CNN "The Situation Room" Trancript: The Fiscal Cliff Debate

Interview

By:  Debbie Wasserman Schultz
Date: Jan. 1, 2013
Location: Unknown

BLITZER: The Senate compromise on the fiscal cliff was hard- fought, but passed overwhelmingly, 89-9. The House majority leader and other top Republicans, though, have put the deal in limbo right now.

I spoke with Republican Congressman Darrell Issa in our last hour.

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA (R), CALIFORNIA: I'm with Eric Cantor. I can't vote for it in its current form. And for a good reason. The Senate, the president and the vice president failed to meet their obligation, their own stated obligation, which was to bring us a balanced bill.

(END VIDEO CLIP)

BLITZER: Let's discuss what's going on with Democratic National Committee chair, Representative Debbie Wasserman Schultz of Florida. Congresswoman, thanks very much for joining us.

REP. DEBBIE WASSERMAN SCHULTZ (D-FL), DEMOCRATIC PARTY CHAIRWOMAN: Hi, Wolf.

BLITZER: Are you opened to amendments to what passed the Senate last night? WASSERMAN SCHULTZ: I'm sorry, I missed that. I had...

BLITZER: I said...

WASSERMAN SCHULTZ: -- someone else in my ear.

BLITZER: All right.

Are you open to amendments to what passed the Senate last night?

WASSERMAN SCHULTZ: No, because what this agreement was, when the vice president and Mitch McConnell went into these negotiations over the weekend, the deal was -- and Speaker Boehner agreed to this -- that whatever they came up, with especially if it passed overwhelmingly in the Senate, as this did, 89-8, that there would be a straight up or down vote on the House floor. I mean this is just unbelievable. It's understandable, OK, so there are some Republicans, maybe many Republicans, that don't support it. We have angst in our caucus, too.

But the bottom line is that the bill should be put on the floor. There should be an up or down vote. The number of Democrats and Republicans that are willing to vote for it should be combined. And we'll see whether it passes.

But to play games with whether tax rates go up, tax -- taxes go up on 98 percent of Americans -- I mean look -- look at what they're walking away from, potentially, Wolf.

This is a bill that prevents 98 percent of Americans from having their taxes go up. It's a bill that makes sure that we have a permanent fix to middle class taxes going up by permanently patching the AMT tax. It's a bill that makes sure that we have a balanced approach. We -- we've got an extension of the American Opportunity Tax Credit, which makes sure that more young people can go to college. We have an extension of the earned income tax credit and an extension of the child opportunity tax credit.

Are these things that the Republicans actually want to allow to lapse? Because that's what would happen. And it would be devastating to the middle class. If they had Republicans in their conference that won't vote for the bill, fine. We have Democrats that probably won't vote for it either. But, the bill needs this straight up or down vote on the House floor.

BLITZER: Did the Speaker of the House, John Boehner, agree that anything that passed with a decisive bipartisan majority in the Senate would come up for an up or down vote in the House without any opportunity for amendments that it would just come up for a vote as is.

WASSERMAN-SCHULTZ: That was always are understanding. I mean, otherwise, what was the point of their being, you know, a sit down head-to-head negotiation between the vice president and Mitch McConnell. Mitch McConnell, I'm sure, believed that he was negotiating on behalf of John Boehner and not that there's a guarantee that the Republicans are going to support it.

But certainly that whatever comes out, I mean, imagine, this bill passed the Senate 89-8. That is an overwhelming majority. It needs to have conservative moderate and progressive support and it needs to just have a straight up or down vote on the House floor. We need to stop playing games.

We need to make sure that we stop jeopardizing the tax rates of the middle class where if we don't pass this bill or if we certainly don't take a vote on it, then 98 percent of Americans are going to see a tax increase, and that's on the Republicans.

BLITZER: What happen if there's no deal that the senate legislation is not passed by the House of Representatives as is on Thursday at noon, there'll be the 113th Congress that sworn in, a new Senate that sworn in? What happens then? What happens to tax rates?

What happens to that so-called sequestration that force domestic and national security spending cuts? In other words, how much time will there be to retroactively fix this?

WASSERMAN-SCHULTZ: Well, I think it's very clear. If there's no deal, if the Republicans -- if they try to amend this bill and send it back, the Senate isn't even here. So, I mean, that means that we're basically at Thursday at the earliest when both House and Senate members are sworn in for the new Congress, and it means we're going over the cliff.

What it also means is that taxes increase on everyone regardless of income. And, you know, if that's what the Republicans want, it's a little baffling, but we need to make sure that as we go through -- this is step one. Down the road in two months, when we deal with the sequester, the significant defense and domestic spending cuts, we need to make sure we address deficit reduction with a balanced approach to -- with revenue and with spending cuts.

