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GREGORY: Congressman Van Hollen, here's the reality. You've got Speaker Boehner saying this morning to Fox, we are nowhere, that this was an unserious proposal. Is it just political theater like the treasury secretary says?
REP. CHRIS VAN HOLLEN (D-MD; Ranking Member, Budget Committee): Well, what's happened now is that the president has put forward a plan. It's transparent. It's on the internet. Speaker Boehner needs to come forward and put his counter plan on the table right now. That's what has to happen. So when Speaker Boehner says we're at a stalemate, it's because he refuses to put forward other options. Let's be really clear on what the president has said. He wants to extend tax relief for hundred percent of American families and small businesses on their first 250 thousand dollars of income.
MR. NORQUIST: Two hundred
REP. HOLLEN: And what Republicans are saying it is, nobody gets that tax relief unless folks over 250 thousand get the extra four cents on the dollar that they were getting compared to the Clinton tax rates. And I just don't believe that the American people are going to accept the Republican position when we need to extend middle class tax cuts and get serious about our long-term deficit reduction.
GREGORY: All right. We're going to continue the debate. Maria, the gamesmanship, that's the big piece of this. What's the bottom line? Does the president have a chance to prevail with how he's going about this at the moment?
MS. MARIA BARTIROMO (Host, CNBC's "Closing Bell"): At this point, it looks like both sides are digging in. Based on that interview, it looks like the president is digging in and that's unfortunate, because it doesn't seem like we are looking at compromise right now. As far as the economy is concerned, we are going to see a hit to the economy if in fact both sides continue to dig in. And the markets right now are expecting a deal. The markets have been trading fine. If we don't get a deal, we're going to see a sizeable decline in stocks. We are going to get a big disappointment.
GREGORY: And Jim, let's just remind people what we're talking about. We're talking about going over the fiscal cliff, what actually happens? The Bush tax rates expire January 1, so taxes automatically go up to those Clinton era levels. Emergency unemployment benefits end. The 2011 payroll tax holiday expires. The alternative minimum tax kicks in. And then you've got a trillion dollars in automatic spending cuts, half of which is in defense. How is the president doing in his pitch so far, both in his first offer and how he's going to the public to sell this?
MR. JIM CRAMER (Host, CNBC's "Mad Money"): I think he's doing pretty well. See, I think he's calling for compromise. Compromise means no firings of any great magnitude starting January 8th. A big January 8, because that's when the first companies report. There will be a foot race to fire. Who can fire the most? Who saw the recession coming? And I think that compromise, which I believe the president is actually offering, avoids those firings, avoids the big spending problems that you're going to see. There's no Valentine's Day. There's no Easter. There's no big spending days coming if you go through and don't compromise.
GREGORY: So here's-- here's what I think is going on in part, Grover. The president is being as aggressive as he is with this initial proposal, putting Boehner in a position to fight him hard, so if Boehner can win some concessions, that he can look better. That he can say to his caucus, look, we fought the good fight here. I've dialed them back from where they were significantly. We got to take this tough medicine.
MR. NORQUIST: It might work, except you-- you left a couple of things off. There's a trillion dollars of Obamacare taxes hitting in the next several years, many of them-- five major taxes. If you have a flexible savings account on January 1st-- this isn't the fiscal cliff. This is what Obama has already baked into the cake. Your flexible savings account is going to be trashed by taxes. The special needs. Millions of special needs families are going to find their taxes go up. If you're really sick, you can't deduct as much of your health care costs as you used to. These are all the ways that Obama's raising taxes, a trillion dollars, 1.1 trillion over the next decade. Five major taxes. His new taxes are not off the table. They hit directly into the middle class. They make-- the medical devices. When you go to the hospital, medical devices like riding in a wheelchair will get more expensive because of this tax. I mean, these-- these taxes are damaging.
GREGORY: All right.
MR. NORQUIST: And he wants to make them permanent.
REP. HOLLEN: I-- I think Grover knows that the-- the major source of additional taxes as part of the Affordable Care Act was asking higher income individuals over two hundred fifty thousand to pay higher capital gains, about 3.7 percent, and more on their-- on their Medicare contribution. That was the bulk of the taxes. So, to suggest that this is a big tax increase on middle income Americans is just not right. The president's expose-- proposing that we extend tax relief for the middle income Americans. That's what we've got to do.
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REP. HOLLEN: Well, we haven't talked about one of the big piece of the fiscal cliff, which actually has a way bigger impact on the economy than-- than tax breaks for the folks at the very top, and that's the payroll tax extension for 160 million Americans. The nonpartisan congressional budget office says that gives you the most bang for your-- your buck economically speaking. I believe we have to either extend that for a year or come up with some alternative way of doing that. Let me just say a quick word about Medicare reform. There's a-- there's a difference in outlook. We believe we have to find savings in Medicare. The president did, 760 billion, and we can build on that model by trying to modernize the system, reduce costs over all in the system, not simply transfer rising health care costs onto the backs of seniors on Medicare, 22 thousand dollar median income. That's what their voucher plan did. We believe we can find savings by changing the way we reimburse doctors and hospitals. Not by across the board cuts, but by focusing on the value of care, the quality of care, not the volume of care and the quantity of care.
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