CBS "Face the Nation with Bob Schieffer" Transcript: Budget Cuts

Interview

SCHIEFFER: Good morning again. Well, we sat down with California Congresswoman Nancy Pelosi Friday, and it didn't take her long to make some news. We started with that quote on "no more taxes" from Senate Republican Leader Mitch McConnell.

SCHIEFFER: Do you then agree with the Republican leader in the Senate, Mr. McConnell, who says we're done now with the taxing side of it; now we have to concentrate on spending? Is that done now?

PELOSI: No.

SCHIEFFER: Is the revenue side of it taken care of yet?

PELOSI: No, no, it is not. I mean, the president had said originally he wanted $1.6 trillion in revenue. He took it down to $1.2 as a compromise. In this legislation we had $620 billion, very significant, high-end tax -- changing the high-end tax rate to 39.6 percent. But that is not enough on the revenue side. We've already agreed to $1 trillion in spending cuts, over $1 trillion in spending cuts.

SCHIEFFER: So what are you talking about there? Are you talking about more taxes?

PELOSI: We're talking about looking at the tax code, putting everything on the table from the standpoint of closing loopholes -- and we know that we can do that -- special subsidies for big oil, for example, $38 billion right there. But again, not to take things in isolation, just to say, OK, well, how much more revenue can we get as we go forward?

SCHIEFFER: Does your idea of tax reform mean eliminating more deductions now?

PELOSI: My idea of tax reform is to have a comprehensive view. We've talked about tax simplification and fairness as something that we should be engaged in all long, long before these fights came along. And now we have a chance to do that with I'd say a heightened awareness by the public on why we need to do certain things. So let's, you know, put on the table what it is that we can, in order to increase revenue. We've changed the rate, the high-end tax rate, 39.6 percent, a very important step. And again, there's much more that we can do by just subjecting it to the scrutiny of what is bringing in revenue, what is creating growth. And we don't want to hurt that if there's some tax provisions that create growth. We want to support that. So, again, taking it one step at a time but not in isolation say "Would do you this? Would do you that?" Well, no, let's look at the...

SCHIEFFER: Well, people who are listening to you this morning are going to say she's talking about more taxes; she's talking about bringing in more, in one way or another, by increasing taxes.

PELOSI: One thing I'm not talking about is bringing in more at the expense of the middle class -- at the expense of the middle class. That is not something -- and that was what we were fighting all along in this because, to the extent that you diminished the tax cut, the tax change at the high end, you would have to claw down into the middle class to get more revenue.

SCHIEFFER: Are you then saying to the upper classes, get ready; you're going to have to pay some more; this is not the end of it?

PELOSI: Well, I'm saying that's not off the table.

SCHIEFFER: That's not off the table?

PELOSI: That's not off the table. But not in terms of tax rates but in terms of other considerations.

SCHIEFFER: You're talking about deductions and other things.

PELOSI: And the rest

SCHIEFFER: What would be some of the things that you think -- on the upper-income people, what kind of deductions are you talking about?

PELOSI: As I said, I'm not going into particulars.

SCHIEFFER: You're not going into...

PELOSI: Put it all -- put it all on the table and see what is working. You know, I'm fairly -- frankly, I'm fairly agnostic about what it could be, now that we have injected some fairness into the process. But, you know, if it works for us, if it grows our economy, if it's something that justifies its existence, it should be there. If it's something -- I mean, we've talked about carried interest. How do we do that correctly? We've talked about subsidies for big oil. What is the justification to give an incentive to drill when oil companies are making $1 trillion over that same period of time? So again, it's justify your existence if you are a special tax break, and again, all of it not to reach down to the middle class.

SCHIEFFER: Let's talk about cutting spending. Are Democrats ready to make significant reforms in entitlements?

PELOSI: We already have.

SCHIEFFER: Well, I know that.

PELOSI: Good.

SCHIEFFER: And that's what every Democrat that I ask this question always says that.

PELOSI: We already have.

SCHIEFFER: But so that's it?

PELOSI: No, that isn't it, but I say it's a sign of our intentions. We already have an Affordable Care Act. We saved -- found savings of over $700 billion by slowing the increase and the rate of reimbursement to certain providers. We used that $700 billion to increase benefits to seniors and the Republicans used it -- took the same money and used it for a tax cut at the high end and said that we were cutting benefits, which we weren't. But again, as a first step, that was really important. And secondly, I've said to my Republican colleagues over and over, we want to find savings so that we can prolong Social Security, so we can prolong Medicare, but if you're there to just destroy them, then that's not saving.

SCHIEFFER: Well, let me just ask you some specifics and you just answer yes or no. Would you support raising the eligibility age for Medicare from 65 to 67?

PELOSI: No.

SCHIEFFER: No. What about means testing?

PELOSI: Do you want to know why?

SCHIEFFER: Well, let me just...

(LAUGHTER)

... we got your answer, no.

PELOSI: OK.

(LAUGHTER)

SCHIEFFER: What about means testing on Medicare benefits?

PELOSI: We already do have some means testing in certain aspects of Medicare. And while we would want to do it in a way that, again, does not hurt the middle class, there are certain piece of it that are already...

