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

Interview

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WALLACE: Congress is rushing to finish its business and get home for Christmas. But, first, they are trying to work out a compromise to extend the payroll tax cut next year. And so far, there's no deal.

One of the key players in this political drama is Senate Republican leader Mitch McConnell, who joins now us from Louisville.

Senator, the House is expected to pass a bill this week that would extend the payroll tax cut, but would also link it to further action, trying to move up work on the Keystone pipeline -- oil pipeline.

You're number two, Senator John Kyl, said this week, "The package that comes from the house is it. I don't think there is any further negotiation."

Question -- is that your position on the House bill -- take it or leave it?

SENATE MINORITY LEADER MITCH MCCONNELL, R-KY.: Well, if I could just briefly say, the reason we are having to deal with these emergency measures like extending the payroll tax holiday for another year is the president's policies all put in place in the first years of the administration when he had a completely compliant Congress had completely failed. They ran the debt up 35 percent. Unemployment basically hasn't budged. It's now at 8.6 percent. So, that's the reason we are discussing this kind of temporary measures.

So, let's take a look at it. I believe that we should extend the payroll tax holiday another year, avoid a tax increase on working people for another year.

MCCONNELL: I agreed with Senator Reid, my counterpart, that we ought not to do it again next year.

Now, we know that's an emergency package coupled with an extension of unemployment, with some reforms. But at the same time, Chris, we'd like to create some jobs.

And so, we have the Keystone pipeline in there. It's a shovel- ready project. The biggest and most important ready-to-go project in America, wouldn't cost the government a penny, not one penny.

Three years of environmental studies have already been done, the secretary of state was ready to sign off on it, the president called it to the White House and delayed it for a year. This would create 22,000 jobs almost immediately, ready to go, with no money.

We also have a provision in there.

(CROSSTALK)

WALLACE: If I may, sir, we just have -- we just have limited time. I just want to ask you, though, if I may press my question: do you agree with Senator Kyl that there is no further negotiation. The House bill, if it comes out of the House, gets to the Senate, take it or leave it?

MCCONNELL: Well, we put together a package that's very balanced. We believe it would pass the House on the bipartisan basis, and pass the Senate on a bipartisan basis. I would tell you one of the reasons it will is there's another provision in there to stopping an EPA regulation called Boiler MACT, which a lot of people haven't heard of. But Senator Mikulski and Senator Wyden and Senator Nelson in the Senate also support stopping EPA from doing that. That will save a lot jobs.

So, what we have done here, Chris, is work very hard to put together a package that actually both sides can support.

WALLACE: Well, Senate Democratic leader Reid says there's no chance that the House bill with the Keystone pipeline in it will pass the Senate. He says it will not pass the Senate.

And here's what President Obama said.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Any effort to try tie Keystone to the payroll tax I will reject.

(END VIDEO CLIP)

WALLACE: Question -- if the millionaire's tax that the Democrats want is a nonstarter from your point of view, and if the Keystone pipeline is a nonstarter from their point of view, where is the compromise here? And what is the chance that a deal will be worked out before more than 150 million Americans get a payroll tax hike?

MCCONNELL: Yes, that ain't going to happen, and obviously we'll reach an agreement. The president is posturing here. He had to stand up to the AFL-CIO. I'm on the same side as Jimmy Hoffa and the AFL-CIO on this. The Teamsters and the AFL-CIO want the Keystone Pipeline right now.

Look, the president has been talking about creating jobs. This is ready to go immediately. All it requires is his sign off.

And with regard to Senator Reid's comments, I'm sure he hadn't check with his own conference. There are a significant number of Democrats, Senators and House members who are going to support this package. This has bipartisan support.

WALLACE: When you said, Senator, that isn't going to happen, I just want to make sure, you are saying that the payroll tax cut will be extended?

MCCONNELL: Well, of course. I mean, it has bipartisan support. But we also need to have something in there that prevents the loss of jobs and something that will create the jobs. And that's why we inserted Boiler MACT, supported on a bipartisan basis and the Keystone pipeline supported on a bipartisan basis. One would save jobs, one would create jobs right now.

