SCHIEFFER: And good morning again. We welcome to the broadcast the Senate Republican Leader Mitch McConnell.
Senator McConnell, Jim Baker, the former secretary of state who led five Republican presidential campaigns, described this recent brawl over trying to tie the defunding of Obamacare to shutting down the U.S. government -- he described it by recalling the words of a long-ago candidate who lost a Senate race in Texas who said, "We shot ourselves in the foot and then reloaded."
Will you ever let something like this happen again?
MCCONNELL: You know, one of my favorite old Kentucky sayings is there's no education in the second kick of a mule. The first kick of the mule occurred back in 1995 when we were -- the Republican House shut down the government.
Look, shutting down the government, in my view, is not conservative policy. I don't think a two-week paid vacation for federal employees is conservative policy. A number of us were saying back in July that this strategy could not and would not work, and of course it didn't. So there will not be another government shutdown. You can count on that.
SCHIEFFER: Well, how badly do you think the country was hurt by all of this?
MCCONNELL: Well, it certainly didn't do the country any good to have, you know, both a government shutdown and a pending fiscal crisis right on top of it. But, look, we're a big, resilient country. You just pointed out how the stock market bounced back immediately. I was pleased to play a role in keeping us from going to the brink. I think it was important to do the right thing for the country. And we did it.
SCHIEFFER: You know, while people here were giving you credit for being the one who was able to get together with the Democrats and broker this deal, back in your home state of Kentucky, the Tea Party folks went nuts.
I mean, you are going to have a Tea Party candidate opposing you in the Republican primary. They are -- say they are now more determined than ever to beat you. They even accused you of taking a kickback. They said that...
... in this legislation, there is a provision that provides a way to get $2 billion to fund a dam project in Kentucky. What -- what is that all about?
MCCONNELL: Well, as has been widely reported, it was a provision requested by the president and the Corps of Engineers and suggested by a senator from Tennessee and a senator from California that actually saves the taxpayers $160 million. Rarely, in a spending bill, do you have a provision that saves $160 million for the taxpayers.
SCHIEFFER: But did you have anything to do with putting that into this legislation?
MCCONNELL: It was put in by Senator Alexander and Senator Feinstein, senators from Tennessee and California, because it saved $160 million for the taxpayers.
SCHIEFFER: And -- though you have lobbied for that project before. I mean, it is a Kentucky project.
MCCONNELL: In past years -- yeah, in past years. It's a dam that sits in the -- an important inland waterway passage between the Mississippi and the Ohio. It's been a longstanding project. It doesn't just benefit Kentucky. It benefits the whole inland waterway system. It is extremely important to the commerce that flows down the central part of the United States, yes.
SCHIEFFER: Let me ask you about Senator Ted Cruz. He led this effort to tie the defunding of Obamacare to shutting down the government. He said he is not backing away. He says he will continue to do -- and these are his words -- "anything he can" to stop what he calls "the train wreck that is Obamacare."
How are you going to deal with that?
MCCONNELL: Well, I certainly agree with Senator Cruz that Obamacare is indeed a train wreck. I mean, a visit to the website is kind of like a trip to the Department of Motor Vehicles in your state. People can't -- even if they can access the website, there's no way to -- to get quotes.
Even those who may be fortunate enough to sign up are going to find that the premiums are hiring and the choices are fewer.
One thing that all Republicans agreed on back in 2009 is that we thought Obamacare was a terrible mistake for the country. We still think that, and we're going to do everything we can in the future to try to repeal it. But that requires a Republican Senate and a different president.
We have a math problem in the Senate in getting rid of Obamacare. It's that -- it's the following math problem, 55 Democrats and 45 Republicans. We only control a portion of the government, and so that limits our ability to get rid of this horrible law.
SCHIEFFER: But let me get back to what do you do about Senator Cruz? How do you deal with him?
Trent Lott, your predecessor, the very conservative Republican from Mississippi, was asked by The Washington Post, and he said, "You gotta roll him." He said "We've got to have more pushback against these people who come to Washington and suddenly announce they have all the answers."
What do you -- when Senator Cruz tries this again, how will you respond to that?
MCCONNELL: Look, we've got a big conference with 45. I'd like to have 51. That would make me the majority leader instead of the minority leader. We have a lot of people with different points of view.
