MR. DAVID GREGORY: This morning on MEET THE PRESS, time running out to avoid the fiscal cliff. Is a deal closer than most think?
In public, the lines are drawn. But behind the scenes, the give and take over taxes and entitlement cuts point toward a deal by Christmas. What is standing in the way? This morning, the debate is right here. The house speaker’s top lieutenant, Congressman Kevin McCarthy, and top White House ally, the assistant Senate majority leader, Dick Durbin. McCarthy and Durbin square off.
Then, what is the political endgame for both Republicans and Democrats? Who wins and who loses as this fight drags on?
Plus, the future of the Republican Party is a hot topic as both sides start plotting the 2016 campaign. Our political roundtable features two former Capitol Hill insiders: Newt Gingrich and Lawrence O’Donnell, plus three journalists on the story.
Announcer: From NBC News in Washington, the world’s longest running television program, this is MEET THE PRESS with David Gregory.
GREGORY: And good Sunday morning. The looming fiscal cliff now 22 days away, is it stalemate or a compromise? We’re going to go inside the negotiations as I said with two top leaders in just a minute. But I want to start this morning with the ongoing crisis in Syria where the Assad government, as you know, is engaged in a brutal crackdown on its own people. And this week something significant happened, I think, the president signaled a big potential ship-- potential shift in U.S. involvement there. Here’s what he said.
PRESIDENT BARACK OBAMA: I want to make it absolutely clear to Assad and those under his command, the world is watching. The use of chemical weapons is and would be totally unacceptable. And if you make the tragic mistake of using these weapons there will be consequences and you will be held accountable.
GREGORY: NBC’s chief foreign correspondent Richard Engel is in Syria this morning to bring us the very latest on what is, of course, a developing story. Richard.
MR. RICHARD ENGEL (Chief Foreign Correspondent, NBC News): David, despite increasing criticism and international warnings, the government of Bashar al-Assad if anything is intensifying its military campaign against the opposition. This area on the outskirts of Aleppo was bombed by government forces last night. Regarding chemical weapons, David, commanders we’ve spoken to, are very concerned that the government could use chemical weapons. They’re completely not prepared for that eventuality. They don’t have gas masks. They don’t have medicine. There is no early warning system here. They have appealed for some kind of training, but so far on the ground there’s nothing that could protect them from sarin gas or any other kind of deadly chemical weapon that could be used. There are also rebel commanders we’re spoke-- we’ve spoken to not very encouraged by what they’re hearing from President Obama. They don’t think that these kind of warnings of unspecified consequences will make any difference on the ground. They say the White House and President Obama has warned the government not to attack civilians, yet civilians have been attacked. They’ve warned the Syrian government not to use disproportionate force, yet clearly disproportionate force has been and is being used in this conflict 21 months on, 40,000 plus dead.
Now, in terms of what will happen next, it’s hard to know on the ground here. The-- the rebels are clearly making advances. The north of this country feels like an independent state aside from attacking from the air. There are not very many Syrian troops in this area at all. But the-- the rebels still don’t have enough power to deliver a knockout blow. Most of their fighting is focused on the-- on the two big cities, Aleppo and Damascus, but as of know they haven’t bee able to take either one of them. David.
GREGORY: Richard Engel in Syria for us this morning, thank you very much. For more on this developing story I want to go to The Atlantic’s Jeffrey Goldberg who is also a columnist for Bloomberg View and White House correspondent for the New York Times Helene Cooper. Welcome to both of you. Jeffrey, you cover this entire region extensively and have for years, you heard what the president said and what Richard has said. Why this red line, something the United-- United States never did in Iraq, for instance, when Hussein used chemical weapons, but we’re doing it here, big shift maybe?
MR. JEFFREY GOLDBERG (National Correspondent, The Atlantic/Columnist, Bloomberg View): Well, only if you believe that it’s really a-- a red line. I mean, Syrian opposition is probably correct to doubt whether the administration would do something if-- if they use chemical weapons on their people. After all, they have been killing thousands of people every month, the-- the-- the Assad government, using regular old conventional weapons and so it’s not entirely clear to me that-- that this would trigger an automatic response. I mean, there is no real Obama doctrine here except for passivity, I’m afraid to say.
GREGORY: And, Helene, if we do get Assad out, the United States, other allies, what then?