So, why not have balance rather than have the whole package designed to help those who are unemployed or preventing a tax cut on working Americans. Let's have something that actually produces and saves jobs. So, we put together a bipartisan package that I think is going to enjoy pretty support among a lot of Democrats in the Senate.

WALLACE: Well, you talk about support, bipartisan support. Aside from the merits of the argument, the president and Democrats seem to feel that they are winning this political argument. And the president made the point this week, let's watch.

(BEGIN VIDEO CLIP)

OBAMA: I know many Republicans have sworn the oath never to raise taxes as long as they live. How can it be that the only time there is a catch is when it comes to raising taxes on the middle class families?

(END VIDEO CLIP)

WALLACE: Why are so many Republicans -- why are so many Republicans, including more than half of your Senate Republicans, why are they voting against extending the payroll tax cut?

MCCONNELL: Well, on the president's comment -- it's hard not to laugh because four out of five of the people they are targeting, the rich people they are targeting, are actually business owners who create jobs.

Look, we are not here to defend high income people. And in this bipartisan package that we're just discussing, we make sure that millionaires don't get unemployment and don't get food stamp. We freeze the pay for members of Congress and for all federal workers, continue to freeze the pay that has been frozen.

This is a very balanced package. It doesn't do anything for millionaires. In fact, it goes after them on the benefit side.

WALLACE: But, Senator, if I may, 26, more than half of your Republicans didn't vote against the Democrat plan with the millionaire's tax. They voted against your plan, the Republican plan, that didn't have a millionaire's tax. They were against extending the payroll tax cuts.

MCCONNELL: Well, there is another package put together that I think many of them will find much more attractive because of the additional pay-fors and job-creating elements that I have been describing to you that we put in the package and come over to the House, I believe, on a bipartisan basis.

WALLACE: But let me switch subjects on you. This week, the Senate Republicans blocked the nomination of Richard Cordray, to run the Consumer Financial Protection Bureau. What's your problem with an agency that would protect consumers from mortgage lenders, from debt collectors and student lenders?

MCCONNELL: Yes, here's the problem: this new agency answers to no one, absolutely no one -- another unelected czar. We've got a bunch of those in the White House. We don't need any more of them.

And the only way we can incentivize the administration to change this agency which isn't subject to oversight by Congress, doesn't get its money from Congress, answers to literally to no one -- it's one individual who could bring down the banking system in this country if he chose to, has unlimited power. No one has that kind of power.

So, what we are saying to the president is: join with us and reform this agency, make it accountable to someone, the people elected the Congress for its funding and for its oversight, and then send up somebody and we'll be happy to confirm them. There's nothing wrong with Mr. Cordray personally. This is about an unaccountable, unelected czar. And we're simply not going to appoint him, or confirm him, or anybody else to this agency that shouldn't exist in its current form.

WALLACE: What do you think of Attorney General Holder and the way his Justice Department has handled Operation Fast and Furious?

MCCONNELL: Well, they clearly aren't being forthcoming. We believe the attorney general misled Congress. And more specifically, we believe the head of the criminal division misled Congress.

I don't know what they've got to hide. Congress has been asking for information. They ought to turn it over. It's really quite unusual to be stonewalled like this by such high members of the administration.

WALLACE: I just want to go on that, because that's a fairly explosive charge. You are believing that the attorney general knowingly misled Congress?

MCCONNELL: I don't know if he knowingly did or not. We believe he was not particularly truthful with Congress. We believe the head of the criminal division clearly has misled Congress.

Why would they want to do that? What is the point? What are they hiding?

They ought to be completely transparent about this particular operation. It's become controversial, I can understand it's embarrassing for them, but I think misleading Congress is not a great way to go.

WALLACE: So, the obvious question is, do you think that Eric Holder and Lanny Breuer, the assistant attorney general that we're talking about, do you think they should either resign or if they fail to, be fired by the president?

MCCONNELL: Look, I'm not calling for anybody's resignation today. But I'm calling for them to be more forthcoming, to be more accountable, to tell us what happened. That's what we've been asking them to do. And so far, we haven't gotten straight answers.

WALLACE: Senator McConnell, we're going to have to leave there. I want to thank you so much for coming in today, sir, and we'll stay on top of all of these stories.

MCCONNELL: Thank you.

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