BREAK IN TRANSCRIPT
STEPHANOPOULOS: And with that, let's bring in the number-two Democrat in the Senate, Dick Durbin of Illinois, and top Republican Lindsey Graham of South Carolina.
Senators, welcome. And, Senator Durbin, let me begin with you. You see those markets going up in anticipation of a deal. Are they right to be optimistic?
DURBIN: Well, they should be optimistic, because we can solve this problem. Unfortunately, for the last 10 days, with the House and Congress gone for the Thanksgiving recess, there hasn't much -- much progress hasn't been made. But tomorrow there's no excuse. We're back in town.
And, George, let me tell you, it gets down to the basics. The House of Representatives has a bipartisan bill passed by the Senate that will spare 98 percent of taxpayers across America from any income tax raises and 97 percent of businesses. It's a bipartisan bill the House should pass to make sure that we go forward with these negotiations without this specter of tax increases for working families.
They also, I might add, have a bipartisan farm bill sent by the Senate that they've been unable to pass and a bipartisan bill for the Violence Against Women Act reauthorization. It's time for the House in the closing days of this session to at least take up those three measures and pass it.
STEPHANOPOULOS: OK, Senator Graham, you've signaled that you're willing to raise revenues as part of an overall deal that also includes spending cuts, and that's drawn the fire of Grover Norquist, you know, the author of that no-tax pledge that's been in place among so many Republicans for 20 years right now. He thinks the best solution is actually not to negotiate a compromise right now, is to go over the cliff. He says the world won't come to an end if this isn't resolved before January. Take the sequester. The only thing worse than sequester cuts is to not cut spending at all. He's saying don't raise taxes, accept those spending cuts.
GRAHAM: Well, what I would say to Grover Norquist is that the sequester destroys the United States military. According to our own secretary of defense, it would be shooting ourselves in the head. You'd have the smallest Army since 1940, the smallest Navy since 1915, the smallest Air Force in the history of the country, so sequestration must be replaced.
I'm willing to generate revenue. It's fair to ask my party to put revenue on the table. We're below historic averages. I will not raise tax rates to do it. I will cap deductions. If you cap deductions around the $30,000, $40,000 range, you can raise $1 trillion in revenue, and the people who lose their deductions are the upper-income Americans.
But to do this, I just don't want to promise the spending cuts. I want entitlement reforms. Republicans always put revenue on the table. Democrats always promise to cut spending. Well, we never cut spending. What I'm looking for is more revenue for entitlement reform before the end of the year...
STEPHANOPOULOS: I want to ask Senator Durbin about that, but let me press you one more time on Grover Norquist, because he's had some tough words for you. In the end, he says, you're not going to go through on this promise to raise revenues, because you, quote, "like being a senator." Your response?
GRAHAM: I love being a senator, and I want to be a senator that matters for the state of South Carolina and the country. When you're $16 trillion in debt, the only pledge we should be making to each other is to avoid becoming Greece, and Republicans -- Republicans should put revenue on the table. We're this far in debt. We don't generate enough revenue. Capping deductions will help generate revenue. Raising tax rates will hurt job creation.
So I agree with Grover, we shouldn't raise rates, but I think Grover is wrong when it comes to we can't cap deductions and buy down debt. What do you do with the money? I want to buy down debt and cut rates to create jobs, but I will violate the pledge, long story short, for the good of the country, only if Democrats will do entitlement reform.
STEPHANOPOULOS: Let's talk about that entitlement reform, Senator Durbin, because you see your allies in the Democratic Party are already starting to mobilize with ads from labor unions, the AARP airing across the country right now. I want to show part of it right now.
(BEGIN VIDEO CLIP)
(UNKNOWN): How do we move our country forward and reduce the deficit? By creating jobs and growing our economy, not by cutting progress that families rely on most. For working families, it's all about putting Americans back to work, not cutting the things we rely on most.
(END VIDEO CLIP)
STEPHANOPOULOS: They are signaling that they can't accept the kinds of entitlement reforms, especially in Medicare and Social Security, that Senator Graham is saying are prerequisite to a deal.
DURBIN: Let me tell you, first, George -- and you know this -- Social Security does not add one penny to our debt -- not a penny. It's a separate funded operation, and we can do things that I believe we should now, smaller things, played out over the long term that gives it solvency.