MS. COOPER: Well, that’s the big-- that’s part of the reason why the Obama administration has done in the views of many so little toward getting President Assad out, and that’s because they’re-- they’re just really afraid. Syria looks-- Syria would be so much worse. You-- you saw the break-up of Iraq after the United States invasion in 2003. Syria would be that times 10. And there’s a lot of worry about what are you going to do with-- you have to worry about the slaughter of the Alawites in the mountains. You have to worry about, you know, just this whole break-up and who would govern this-- this region that is so, so-- this country that is so critical toward the whole region. But I-- I also-- I do think, though, that there’s chemical weapons would be sort of-- that -- I think for the Obama administration, that’s a line that-- that they would have trouble defending their passivity so far if-- if Assad crossed. I mean, that’s a hard one. It’s hard for me to imagine them not doing anything.
MR. GOLDBERG: Look, given that they haven’t really done very much over the past twenty-one months.
MS. COOPER: I can't argue with that.
MR. GOLDBERG: Yeah. And that they haven’t done very much at all, it’s not implausible that they would not do the-- the declarative thing of invading or stopping the use of chemical weapons. Also, it’s very little solace to people who are being bombed with chemical weapons that now President Obama is going to intervene on their behalf. Also this red line gives the Syrians a way of understanding that Obama won’t do anything before the red line.
MR. GOLDBERG: So-- so the Syrian government can keep on murdering its people using conventional weapons and-- and-- and get away with it because Obama told them that I’m not going to invade. I'm not going to do anything.
GREGORY: Before-- before we go, I do want to touch on Egypt as well, which has significant developments and also begs the question of what the administration is prepared to do with Morsi in Egypt.
MR. GOLDBERG: The tougher one.
MR. GOLDBERG: Yeah, that’s a tougher one. I mean, Morsi has-- has seemingly backed down from his-- his absolutist stance, but he is getting what he-- he wants. And, you know, this-- all this begs the question, you know, is-- is Morsi really just Mubarak with a beard and is the administration getting into bed with the guy they are going to regret getting into bed with later? That said, you know, the opposition is fractured, and-- and-- and these guys, the Muslim brotherhood, have played a positive role in the last Israeli-Hamas war and so the administration is really flummoxed by this a little bit.
GREGORY: And certainly it’s an issue that I think the administration has been spending a lot of time on in the second term. We’ll leave it there for now. Helene, we’ll see you in a few minutes as part of our roundtable. Jeffrey, thank you so much.
Joining me now, one of the White House’s closest allies in the state assistant majority leader Dick Durbin of Illinois and one of Speaker Boehner’s top lieutenants in the house, California Republican Congressman Kevin McCarthy. Welcome to you both. I’ll get to some of these foreign policy questions later, but I want to talk about what’s been top of mind for both of you and that is this fiscal cliff deadline that Congress faces. The reality is, if you hear it from the outside, these public statements from both sides, it doesn’t sound very good. Here’s Speaker Boehner and the president talking at the end of the week.
REP. JOHN BOEHNER (R-OH Speaker of the house): When it comes to the fif-- fiscal cliff that is threatening of our economy and threatening jobs, the White House has wasted another week.
The president has adopted a deliberate strategy to slow-walk or economy right to the edge of the fiscal cliff.
PRESIDENT BARACK OBAMA: We’re going to have to see the rates on the top two percent go up. And we’re not going to be able to get a deal without it.
GREGORY: So here’s my sense, Congressman McCarthy. Why in the minds of Republicans aren’t they processing it this way--look, Mister President, we’ll give you what you want on rates. Let them go up. But we got to get something in return, if we do say big cuts on entitlements in the Medicare program; we’re willing to make a deal. Is that essentially the thinking of Speaker Boehner at this point?
REP. KEVIN MCCARTHY (R-CHRIS ANDERSON:, Republican Whip): The president wants the rates to go up, that doesn’t solve the problem and we don’t want to be back here in another year, in another 10 years answering the same questions. But right after the election we sent a plan to the president where we gave revenues, but we’re looking for spending cuts. And he took three weeks to come back to us. He has gone on still on the campaign trail, still working through. But you got to understand, Republicans have not waited to solve this problem and sat back. In the summer, we passed a bill that froze the rates, took care of sequestration and passed it. It sat in the Senate. We’re one who believes we want to solve this problem. We think this is our moment. This is our time.
GREGORY: So is the moment-- does it come down to this, where you would say, look, we’ll give you higher marginal tax rates if we get something significant on spending, on Medicare, in return?
REP. MCCARTHY: It doesn’t solve the problem. If the president is asking for higher ratings, he is asking for more revenue. Most economists agree the best way to get that is through closing special loopholes. And, you know what, when you close those, it makes a fair tax process. So people invest on the return, not invest based upon what the IRS says.
