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FOX "Fox News Sunday with Chris Wallace" Transcript: Fiscal Cliff Deal

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CHRIS WALLACE, ANCHOR: I'm Chris Wallace.

Talks to avert the fiscal cliff stalled, while Washington debates how to prevent more mass murders.

(BEGIN VIDEOTAPE)

WALLACE: With nine days to go, is it possible to make a deal to head off big tax increases, and spending cuts? We'll ask two senate leaders, Republican John Barrasso, and, Democrat Kent Conrad.

Then, as the nation mourns the victims of the Newtown school shooting, we turn to a man of faith for some answers. In these trying times, he sees the need for a spiritual awakening. We'll discuss the Sandy Hook massacre and the meaning of Christmas with Pastor Rick Warren.

Plus, a change at the State Department, as the Benghazi report is finally released. We'll ask our Sunday panel about the nomination of John Kerry to replace Hillary Clinton. And, where the investigation of a terror attack that killed four Americans goes now.

And, our Power Player of the Week continues in holiday tradition to show respect for veterans.

All, right now, on "Fox News Sunday."

(END VIDEOTAPE)

WALLACE: And hello, again from Fox News in Washington.

At Christmas, people who are naughty get coal in their stockings, and if the White House and Congress don't make a deal in the next nine days to avoid the fiscal cliff we ring in the New Year with big tax increases and spending cuts.

Here to talk about what is going to happen are two leading senators -- John Barrasso, chairman of the Republican Policy Committee. And, from New York, Democrat Kent Conrad, chairman of the Senate Budget Committee.

Senators, welcome back to "Fox News Sunday."

SEN. JOHN BARRASSO, R-WY.: Thanks for having me.

SEN. KENT CONRAD, D-N.D.: Good to be with you.

WALLACE: Before heading to Hawaii for Christmas, the president laid out a new, stripped-down plan to avert the fiscal cliff.

Here's what it is: extend the Bush tax cuts for people making less than $250,000. Extend unemployment benefits for the 2 million people who will run out, next month. And, delay the sequester of $110 billion in spending cuts next year.

For all of the talk of $4 trillion in debt reduction, this plan would only save $800 billion, over 10 years.

Senator Conrad, is that the best that Washington can do over the next nine days, and can you pass even that?

CONRAD: Look, Chris, it may come to that but we can do better. And we should do better. This is an opportunity to do something that would be hugely important for the country.

And, my own belief is, what we ought to do is take Speaker Boehner's last offer, the president's last offer, split the difference, and that would be a package of about $2.6 trillion. You couple that with the $1.1 trillion that's already done. And, that would be close to the $4 trillion needed to stabilize the debt and begin to bring it down.

And, then, if you want to do add -- add on the alternative minimum tax which costs about $800 billion to fix, you could offset that with overseas contingency operations, war costs -- some people say, well, neither of those are real. Both of them are a fiction. In some sense, that is true, but, at least you are offsetting a spending fiction with the revenue fiction, and clearing the deck so that we don't increase from 4 million to 31 million people the number affected by the alternative minimum tax.

(CROSSTALK)

WALLACE: So, let me just ask you, Senator, briefly, what would that mean? What would the level be for taxes for revenue? How much would be raised in revenue, and, what would it mean in new spending cuts?

CONRAD: The spending cuts would be $1,450,000,000,000. The revenue would be $1,150,000,000,000. So, you see there, that's a combination of $2.6 trillion. And you couple that with the $1.1 trillion that's already done, and, you are at $3.7 trillion.

And, look, is it perfect? No. Is it everything we hoped for? No. Does it match what Bowles-Simpson did? No.

At an even comparison, Bowles-Simpson would be $5.3 trillion.

WALLACE: All right. You're in the weeds.

Let me ask you one last quick question. Are you saying that you don't like the president's plan?

CONRAD: Look, it may come to that. But I would hope we'd have one last attempt here to do what everyone knows needs to be done, which is the larger plan that really does stabilize the debt, and get us moving in the right direction and, does it in a way that is cognizant that we have an economy that is recovering, that is still weak and, we don't slam it. We don't slam on the brakes here in a way that puts us back into recession. That -- takes the jobless rate to 9.1 percent.

WALLACE: Let me bring in Senator Barrasso.

Your reaction to Senator Conrad's plan?

BARRASSO: I want to find a solution. I want us to not go over the cliff, because I think if we do, it hurts our economy and it hurts our country.