Medicare is another story. Only 12 years of solvency lie ahead if we do nothing. So those who say, "Don't touch it, don't change it," arthis weeke ignoring the obvious. We want Medicare to be there for today's seniors and tomorrow's, as well. We don't want to go the Paul Ryan route of voucherizing it, privatizing it, but we can make meaningful reforms in Medicare and Medicaid without compromising the integrity of the program, making sure that the beneficiaries are not paying the price for it, except perhaps the high-income beneficiaries. That to me is a reasonable approach.
Let me salute Lindsey Graham. What he just said about revenue and taxes needs to be said on his side of the aisle. We need to be honest on our side of the aisle. And as we did under Bowles-Simpson, put everything on the table.
STEPHANOPOULOS: Does that include raising the age for Medicare eligibility?
DURBIN: Here's my concern about that, George. What happens to the early retiree who needs health insurance before that person's eligible for Medicare? I had it happen in my family, and I'll bet a lot of your viewers did, as well. We've got to make sure that there is seamless coverage of affordable health insurance for every American. My concern about raising that Medicare retirement age is there will be gaps in coverage or coverage that's way too expensive for seniors to purchase.
STEPHANOPOULOS: Is that a fair point, Senator Graham?
GRAHAM: Not really. I don't think you can look at entitlement reform without adjusting the age for retirement, like Tip O'Neill and Ronald Reagan did. It goes to 66, 67 here pretty soon for Social Security. Let it float up another year or so over the next 30 years, adjust Medicare from 65 to 67 over the next 30 years, means test benefits for people in our income level. I don't expect the Democrats to go for premium support or a voucher plan, but I do expect them to adjust these entitlement programs before they bankrupt the country and run out of money themselves. So age adjustment and means testing for both Social Security, Medicare I think is eminently reasonable. And all those who've looked at this problem have done that over time.
STEPHANOPOULOS: I want to move on to another subject, but, quickly, Senator Durbin, you praised Senator Graham right there because he was open to more revenues. Do you think that capping deductions is the answer? Or will there actually have to be an increase in tax rates for the wealthy?
DURBIN: No, I think the top rate needs to go up, and that's where I may disagree with my friend, Lindsey Graham. Remember, during the course of the presidential debate, how many times the president turns to Mitt Romney and said, well, do the arithmetic. How in the world are you going to reduce deductions and generate enough revenue for meaningful deficit reduction? He could never answer the question, because there is no reasonable answer to it. Let the rates go up to 39 percent. Let us also take a look at the deductions. Let's make sure that revenue is an integral part of deficit reduction.
And, yes, from my side of the table, bring entitlement reform into the conversation. Social Security, set aside. Doesn't add to the deficit. But when it comes to Medicare and Medicaid, protect the integrity of the program, but give it solvency for more and more years.
STEPHANOPOULOS: Senator Graham, let me ask you about the fallout from the attack on the U.S. consulate in Benghazi and U.N. Ambassador Susan Rice. You've been highly critical of Ambassador Rice, and this week, for the first time, she responded. Take a look.
(BEGIN VIDEO CLIP)
RICE: When discussing the attacks against our facilities in Benghazi, I relied solely and squarely on the information provided to me by the intelligence community. I made clear that the information was preliminary and that our investigations would give us the definitive answers.
(END VIDEO CLIP)
STEPHANOPOULOS: Senator Graham, we also learned this week from the director of national intelligence that references to Al Qaida and terrorism in the talking points she was given were taken out by the intelligence officials for security reasons, not by political officials for political reasons. Do you now accept the explanation of Ambassador Rice?
GRAHAM: I don't believe that the best and current intelligence assessment on 16 September was that there was a spontaneous event in Benghazi based on a video that led to a mob that became a riot. The CIA station chief on the day of the attack reported in real time, "We're under attack by Al Qaida affiliates." The president in Libya said on the day of the attack -- excuse me, on 16 September -- Al Qaida was involved. We've got drones. Release the video. We all know what a mob looks like in the Mideast.
I am increasingly convinced -- the FBI interviewed the survivors in Ramstein, Germany, the day after. I'm increasingly convinced that the best and current intelligence assessment on 16 September went against the video. The video was a political smokescreen. The actual facts were this was a coordinated, pre-planned terrorist attack. When the president said on Letterman we think the video caused this, when he said to the U.N. that we're not going to let some hateful video turn the Mideast into a bad spot, that they're not relying on the best and current intelligence assessment...