But none of these solutions should be allowed to be balanced on the backs of the middle class and the Republicans, in this battling way, seem to think it's OK. That's what they're risking. It's incomprehensible, actually.

BLITZER: How many of your Democrat -- fellow Democrats in the House you think will vote again -- let's assume the Senate bill comes up.

WASSERMAN-SCHULTZ: Right.

BLITZER: There's some criticism, as you know, from the left that they don't like what passed the Senate. Listen to Robert Reich, for example. He's not a member of Congress. He was a labor secretary during the Clinton administration. Listen to what he told me yesterday.

(BEGIN VIDEO CLIP)

ROBERT REICH, FORMER LABOR SECRETARY: I think no deal is actually better than a bad deal. I would go over the fiscal cliff and then I would introduce legislation to provide a middle class tax cut and also restore a lot of the spending cuts, and the Republicans would have to go along with it.

I don't want to make the Bush tax cut permanent up to $450,000, and also, I want the Republicans to deal and make a deal on the debt ceiling

(END VIDEO CLIP)

BLITZER: How many members of what you call the progressive caucus in the House you think are with Robert Reich saying no deal is better than this current deal?

WASSERMAN-SCHULTZ: Look, there are members that believe this deal isn't perfect. No deal is perfect. There are things I don't like in the deal. I'll give you an example. With the Medicare reimbursement rate, that the pay fors (ph) in that portion of the deal make me a little bit uncomfortable, but at the end of the day, I know that I don't want taxes to go up on 98 percent of Americans and 97 percent of small business owners.

I know that we need to make a down payment on the beginning of a balanced approach to deficit reduction. I certainly know that we should -- that the American people spoke on election day and said that they're comfortable with letting tax rates rise for the wealthiest two percent of Americans. I mean, really?

The Republicans are going to oppose a bill that increases the tax rates for people who make more than $450,000 a year? But look, I represent a fairly wealthy district, upper middle to wealthy district. And folks at home are not, you know, ringing my phone off the hook saying, don't vote for this because they know that we've got to do something.

We've got to make a down payment on deficit reduction. We've got to make sure that we take a balanced approach. We've got to protect the middle class and we've got to focus on -- let's -- what I haven't heard about in a couple of days is, our needs get back to the number one issue, creating jobs and getting this economy turned around.

This is one of the first things we have to do so we can move on aggressively towards that.

BLITZER: Bottom line, the House Republicans are meeting right now. They've just started a second meeting of the day. What do you anticipate will happen tonight?

WASSERMAN-SCHULTZ: You know, I said earlier today, predicting what this group of Republican and the House members will do is it certainly a challenge.

I know if -- there are enough -- from working with them as many years as I have, I know there are enough responsible Republicans in their conference that if a bill was put on the House floor, it is likely that there would be enough Democrats and enough Republicans that could pass that bill and send it to the president so we can prevent 98 percent of Americans from having their taxes increased and we could begin to really get a handle on our deficit reduction problem.

BLITZER: You believe there really is a fight between John Boehner, a disagreement between John Boehner and Eric Cantor, the number two Republican in the House?

WASSERMAN-SCHULTZ: You know, it's hard for me to care. I don't know the internal workings of the Republican leadership well enough. It's hard for me to characterize what this is, what this boils down to, but I do know that they have a really and (INAUDIBLE) group of extreme Tea Party members in their conference that seem to be really separated from reality, from the reality that most Americans really want us to just work together and stop with the my way or the highway politics.

Wolf, I'm going to have to go home. I represent a liberal district. If I vote for this, I'm going to have to go home and defend it to my liberal constituents just like I did when I voted for the debt ceiling deal that included a trillion dollars of only a spending cuts with no revenue at all. That was a totally unbalanced approach.

I have to go back and defend that then as did many of my fellow Democrats. Republicans need to gather up their courage. They need to do what's right, strengthen their spines, and come together and work with us so that we can protect the middle class and move on --

BLITZER: One final question.

WASSERMAN-SCHULTZ: Sure.

BLITZER: Give me a quick answer. Marco Rubio, your senator from Florida, he was one of eight senators who voted against the deal last night. What does that say to you?

WASSERMAN-SCHULTZ: It says to me that Marco Rubio is thinking about himself. That's what it says. Not about what's best for the American people or for Floridians.

BLITZER: All right. You said it. Thank you, Debbie Wasserman- Schultz. Thanks so much for joining us.

WASSERMAN-SCHULTZ: Thank you.