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

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GARRETT: I appreciate it very much. Now we're going to turn to two key members of the Senate Budget Committee, New Hampshire Republican Kelly Ayotte, who is in Manchester, and Virginia Democrat Tim Kaine, who joins us from Richmond. Senator Kaine, I'd like to start with you. Last Friday the White House said it hopes the Senate -- meaning led by the Democratic leadership -- will this week begin debate and have votes on an alternative to these across-the-board spending cuts. As a Democrat on the Budget Committee, Senator, what is your message to the Democratic leadership? How soon do you want that debate to begin and why is it taking so long for it to begin in the first place?

KAINE: Well, we laid a plan on the table about 10 days ago, and we will be voting on it this week, Major. And I completely agree; I think this needs to start in the Senate. And if we can find a balanced package in the Senate that gets some bipartisan support, we can avoid these sequester cuts. I just did a trip around Virginia to armed services installations over the last week in Virginia, 90,000 DOD civilian employees getting furloughed, including nurses at Army hospitals, ship repairers laying 300 of their 450 employees, and wounded warriors, who are scheduled to transition back to civilian life who, in many instances have jobs; they're reservists, so they would go back into working in national security positions at the federal level. And they're facing hiring freezes and furloughs that make them wonder whether they can reenter civilian life. There is no reason that this has to happen. We just need to find a balanced approach, and that's the approach that we will be voting on this week.

GARRETT: But Senator Kaine, to my original question, why is it taking it so long? You know in the Commonwealth of Virginia that these cuts have been in the pipeline; there have been -- there have been warnings about it for a good long time. Many Americans look at this situation and say, why does it always have to wait until the last minute?

KAINE: And, you know, Major, you're right. I'm new here. I've been in the Senate for about six weeks. There's no reason we should be playing this kind of brinksmanship. And, as you know, we have got kind of brinksmanship around sequester and then later brinksmanship around continuing resolution. What we need to do -- and you mentioned Senator Ayotte and I are on the Budget Committee -- we need to return to ordinary budgeting. We're writing a budget in the Senate this year for the first time in normal course of business since 2009. The right way to make decisions about spending, about revenues and even about deficit reduction is as part of a normal, ordinary budget process. Let's get rid of the gimmicks: sequester, continuing resolution; get back to ordinary budgeting, just like what happens in every state capital every year. That's the -- we're moving back to that, and that's going to be the solution to these challenges and doing it in a balanced way.

GARRETT: Senator Ayotte, I want to bring you into the conversation. The Democratic alternative will call for a mix of spending cuts, but also tax increases. Are you prepared to support any tax increases? Will Republicans develop an alternative that has any loophole closings? Or do you think this can and should be done strictly through other alternative spending cuts?

AYOTTE: Major, let me just say I agree with what Tim just said. I serve on the Budget Committee; I have been outraged by the fact that we haven't had a budget for three years because the Senate Democrats haven't wanted to do it. I'm glad to hear Tim say we should do it. We wouldn't be in these positions if we -- these sequester-type situations if we actually prioritized spending. In terms of the Democrats' plan, it seems like the first thing they come up with is we're going to raise taxes after having increased revenue; if you recall, in January, $600 billion over the next 10 years without any spending cuts. I think Republicans should have an alternative in the Senate. I'm working on one to introduce one that will show that we're looking at a little over 2 percent in a $3.5 trillion pot of federal spending in 2013. So that's what we need to do. I'll come up with an alternative spending cut proposal with other colleagues in the Senate. And I want to add this. I think also this notion of giving the president the discretion to make the spending cuts, I think that's a cop-out, so I will be urging my colleagues to have an alternative and for us to present one.

GARRETT: Well, Senator Ayotte, you've proposed legislation that would allow some of these cuts to be carried over or dealt with through attrition at the federal employee level, meaning, if there are people who leave the federal workforce, they're not replaced. One would be replaced for every three vacancies. Are you going to press that before the Senate?

AYOTTE: I have offered that proposal along with Buck McKeon in the House. It's taken from the president's own fiscal commission. But I'm actually working on an alternative with other spending cuts to bring forward, working with other senators, that I believe we will bring forward, and I think that's the right thing to do. I mean, stepping back for a minute, think about you had the secretary of education on previously. If you look at between 2008 and 2010, if you add in the stimulus, the education spending increased 41 percent. So what we're looking at is how can we come up with more sensible spending reductions? I agree with Tim that we don't want to undermine our national security. I in fact traveled around the country with Senators McCain and Graham and actually went to Virginia. We've been talking about this for a year and asking the president for a year to come forward. In the campaign he said this wasn't going to happen. It's time for him to lead this effort as the commander in chief of this country.

GARRETT: Senator Kaine and Senator Ayotte, I want to ask you this, sort of, larger threshold question. The fourth quarter GDP numbers showed a negative growth and there were indications that some of that might have been caused or originated with concern in the defense sector. Both of you represent states with large -- that have large defense either operation or contractors. Is this the wrong time to be cutting any spending in Washington? Do we have -- do we risk any sort of contraction in the economy if we go through with these, no matter how they're composed?

KAINE: Major, I think -- I think it is a risk, and that's why I really think we need a balanced approach. You know, the Senate and House working together have already reduced spending by about $1.4 trillion, and as Kelly indicated, there was a $600 billion increase in revenue. The right way to fix it going forward is a balanced approach that doesn't cut too deeply. Just to use a Virginia example, yesterday Governor McDonnell, my governor -- you're going to have him on in a minute -- worked on a legislature of Democrats and Republicans for a compromised transportation package that reduced spending in some line items and increased revenue. It was a balanced approach. He had to buck Grover Norquist to do it. It wasn't perfect, because compromises aren't perfect, but it's that kind of balanced approach that will preserve Armed Services, preserve defense and enable our economy to start to grow instead of choking off what we're seeing as, you know, a strong stock market and some other indications that we can have real success if we approach this the right way.

GARRETT: Senator -- Senator Ayotte, quickly, do we have an austerity risk here or do these cuts need to happen; it just needs to be a debate over how they're composed?

AYOTTE: Major, I think that we can do this in a more sensible way. What we need is leadership from the commander in chief, rather than -- you know, he's been out campaigning -- even though this idea came from the White House, apparently from Jack Lew, his Treasury nominee -- he's been out trying to blame Republicans -- I think the American people are tired of the blame game -- to come up with responsible spending reductions. We can do that without hurting our economy, in fact, letting -- also dealing with our tax code to make us more competitive instead of just the first answer being further increasing taxes. That's what we can do to help economic growth and to move forward.

GARRETT: Senator Ayotte, thank you very much. Senator Kaine, we've got to go. I appreciate you both very much and we'll see you on Washington...

KAINE: Great to be with you.

GARRETT: We'll see you on Capitol Hill very soon.

KAINE: Thanks, Major.

GARRETT: And we'll be back in one minute to hear from four of the nation's governors.


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