We had some tactical differences about how to get at the repeal of Obamacare. But the fact that we have some tactical differences doesn't mean we don't all share the same goal. Obamacare is the worst piece of legislation that's been passed in the last half century, the single biggest step in the direction of Europeanizing our country. We need to get rid of it. And if the American people will give us a majority in the Senate and a new president, that's exactly what we're going to do.
SCHIEFFER: I have to tell you that the White House, as late as last night, was telling me that one of the reasons for all these problems with this website is that it has been overwhelmed with people that want this insurance. And they're saying that they are enrolling people into this program and that, like all new programs, the glitches will have to be worked out.
MCCONNELL: Well, let me quote Robert Gibbs, the president's former press secretary, who said it's "excruciatingly embarrassing for the administration."
In Oregon, no one has signed up; in Alaska, seven. It's -- they've had three or four years here to get this ready. God only knows how much money they've spent. And it's a failure. You know, the government simply isn't going to be able to get this job done correctly. And even if you were lucky enough, Bob, to get on to sign up, you're going to find you've got fewer choices and higher premiums. This is a very bad deal for the American people.
SCHIEFFER: You have primary opposition. You have Tea Party people who now say you are public enemy number one. It seems to me, though, this is -- this is something that goes beyond Mitch McConnell and the right side of the Republican party in Kentucky. Are we seeing a war now for the soul of the Republican party?
MCCONNELL: Well, just let me say this about the primary in Kentucky. I've -- I've endured millions of dollars of attack ads that have been calling me a right-wing fanatic over the years. I think my opponents in the primary are going to have a hard time convincing Kentucky primary voters that I'm some kind of liberal.
You know, I enjoy the support of the most famous Tea Party senator in America, Rand Paul. I'm supported by Marco Rubio, Pat Toomey, two other Tea Party favorites who were elected in 2010. I have the support of Mike Huckabee and Bill Bennett. I think they're going to have a hard time convincing Kentucky primary voters that Mitch McConnell is some kind of liberal.
In fact, we took a poll last month to check that out, and only 2 percent of Kentuckians thought I was a liberal. So I think that's a pretty hard sell. And it's almost certainly going to fail.
SCHIEFFER: What do you want now from President Obama? What do you want him to do now? You -- you're facing the same problems that caused this government shutdown. What would you like the president to do now, Senator?
MCCONNELL: Well, my first choice would be to take advantage of the opportunity presented by a divided government. You know, divided government has frequently done very, very important things.
I think of Ronald Reagan and Tip O'Neill raising the age for Social Security, which saved Social Security for a generation.
I think of Ronald Reagan and Tip O'Neill doing the last comprehensive tax reform.
I think of Bill Clinton and a Republican Congress doing welfare reform and actually balancing the budget multiple years in the late 90s. Divided government is actually an opportunity to tackle tough stuff. And we all know that the unsustainable growth rate of entitlements is the single biggest challenge confronting America's future. If we don't fix that, we're not going to leave behind for our children the same kind of country our parents left behind for us. I wish President Obama would lead and take advantage of the opportunities presented by divided government.
SCHIEFFER: How are the first --
MCCONNELL: -- Obama don't expect --
SCHIEFFER: what are the first steps --
MCCONNELL: -- honestly, I --
SCHIEFFER: -- in doing that?
Do you want him to call you on the phone?
Do you want him to set up some kind of a meeting?
Do you want to let it be settled up there on the Hill?
Because some-- even some Democrats say the president has not been active enough in this fight.
Would you like more contact with him, or is that a waste of time?
MCCONNELL: Well, we've talked about this. What I'd like for him is to step up to the plate and do it.
Unfortunately, every discussion we've had about this in the past has had what I would call a ransom attached to it-- $1 trillion in new tax revenues.
Look, we don't have this problem because we tax too little this country. We have it because we spend too much.
We currently have a $17 trillion national debt, and that pales in comparison to what's coming our way if we don't make the eligibility for entitlements fit the demographics of America today and tomorrow. Do I expect this kind of presidential leadership in the near future? Honestly, no.
