MSNBC "Hardball with Chris Matthews" - Transcript

Interview

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REP. LORETTA SANCHEZ (D), CALIFORNIA: Well, first of all, I find it interesting that the Republicans campaigned on bringing down the deficit and yet they want to increase it by $700 billion. The reality is that we need to pay down some of our debt, and one of the ways to do that is not to continue some of these tax cuts, in particular for the wealthy.

They would argue, and some people do, that the--that this will not -

that it will not help to create jobs. Well, some of us have said, Listen, let"s help the middle class and continue to keep tax cuts for them. And let"s make sure that the capital gains tax is at 15 percent, that we continue that. And that will actually help people to decide to invest in businesses, to decide to put their money into play, to create jobs, et cetera.

But this whole idea that somehow, they ran on bringing down the debt -

the way you pay down the debt is you have to have money to do that. You have to have a revenue source to pay down the debt.

SMERCONISH: Congresswoman, are you prepared...

SANCHEZ: And to do that...

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SMERCONISH: Congresswoman Sanchez, are you open to compromise for the wealthiest of Americans?

SANCHEZ: Well, I believe I just told you that I am for a 15 percent capital gains tax to continue. So that would be part of it. And why? Because I understand...

SMERCONISH: But how about on the 2 percent? How about on those 2 percent over $250,000?

SANCHEZ: Well, a lot of that capital gains tax is in people"s hands, to move it, to be able to move it into places. So that will occur for them. They will not pay as much tax. But to say that you"re just going to give it on the regular income earned by them, I think that would be wrong because we"re talking about $700 billion.

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CULBERSON: Well, the category that President Obama and the Democrats keep referring to are small business owners, primarily, the people who create jobs in this country. But secondly, Michael, I think it"s vital to point out--my colleague just said that that $700 billion we"re talking about taking away from the government. No, no, no. That"s $700 billion in tax increases that will happen January 1st unless this Congress votes to prevent it. That"s $700 billion additional that Americans will not have to spend or invest or save.

So it"s vital that we--and if you want to look for $700 billion--conservatives look at this as--if you want to save the government money, you cut spending.

SANCHEZ: Exactly!

CULBERSON: We need to cut spending, and I can identify...

SANCHEZ: Exactly!

CULBERSON: Loretta, I can identify $700 billion for you -- $600 billion...

SANCHEZ: And I can tell you...

CULBERSON: ... right out of the gate.

SANCHEZ: And I can tell you, at $8 billion a month, let"s get out of Iraq and Afghanistan. At $8 billion a month, let"s get out of Iraq and Afghanistan! I want to hear those words out of your mouth because that"s what we"re talking about here.

CULBERSON: Loretta, I"m committed to balancing this budget, getting us back on track towards a balanced budget. Cutting taxes and cutting spending is the best way to grow this economy and allow individual Americans to keep and save--and spend more of their own money. We need to cut spending first...

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SANCHEZ: First of all, you know, $700 billion--we have to find those cuts. Like I said, $8 billion of that--a majority of Americans want to get out of Iraq and Afghanistan. That would save us $8 billion a month. Over a year, we could pay for what we"re talking about here.

But no, my colleague wants it both ways. He wants to spend--oh, he wants to spend on defense! He wants to spend on Afghanistan! He wants to put money in pockets of people who are halfway around the world! And he wants to cut services to the poor here. He wants to cut services to people that need pre-school. He wants to cut services to people who have cancer and have no way to get well. So he wants to have it both ways.

CULBERSON: Loretta, I never said any...

SANCHEZ: He wants to give the rich all kinds of money, but he--if he doesn"t want to cut in all places--no, there"s just particular places. This is what America has to understand!

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SANCHEZ: This economy--this economy became--happened because of George Bush and a Congress dominated by the Republicans in the early portion, the first six years of his administration. You, the Republicans, were the ones that got us into this deficit and this debt position. You were! And you were also the ones that promised everybody a tax cut. So what did you do? You didn"t make it permanent because that would cost too much money. No, no! You promised everybody...

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SANCHEZ: It was the Republican-controlled Congress and George Bush in the White House that put this debt into place. And now we, the Democrats, have been working to try to get this debt down in an economy that they wrecked because I"ll remind you that before George Bush came in, we were running surpluses when he came in, and Clinton--under President Clinton, we had eight years of the best...

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