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FOX "Fox News Sunday with Chris Wallace" - Transcript - Budget Compromise

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CHRIS WALLACE, HOST: I'm Chris Wallace.

Will charm be enough to bridge the differences in the battle of the budget?

(BEGIN VIDEOTAPE)

WALLACE: President Obama reaches out to all members of Congress, just as House Republicans and Senate Democrats come out with dramatically different blueprints for our fiscal future. What are the chances for a compromise? We'll ask two senators leading the debate, Democrat Dick Durbin and Republican Bob Corker.

Then, Republicans at a crossroads. As conservative activists gather in Washington, GOP leaders argue about the future of the party. We'll discuss differences within the GOP, with Matt Kibbe of FreedomWorks and former Congressman Steve LaTourette of the Republican main street partnership.

Plus, the U.S. response to North Korean threats by beefing up its missile defense as the president heads to Israel. We'll ask our Sunday panel whether Mr. Obama has the right answers to foreign policy challenges around the world.

And, our Power Player of the Week -- a celebrity chef combines the classics with the cutting-edge.

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

(END VIDEOTAPE)

WALLACE: Hello, again and happy St. Patrick's Day from Fox News in Washington.

The president met with Republicans and Democrats, in both the House and Senate this week. But, for all the talk of a grand bargain, there was no sign the two parties are any closer to bridging the divide over our nation's debt.

We want to discuss the chances for a deal with two key senators. Dick Durbin, the Senate's number two Democrat, joins us from Chicago. Tennessee Republican Bob Corker is in Chattanooga.

So, gentlemen, while the president was meeting with members of Congress, House Republicans and Senate Democrats put out their budget plans, which had dramatic differences.

Let's look at them.

The GOP plan would cut the deficit $4.6 trillion over 10 years, all through spending cuts. The Democratic plan would cut the deficit $1.8 trillion. Half through spending cuts and half through tax hikes. Senator Corker, let me start with you: will Senate Republicans accept a tax increase, if you get serious entitlement reform and cuts?

SEN. BOB CORKER, R-TENN.: Well, I think Senate Republicans and all Republicans want to see a 75-year solution to entitlements. And, I think Republicans are joined in wanting to see tax reform. So, to the extent that generates revenues and how that's scored, obviously, that will be debated as we move ahead.

But I think all of us understand the real issue driving the deficits that we have in our country are the entitlements, and that's what we want to see solved. We want to see these available for generations -- generations to come.

WALLACE: But just real quickly, you understand the price for entitlement reform in any deal would be a tax increase. Would you buy that and what do you think the prospects is there will be a deal sometime before this summer?

CORKER: Well, again, I think -- I think, there, by the way, is a chance on a deal. I know the president is saying the right things, and we have an opportunity over the next four to five months, I think, that, you know, we'll know when the president is serious by virtue of a process that's set up where he is actually at the table and whether he has a designee, and whether he begins to say publicly to the American people, to all Americans, that he understands that Americans are only paying 1/3 of the costs of Medicare, and that has to change for the program to be here down the road.

But, look, Chris, I think Republicans, if they saw true entitlement reform, would be glad to look at tax reform that generates additional revenue. And that doesn't mean increasing rates. That means closing loopholes.

It also means arranging our tax system so that we have economic growth. And I think we have been saying that from day one.

WALLACE: Well, Senator Durbin, I heard some give there from Senator Corker. Let me ask you: are Senate Democrats willing to make serious cuts, reforms to entitlements, if you get added tax revenue? And what do you think of the prospects for a grand bargain.

SEN. DICK DURBIN, D-ILL.: Well, Chris, let me tell you, I think Bob just gave an honest and constructive answer. Really, what he articulated is what he did in the Bowles-Simpson commission and what we've done ever since. We've said, let's put everything on the table. And I want to thank Bob for saying that.

We've got to, of course, pass this budget resolution in the Senate. Patty Murray has done an extraordinarily good job. And then we're going to move to the next stage, and that is the grand bargain stage. That's what the president is trying to set that up -- both sides sitting down on a bipartisan basis, not eliminating Medicare -- as I'm afraid the Paul Ryan budget would do -- but making sure it's going to survive for generations to come, putting revenues on the table that are fair and won't penalize the working people across America and making sure it's a balanced approach.

I think what Bob Corker just said from his side is a basic set of principles that both parties can rally around.

