Fox News "Fox News Sunday with Chris Wallace" - Transcript

Interview

BREAK IN TRANSCRIPT

WALLACE: The congressional super committee now has 10 days until November 23rd to come up with a plan to cut the deficit by at least $1.2 trillion over the next decade. Otherwise, there will be automatic cuts, including $600 billion from the Pentagon.

We'll hear from a top Democrat in the committee in a moment. But, first, Republican Senator Pat Toomey of Pennsylvania, who offered a compromise this week.

Senator Toomey, welcome back to "Fox News Sunday."

SEN. PAT TOOMEY, R-PA.: Good morning, Chris. Thanks for having me.

WALLACE: Before we get to your plan, let's take the overview of where do things stand 10 days out? What are -- where are talks now and what do you think of the realistic chances of making a deal by a week from Wednesday?

TOOMEY: Well, let me be very clear. The clock is running out, but it hasn't run out yet. We still have time, but we have no time to waste. I stay here this weekend, as most of my colleagues did, so that we could continue the various discussions that are taking place.

TOOMEY: It's really, really important that we'd be successful and I intend to work hard as I can to try to --

WALLACE: But where would you say the talks are right now?

TOOMEY: You know, it's a difficult point. I think we got a ways to go. But I hope we can close that gap very quickly.

WALLACE: Again, before we get to your plan. What are the stakes if you fail to make a deal. If on November 23rd, the super committee comes up empty and the automatic triggers come in, and we'll talk about that in a moment. What do you think the impact is on the markets, on the economy and on the U.S. credit rating?

TOOMEY: I think that there will be further erosion of what little confidence remains of our federal government. This has been a dysfunction Senate that I've been serving in for the year that I've been in office. And this is an attempt to try to make some important progress. It would only be the first of what needs to be many steps because we've dug a deep hole for ourselves. I think it's really important that we'd be successful.

WALLACE: All right. You offered a plan that breaks with the Republican pledge not to raise any tax revenue. Let's drill down into the plan.

You would cut the deficit $1.2 trillion, which is the mark that is supposed to be met by the super committee with $700 billion in spending cuts and $500 billion in revenue increases. On the revenue side, you get $250 billion by limiting deductions especially for top earners. In exchange, you would lower tax rates, the top rate would go from 35 percent to 28 percent.

Question: why are you breaking with the GOP pledge not to raise taxes in the middle of a bad economy and how many Republicans will go along with you.

TOOMEY: Well, let me -- first of all, let me say, if I were king, this is not the plan I'd put on the table. But if we both went into our respective corners and had no flexibility at all, then we wouldn't get anything accomplish. Number two, the plan that I put on the table is contingent upon pro-growth tax reform.

Every group that's looked to this, all of the bipartisan commissions, gang of six and the others, have acknowledge that if there is more revenue it has to come in the context of pro-growth tax reform, the kind of reform we're talking about absolutely guaranteed to create millions of jobs over time and still more revenue.

And, finally, Chris, the other reason to make a tough decision like this, is in the alternative, we are 13 months away from the biggest tax increase in American history. And that's written into law. That's going to happen.

WALLACE: You're talking about the Bush tax cuts expire.

TOOMEY: That's exactly right.

And so, what we've suggested is, as an alternative to an economy destroying tax increase right around the corner, let's have a reform, let's simplify the code, let's lower rates, let's wipe out some of the loop holes and special interest, favors and deductions. Let's have the economic growth that would come with that.

And as we lower the rates and contract the value of deductions, we'll only generate a little revenue so that we can reduce the deficit.

WALLACE: Now, I don't want to get too far on the weeds, but Democrats immediately rejected your plan because they say that the money that would be lost by lowering those tax rates, basically 20 percent below the Bush tax cuts, would cost over $3 trillion for the economy, and they say the money you're going to will lose that will increase the deficit is more than money you'll get from closing these tax loops. That it's a net loser.

TOOMEY: First of all, that's not true. You could design this in a way -- and as I said, I didn't invent this. We didn't invent this. This is an idea that's been suggested by the Simpson-Bowles commission, by the Rivlin-Domenici.

Now, it's true that they want to raise taxes more. I think that as you reduce the value of these deductions, if you go too far, you try to create too much revenue, you can do economic damage. But you absolutely can do this in a way that will be pro-growth, that will generate more revenue, that would avoid this huge tax increase that's otherwise coming and I think that's a direction we should move in.

WALLACE: The president says if the committee fails and these automatic triggers go into effect, which includes $600 billion cuts for the Pentagon, very controversial. He says, I will veto any measure that would end the triggers. He says we're going to go ahead with those.

You agree with him?

TOOMEY: I don't think that we should eliminate the sequestration of the alternative. First of all, I'm not giving up on getting something done. I really think we still can. And I'm going to do everything I can to achieve that.

But in a very, very unfortunate event that we don't, I think it's very likely that Congress would reconsider the configuration of that sequestration and considers, is this really the best way to do it? I think that would be a lively debate that will occur and the nature of those cuts, which I think the cuts have to occur. They might occur in a different fashion.

WALLACE: Finally, and I just want to bring you back to Penn State, the subject in the first segment because you were a senator from Pennsylvania. At one point, you were urging, along with a number of colleagues, that Joe Paterno be given the congressional medal the Presidential Medal of Freedom. You've now rescinded that support.

Why did you rescind the support and do you think the trustees were right to fire him?

TOOMEY: You know, it absolutely broke my heart to have to rescind that recommendation. But, Chris, it seems to me that there are important and disturbing questions about what coach Paterno knew and when he knew it and what he did with that information.

And given the uncertainty around those issues, I couldn't in good conscience continue to recommend that he'd receive the highest award that a civilian can receive in the United States of America.

WALLACE: And do you -- briefly, do you think that the trustees are right to fire them.

TOOMEY: That's a decision for them to make, but I certainly understand why they came to that decision.

WALLACE: Senator Toomey, thank you so much. Thanks for coming in today. We'll stay on top of this. Thank you.

TOOMEY: Thanks.

BREAK IN TRANSCRIPT

Source