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

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CROWLEY: Twitter hashtags with names like #fireboehner have become popular as both the right and left chime in.

Still, where the votes get counted in his caucus of Republicans, Boehner seems to have more room to maneuver than he did in pre- election faceoffs over fiscal matters. But more leeway is not unanimity. It begs the question, even if the Republican speaker gets a deal, can he get it passed?

Joining me now, Republican congressman Tom Cole of Oklahoma, Republican congresswoman Marsha Blackburn of Tennessee, thank you both so much for joining us.

And I think that's really the key question that we keep hearing, they'll get a deal -- they'll get something. But it doesn't matter if the two of them get a deal, it matters if the speaker has the House votes for it. Tell me about the zeitgeist inside the caucus now in how free of a hand the speaker has.

BLACKBURN: You know, I think that inside the caucus what people are looking at is how do we solve the system-wide problems. And if you're going to talk revenues, you have to talk cuts, you have to talk reform of your trust funds Medicare and Social Security and you've got to deal with entitlements.

CROWLEY: You've got 30 -- less than that, 20 something days to do that.

BLACKBURN: That's right and these are things that we have been talking about for years. Now the fiscal cliff is a name that the media came up with, but some of us have been saying for years, you have got to stop the out of control federal spending or you will end up at this point, we're there.

CROWLEY: Congressman Cole, let me -- I just want to the remind folks of something that you have said about the middle class tax cuts and letting them go on and also you're reply to that. I just want to the play that to get our viewers up to speed.

(BEGIN VIDEO CLIP)

COLE: In my view, we all agree that we're not going to raise taxes on people that make less than $250,000, we should just take them out of this discussion right now.

BLACKBURN: He has his idea, I don't want to raise taxes on anybody.

(END VIDEO CLIP) CROWLEY: It seems to me now this is the split I think inside the Republican caucus...

COLE: Actually, I don't think so. I think there's actually more discussion about tactics than it is any difference. None of us want to raise the rates on anybody, but the reality is the rates on everybody go up at the end of the month. Since we degree with the Democrats on 98 percent of the American people and 80 percent of the Bush tax cuts, to me, I would just get that off the table now so they don't worry about it.

I think those people are actually the president's leverage in this debate. It's the Democrats that are going around screaming your taxes are going to go up, your taxes are going to up if Republicans don't agree. So let's just make sure that for 98 percent they know they're not.

Now we can continue to fight on the other two percent and the higher rates...

CROWLEY: But you lose your leverage a little bit. Isn't that the argument against it?

COLE: No. Actually I think it's quite the opposite. We gain language -- we gain leverage.

CROWLEY: So you would go along with something like that?

BLACKBURN: No see, I have a different approach. The good thing is we are the party of big ideas. We're putting ideas out on the table and saying this is how we solve this. Let's talk about it.

Now, what I want to do is make certain that no one's taxes go up. Let's look at cleaning up the tax code. And Candy, the problem here is as one of my constituents said to me yesterday, it is 2 percent today, tomorrow it's 10 percent. And people know just like this, federal income tax that went on the books in 1913, it's coming to them real fast.

CROWLEY: But congresswoman, there's two realities here. One, the calendar. You can't get tax reform between now and the end of the year. You can't get entitlement reform between now -- as you say, people have been talking about it for decades, they're not going to get it done before the end of the year.

And number two, you all lost the election, so would you think that doesn't put some limitations on what you can ask for here? You lost members of the House, you lost members of the Senate, and you lost the White House.

BLACKBURN: A couple points here, number one, the president thinks he has momentum, I think he is running on adrenaline from the campaign.

Second thing, we won the House.

CROWLEY: But you lost seats.

BLACKBURN: And the American people have put us there -- you're right, we did -- but the American people have clearly said we don't want our taxes to go up. What we need do -- I mean, the Lincoln quote, that Lincoln movie now, you know, you've got to deal with the issues of tomorrow by looking at it today. You cannot be practicing escapism and not putting these issues on the table. It is an imperative to deal with the spending.

CROWLEY: Congressman, what is the art of the doable here for Republicans?

COLE: Well, the first thing that's doable is to take the things you agree on and get them off of the table.

CROWLEY: And that would be tax cuts for people...

COLE: ...get it done.

CROWLEY: In your caucus, do you have a lot of -- is there a lot of burgeoning Republican support for that?

COLE: Yeah, honestly I think if it got to the floor, it would carry.

CROWLEY: Ah, well in the House that's the big deal, though, is getting it on the floor.

COLE: I think it would. Look, that's my judgment, but I spend a lot of time counting votes and looking around. But this doesn't say we're going to raise taxes on anybody, it says OK this group for sure, your taxes aren't going up. Get that done with, get it over with.

