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FOX "Fox News Sunday with Chris Wallace" Transcript: Fiscal Cliff


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JOHN ROBERTS, HOST: I'm John Roberts, in for Chris Wallace.

If you think the fight over the "fiscal cliff" was tough, stay tuned for a bruising round two.


ROBERTS (voice-over): From automatic spending cuts to raising the debt ceiling, to paying for Uncle Sam to open, the battle lines are drawn. How will that fight play out?

We'll ask two key congressmen, Democrat Chris Van Hollen and Republican Jim Jordan.

Then, a new Republican voice challenges the Grand Old Party to find a different vision. He's the new man in town with a message that champions opportunities. Will the party establishment listen? We'll get a fresh perspective from Senator Ted Cruz.

And from spending to immigration and to the gun control debate, will the new Congress be able to get past the toxic partisanship to get things done for voters.

We'll ask our Sunday panel to read the political tea leaves.

All right now on "Fox News Sunday."


ROBERTS: And hello again from Fox News in Washington. After side stepping the "fiscal cliff", the country now faces an economic triple threat of even greater scale. At stake government, automatic spending cuts, government funding and the full faith and credit of the United States. With bruises still fresh from the last dust up, early jabs are already flying.

Joining me now to talk about this are two influential members of Congress -- Democrat Chris Van Hollen and Republican Jim Jordan.

Welcome to you both.

We were talking before the program started. Mitch McConnell, the Senate minority leader, said just a few minutes ago on another Sunday morning program, the revenue piece of this is done. No more taxes. The president wants more taxes. He wants to close some loopholes and limit deductions.

Chris Van Hollen, how is this fight going to unfold as we go forward?

VAN HOLLEN: Well, if Mitch McConnell is going to draw the line in the sand, it's going to be a recipe for more gridlock. We have to take a balanced approach to long-term deficit reduction -- meaning additional cuts.

And remember, last year, the president signed in law more than $1.5 trillion in cuts, 100 percent cuts. As a result of avoiding the "fiscal cliff", we raised $730 billion in revenue from very high income individuals.

As we go forward, we need to adopt the same frame work as the bipartisan Simpson-Bowles commission. Meaning, a combination of cuts and revenue.

You remember during the campaign when, you know, you saw the Republican candidate and Paul Ryan talking about all those the breaks in the loopholes in the tax code that disproportionately benefit very wealthy people, guess what? They are still there. So, through tax reform, we can raise more revenue matched by additional cuts to address the sequester issue and long-term deficit.

ROBERTS: Congressman Jordan, do you buy the argument?

JORDAN: No, because the cuts that Chris referenced are cuts that have yet to happen, they are scheduled for the out-years. And as Congress typically does, they say, oh, give us the revenue now and we promise -- we promise we'll get to cuts.

That's exactly what this "fiscal cliff" deal was. They got revenue now, no cuts in there. So, the same old, same old.

And I tell folks back at home all the time, remember, this is promises from politicians. It's not a promise from your parents, from your pastor or from your priest. This is politician saying, oh, give us some revenue, we promise we'll get to this balanced approach later. We promise we'll cut spending later.

Mitch McConnell is exactly right. If they're going to go after -- they just got revenue. We've got to cut spending. We've got $16 trillion debt. The credit card is maxed out. We've got to cut spending.

So, he is exactly right. Let's focus on the problem, which is this government can't control spending. We've got to get control of it so we can have a private future from here --

ROBERTS: Congressman Van Hollen, you and I spoke at length during the campaign when you were the president's point person on the budget, and you repeatedly stated and you said it again this morning, Simpson-Bowles, Simpson-Bowles, that is the model. You've got to have revenue and you've got to have spending cut.

VAN HOLLEN: That's right.

ROBERTS: Well, we got revenue. We've got a teeny-tiny a little spending cut along with the "fiscal cliff" deal. Where are the spending cuts?

VAN HOLLEN: Actually, the cuts and revenue that we've taken so far are still far short in both categories from Simpson-Bowles.

ROBERTS: Yes, but the spending cuts are way short.

VAN HOLLEN: Actually, that's not the case.

ROBERTS: You are looking at $4 trillion hole -- in the debt for the next 10 years.

VAN HOLLEN: Look, Simpson Bowles I said as a starting point. We were going to allow the upper income taxes to go back to Clinton era levels. We'd just barely gotten to that starting point. In fact, we're a little short, with the $640 billion. On top of that, they raised over a trillion dollars in revenue combined with cuts.

