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CNN "State of the Union with Candy Crowley" - Transcript

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Joining me is Senate Republican leader Mitch McConnell. There are few people in Washington with a larger stake in seeing that Mitt Romney does well than you do, because you would like to go from minority leader in the Senate to majority. How do you think he has been doing? MCCONNELL: Well, the race is very, very close. I mean I think the best evidence of that is a Gallup tracking poll that has had it consistently very close. People are unhappy with the economy. They know that Mitt Romney is a job creator and I think he has got a great chance of being elected.

CROWLEY: But his campaign, as you know, has come under fire from Republicans, first as being not ready for prime time, as we said, that he needs a steady, sort of more national hand in this.

Do you have any complaints, first of all, about how they handled this whole Supreme Court tax issue, which is a major issue for you all?

MCCONNELL: Well, I think a better use of my time is to criticize the guys we are running against. I'm not here to critique the Romney campaign. I do think that we've got plenty to run against. The president has got a very, very poor record. That is why he does not want to talk about it.

I mean, take Friday's job figure, for example. You can go back two years ago and the job figure was better and the president said we are turning the -- we are turning it around. You know, clearly what they are doing is not working. And I think that is what this campaign needs to be about.

CROWLEY: And yet, we did look at the figures for this year, and you know that there were great advances in job creation in the first quarter. It's been minimal in the second quarter.

Nonetheless, still job creation. When you average out the first six months, it is something like 125,000-130,000 jobs have been created on average. That's not too bad considering where we came from, is it?

MCCONNELL: It is terrible. We have got 41 straight months now of unemployment above 8 percent, 41 straight months. Candy, this is the most tepid recovery -- if it is a recovery -- from a deep recession in American history.

The economy is just sputtering along and the reason for that, in my judgment, is because of what the administration chose to do: spend, borrow, pass this new ObamaCare law with its penalty tax in it, its mandate tax. All of this is slowing the economy down.

CROWLEY: Let me ask you about the president's jobs plan that was introduced last September, I think. And something -- this is what he is saying on the campaign trail. This was in Columbus, Ohio, in an interview with WBNS.

(BEGIN VIDEO CLIP)

OBAMA: -- making sure that we're rebuilding the infrastructure, our roads, our bridges, our runways, all those things that could put construction workers back to work right now and would lift the entire economy and then, as I said, refocusing on manufacturing. That's the recipe for growth over the long term.

(END VIDEO CLIP)

CROWLEY: So what's wrong with any of that? Shouldn't Congress, at this point, be saying the American people want this economy to be better? Isn't it incumbent on you all to find something you can agree on in the long list of things the president put in that jobs package and move it forward?

MCCONNELL: Well, we just passed a transportation bill, so we were addressing an issue that we had broad agreement on, that transportation is important to our economy.

But look, the way we're going to get the private sector going again is to change the way the government is treating the private sector. Things like ObamaCare, things like overregulation are causing companies not to hire. And we have got the fiscal cliff coming at the end of the year.

You know, what we ought to be doing is extend the current tax rates for another year with a hard requirement to get through comprehensive tax reform one more time. I negotiated with Vice President Biden the two-year extension of the current tax rates that we're in right now.

The president signed it because he argued that to let taxes going up would make the economy worse. We have a slower growth rate today than we had then. That would settle at least part of the problem.

CROWLEY: Let me ask you though, because they are doing nothing because you all are at odds over what you should do, is in fact, a lot of people argue, slowing the growth of the economy here in the U.S. and adding to the jobless rate, which is pretty tepid.

I want to play you something from the managing director of the IMF.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: The threat, only the threat of the delay in raising the debt ceiling and of the fiscal cliff could weaken growth already later this year, and should they materialize because no agreement can be reached, the domestic effects would be severe with negative spillovers to the rest of the world.

(END VIDEO CLIP)

CROWLEY: So basically IMF is saying if you don't come off this fiscal cliff -- and by you, I mean Congress -- it is going to add to the uncertainty. There are certain things -- ObamaCare, you've mentioned it; regulations, that's fine.

You're not going to the Democrats to agree on it, but something that Congress could do is something about this oncoming train, which everyone sees coming, and yet there's no action. MCCONNELL: Well, what we could do and is what the House is going to do this week, I believe, is go ahead and extend the current tax rates for another year. That deals with part of the fiscal cliff.

(CROSSTALK)

CROWLEY: The president said he would veto that, so --

MCCONNELL: The president shouldn't veto that. This is the same president who signed the very same thing two years ago with the argument --

CROWLEY: I understand.