When I listen to the president, I think the president is eager to go over the cliff for political purposes. I think he sees a political victory at the bottom of the cliff. He gets all these additional tax revenue for new programs. He gets to cut the military, which Democrats have been calling for, for years, and, he gets to blame Republicans for it.

And when the president recently was in The Wall Street Journal, yesterday, talked about, you know, using the State of the Union and using his inaugural address to blame Republicans, that doesn't sound like somebody who is working with Republicans to find a solution. It's time for the president to lead.

WALLACE: Well -- all right. You heard the president's plan and he basically said, this is all I think we can get done in these next nine days, extend the Bush tax cuts, for everybody below $250,000, and, extend unemployment benefits.

As the number three Republican in the Senate, can you guarantee the Republicans will not filibuster the plan?

BARRASSO: I can't even guarantee that the Democrats will vote for it. You have many Democrats on the record who don't like this either in the Senate. The $250,000 number is too low, according to a number of the Democrats. It doesn't deal with so many of the issues out there.

So, I'm not sure that they even get a majority in the Senate, even though the Democrats do have a majority of the members of the Senate right now.

WALLACE: And what about Republicans? Would you filibuster it?

BARRASSO: That's a different issue. I just don't think this is going to solve the problems -- it actually doesn't solve the problems.

We have a spending problem in this country, Chris. We don't have a taxing problem. The president is fixated on raising taxes.

(CROSSTALK)

WALLACE: I understand that. But we have had this, you know, we've had that argument before.

All right. We got nine days. Are we going over the cliff here?

BARRASSO: I believe we are and I believe the president is eager to go over the cliff for political purposes. He senses a victory at the bottom of the cliff. I think it hurts our country and hurts our economy.

WALLACE: All right. Senator Barrasso, I understand your party opposes raising taxes and I'm not even saying whether you are right or wrong. That's something that your party believes.

But, whether like it or not, the bush tax cuts expire for everyone the first of the year. Why not extend the Bush tax cuts for 98 percent of people instead of raising them for everybody?

BARRASSO: I don't want us to go over the cliff. I want to find a solution. The extension of making permanent the Bush tax cuts for everyone, I think would be a good idea. They have the bill that came over --

WALLACE: That's not going to happen.

BARRASSO: The Senate can bring -- Harry Reid can bring it up, amendments can be offered. So, I think there is still time. We are coming back here on the 27th.

But, realistically, what the president has just proposed, is raising taxes, now, perhaps, dealing with spending later. We need to grow the economy, we need entitlement reform and the president seems to be ignoring those things, Chris.

WALLACE: All right. Senator Conrad, let's talk about the president's -- not the Conrad offer, but the president's offer.

You were a member of the Bowles-Simpson deficit commission and you voted for their final report. Let's remind people. That proposed almost $3 trillion in spending cuts. President Obama's last offer, the one that the Republicans rejected, was less than $1 trillion in spending cuts.

We checked. That would be less than 2 percent of the $44 trillion the government will spend over the next decade.

Again, is that the best Democrats can do? Two percent of all the spending over the next decade?

CONRAD: You know, this conversation means exactly what is wrong in Washington. I mean, just listen to the conversation you just had. It's he said/she said, blame the other guy.

And, look, I tried to be constructive here and lay out an actual plan to get us nearly $4 trillion, by taking the offers that are on the table. Speaker Boehner and president were so close and then, Speaker Boehner went off on plan b. I don't -- I never understood why, had no prospect of succeeding. It did not succeed, even in his own caucus. But now --

(CROSSTALK)

WALLACE: You are not answering my question.

CONRAD: Yes. Because I'll tell you, something, because we only have nine days left here. When are we going to get serious about actual solutions? I would welcome John to tell me, he says he wants a solution. Give us one! Give us one, John! I laid out --

BARRASSO: There is only one person that can provide the leadership and that's the president of the United States.

CONRAD: No, no sir, that is not true. No --

BARRASSO: There is only one person that can provide he leadership, rather than campaigning, he ought to be here, leading and working with people and talking to folks on both sides of the aisle. To get a solution so we don't go over the cliff. They believe the president is eager to go over the cliff.

CONRAD: I don't believe that at all. There are 535 of us that can provide leadership. There are 435 in the House, 100 in the Senate and there is the president, all of us have a responsibility here.

And, you know what is happening? What is happening is the same old tired blame game. He said/she said.

