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BOB SCHIEFFER: All right, well, Mister Leader, we want to thank you for being with us this morning and for-- for answering questions. That's why we ask you here and you're pretty good about-- about answering them.
I want to turn now to Mark Warner, Democrat of Virginia. He's on the Budget Committee and down in Columbia, South Carolina; Senator Lindsey Graham. Senator Warner, first to you, what went through your mind when you heard Speaker Boehner say what he said this week?
SENATOR MARK WARNER (Budget Committee/D-Virginia): It felt like Groundhog's Day. You know we saw what happened when the speaker last year played, in effect, debt ceiling roulette. He almost blew up the whole economy and the notion with fiscal turmoil going on in Europe right now that he would try to say we're going to draw this bright line again, and kind of my way or the highway approach. I think it's incredibly irresponsible. You know, the fact is I agree with Senator McConnell. We've got to take on this debt issue. We've got to recognize sixteen trillion dollars in debt, four and half billion dollars a day we add to it. But it's going to take a balanced plan, it's going to take a plan like Simpson-Bowles, like our "Gang of Six" plan, that has revenues, that has entitlement reform and this notion that it's going to be all done on one side of the balance sheet with spending cuts only, there's no responsible person out there that has looked at this problem that doesn't say you've got to do both.
BOB SCHIEFFER: Senator Graham, what would you respond to that? How would you respond to that?
SENATOR LINDSEY GRAHAM (Budget Committee/R-South Carolina): Well, I would say that most Americans believe that we're (INDISTINCT) in debt that their children's future is at risk, and if we're going to raise the debt ceiling we already borrow forty cents of every dollar. For every dollar that we borrow in the future we ought to cut the government by an equivalent dollar is not radical. There's something we should have been doing a long time ago. And there's not a snowball's chance in hell that we're going to get out of debt, reform entitlements and control spending without presidential leadership.
So what Boehner proposed about raising the debt ceiling is just a start. I am not going to vote to raise the debt ceiling until you show me we're serious about getting out of debt and the Gang of Six, Bowles-Simpson, hats off. If I were President Obama or Candidate Romney, I would tell the public we're going to take Bowles-Simpson. That will be our road map for the future. If you'd like to change it you'll have a chance. But we're going to take that up. We're going to control federal spending. We're going to flatten the tax code and get new revenue by eliminating deductions and we're going to have entitlement reform and it's going to take a presidential leader to make that happen.
BOB SCHIEFFER: Senator Warner, you're-- are part of that so-called "Gang of Six," some people call it a gang of eight, that have been looking for some way out of this thing. What do you-- do you think there's still any chance that you all could come up with something that-- that--
ENATOR MARK WARNER: Absolutely, Bob. I mean, we're actually up to forty-five senators. Lindsey has been suggesting and helpful as well. And we have over hundred members of the House. I think, you know, we know that it's going require reform of the tax code that's going to generate additional revenue. It's going to require changing our entitlement programs so there will be a Medicare and Social Security forty, fifty years from now. It's going to require putting some defense spending cuts on the table as-- as Simpson-Bowles laid out. And we're still at work at this. And what we're going to need and whether this moment comes in the lame-duck session or the first quarter of next year, it's going to require all of us kind of shoulder to the wheel and being willing to kind of take off our Democrat and Republican hats and put our country first.
BOB SCHIEFFER: Do you think anything could actually happen before the election, Senator Graham? Honestly.
SENATOR LINDSEY GRAHAM: Oh, not really. The President-- no, I really don't, Bob. The President's last three budgets have gotten zero votes and our Democratic colleagues haven't-- haven't voted for a budget since April 2009. So I don't see a breakthrough. But in the lame-duck, we'll have an opportunity to take the "Gang of Six" idea, Simpson-Bowles, but for the campaign itself I think both candidates for President should be asked, would you take Simpson-Bowles as a road map to fiscal sanity and pledge to try to implement parts of it and bring it to the Congress for a vote. I-- I-- I would love to hear both of them say, yes. You know President Obama has had three and a half years to change things. He had two years with super Democratic majorities. And they did basically nothing but run up the debt. So I don't see much happening.
BOB SCHIEFFER: What about that, Senator Warner?
SENATOR MARK WARNER: Well, I think it would be great but we've already seen President Obama came out when the "Gang of Six" laid out their ideas and he said, yeah. He went on TV and said he'd support them. That probably cost us some votes amongst Republicans in the House. What we-- what I'm concerned about is Mitt Romney's position which during the Republican presidential nominating process, well, he said he wouldn't even take a deal that had ten dollars in cuts for one dollar in new revenues. Reaffirming that position drives us right into the fiscal ditch.
BOB SCHIEFFER: You know, Dan Balz had an interesting piece--
SENATOR MARK WARNER: Mm-Hm.
BOB SCHIEFFER: --in The Washington Post this morning, where he said there are a lot of big issues on the table but he said the biggest issue is not being addressed and that is simply this--can Washington actually govern it? I think it's a very fair question and a pertinent question. What's gone wrong, Senator Warner?
