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SEN. MARK WARNER (D), VIRGINIA: The challenge is, if we don't act by the end of the year to avoid the sequester or if we simply kick the can down the road further, we could even see a further downgrade of our debt, which could mean it might be decades before we could get it back.
So, I know there was a lot of folks last year who thought we were a little, you know, the little boy who cried wolf. We said if we don't do this, we'll get a downgrade and it will have a negative effect. We got the downgrade, and we didn't see the stock market reel terribly, but clearly consumer confidence was hit. Then the supercommittee failed, and last fall, and again, we didn't see a real negative effect.
But I do feel like that story of the little boy who cried wolf. The first two times he cried wolf, nothing happened. The third time, and this is the third time with the fiscal cliff, I think if we don't act, we could see not only another debt downgrade, but we could see a real decline in our economy.
BURNETT: Treasury Secretary Geithner was giving an interview to Bloomberg and he was so much more sanguine when he said, look, they're only charging us 1.5 percent to borrow money for 10 years. Look, we've borrowed over $1.5 trillion in the past year and a half since we got downgraded.
You're a senator, you're a businessman. Things can change very quickly when it comes to those rates, right?
WARNER: Erin, we're in pretty good shape until the bond market turns against us. You know, in a strange way, we have not been hit as hard, because Europe has looked even worse.
BURNETT: Yes. And so, let's talk a little bit about that. Because part of the fallout, obviously, as you said, from the debt ceiling debacle and the subsequent downgrade was this the sequester that's now looming. You're in a tough spot given that you're from Virginia, which is such a defense-heavy state.
But if there is a sequester, would you keep it as structured or would you support the shift to say, well, look, let's not make those defense cuts, but make some of them more from the services side of the equation, like some of your Republican colleagues have pushed for?
WARNER: Erin, first of all, I think it's kind of ironic that some of the very congressional leaders who have put together the so- called sequester, these automatic cuts to try to force us to act, who are the ones who are the shrillest, sometimes, about trying to cut back on government spending, are now saying we want to cut back other spending, not this spending.
BURNETT: It is a great irony, yes.
WARNER: It is a great irony. And listen, I don't want to have the sequester. I don't want to have the defense cuts, especially in a state like ours, but there's going to have to be cutbacks. And what I think is rather than just fixing the defense cuts or just kicking the can down, none of this gets any easier. Every day we failed to act, we add $4 billion to our national debt.
Let's come back, brush off our gang of six plan, the Simpson/Bowles plan that raises revenues, looks at our entitlement programs to make changes there so we don't have to make all of these cuts. BURNETT: I'm only going to say this, because I've noticed you're a little bit hoarse, and maybe it's from yelling at people -- you're losing your voice, that they won't actually get this done. I mean, is there a chance -- you were the group of six, you had a deal, you and Tom Coburn have come on this show together, the left and the right and said, look, we have a deal. And yet here we are.
I mean, is there any chance of us getting a grand bargain? Sometimes it feels like, you have a voice of reason like you or like Tom Coburn, and yet we're going to end up going off this cliff, seeing our debt go down further, because nobody's working together.
WARNER: You know, I actually think we will solve this problem. I think the necessity of doing it will force us. Anybody that thinks there's going to be a Democrats-only solution or Republicans-only solution is just not dealing in reality. So there are a large group of us, more than the gang of six. We have about 45 senators saying, we want to get something done. We're going to lay it out.
And you know, when I get depressed, I always go back to that wonderful Winston Churchill quote that said, you can always count on the Americans to do the right thing, after they've tried everything else. Well, we've kind of tried everything else, it's now time for us to do the right thing.
BURNETT: And I know you said you've got a number of new ideas, and I get it, you don't want some of them shot down, because that's how this incredibly polarized environment seems to work. But can you give us a sense of what's in there? I mean, is this just a rehashing of the different packaging of a Simpson/Bowles, group of six, or is there going to be a couple of new things. And if so, can you tell me about one?
WARNER: I think we need to focus on the retirement side, the health care side, to get the kind of sustainable savings hat we need, we've got look not just as Chairman Bernanke of the Fed has said, not just looking the kind of silly way Congress does budgets on a 10-year basis, you've got to look on a longer term, because some of the changes we will be proposing will be phased in over a longer period of time.
So if you get a lot of savings in year 12 or 13, we've got to figure out a way for that count. I also -- this is just my personal view -- believe we need a plan that not only reforms our entitlement code, or our tax code, to generate more revenues, to lower some of our deductions, but we need an approach where every American can find a way to chip in, even a little bit, into the solution set on this problem.
This is an area where --
BURNETT: This is a broad-based kind of concept?
WARNER: Just kind of broadening the base, but with the sense that everybody needs to make some level of contribution. BURNETT: One final question, when you talk about taking everything on and you're someone who's taken the heat, you know, on your own side, stood up for things, Virginia, on this issue of defense. I mean, you know, your state's put out all of this information saying, look, we've got about a million jobs from the defense industry, one of the top three states in the country. The Department of Defense, obviously, is your largest employer vis-a-vis the Pentagon, nearly 20 percent of your state's economy.
So -- but you're willing to say, look, I don't like the sequester, but I recognize the need for more defense cuts. That's a pretty courageous thing to say when I look at your state.
WARNER: The defense budget has doubled in the last decade. We need to make sure that America keeps the strongest defense in the world, but as the former chairman of the Joint Chiefs of Staff said, Admiral Mullen, the biggest threat to our national security is not the terrorists, but this debt and deficit.
So the idea that we're going to be able to exclude any part, I don't want to do the sequester. I think we can avoid the sequester, but not by simply kicking the can down the road, but by actually putting a comprehensive plan.
Let's go where we are really going to solve this. We've got to generate some more revenues and we've got to find a way not to spend as much on the entitlement programs and make sure that they are sustainable over a 20, 30-year period.
BURNEETT: All right. Senator Warner, always a pleasure. Thank you so much.
WARNER: Thank you, Erin.
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