SCHIEFFER: But there might be some way -- some things in there that you could -- you could at least consider?

PELOSI: I think you and I could probably afford to pay a little more for a deductible or a co-pay or something like that.

SCHIEFFER: OK. What about any chance of changing the formula for Social Security benefits?

PELOSI: I don't know what you mean.

SCHIEFFER: Well, I mean can you see a way of-- in Social Security, to change the way the benefits are paid? Should there be some differences, some changes in that?

PELOSI: Well, I think, as far as Social Security is concerned, this is an insurance initiative that was very masterfully put together so that it's not a poor people's program. It is an insurance program that people pay in...

(CROSSTALK)

PELOSI: ... we take out whatever -- now, you and I will pay more taxes on it because -- assuming that we make a certain amount of money -- will pay more taxes on it and that's where some of the evening out comes out. But I really do not think that we should do anything to Social Security that reduces benefits to the beneficiaries. I do think there are ways for us to strengthen Medicare and Social Security, but I think they should be on their own table, that if you find savings in any initiative on Social Security, it should be poured back into Social Security to prolong its life. It should not be a cash cow to give tax breaks some place in the tax code and say we have to cover it by changing Social Security.

SCHIEFFER: Let me ask you this. Speaker Boehner says that we need to match every dollar that goes to raising the debt ceiling, and that's one of the hardest votes that's going to be coming soon. We need to match every dollar that goes to raising the debt ceiling with at least one dollar of spending cuts. Could you support cuts that high?

PELOSI: No. Well, I don't think these two things should be related. I think that we should subject every dollar we spend, every taxpayer dollar, whether it's defense or domestic, to the harshest scrutiny. Is the taxpayer getting his or her dollar's worth for -- for that spending? But, on the other hand, that is a judgment that we have to make as we make cuts to reduce spending but having nothing to do with whether the full faith and credit of the United States of America should be placed in jeopardy. The mere suggestion of it last summer resulted in our downgrading of our credit rating, just the suggestion of it. It didn't even happen, and we were downgraded. So I think that this is a really fundamental discussion, and while -- if you say to somebody, "should we cut spending in order to reduce -- to raise the debt ceiling" it sounds almost logical, but the two are totally separate. The debt ceiling is about spending that has already occurred. You're going to say I'm not going to pay my bills unless you stop buying stuff? Well, then stop buying stuff so you don't have future bills. But right now we to pay the bills that have been incurred. And if you want to say cut spending for what we do next, fine. But don't die of tie it to the debt ceiling.

SCHIEFFER: Well, let me tell you, here are the big dates that are coming. End of February, congress has to raise the debt ceiling to keep the country from going into default, as you say. On March 1, those draconian cuts in social programs and defense program goes into effect, unless you do something to put it off.

PELOSI: Unless we do something, yeah.

SCHIEFFER: And then on March 27, the government basically runs out of money. Why can't the congress solve these problems before we get up to those deadlines? Why do we go through this kind of exercise that embarrasses everyone?

PELOSI: Well, you ask the Republicans because we always passed the debt ceiling when President Bush was president, as he was incurring these massive debts and the Republicans weren't saying boo at the time. There should be -- this is a conversation where there should be no doubt. In fact, if I were president, I would use the 14th Amendment, which says that the United States will always be paying...

SCHIEFFER: You would just go ahead and do it, you wouldn't wait for congress.

PELOSI: I would just go do it, right. But the congress has incurred much of this debt. So what are we saying, we incurred it, but we're not going to pay it? If you want to say we're not going to it so much in the future, well, that's another thing, but you can't say I'm not paying my past debts.

SCHIEFFER: What has happened to Washington?

PELOSI: I don't know.

SCHIEFFER: It simply did not used to be this way.

PELOSI: Absolutely not, no.

SCHIEFFER: What do you think is wrong here? What happened? And what needs to happen?

PELOSI: Well, I think that sadly, because as you said, it didn't used to be this way. In fact, in recent history, it hasn't been this way. When President Bush was president and I was speaker, we worked cooperatively to do the biggest energy bill in history. We did the TARP, the Republicans walked away from their own president. We did a wonderful stimulus with rebates all the way down to refundability for poor people. We worked together on a number of things. We didn't agree on the wars and we had their differences, but we worked together with the president. When this president came in and we were in the majority, we got things done. When this president was still there, and the Republicans came in, they said the most important thing they could do was to make sure he did not succeed. And that's really unfortunate. But it also, I keep saying to my Republican friends, take back your party. This isn't the Grand Old Party that did so many things for America, that commanded so much respect. We need a strong Republican Party. This is really the over-the-edge crowd. That's the way i see it. It doesn't mean there aren't some in there who still had some respect for the role of -- the public role of clean air, clean water, food safety, public safety, Medicare, Medicaid, Social Security and the rest. But the fact is that it is dominated by an element that are anti-government ideologues, and are committed to not cooperating with this president. And it's hard to understand. I think this new class coming in invigorates, refreshes the congress and says let's just have a fresh -- let's sweep away what happened the last two years. Let's go back to another time where we had respect for each other's opinion and respect for people who sent us here.

SCHIEFFER: Leader Pelosi, Thank you so much.

PELOSI: Thank you.

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