GREGORY: All right, Senator Durbin, the opening position, as I sort of gleaned it from being on Capitol Hill on doing some reporting this week, is what I just said. Do you see it that way?
SEN. DICK DURBIN (D-IL, Assistant Democratic Leader): I can tell you that Congressman McCarthy is going to struggle with the numbers just as Mitt Romney did in the debates. They don’t add up. If you don’t increase tax rates on the highest two percent of income earners you cannot generate enough revenue to have meaningful deficit reduction. And unfortunately the changes in the tax code, which the Republicans say they want to turn to will start cutting tax-- increasing taxes and cutting tax deductions for the middle-class Americans.
GREGORY: But, Senator, can I stop you on that point because I think that’s significant. What you just said is what the president has said, is that hey, we can’t get enough revenue to solve the problem unless those rates go up. But wait a minute, last summer, in July of 2011, this is what he said about how to get to 1.2 trillion in revenue. Listen.
(Videotape, July 22, 2011)
PRESIDENT BARACK OBAMA: What we said was, give us 1.2 trillion in additional revenues which could be accomplished without hiking taxes, tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions, and engaging in a tax reform process that could have lowered rates generally, while broadening the base.
GREGORY: So if that was true then, Senator, why can’t he just do tax deductions? Republicans say they would agree to that, and not focus so much on raising the top rates?
SEN. DURBIN: David, we’ve set a target of cutting four trillion dollars out of the deficit over the next 10 years, four trillion. And to reach that, the president said he needs 1.6 trillion dollars in revenue, which is the same percentage of revenue as the Simpson-Bowles Commission. In fact, it’s a little lower. You can’t reach 1.6 unless you put the upper rate for the highest income Americans on the table and include tax reform. The reason why the Republicans have stuck with 800 billion dollars is it’s-- it really is their goal in this, but it doesn’t reach the four trillion dollar deficit reduction.
GREGORY: Congressman, what do you say about that?
REP. MCCARTHY: Well, let me tell you that the Republican goal is to solve the problem, economic problem. And look, the numbers don’t lie. We’re two months into this fiscal year. We already have a 292 billion dollar deficit. But you know what, in those two months, revenues have increased by 10 percent, 30 billion dollars. You only get 31 billion dollars in the first year when you raise those two rates. But you know what the problem is? We increased spending by 16 percent, 87 billion. This is more about a spending problem, not a taxing problem…
GREGORY: All right. But I’m going to get to that.
REP. MCCARTHY: …and that’s the problem with Washington.
GREGORY: First of all, Congressman, you threw out a number there, there’s a lot of numbers that can confuse people. You talk about 31 billion dollars. The reality is, over 10 years, based on documents I’ve seen from Republicans, raising those top rates would get you over 400 billion dollars in new revenue. So that seems to be a…
REP. MCCARTHY: Yeah. But in two--
GREGORY: …fact that both sides agree.
REP. MCCARTHY: David, David, in two months of this new fiscal year, you’ve achieved 30 billion more in revenue, 10 percent increase in revenue, but we spent 16 percent increase in spending. That’s 87 billion more. It is a spending problem. And the president wants to increase taxes to continue the spending.
GREGORY: All right. But here--
REP. MCCARTHY: He proposed a plan that put a new stimulus in that added more than just those top two rates’ worth in the first year. That’s the problem with Washington.
GREGORY: And I want to get to the spending and the entitlement question in just a moment, but I want to stay on tax rates for one minute. And I still put the challenge to you, Congressman. There are members of your own party who are saying privately, some saying publicly, look, just fold on the tax rates so that conservatives can get a better deal. Just this week on Morning Joe on MSNBC, here’s Senator Tom Coburn, Republican conservative from Oklahoma. This is what he had to say.
SEN. TOM COBURN (R-OK): Personally, I know we have to raise revenue. I don’t really care which way we do it. Actually, I would rather see the rates go up than do it the other way because it gives us greater chance to reform the tax code and broaden the base in the future.
GREGORY: How about that, Congressman?
REP. MCCARTHY: Look, I think if you close special interest tax loopholes, you have a fairer process. Because those who are listening today, they don’t have a lobbyist, they don’t have some attorney or they don’t have some high-priced account or some special interest out there. They want a fair process that they know when they go fill out their tax code others aren’t getting a special loophole. That is a more efficient way and a fairer way. And it also makes you invest your money not based on what the IRS says but based upon the economy. And it will grow the economy stronger--more taxpayers, more workers produces more revenue.