But let me say what I do expect to come out of the next episode that we'll have in January and February. We have, as a result of the Budget Control Act, which was passed in 2011, which the president signed and was supported on a bipartisan basis, actually reduce government spending for two years in a row for the first time since right after the Korean War.
It is reducing government spending. Our Democratic friends want to bust the caps-- in other words, spend more-- and they want to raise taxes. For me, the bottom line, when we reengage early next year, is I don't want to bust the caps. And I don't want to raise spending because we are, in fact, reducing government spending -- not as much as we need to, but it is a success.
SCHIEFFER: But wouldn't it be a good idea, maybe, to start reengaging before early next year to try to lay some groundwork for that?
I mean, have you given any thought to calling the president or if he called you, would you take the call?
I mean, what happens right now?
MCCONNELL: Oh, yes.
SCHIEFFER: What ought to happen right now?
MCCONNELL: Well, what's happening right now is there is a budget conference with Paul Ryan and Patty Murray. And they're going to see if they can come up with a proposal.
Look, we interact with the White House whenever they would like to. My preference would still be a big deal.
But let me say at a minimum, at a minimum, we ought not to bust the caps that are actually reducing government spending and we ought not to raise taxes. At a bare minimum, it seems to me, that's the best way to go forward as we go into the discussions that we will have in January and February.
SCHIEFFER: All right, well, Senator, I want to thank you very much for coming out and talking to us this morning. We appreciate it.
We're going to turn now to two key senators, Republican Lindsey Graham; he is joining us from his home state in South Carolina. And Democrat Mark Warner of Virginia, he'll be a key player and he is with us here in the studio.
Senator Warner, let me just start with you. You heard what Senator McConnell said.
Where do you think this is headed?
WARNER: Well, Bob, I think we need to step back a moment and say we just went through an awful period for our country.
SCHIEFFER: He basically agrees with that.
WARNER: Listen, the numbers are coming in,$24 billion hit to the economy. We actually increased the deficit. You can't start and stop the largest enterprise in the world, the federal government, without adding costs.
We've actually built in higher interest rates because any time we get close to a potential default, we're going to have higher T-bill pricing. That's been built in. That passes through to mortgage costs, car loans, student loans.
So what we need to do now is-- I'm an advocate of a big deal, but we ought to at least first start and make sure that we actually operate the government for a year going forward with a solid budget and find ways to alleviate some of the damage also being done by sequestration, which is this automatic spending cuts which Lindsey and I and a whole group of others say was the stupidest way possible to go about cutting government.
SCHIEFFER: Senator Graham, you heard your leader.
Where do you think this is going now?
GRAHAM: Well, I think what would be good for the country is if the Budget Committee reported out a bill by the December 13th that did three things-- fund some infrastructure. There's a lot of bipartisan support for infrastructure funding for our roads, our bridges and our ports.
And the president should give Democrats some political cover to reform entitled, and Republicans need to be courageous enough to flatten out the tax code. If we did those three things and replaced sequestration we could end this year on a very positive note.
SCHIEFFER: Do you think there's any chance something like that could happen?
GRAHAM: With presidential leadership -- well, I think it would take leadership. The public is ready for the Congress to behave better. This is a second chance. It would help us all. Sixty percent of the people in the United States want to fire every one of us. I understand that.
But if we could come together and pay for an infrastructure bill-- Mark is working on an infrastructure system of funding. If the president would give cover to Democrats to enact CPI changes that he's already embraced, and people like me would agree to bring in revenue, not by raising taxes, by flattening out the tax code and bring in some repatriated corporate earnings at a lower rate, apply that money to the -- to infrastructure, we could replace sequestration in whole or in part and it would help us all. It would help the country. (Inaudible) with some leadership. SCHIEFFER: Senator Graham, what do you think the impact of all this has been on the Republican Party, your party?
GRAHAM: It's a wake-up call. Conservatism is an asset to the Republican Party. We're a right of center nation. We're not a right ditch nation. I think we've learned that this was a political gift to the president by the Republican Party at a time he needed it the most. The tactic of defunding the government, unless he repealed his signature issue, was as poorly designed as ObamaCare itself, almost.
I can't imagine President Bush agreeing to repeal the Bush tax cuts if the Democrats had challenged him with the following proposition -- we will fund all the government, Mr. President, if you, President Bush, would give up on your tax cuts.