So, yes, we have to do more cuts. And the president has been very clear. He put on the table $1.2 trillion in cuts proposal, combined with $1.2 trillion revenue.

The only reason we weren't be able to go forward with that was that you had House Republicans deciding not to follow Speaker Boehner in the balanced approach. And, frankly, that is the going forward. The danger going forward is that the House Republican caucus will continue to refuse to take a balanced approach and that's going to deadlock the entire process.

ROBERTS: Another danger going forward, according to many people, is how far you push the spending debate into the debt ceiling limit, whether you're going to pass it. Here's what the president said about that on Tuesday. Let's listen.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Congress refuses to give the United States government the ability to pay the bills on time, the consequences for the entire global economy would be catastrophic, far worse than the impact of a "fiscal cliff."


ROBERTS: Congressman Jordan, back in 2012 when he had this debate, you advocated going past the debt ceiling deadline, saying it wouldn't be such a bad thing. Would you advocate that again this time?

JORDAN: I advocate a solution, not a deal. What we always get in Washington is a deal. What Americans wanted is a solution. It's no wonder the president doesn't want to debate this because if I had been the president of the United States and presided over the four highest annual deficits in American history, a $5 trillion increase in the national debt, I probably wouldn't want to talk about the issue either.

But let's look at the facts. Since the debt ceiling agreement passed 16 months ago, the day after it passed, we got a downgrade from S&P first time in American history. A week after it passed, the market had dropped 1,300 points.

The super committee which Chris voted for and so many members voted for fell apart like we all thought it would. The scheduled cuts, the only scheduled cuts that were supposed to take place, we just suspended them five days ago in the "fiscal cliff" deal. We have yet to cut one dime from the last debt ceiling agreement, and now, here, it is time to do it again.

So, this is -- we've got to stop the madness. I mean, this is the 18-year-old kid on a credit card and he maxed out the credit card. Instead of cutting it up and putting them on a budget, Barack Obama says give us a new credit card, and, oh, by the way, Harry Reid, you don't have to pass a budget in three years. I mean, this is crazy.

ROBERTS: But would you support this year letting the debt ceiling deadline lapse?

JORDAN: What I won't support is not dealing with the program. Americans sent us here to deal with the problem. If you want to keep giving government more free -- this whole, the way this town works, this "fiscal cliff" deal, the only winners in this "fiscal cliff" deal were Washington. They've got more money. The folks I represent in the fourth district of Ohio, they lost revenue, small business owners had money taken from them.

Washington always wins. The politicians, the consultants, the folks here always win. In fact, 10 of -- seven of the 10 wealthiest counties are in the D.C. area. In fact, Mr. Van Hollen represents one of those areas. This area always wins. It's regular Americans who lose and it's about time we said stop this madness, cut up the credit card, we want a solution. Not another Washington deal which helps D.C.

VAN HOLLEN: Look, a couple of points, John. First of all, the sequester was not kicked down the road. It was replaced for two months with the combination of --

JORDAN: Replaced and postponed.


JORDAN: Postponed. Which is why Washington is great at dealing for it.

VAN HOLLEN: Jim, you've got to get your facts straight.

JORDAN: I have them straight.

VAN HOLLEN: We have $24 billion in deficit reduction. Half of it was cuts, half of it revenue, not nearly enough. But the idea is the model going forward is to continue to do balanced approach of cuts and revenue.

Number two, what America go was we didn't go over the "fiscal cliff." I mean, I know you voted not to go over the "fiscal cliff" --

JORDAN: I voted not to raise taxes on anyone.

VAN HOLLEN: Yes, because you didn't want to ask people making a million dollars a year --

JORDAN: You could have stopped every single person from having their tax rates go up --

VAN HOLLEN: Yes, Jim, Jim, Jim --

JORDAN: The president could have stopped it. What you guys decided is we want additional revenue. Washington won again.

VAN HOLLEN: No, what we said was that we need to take a balanced approach high income earners need to contribute a little more to reducing our deficit, because otherwise, folks on Medicaid and Medicare who earn $22,000 a year, median income, would get walloped.

I know you want to wallop them to protect the millionaires.


VAN HOLLEN: But going forward --

JORDAN: I want to fix the problem.

VAN HOLLEN: -- going forward on the debt ceiling, Newt Gingrich had it right on Friday when he said it was a dead loser for the Republicans to threaten to tank the United States economy by refusing to pay our own bills. This is not future payments is it paying bills that are due and owing. This is like we get up one morning say we're not going to pay our mortgage.