STEPHANOPOULOS: But, Senator, all the evidence is the ambassador...
GRAHAM: They're pushing a political story.
STEPHANOPOULOS: All the evidence is that Ambassador Rice was using the information given to her by the intelligence community.
GRAHAM: I don't -- I don't believe that. I will -- here's what I want to know. Have the intelligence community, not the deputies, the people on the ground, put in one pile all the evidence of a pre-planned, coordinated terrorist attack with Al Qaida militia in one pot and put in the other pot the evidence that this was a spontaneous mob created by a hateful video.
I've seen no evidence -- what did the FBI get from the survivors? They said there was never a mob to begin with. There were mobs in the -- riots in the Mideast, but none of them have mortars, none of them lasted for seven hours. And why for seven hours could we not help these poor people? Where was the Department of Defense?
And when you look at the history of Benghazi, George, August 16th, there was a report coming out of Benghazi saying there are 10 Al Qaida militias roaming around Benghazi, we cannot withstand a coordinated attack. This is on 16 August. The British closed their consulate in Benghazi. The Red Cross left. We kept our consulate open, unreinforced. There was an Al Qaida storm brewing for months. I blame the president above all others.
STEPHANOPOULOS: You're still -- you're as forceful as ever.
GRAHAM: We'll get to the bottom of this.
STEPHANOPOULOS: So do you still oppose Ambassador Rice's elevation to secretary of state, if that's what President Obama chooses to do?
GRAHAM: When she comes over, if she does, there will be a lot of questions asked of her about this event and others. But I do not believe the video is the cause -- when 14 September -- when Secretary Clinton told the families, "We're going to put in jail the man who made this video," she should have said, "I'm sorry we left the consulate open and it became a death trap. I'm sorry we couldn't help your family for over seven hours."
I don't believe the video is the reason for this. I don't believe it was ever the reason for this. That was a political story, not an intel story, and we're going to hold people accountable...
GRAHAM: ... for a major national security breakdown three weeks before the election. That is our job.
STEPHANOPOULOS: Senator Durbin...
GRAHAM: And we will do our job.
STEPHANOPOULOS: ... you were shaking your head there.
DURBIN: Well, I can just tell you, if this were an NFL football game, the critics of Ambassador Rice would be penalized for piling on. For goodness' sake, she got the report from the intelligence community. She dutifully reported it to the public, just exactly what we expect her to do. They had decided not to include the Al Qaida reference so we wouldn't compromise our sources in Benghazi and in Libya. And now we have the committees of jurisdiction, the Intelligence Committee, the Foreign Relations Committee, the Homeland Security Committee, all taking an honest, bipartisan look at this. It's the way it should be done.
George, I have enough time here in Washington to remember when President Ronald Reagan in Lebanon saw our embassy attacked and then a barracks bombed, where 230 U.S. Marines were killed. That sort of thing should at least call the attention of the United States to look to ways to avoid these tragedies in the future. Instead, this has just been a dance-fest to go after Ambassador Rice. That should come to an end. Let's get down to the basic issues, as the State Department is doing. Find out how to keep our people safe who are representing us around the world and stop making this a personal attack on Ambassador Rice.
STEPHANOPOULOS: On that, you can both -- you can both agree that there will be questions.
STEPHANOPOULOS: Senator Graham, you get the last word, quickly.
GRAHAM: Very quickly, this is about four dead Americans. This is about a national security failure. We need a focused look at what happened here. Last week, Al Qaida was taken out because we didn't want to tip them off. This week, apparently Al Qaida was taken out because it was a tenuous reference. My belief is that the intel -- there was a mountain of intel to dispute the video characterization. There was really no intel saying this was a spontaneous event. And the storyline created by Secretary Rice -- Ambassador Rice and the president himself for seven days was far out of sync with the intel, and it was a political smokescreen, not an accurate reporting of what happened to those four dead Americans -- poor Americans in Benghazi, and we will get to it like we got to the bottom of Iran-Contra. We're not going to let up on this.
STEPHANOPOULOS: You clearly have more questions. OK, gentlemen, thank you both very much.
DURBIN: Thank you.
BREAK IN TRANSCRIPT