President Obama was never going to give up on his signature issue. But as a party we have got to do soul-searching and I hope our House colleagues will follow Speaker Boehner. The only way the government can shut down is not what Senator Cruz says but what the House does. So President Obama, work with John Boehner. Work with Harry Reid, Senator Reid.
Senator Reid, stop moving the goalposts on Speaker Boehner. To my House Republican colleagues, follow Speaker Boehner. He's a good man.
If we'll do all this, we won't shut the government down again.
SCHIEFFER: All right. Well, we're going to come back to both and you Senator Warner and talk some more about this in one minute.
SCHIEFFER: Back now with Senators Graham and Warner.
Senator Warner, you heard Senator Graham lay out what he thinks the path is here. He also talks about how badly Republicans were hurt.
Was your party hurt by this?
And where do you think this all goes now?
WARNER: Bob, there were really no winners. I mean, our country took an economic hit. We also took, I think, a confidence hit in terms of the American public. I understand why people are madder than heck at all of us.
And we took a hit on the world stage. Look when you see China and Russia saying let's de-dollarize the world. Let's move away from an American-driven economy. So I think-- and Lindsey and I, we found that we have a lot of common ground agreement. We're working on infrastructure together. We ought to put this in an order of three things.
First, we've got to show we can govern. Basic governance means we've got to put a budget in place where we go at least for a year without any threat of a fiscal crisis.
Then on top of that, we ought to find common agreement where we can make these investments in infrastructure and replace some of the damage being done that I think on the defense side and on the discretionary side around sequestration.
There are smarter ways to cut government than sequestration. And then I believe that the single biggest thing we could do for our economy, single biggest job creator, would be to put together a bigger bargain that includes revenues, that includes entitlement reform.
We all know at the end of the day, Republicans are going to have to give on revenues, Democrats are going to have to give on entitlement reform. We do, that, the confidence building that would take place I actually believe would do more for job creation than any other program we've talked about.
SCHIEFFER: Senator Graham, you talked about what is going on in the House of Representatives.
Do you think Speaker Boehner is going to survive all this?
GRAHAM: I hope so. I hope people rally around John and learn from this tactical mistake that they made regarding defunding ObamaCare. John is ready to do a big deal.
They were $150 billion a part, he and President Obama.
So as we go back into the budget negotiations, I hope that under Paul Ryan's leadership, and with some presidential leadership, we can do what Mark just talked about -- an infrastructure bill that would allow to us create jobs, entitlement reform and tax code reform.
And John Boehner is a willing participant, so is Mitch McConnell. We have got a unique opportunity here after this debacle called the shutdown to reenergize the congress and maybe get better standing.
But John Boehner, please, follow John.
SCHIEFFER: What about Senator Ted Cruz? I asked Senator McConnell six ways from Sunday about how he was going to handle that part of it on -- from here on in, and he didn't really give me any specifics. Has Ted Cruz hurt your party?
GRAHAM: I think the tactical choice that he embraced hurt our party. Ted is a smart guy, but Ted Cruz can't shut the government down. What shuts the government down is when the House and the Senate can't agree on a funding number. And our president has been virtually AWOL. This idea I won't negotiate, the president of the United States needs to get involved with Boehner and Senator Reid to try to bring us together.
The political marketplace will determine Ted Cruz's future. We helped President Obama when he needed our help the most. After this debacle called the shutdown, our party's been hurt. Our brand name is at its lowest ever. Obamacare actually got a bump in polling. And we got in the way of a disastrous I don't roll-out, so from my point of view, this was a tactical choice that hurt us, but the good news for the Republican Party is that of the debacle is over, if we don't do it again and Obamacare is a continuing debacle.
One quick story, a friend of mine owns 52 Wendys. He's put pen to paper. He has 40 percent of his workforce ensured today. Under Obamacare, if 20 percent choose insurance his insurance costs will double. That story is repeating itself throughout the economy.
Obamacare is a debacle that will go into 2014. The shutdown should be in our rearview mirror as Republicans.
SCHIEFFER: I will just respond that the White House says it won't happen that way. I'm sorry, we're out of time. But I want to thank both Senators for being here this morning. Back in a minute with some more...
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