That is reckless and irresponsible. And the reason it's not credible, John, it's kind of the mad man theory to negotiations, right? "Give us what we want," is what Republicans are going to say, "or we're going to tank the United States economy."

JORDAN: No, no.

VAN HOLLEN: That's reckless and it's irresponsible and we won't do it.

JORDAN: What's reckless is not addressing the problem. And that's what we want to do.

ROBERTS: Let's look at the way that this may unfold. The president says if this is tide to the debt ceiling, this is not a discussion that I'm going to have. But Speaker Boehner said it's absolutely a discussion to go ahead. In fact, when we talk about raising the debt ceiling, we want an equal offset, equal or greater offset in taxes and other cuts -- and is equal or greater offset rather in spending and other cuts.

Mitch McConnell said the other day, Mr. President, this is an argument that you're going to have. Let's listen to what he said.


SEN. MITCH MCCONNELL, R - KY, HOUSE MINORITY LEADER: Now that he has the tax rates he wants, his calls for balance means he needs to join us in the effort to achieve meaningful spending reform. The president may not want to have this debate, but it's one he's going to have because the country needs it.


ROBERTS: So, does the country need this debate? I mean, two years ago, we went from $14 trillion to $16 trillion debt ceiling. And everybody said how horrible that was. Now, we're talking about going from $16 trillion to $18 trillion, and that only takes us through 2014, in which point we're going to be talking about going to $20 trillion.

So, a lot of people are rightly asking, I think, when does this stop?

JORDAN: Yes, when does the madness stop? The country needs a debate. We need to solve the problem.

We need to -- I think what you'll see from the House side is we'll put forward a plan that says -- OK, Mr. President, if you want to increase the borrowing authority of this country, here is a menu of options where you can reduce spending of equal or greater amount. You tell us, Mr. President, you've been afraid to put together a budget. Harry Reid hasn't passed a budget in three years.

JORDAN: You tell us for a change where you think it's appropriate that we reduce spending because that's what has to happen if we're going to solve this problem. That's the adult, responsible, disciplined thing to do.

And frankly, it's what the American people are looking for us to do. Let's do it for a change. Instead of just saying, oh, giving us more revenue, we promise, we'll cut spending later.

Give us more borrowing authority. Let us run up the credit card more, we promise we'll cut -- this is the old -- this is Lucy, Charlie Brown and the football. And the American people are saying we are tired of it.

We're not going to try to kick it this time because you guys, you always screw it up. Let's do the right thing, let's actually solve this problem. Put this country on a path to getting to balance so that we can have a growing economy and things we want to see happen.

ROBERTS: Do the president's feet need to be held on the fire here on spending?

VAN HOLLEN: Look, first of all, the president has already put on the table a plan for another $1.2 trillion in spending cuts. They walked away from that proposal, why? Because Jim and his colleagues didn't want to ask people who earned over $1 million to pay a little bit more.

So, the president -- and the president's budget contained spending cuts, the difference --


JORDAN: Tell me if tax increase has ever created a single job, Chris. Does the tax increase ever create one single job? Tax increases on job creators, does that create jobs?

VAN HOLLEN: Jim, if we don't get our deficit under control, it's going to hurt our long-term economic growth.

JORDAN: We have to grow the economy. You have to cut spending and grow the economy --


VAN HOLLEN: Look, Jim, you voted to go over the "fiscal cliff." That would have hurt the economy, all right?

ROBERTS: We'll see if there's one point that the two of you can agree on here. Do we need to do something to get our deficits and debt under control?

VAN HOLLEN: Yes, of course, we do, and we need to take a balanced --

JORDAN: Yes. We need to cut spending.

VAN HOLLEN: No -- yes. You need to cut spending. You also need to take the balanced approach. We started talking about Simpson. You support the Simpson-Bowles framework, Jim. That's a bipartisan framework. You support that framework.

JORDAN: Chris, you just got -- you just got -- you just got tax revenue -- I support the spending reduction part of that because you just got the tax revenue you wanted, which is going to hurt the economic growth.


VAN HOLLEN: Look, we already did $1.5 trillion in cuts last year. We need to do more --


VAN HOLLEN: No, we cap spending going forward. We cap spending.

JORDAN: Going forward, nothing has happened yet.

VAN HOLLEN: So, you heard his answer. He wants to take half of the Simpson-Bowles recommendations. He wants to take just the cuts. Every bipartisan agreement --

ROBERTS: You already have the spending part of that, though.


ROBERTS: I said, you already got part of the tax revenue.

VAN HOLLEN: And we got part of the spending. We got $1.5 trillion spending cuts last year.

