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CNN "CNN Newsroom" - Transcript


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BALDWIN: So let me just pose this one to you. You just heard Harry Reid.

Would you agree with Harry Reid the plan offered yesterday by that house speaker is, quote/unquote, "a serious plan?"

WELCH: Well, you know, I don't know the details of it. It is $800 billion supposedly in revenues and it's a lot of Medicare cuts, but they're not specified.

So, the details, obviously, are really, really essential, but, you know, the speaker, I think, does in fact want to reach an agreement.

Objectively he's in a very difficult position. He knows revenues have to go up, but the people he represents in the Republican conference ran for election on the promise of lowering taxes, lowering revenues, not increasing them.

BALDWIN: But let me jump in on that point.

Forgive me, congressman, but here is, at least, what some are calling a compromise from some of these Republicans because this is the Boehner plan and it does go counter to the Republicans, you know, long-held position of not raising revenues through the tax system.

Why is that not a compromise?

WELCH: No, it is.

BALDWIN: You do agree?

WELCH: I do agree with that. And I think that my view of the speaker is being -- he wants to get to yes on this if he possibly can.

What I'm saying is that he has got a huge challenge, much more difficult on his side than on our side because his folks ran to lower taxes, not raise them, and he's going to have to persuade them to raise taxes and that's contrary to what they campaigned on.

Secondly, in order for him to be able to do that, he's going to be pushing for Medicare cuts that will be unacceptable to the president.

And then, third, he's indicated that he will not have the debt ceiling be part of these discussions so that he can use that as leverage to get more cuts down the road.

So, these are the practical challenges that he and the president face in these negotiations and it makes me think that the odds are probably better than 50/50 that what will happen is that we'll postpone action on taxes until the first week of January, when, in fact, there will be a Senate bill on the floor and we can vote to provide tax cuts for 98 percent of the people.

BALDWIN: Is that then the reason? I want to ask you about it. It would be cuts at that point and then, of course, not raising the taxes, but cuts after January 1st.

But, you know, you've said, you made news saying that perhaps that the country needs to go over this fiscal cliff. Why do you say that?

WELCH: Well, it is not -- the preferred action would be for us to get together and reach a deal before January 1st, but I don't think it is going to really be possible, particularly on the Republican side, for the reasons I just mentioned.

Also, I think that it's much more important to get a good durable deal and, if that's on January 5th or January 15th as opposed to December 15th, that's better than a bad deal before the end of the year.

So, time will tell, but I think the cliff is not a cliff. It's a slope.

The most important thing right now, from the president's perspective, is that we get a significant contribution of revenues towards a balanced budget deal. The leverage favors him right now and you're seeing that in these negotiations, but whether they'll be able to close the deal with speaker -- Senator McConnell and Senator Reid and the president remains to be seen.

BALDWIN: But you talk about leverage and I just have to ask. You have said, Congressman, that Democrats have blinked in past negotiations. Do you think the president is a good negotiator?

WELCH: He's doing great on this. You know, everything he's saying and doing is consistent with what he said in the campaign.

You know, what you have now is the president ran on a very explicit platform of having taxes go up on the top 2 percent, above $250,000. He won the election.

Also, the Romney supporters, by better than 50 percent margin and exit polls, supported that policy, so the president knows he's got the American people behind him.

And this is not a debt ceiling situation where we're literally going to default on our debt. We've got this fiscal cliff date, but it is really more of a slope.

So, I am confident that the president is hanging in there because it makes sense for him to do and I think he's really convinced the American people to support him and it is good for the economy.

BALDWIN: OK. Congressman Peter Welch, thank you so much for joining me from the Hill. We'll see, 28 days to go, whether in fact we go over the slope or not.


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