I think the American people are tired of it. What they want to hear is what is the solution? What is the way to stop this, before we go over the cliff? Put the economy back in the recession and put millions more people out of work.

Look, both sides are going to have to give some ground.

WALLACE: All right, gentlemen --

CONRAD: We ought to hear from Republicans what ground they are willing to give. I've outlined what ground this Democrat is willing to give and have demonstrated it with Bowles-Simpson and the group of six. We can do this.

WALLACE: All right. I want to move on to another subject, we have limit time and I think we have exhausted this debate for the purposes of this program.

A week after this massacre at Sandy Hook Elementary, NRA executive Wayne LaPierre joined the debate. Here's part of what he said:

(BEGIN VIDEO CLIP)

LAPIERRE: The only thing that stops a bad guy with a gun is a good guy with a gun.

(END VIDEO CLIP)

WALLACE: Senator Barrasso, Wayne LaPierre proposed having an armed guard in every school in America. Estimates are that would cost somewhere in the neighborhood of $8 billion a year. Couple of questions: one, would you vote at a time of deficit issues, for $8 billion a year to put armed guards in every school in America? And, are there any laws you could support, in terms of assault guns, assault rifles, in terms of high capacity magazines, tightening background checks -- any new gun controls you could support?

BARRASSO: Let's step back for a second. I'm a doctor. I'm a father of three. And, I'm from Wyoming, a state where we believe strongly in our Second Amendment rights.

We are the people of Wyoming, me, personally, are still absolutely committed to find real solutions that work. So, something like this tragedy never happens again. Three more of those children were laid to rest, yesterday.

WALLACE: I'm asking a very specific question, sir.

BARRASSO: Very, very, very, very, very hurtful to all of us in this country. I think decisions about schools ought to be made at the local level. I would not want a national effort to say you have to do this in schools. I think local education decisions are best made at the local level.

You know, we're going to have a very spirited discussion in Congress, in the beginning of next year. We need to look at all of the issues, because what Wayne LaPierre and the president of the United States agree on, is that in this country, we have a culture of violence. And, I don't think --

WALLACE: That's really --

(CROSSTALK)

BARRASSO: Whether it's a culture of violence --

WALLACE: And also, also the president believes -- I'm not saying he's right or wrong -- but the president believes that there is a need for tighter gun control, would you support it or not?

BARRASSO: I'm a strong supporter of our Second Amendment rights.

WALLACE: That doesn't answer the question.

BARRASSO: I want to find real solutions. I want to find real solutions that work and Washington is not necessarily the place that you're going to find those solutions. They're going to be found in our families, in our faith, in our communities, and in medicine and in health care.

WALLACE: Senator --

BARRASSO: Those are the problems.

WALLACE: Senator Conrad, what do you think of what Wayne LaPierre had to say? And are there any gun controls that you would support?

CONRAD: Well, I already have. I voted for an assault weapons ban twice and I voted for the closing the gun -- closing the gun show loophole where 40 percent of the guns are sold in this country and no background check occurs in those sales. I mean, maybe you can catch people who shouldn't have their hands on a gun if you close the gun show loophole.

I also voted for a lock to be sold with guns, so that you have a trigger lock, $5, you can have a trigger lock, that actually might have prevented this, if the mother had had trigger locks on those guns.

WALLACE: And we've got about a minute left.

CONRAD: She would have been able to perhaps prevent this.

WALLACE: Senator Conrad, what do -- what do you think of Wayne LaPierre's proffer to the debate?

CONRAD: I mean, it is pretty empty, isn't it? That is the only answer, is to put more guns in schools?

Look, we already have armed officers in many schools. And in Washington, D.C., we have armed officers in schools. And, some of that is appropriate, and, perhaps, we can do more. It actually doesn't cost $8 billion, we have 130,000 elementary and secondary schools in this country. If you have two officers in each, that would cost $25 billion. Where is that money going to come from?

WALLACE: I'll give you 30 seconds to respond, Senator Barrasso, and we have to wrap this up.

BARRASSO: Well, it is the Christmas season. Washington doesn't have the answers for everything, for our culture. There are issues of mental health. There are issues of our culture.

And, I think we're can look at get false sense of security from Washington, and in passing more laws, but we need real solutions to a significant problem in our country, and I'm not sure passing another law in Washington is going to actually find a real solution.

WALLACE: Senator Barrasso, Senator Conrad, we want to thank you both. Thanks for coming in today. And merry Christmas to both of you.

BARRASSO: Thank you.

CONRAD: You, too.


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