WALLACE: And just real specifically because I want to pin you done on this -- are you saying that you would accept structural changes -- as you say, not doing away with Medicare -- but structural changes and cuts to entitlements.

DURBIN: Let me just tell you what we are facing. In 10, 12 years, Medicare goes broke. That's unacceptable. We want to make sure that Medicare is there for generations to come. And, that means making some reforms and some constructive changes.

The Paul Ryan voucher approach is destructive of Medicare. It will not survive. Millions of Americans will lose their benefits.

But, there are ways to approach it -- to reduce the cost of medical care, and still keep our promise to seniors across America.

WALLACE: Part of the problem in this debate is that the parties seem to be disagreeing about the importance of dealing with our national debt. I want to play what President Obama said this week, and, also, what he said back as a candidate in 2008. Take a look.

(BEGIN VIDEO CLIPS)

PRESIDENT BARACK OBAMA: We don't have an immediate crisis in terms of debt. In fact, for the next 10 years, it's going to be in a sustainable place.

We now have over $9 trillion of debt that we are going to have to pay back -- $30,000, for every man, woman and child. That's irresponsible. It is unpatriotic.

(END VIDEO CLIPS)

WALLACE: Senator Durbin, when candidate Obama said that, our national debt was $9 trillion. It's now $16 trillion.

So, the question is -- if it was unpatriotic at $9 trillion, is it sustainable at $16 trillion?

DURBIN: Chris, here's the good news. We have reduced the long term deficit by about $2.4 trillion. That's included almost (ph) $600 billion in new revenue as part of the fiscal cliff. We still have to do more but we have taken the edge off the crisis, I'll concede that.

What the president is pointing to is this -- we need strong economic recovery. We need to put Americans back to work. That's our first priority.

Deficit reduction, I would put, as the second priority, and, one that is coupled with economic growth.

So, I think we can do both. Make sure we have deficit reduction but don't cut too much, too fast. Take, for example, the sequestration. Seven hundred thousand American jobs will be lost.

This is not the right thing to do. Not the right time to do it. We've got to phase it in and sequence it so we can have economic growth and Americans paying taxes. That really helps us recover.

WALLACE: Senator Corker, some Democrats -- and you just heard this, sort of, from Dick Durbin, but I've heard it in more extreme forms from other Democrats, say, it's more important to have national growth than to deal with the national debt. Your response?

CORKER: Well, I think we should have economic growth and, obviously, we'd like to see that happen. And I think reducing the debt helps create economic growth.

So, look, I think it's ridiculous to say that cutting $1.2 trillion over the next decade, when we're going to spend $47 trillion of your money is a step too far. Of course, we need to do that.

And on top of that, we need to build towards these entitlement reforms which obviously are creating the huge debt down the road. But, look, I think it was disappointing to all of us to have the president come in and talking the way that he is.

And, by the way, I've attended the dinner. I've been on the phone calls, I've met with the White House, and I appreciate the outreach.

But in the midst of that, to act as if this deficit issue is not that important was a little disheartening. But I do think, Chris, again, I think we've got the best opportunity we're going to have under this president over the next four months to solve this problem.

And I look forward to working with Dick Durbin and others as we kind of build on the commonalities that we have. We have a lot of things that separate us. But there is enough commonality here, I think, to build off of that. It's the most important thing we can do for our nation's economic growth and our long term security, and that's what we need to be focused on.

WALLACE: Before we move on, because, you know, I am getting a kind of hopeful sense from both of you -- and I just want to pick up and button it up quickly with you, Senator Durbin.

Do you agree it is the last best chance for a big deal? And how optimistic are you that you're going to be able to pull it off between now and, let's say, midsummer?

DURBIN: Listen, if you are a senator, you have to be patient but I've been at this for years and this is an excellent opportunity. But, both sides have to come together. And I think what Bob has said and what I've tried to say this morning is: there are elements of this that we can all agree on, on a bipartisan basis.

I think what the president is trying to do is not a charm offensive, but basically to say to the Republicans, I'm serious about this. I will sit down with you, and honestly work to come up with a grand bargain. Let's not miss this opportunity.

WALLACE: Before you deal --

CORKER: Chris, Chris --

WALLACE: Go ahead, Senator.

