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MATTHEWS: Back to HARDBALL.
Let`s take making a deal here for all that at home who want to see Republicans and Democrats work together to avoid the fiscal cliff. We can bring you two lawmakers now who are open to cutting a deal before the end of the year. With me now tonight are members from both sides of the aisle, U.S. congressman Lee Terry, a Republican from Nebraska, and U.S. Congressman Gerry Connolly, a Democrat from nearby Southern Virginia. But, first, Congressman Terry, I want to start with you.
REP. LEE TERRY (R), NEBRASKA: OK.
MATTHEWS: You told "The Omaha World Herald" this about Republicans -- quote -- "We`re screwed either way. We really have no leverage in these
discussions." Congressman, what did you mean by that?
TERRY: Well, what I mean by that is that the president wants us to take a tax vote before he`s willing to talk about anything else, cutting or reforming. And Republicans just aren`t going to do that. So what he`s doing is setting us up to be the fall people for going over the fiscal cliff. And, frankly, going over the fiscal cliff is a win for the president. So either way, we`re going to get it.
MATTHEWS: But I don`t see why that`s true, because if you -- first of all, the president has talked around what kind of cuts he wants to do in non- defense discretionary and almost a third of a trillion dollars over 10 years in entitlements.
He`s talked along those lines. And if he doesn`t give you a definition and details by the time you go to vote, obviously, you won`t vote for it. So, what`s your risk? He`s got to get in the pot, too, with his part of the deal well before the end of the year.
TERRY: Yes, I think he wins by playing the political games, because we...
MATTHEWS: What game?
TERRY: ... you have met that -- well, the setting up -- saying that we have to take a tax vote before he`s even willing to discuss anything else?
MATTHEWS: Oh, OK. You said he wants to vote on that. OK. You said he wants to vote on that without the package being prepared.
TERRY: Well, that`s right. He wants us -- he said that the other day, that he wants us to take that tax vote to prove our sincerity. Well, I will tell you what. If he comes with a big package that does raise revenues, a lot of us are going to vote for that if it`s good enough.
MATTHEWS: Well, I disagree with the president. I`m with you on that then.
TERRY: That`s his position, but he`s not discussing that.
MATTHEWS: Look, if he wants a separate vote, I agree with him, but I think -- I agree with you guys, because I think he has to do some -- let me ask you. From your point of view, would you agree to -- for high income people above a quarter million a year? Would you go for a 38 percent marginal rate? Would you accept something like that as a compromise, with something perhaps, a higher cap on Medicare payments? Would you accept something like that?
TERRY: I think those are all part of the discussion here, and we will be open to a lot of different things as long as we get the big deal on this, that we make those type of reforms.
TERRY: I would rather see tax reform than just going and saying we`re going to increase the rate on the top level from...
MATTHEWS: I know you would.
TERRY: ... you know, 35 to 38.
MATTHEWS: But that won`t work, because the liberals will never get in to
deal with you guys unless you raise the rates. I promise you that.
MATTHEWS: They want to see the bite marks on your neck. They want to know
that you guys defending the rich have paid a price before they will pay. The Pelosi core of the Democratic Party will not deal if the president doesn`t get a rise in the rates for the rich people.
TERRY: And we feel the same way about them. We don`t trust that they will
have earnest discussions about tax cuts -- I`m sorry -- about real spending cuts, and so setting up that we have to vote first...
MATTHEWS: OK. Let me bring in Mr. Connolly.
TERRY: ... just isn`t going to work.
MATTHEWS: OK. I don`t know about this game of who is first here, this Alphonse and Gaston game here. Somebody is going to have to go first.
TERRY: That`s true.
MATTHEWS: Let me ask you, Mr. Connolly, well, how do you see this react --
how do you react to what he`s saying there, first of all? That makes is
REP. GERRY CONNOLLY (D), VIRGINIA: Well, I certainly can understand Congressman Terry`s concern, but I think the election is over. The president won the election, and there weren`t a lot of explicits in this campaign, but one that there was, was the president explicitly saying -- I was at three rallies with him in Virginia -- I think the better off the higher income tax brackets ought to pay a little bit to help us in this fiscal cliff. He campaigned and won on that premise. Public opinion polling subsequently shows the public is with him on that. So, let`s get beyond the campaigning.
CHRIS MATTHEWS, HOST: Yes.
CONNOLLY: Let`s get beyond the name calling and try to settle that so that
the 98 percent whose taxes will stay low can stay low.
MATTHEWS: Let me ask you both if you agree on this. The importance of getting this done before Christmas and not letting this go slinking off beyond January 1st. You first, Mr. Terry.
REP. LEE TERRY (R), NEBRASKA: Yes, I want to get this done, and I think the people want us to get this done. So I don`t want to punt it. I don`t want to push it into next year. Let`s get the discussions rolling, let`s get the big deal done. That`s what the people want us to do.
MATTHEWS: Well, I hope you can get your business community behind you
because they`re the unlikely allies of the president here. It`s Tom Donohue and the U.S. Chamber --
TERRY: They want it done.
MATTHEWS: I know. But they`ve got to make Republicans vote for a deal
early. Mr. Connolly, do you think that the liberals will vote for anything unless
they get a rise in the tax for the top people?
CONNOLLY: Well, I -- really, I can only speak for myself, Chris, but my sense of the caucus is there are strong feelings about protecting entitlements from depredations on the other side and they want to be very clear about the details. But I think there`s also a willingness to work with the president and support the president in his leadership in averting the fiscal cliff and I agree with Mr. Terry, we want to get this done before the end of the year so that we`re not roiling markets, we`re not disrupting people`s planning for the next calendar year, and we`re not having anybody`s taxes go up in the middle class.
MATTHEWS: Let me get the timing right, Mr. Terry. You`re in the majority.
Are you guys being advised by your whips that there are going to be tough
votes on Christmas Eve, right near Christmas Eve? Or are there going to be
some coming back after Christmas before the 31st in some crazy Christmas
week chaos? In other words, are you being advised that the big votes are
going to come before Christmas?
TERRY: We -- our leadership and our conference has said there hasn`t been
any substantive discussions and so we don`t know when this is going to be
MATTHEWS: Well, that`s not very heartening.
TERRY: No, it isn`t. It`s very frightening as a matter of fact.
MATTHEWS: I`m watching the stock market -- you know what I`m told by my
financial adviser and I trust him completely, Dan Saunders (ph) up there in
New York, he probably loves me mentioning his name. He says that the market right now which is back to the 13,000, the Dow today, good news, is based on the confidence that you professionals can put a deal together before New Year`s. In other words, it`s all based on that. It`s ice we`re on right now, thin
Do I understand you guys have to get this done in time and if you don`t, the markets will be completely screwed up by this worldwide? Your thoughts? Who wants to talk about that one? Mr. Connolly?
CONNOLLY: Yes, I`ll be glad to comment on that. I`m a little more optimistic than my colleague. I think a deal is sort of cooking. I think the parameters of that deal are not mysterious. I don`t think this involves rocket science in putting it together. It requires political consensus. I think there are a lot of trial balloons going on on the Republican side of the aisle to try to build that consensus, and I think once that happens we`re going to get it done. If we have to be here Christmas week in order to protect the American public from the fiscal cliff, I`m happy to be here and so are my colleagues. Whatever it takes --
MATTHEWS: I hope everybody -- I hope everybody speaks Greek because that
would be the appropriate language to use the week after Christmas. Thank
you both. Get it done before Christmas.
CONNOLLY: Thank you.
MATTHEWS: Thank you, U.S. Congressman Lee Terry, thank you so much for
coming on, sir.
TERRY: Thank you.
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