SENATOR MARK WARNER: Well, I do think this issue around debt and deficit has become a proxy for whether our institutions can still function. Because we're not going to get to any other issue until we can in effect figure out what our balance sheet looks like, what's our long-term tax code is going to look like; what's our entitlement program is going to look like. And I think that there is a real sense amongst most members we got to get it fixed. And I think there is actually a lot of common ground. There is no institutional support though in Washington for people to do the right thing. As a matter of fact, all of the interest groups are very much opposed because it's going to mean changes to the tax code, it's going to mean changes in the entitlement programs. And we need to make it to safer, particularly for some of the folks who have been there a long time to step up and put country first.
BOB SCHIEFFER: I would guess you would agree with most of that, Senator Graham, but how did we get to that point? How did we get to where we are right now?
SENATOR LINDSEY GRAHAM: Well, we had a new President in 2008 that ran on hope and change, and he had a real opportunity for two years with super Democratic majorities to do what Mark said, control federal spending, reform the tax code, and do something about entitlements, and here we are in this election, nothing's happened but more debt, more spending and out-of-control entitlement spending.
Here's what I would say is good news, Republicans have crossed the Rubicon on revenue. We don't have enough money in Washington. We're historically low in terms of revenue collected, but nobody wants to increase taxes. What Mark and the-- and the Simpson-Bowles Committee did, said flatten the tax code, get rid of all deductions but two, take most of the money to buy down rate so we'll have an entrepreneurial economy and put some of the money on debt. Republicans have said in the past all the money from eliminating the deduction must go to reducing taxes. Now, there is a group of us that say that if you take four billion dollars away from ethanol producers, because that's unfair, put a billion dollars on the debt and three billion to lower taxes, that's something that will lead to a breakthrough. And I hope Governor Romney will embrace the concept of reducing deductions and exemptions and putting some of the money on the debt as well as lowering rates. That would be a breakthrough for our party.
BOB SCHIEFFER: All right. Well, I'm going to take a break here. We'll come back and talk about this a little more when we come back.
BOB SCHIEFFER: And we're back now with more from Senators Graham and Warner. Senator Warner, you heard Lindsey Graham just now talking about some of the things Republicans think they could do. What do you think has to happen here?
SENATOR MARK WARNER: Well, I do think we need presidential leadership, and I think President Obama has provided that. He laid out a plan that took four trillion dollars off of the-- the debt amount. It was, I think, a balanced approach. It probably won't be the exact framework. I actually do think the Simpson-Bowles or "Gang of Six" framework is closer to and he has endorsed the "Gang of Six" efforts. But it's going to take all of us shoulder to the wheel. That includes folks outside of Washington as well. I mean they-- we need voters to demand this or fire us all because this is our first responsibility. We're going to need the business community in this fight as well. Too often the business community in-- in the last debt debacle kind of sat out that debate. We need them shoulder to the wheel as well because nothing would be more devastating to the economic recovery and to any business than to have an interest rate spike that would come about if the rest of the world said, hey, we're not sure America's going to get its fiscal act together.
BOB SCHIEFFER: What do you think about what happened at the G-8 when you had all these economic leaders of the world meeting up there at Camp David, Senator Graham. Because up until now, they pretty much stressed austerity as the way out of this debt--
SENATOR LINDSEY GRAHAM: Right.
BOB SCHIEFFER: --crisis that is sweeping across Europe, but yesterday, they seemed to shift a little bit and said maybe the way out of this is more jobs, creating more jobs. And-- and basically talked about more-- more spending, which is what President Obama has been more or less suggesting. You think they took a good step here or how do you think that's going to-- what the impact of that is going to be?
SENATOR LINDSEY GRAHAM: Well, I think the European economies are doomed if they keep down-- going down the road of higher taxes on people who try to create jobs and more federal spending in Europe. I think they need to do what Mark and the "Gang of Six" have tried to do-- control spending. We're at twenty-five percent of our GDP in spending. We need to be at eighteen percent. But take the tax code and flatten it, do away with all these deductions and exemptions and lower rates. Europe can't achieve growth because the governments over there are too large and they're trying to increase taxes and be austere. What they need to do is do what we're trying to do is flatten their tax codes so more jobs can be created, control government spending, and work on their entitlement programs that are out of control.
In America, we got to tell the American people that Bob Schieffer, Lindsey Graham, and Mark Warner need to pay the full cost of the Medicare premiums. We need to tell younger workers you got to work past sixty-five or we're going to lose our nation. We got to adjust the age on Medicare and Social Security. And we've got the means-tested benefits. And if Europe doesn't do that they're going to go down the tubes. And if they keep trying to have growth of jobs by growing government they're never going to get the job growth they need. They need to change their tax system to make it more entrepreneurial and so do we.
SENATOR MARK WARNER: Well, what I would simply say is while I agree with Lindsey, we need a plan, it's going to have to reform our tax code and reform our entitlement programs. You can't cut and tax your way own. You've got to have a growing economy. And candidly that's what I have been really concerned with at least the Ryan and Romney budget plans. They would take the domestic part of our federal spending, which is now about sixteen percent, and cut it down to less than five percent over a period of time. I don't know any nation in the world that can compete in the twenty-first century if they spend less than five percent of their dollars educating their workforce, building their infrastructure, and creating the research and development that's going to create intellectual capital. There's no other country in the world that would have that kind of plan.
BOB SCHIEFFER: All right. Well, I want to thank both of you. And I'll be back in a moment with some thoughts of my own about some real accomplishments in Washington this week.
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