CORKER: If I could say one thing -- I think we are all going to know, again, when the president is serious, will be when he begins using the podium to explain to the American people that the average American family is only paying 1/3 of the cost of Medicare. When he begins to lay that out from his podium -- I have been saying that for years, and Dick Durbin has been saying it for some time -- but when the president uses the bully pulpit to explain to the American people the families are only paying 1/3 of the cost of Medicare, we will know that we have begun the process of trying to solve this problem. I hope that happens as soon as he gets back from Israel.

WALLACE: All right. Gentlemen, before you deal with budget, you've got a more pressing problem and that is that you have to pass a continuing resolution before March 27th and you are going on recess at the end of this week to keep the government running, otherwise, it shuts down.

And the question, Senator Durbin, is -- will the Senate pass a C.R., a continuing resolution, that keeps spending at $984 billion, which is what the spending level is of the House C.R., including the sequester cuts?

DURBIN: Chris, when I left Washington on Thursday, we had 99 amendments pending to this continuing resolution, the budget for the federal government, 99 amendments. Six of the amendments were on the issue of our relationship with Egypt.

This is all very important, I understand. But, we have work to be done in just a short period of time. I urge my Senate colleagues, let's be sparing in the amendments. Let's get the C.R. passed. We can do it and do it quickly, this coming week.

WALLACE: Direct question: would you accept -- will you pass a C.R. at $984 billion, which is the House level that includes the sequester cuts?

DURBIN: Listen, we have put together a C.R. that is acceptable in its dollar terms to the House of Representatives and I think we can agree on what they'll be.

WALLACE: All right. Gentlemen, we're running out of time, I want to ask you each about a question of something you are involved in.

Senator Durbin, you are part of this bipartisan Senate group that is working on immigration reform. Are you going to be able to come up with a plan that creates a pathway to citizenship, for the 11 million illegals who are now in this country? And if so, when are you going to put the plan on the table?

DURBIN: We are working, literally, hours every week, four Democrats, four Republicans. And, we're making progress. There are still some tough, tough issues out there. But I feel good about it.

There is a feeling in the room we have a responsibility to this nation after 25 years to write an immigration law, that we can live with for generations to come.

WALLACE: What's the biggest problem?

DURBIN: Well, there are several problems. You know, we are dealing with border enforcement, which is very important on the Republican side of the table. We are dealing with the question of the 11 million people paying their taxes, having a path to legalization and, then, ultimately, to citizenship.

Tough issues but we are coming together and I think we can do it. I have a positive feeling.

WALLACE: And, finally, Senator Corker, you are the top Republican on the Senate Foreign Relations Committee. This week, on Friday, the Pentagon announced they are going to deploy 14 additional missile interceptors to Alaska to deal with the potential nuclear threat from North Korea.

What do you think of the idea and how serious do you think the threat is from the North Korean regime? And are we paying a price for the fact that President Obama scaled back on missile defense when he came into office?

CORKER: Well, look, I applaud the efforts. I talked to Senator Kerry and I know we have a group heading of you to Poland on Monday to talk about this further. I applaud it as I mentioned. I do hope we'll focus on a base on the eastern side with radar facilities.

And I think the question is, Chris, how does the non-deployment of the fourth base of our European base system affect us over time? So there are some technical issues that we're going to be getting into this week with the Pentagon and the State Department. But, certainly, I think most all of us applaud the efforts to beef up our missile defense on the West Coast.

WALLACE: Do you think that Kim Jong Un and the North Koreans are a real threat to the U.S.?

CORKER: I don't think that threat is imminent and, I don't think they have the delivery mechanisms that are necessary to really harm us. But I think it's really good that we are taking those precautionary measures to make sure that they cannot do damage. I think it puts us in a place -- a different place as it relates to negotiating with them.

And, at the end of the day, Chris, I know there's a lot of talk, six-party talks, and all kind of things that are occurring -- I think all of us understand the key to this is going to be China. They are the ones that can actually affect the behavior in North Korea because of the trade issues and certainly the support issues coming from China into North Korea.

Hopefully, China sees the threat to -- for nuclear proliferation in that part of the world, in the event they are not able to stop what North Korea is doing.

WALLACE: Senator Corker, Senator Durbin, thank you both. We're going to have to leave it there. And thank you for talking with us and, no doubt, there's some tough bargaining ahead on the budget.

Thank you, gentlemen.

CORKER: Thank you.

DURBIN: Thanks.

WALLACE: Up next, the battle inside the GOP over how to grow the party.


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