talk about it publicly because we're going to get--you know, people are going to say, "What? You guys were thinking of doing all those things?" But a whole bunch of things were on the table for the right amount. If people wanted to do a $4 trillion deal, there were discussions about dealing with the major sacred cows of our side. I'm just telling you every one of them was on the table and they know it. And it will be documented, ultimately, in papers that I know will come out of this. But I don't want to get stuck there right now. And the answer is every one of them were on the table. They would not do the revenue.
Look, put it in a perspective. Simpson-Bowles, works for thousands of hours, bipartisan, Republican, Democrat, people outside of the Senate in elected politics. They came out and said, "In order to do a deal, you need $4 trillion and you need $2 trillion of it as revenue. Simpson--Rivlin-Domenici, $2 trillion in revenue. The Gang of Six, which is currently sitting senators, Democrats and Republicans, said you need about $1.8 trillion to $2 trillion in revenue. So our first offer to them was not $1.8 trillion or $2 trillion in revenue. We caught hell from our side for putting an offer on the table of $1.3 trillion in revenue. And everybody said, "Why'd you give up $800 trillion?" Because we knew we were dealing with real bullets here, with real votes, with the real moment, not paper that you put out in a proposal. And guess what? They said, "No, no, no revenue." One--now, wait a minute. We didn't--we put $1 trillion on the table. They said, "No, that's too much. We won't do it." We put $950 billion on the table, "No, too much, we won't do it"; $650 billion, "No, we won't do it." Then finally, Toomey sort of floats this concept which, as we said, the numbers don't work. So we said, "OK, we'll take your money. We'll take the $250 billion. We'll just do it in a way that's real, that actually measures by CBO that it's real revenue. And guess what, they backed off of that. In fact, they've all said, "Oh, we got too much pressure, we got backed." Because Grover Norquist keeps pushing back, and he has said there won't be revenue.
There's only one--let me repeat this. I want America to understand this. There's one thing standing between us and avoiding a sequester and doing $1.2 trillion, and that one thing is the Republican unwillingness to not push for the Bush tax cuts to be extended now. We've even talked to them about guaranteeing them a fast track for tax reform. We'll do tax reform before next December. We'll do tax reform for business. We could lower the corporate tax rate. We could wind up with a major initiative that will create jobs and do our country well, avoid the sequester, show that America works...
MR. GREGORY: OK.
SEN. KERRY: ...if they will just back off insisting that the Bush tax cuts be extended now.
MR. GREGORY: I want to ask you about presidential leadership. The president, after the debt debacle of the summer, said this to the American people:
(Videotape, August 8, 2011)
PRES. OBAMA: I realize that after what we just went through, there's some skepticism that Republicans and Democrats on the so-called supercommittee, this joint committee that's been set up, will be able to reach a compromise. But my hope is that Friday's news will give us a renewed sense of urgency. That committee will have this administration's full cooperation. And I assure you we will stay on it until we get the job done.
MR. GREGORY: Just so that--hearing that last portion, even though it wasn't on the screen, is very important. The president saying we will stay on it until we get the job done. Republicans I talked to, Democrats I talked to say the White House has been hands off when it came to the nitty-gritty time on this.
SEN. KERRY: They were asked to be hands off. The Republicans said, "Don't let Obama come into this because, if he does, it will make it political." We've been in constant touch. I've personally talked to the White House perhaps once a week to see, you know, if, if there was something else we could add, how could we do something. They've been intimately involved, but carefully, so that they didn't politicize it. And I think they did the right thing. Can I just say something here?
MR. GREGORY: But I--hold on...
SEN. KERRY: Yeah.
MR. GREGORY: ...I want to follow on this point. It is going to be politicized. We have a presidential election next year. There are four different panels, including the one the president started, Simpson-Bowles, that was not acted on. All have failed to take on the biggest problems. Does he...
SEN. KERRY: Right.
MR. GREGORY: ...the president, not face a political cost at the polls for the fact that Washington can't get the job done?
SEN. KERRY: This is Congress. This came out of Congress. This is an idea that came from the leadership of Congress. And Congress is supposed to do this.
You know, the other day, David, I, I drove through--I went to Arlington Cemetery to visit the gravesite of a college classmate of ours. And I went with a bunch of my college buddies. And as I was driving in there and I went by that new flat area that's full of the graves of kids from Afghanistan and from Iraq, some of whose funerals I've gone to over there, I've watched it grow. And I asked myself as we were going through there, you know, are we living up to the sacrifice, to the level of commitment these guys made for us? Are we willing to put our political lives on the line for our country, do what we need to do because we know it's right? And then I hear about this pledge, a pledge to a lobbyist that gets in the way of our living up to that sacrifice and doing what's right for our country. The fact is, I took a pledge. My pledge is to the Constitution of the United States, to defend it. My pledge is to well and faithfully execute my duties. And that does not include living up to a pledge to a lobbyist for a deficit reduction committee that, that is now hung up because we won't do the Bush tax cuts permanently, even though we could have accelerated tax reform by next year.
MR. GREGORY: Two, two...
SEN. KERRY: I just want to say this. I say to Jon Kyl, I say to my Republican colleagues, "We're here all day. We are ready to do $1.2 trillion, not less than it." That's what we were told to do. That's the law. We're ready to do it. If they will give up their insistence of the Bush tax cuts, we can get this done.
MR. GREGORY: All right. You've made that point. Quick political question. You have a White House now that is trained on a former Massachusetts politician in Mitt Romney, saying that he has no core, preparing to go after him, as Rahm Emanuel did in Iowa last night, on flip-flopping. A lot of people saying this is basically the same election playbook that then President Bush used against you successfully. Is it going to work this time?
SEN. KERRY: Well, I don't know, David. I've been so focused on this deficit reduction, I honestly have not been following the ins and outs of all of that. It's--you know, let them choose their nominee and we'll see where we wind up.
MR. GREGORY: Does Romney have a core politically?
SEN. KERRY: You know, I--again, you know, there are few people I've met in public life who have changed on as many issues as he has, every major touchstone of American politics, from abortion to guns to war to God to gays, you name it. So people will make their own judgments about that. I was accused of voting once for one thing and another. I did it as a matter of principle. I said, "If this plan doesn't have--if this bill doesn't have a plan about this war then I would oppose it. So I opposed it as a matter of principle, and I'll defend that till the day I die. And, and, and he's going to have to defend his positions throughout this race if he's the nominee.
MR. GREGORY: Senator Kerry, we'll leave it there.
SEN. KERRY: Thank you.
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