Then move on. The speaker has put out a proposal that does not raise rates, that does generate revenue. That makes a lot of sense to me.

But you have to always remember at the end of the month taxes are going to go up for everybody. So let's make sure where we can we save as many of those tax cuts for as many people as possible and continue to fight. You know, it's not waving a white flag to recognize political reality.

CROWLEY: If Speaker Boehner comes to you all with a package that promises entitlement reform, or puts us on a path to it, or whatever, it does the same thing when it comes to spending cuts, does he have support within the caucus for raising tax rates?

COLE: Well, remember, tax rates are going up anyway. So we're not, quote, raising them. That's current law. Now I think what the speaker has supported -- and you should look at the proposal he put out, the most interesting thing to me was every single one of our major leaders signed it, Paul the major committee chairman, including Paul Ryan who really has an obvious outsized role because of his vice presidential nomination signed it.

CROWLEY: That's $800 billion worth of revenue.

COLE: And so this is a speaker that's very strong. This is a speaker that got us through a tough election and retained our majority. I actually think this is a speaker at the peak of his power.

Now the president is going to have to deal with him. And it's not just about this period of time, it's about the next four years. The president will be president for four years, John Boehner is very likely to be speaker for four years. So this is the first part of a relationship that's going to stretch for years and they both need one another to succeed.

But honestly, the president needs John Boehner more than John Boehner needs the president.

CROWLEY: Does the speaker have enough votes inside his caucus to agree to some kind of tax rate hike in the upper echelons of society, the high wage earners? Does he have those votes that he can put together with whatever Nancy Pelosi can stir up and pass it? Is that support in the caucus?

BLACKBURN: I'm not sure there is support for the rate hikes. There is support for revenue by cleaning up the code.

CROWLEY: Can you tell me what the difference is there? Because isn't $800 billion in collected revenue by any other name still a tax hike if you're not?

BLACKBURN: You know, there are so many things, and as I said, this has been part of the debate for years, looking at cleaning up the code. And Candy, getting in there, and there are so many ways you can do it. Maybe you want to cap total deductions, maybe you want to look at some of these tax credits and clean this code up. Dave Camp has put an incredibility amount of time into this, has a plan. He and Kevin Brady out of Texas have worked on this. It is the time -- this is the opportunity to clean that code up.

COLE: If we don't act before the end of the year, taxes go up for everybody, not for 2%, and it's a lot more than $800 billion. There's a big difference between the temporary tax code that runs out, and us proactively raising taxes. And actually in this case...

CROWLEY: On the wealthy, it would run out.

COLE: Yes, some of our people think if we just dig in and hold strong we can stop it, that's just not the case, it happens automatically. You have to do something. And doing something requires the cooperation of the Senate, which the Democrats run, and the signature of the president. So we're not going to get 100 percent of what we want, but we can get a lot. John Boehner is trying to focus this where it belongs, and that's on spending restraint and entitlement reform, because this revenue won't come close to dealing with our fiscal problems.

CROWLEY: But by and large, could you see your way clear to saying I get it, you know, Republicans are taking a bath on this politically, and you have seen all the polling, Republicans will be blamed if the taxes go up on the middle class.

CROWLEY: Do you think that you could you see your way clear at some point to pass the kind of package that the Senate has passed that has -- it keeps those tax rates intact for the middle class and has some child care tax credits and some other things in it? could you pass that, because it is the party of not allowing tax rates to go up.

BLACKBURN: Well, the problem with the rates going up is there again the more people know about this, they're saying, but look, then you're going to come back and you're going to get the tax cuts that were there for me. What we want to do is make the cuts permanent and spending temporary. And I quite frankly like the fact that the American people American people are more engaged on this issue than they have ever been. And that are watching very closely.

CROWLEY: But the tides are running against the Republicans holding on to that is it not?

BLACKBURN: The more people know about this, Candy, the less they're against us. I've talked with people at home all weekend. And when they find out what is out there...

CROWLEY: But you're in a very specific part of Tennessee as well.

COLE: My constituents get that that they're taxes are going up unless we act. And they would like to be taken out of the line of fire. They expect me to continue to fight for everybody's taxes not going up, but if I can get a deal that protects 98 percent of them, and leaves me free to continue fight for the others, they would say take that deal. That's progress. That's maybe working together across the isle a little bit and get it down.

CROWLEY: I have got to run, but I need a one word answer from -- a yes or no -- from either one of you, will House Speaker Boehner still be speaker after the elections inside the caucus?

COLE: Absolutely.

BLACKBURN: Yes, he will be speaker.

CROWLEY: OK. Thank you, so much. Congresswoman Marsha Blackburn, Congressman Tom Cole, appreciate your time today.

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