JORDAN: You got the tax, you didn't get spending cuts.

VAN HOLLEN: That's not true.


ROBERTS: Well, if this discussion this morning is any indication of how the next eight weeks are going to go, it's going to be interesting time.

Let me shift --

VAN HOLLEN: It's becoming a fact-free zone, that's the problem.

ROBERTS: Let me shift gears for a second here. Gun control, that's going to be a big issue on the president agenda in the next year. Ten bills were introduced in the House on Thursday on gun control. One of the big ones introduced by Carolyn McCarthy of New York. Everyone remembers her husband was killed in a Long Island railroad shooting, limiting the capacity of magazines to 10 rounds.

But when you look at the language of all of those bills, and this all came out in the wake of the Newtown shooting, would anything in any one of those have prevented that shooting?

VAN HOLLEN: Well, my view is we need to take a comprehensive approach to gun safety issues. That means looking at school security, means looking at mental health situation, it does mean looking at sensible gun control issues.

ROBERTS: Well, why isn't Congress talking about that? Why isn't --


VAN HOLLEN: Actually, having universal --

ROBERTS: First 10 bills introduced were all about guns.

VAN HOLLEN: Having a universal background checks, so people who have criminal records and who have been found --

ROBERTS: How would that have stopped Adam Lanza from stealing his mother's guns?

VAN HOLLEN: Look, the argument against gun safety provision is always because it doesn't solve everything, we shouldn't do anything. And I don't subscribe to that. I believe we need a comprehensive approach. We need to look at all of the different elements here.

And just because a particular effort won't prevent something in one particular incident doesn't mean you shouldn't do anything that might help in other incidents. Right now, right now, you can be on the terrorist watch list, you can be prevented from boarding an airplane, but you can go down the street and buy a semiautomatic assault weapon. It doesn't make sense.

ROBERTS: Adam Lanza wasn't on anyone's radar screen except for her parents and his doctor's radar screen. So, how does gun control solve that problem?

JORDAN: I don't think it does. I mean, look, every American's heart was broken when they saw what happened there in Connecticut. But more restrictions on law-abiding citizens is not going to prevent this kind of tragedies.

We got to remember, the Second Amendment is about freedom. And that's what we've got to focus on as we move forward. If there's ways outside of this that we can help address the situation, fine. But we've got to remember it's about freedom.

And, frankly, you've got to remember that bad guys aren't stupid, they're just bad. They're going to figure out a way, if they're intent on doing something bad, they're going to figure out a way to get to fire them and use it.

ROBERTS: I don't know if you saw what Charles Krauthammer in what I thought was a very well-thought out opinion piece. He said it's multi-factorial. It's guns, it's mental health, it's society.

You know, he was a psychiatrist who back when he was practicing had a far easier time of committing somebody who thought was potentially violent than you can now. Where are the Republicans on committing people who are mentally ill?

JORDAN: Well, I mean, certainly, we're going to look at that. And you don't want someone with the mental illness getting a firearm. But what I don't want to do is restrict law-abiding citizens from their Second Amendment rights which are focused on freedom.

I point out all the time. Remember, bad guys aren't stupid, they're just bad.

ROBERTS: Great --

VAN HOLLEN: This isn't about restricting people. This is about common sense provision. For example, we have a background check. But right now, there are big loopholes in the background check.

You want to get rid of the background checks, the criminal background checks?


JORDAN: -- concealed carry permit which required a background check, which required to take a training course before a law-abiding citizen could get a firearm.

VAN HOLLEN: So, why not make that universal? Let's join each other then in making sure we get rid of the loophole, make sure that everybody who purchases a gun has to have universal background check. Would you support that?

JORDAN: I support it for concealed carry.

VAN HOLLEN: No, I'm talking about before you can go buy a semiautomatic weapon. Why wouldn't we have a background check?

JORDAN: You've got to remember what the Second Amendment is about, it's about freedom. It's like First Amendment is about freedom. It's like Fourth Amendment is about freedom.

VAN HOLLEN: If you've broken the law and violent act, you should be able to go out and buy semiautomatic assault weapon?

JORDAN: You shouldn't be able to get a concealed carry permit, that's for --


ROBERTS: Gentlemen, I've got to call time on this. But as I say, if this discussion is any indication of what lies ahead --

VAN HOLLEN: Oh, goodness. It's going to be a problem.

ROBERTS: We'll have an interesting time. All right.

JORDAN: Thank you, John.

ROBERTS: And we'll leave it there. Thanks so much for joining us this morning. We appreciate it.

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