MCCONNELL: -- to do otherwise would make the economy worse.

CROWLEY: Yes.

MCCONNELL: I mean, look, the principal reason that we're having this economic trough is what the government is doing to the private sector. Now the president keeps talking about public sector employees.

Unemployment in the public sector is 4.2 percent. We've got to get the private sector going. That is only the way you have job growth, which creates revenue for the government. Everything this administration has done, Candy, has taken us in the wrong direction.

CROWLEY: But they would argue that the stimulus plan and other things they've done since and investing in infrastructure, getting construction jobs going, hiring the teachers, policemen, that that has kept this economy from being even worse over a longer period of time.

And I think, you know, again, we are seeing the same arguments we have seen now --

MCCONNELL: Yes, I know.

CROWLEY: -- for a year and a half. And I sense out there in the country -- and now we're seeing from the IMF -- that what is really worrying people is that you do nothing. It is almost not the something that you do, it is that you look up to Capitol Hill for some sort of guidance. When was the last time that you sat down with the Senate majority leader and said. how can we do this?

MCCONNELL: We have passed 11 different things the president has asked us to pass in the last six months. That is not the point.

The point is this: for two years the administration was able to do everything they wanted to. They borrowed. They spent. They had the government take over American health care. That's all in place, and the question the American people should be asking is how is that working?

Now the president would like to do more of the same. We don't think that makes sense. Why don't we try doing things that get the private sector -- which is the only way we're going to ever (inaudible) going again.

CROWLEY: We don't try, because you are in the minority and not a majority in the Senate, and yet the minority in the Senate can stop things, so, you know, the fact of the matter is don't you and Senator Reid need to sit down and say, here is how we can help the economy? Here's what we can agree on? Have you all done that?

MCCONNELL: We have, as I just indicated, passed a number of things the president's asked for.

CROWLEY: Have you sat down with senator Reid looking forward?

(CROSSTALK)

MCCONNELL: Sure. We -- every day we talk about the way forward and we have passed a number of pieces of legislation that are important and are helpful. But the primary problem is the president would like for us to keep doing more of what he was able to do the first two years when he had total control of Congress.

The American people have looked at the results of that. It clearly has not worked.

CROWLEY: Let me turn you to the Senate race races that are out there. Sitting here today and looking at the landscape, do you believe you will be the majority leader next year?

MCCONNELL: 50-50. I think it is going to be a very close, competitive election. There are a number of places where we have opportunities for pickups, not many places where we have much chance of losing a seat. I think at the end of the day, we will have a very narrow Senate one way or the other.

CROWLEY: And looking at the Virginia race and the Massachusetts race?

MCCONNELL: Two close races. Good candidates --

(CROSSTALK)

CROWLEY: You could lose as easily as you could win?

MCCONNELL: I'm sorry?

CROWLEY: You could lose as easily as you could win?

MCCONNELL: Well, they are close races. We expect to win them both, but they are close races. CROWLEY: And as you look at the Supreme Court decision over the past week and the reaction to it, and you read, I'm assuming Justice Roberts', Chief Justice Roberts' opinion on that -- are you sorry you voted for him?

MCCONNELL: No, I'm not, but I was extremely disappointed. The chief justice, however, did make it clear that the mandate is a tax, and if I may make an observation about that, Candy, you know, the mandate tax, 77 percent of it will be levied on people making $120,000 and less. And interestingly enough, that produces more tax revenue for the government than the so-called Buffett tax which the president tried to get us to pass to raise taxes on high income people.

CROWLEY: And yet there is 330 million-plus population in the U.S. or around in there, we are talking about maybe about 3 million people, at least according to the CBO, how this would -- I mean the congressional folks, according to them, this would affect maybe 3 million people. That is not that much to get 30 million people covered, is it?

MCCONNELL: Well, look, the question is the law in its entirety. The president said it would not raise taxes. It is raising taxes.

CROWLEY: On very few people, though, you would concede that.

MCCONNELL: Well, it is important to those people, and they are middle-income people. More tax revenue raised from middle-income people than the Buffett tax would raise from high-income people from a president who promised not to raise taxes on anyone. It is also driving premiums up. The cost of health care is going up. It cut Medicare by half a trillion dollars over the next ten years. Nothing that was said in connection with passing this health care bill is working out.

CROWLEY: Senator, I want you thank you for joining us this morning. I hope you will come back.

MCCONNELL: I will.

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