GREGORY: I want to talk about spending, Senator Durbin. And I-- a challenge for you, based on a speech that you gave a couple of weeks ago here to progressives, you said the following about entitlement cuts. And I’ll put it up on the screen. This was in your prepared remarks which you stuck by. “Progressives should be willing to talk about ways to ensure the long-term viability of Medicare and Medicaid, but those conversations should not be part of a plan to avert the fiscal cliff.” Why not, is my question? You said in that very same speech there’s absolutely savings to be derived from the Medicare program and trimming it back. Why shouldn’t it be front and center in-- in a specified way beyond what the president is proposing here, which is about 350 billion dollars over 10 years in-- in cuts?
SEN. DURBIN: David, Medicare will run out of money in twelve years. We know that we have to do something to make sure that we take an approach that doesn’t voucherize it or take the approach of the Paul Ryan budget, but keep this a sound program and a solvent program. I just don’t think we can do it in a matter of days here before the end of the year. That was my point. We need to address that in a thoughtful way, through the committee structure after the first year. But the point I want to get to is this. We’ve already cut more than a trillion dollars in spending as part of deficit reduction. We now need to put revenue on the table. The American people spoke on this issue in the election. I’d say to Speaker Boehner and Congressman McCarthy, listen to what the American people said in the election. Listen to the fact that two out of three Americans believe that the wealthiest should pay a little more, and listen to your own caucus. When you have people like Republican, conservative Republican senators like Tom Coburn, Kay Granger, Tom Cole, speaking up and saying, this is the right thing to do, for goodness sakes, let’s get it done.
REP. MCCARTHY: I’d ask the senator, just do the math. If you go to a small family-owned business in Bakersfield, California, that hires my friends, hires my neighbors, with the new tax, say, they pay 37, 39 percent. California, you add another 13.8 percent. Is it fair that any American pays more than half their income into taxes? And that’s before paying a sales tax.
SEN. DURBIN: May I respond to that, please?
REP. MCCARTHY: That’s more than paying for the cable tax just watching this show. Is that fair that we ask or should we make it a more efficient, more accountable government? The spending is the issue, senator?
SEN. DURBIN: May I respond?
REP. MCCARTHY: The president proposed a plan that you didn’t even vote for.
SEN. DURBIN: May I respond?
GREGORY: Go ahead, senator.
REP. MCCARTHY: 97 percent of American businesses are exempt from any tax increase because of the proposal by the president to protect people making less than 250 thousand dollars a year. 98 percent of all Americans are going to be exempt from paying any higher taxes if and only if Speaker Boehner will pass the bill that we sent him in July to protect middle income families.
SEN. DURBIN: You want to protect the people in Bakersfield, I want to protect the people in Chicago and Springfield.
GREGORY: All right. Well, senator, let me just-- I want to pin you down on one point about Medicare. You say you want to basically put off this discussion until later. But bottom line, should the Medicare eligibility age go up? Should there be means testing to really get at the benefits side, if you’re going to shore this program up, because as you say, 12 years before it runs out of money?
SEN. DURBIN: Here’s what it comes down to David. I do believe there should be means testing. And those of us with higher income in retirement should pay more. That could be part of the solution. But when you talk about raising the Medicare eligibility age, there’s one key question--what happens to that early retiree? What about that gap in coverage between their workplace and Medicare? How will they be covered? Now I listen to Republicans say we can’t wait to repeal Obamacare and the insurance exchanges. Well, where does a person turn if they're 65 years of age and the Medicare eligibility age is 67? They have two years there where they may not have the best of health. They need to have accessible, affordable medical insurance during that period.
GREGORY: Congressman, is there a deal by January 1st? And if there are tax increases as part of a deal? On tax rates, is there a Republican civil war that’s going to start?
REP. MCCARTHY: The president says he wants tax rate because he wants revenue. Republicans already offered him the revenue. The president also says he wants a balanced approach. That means two and a half to three times as many spending cuts as there are to revenue. We have spent all this time talking about revenue. But as we watched, our government continued to spend more. This is really about spending. You listen to the senator right there. He doesn’t want to move on spending. And that’s the core of the problem. I don’t think Republicans or Americans want to raise any taxes just to continue the spending in Washington. They want it more efficient, more effective and more accountable. So what we’re saying here is we need to do exactly what Ronald Reagan did with Tip O’Neill. Show the leadership to get in the room and make the changes. Same as Bill Clinton did with Newt Gingrich. Get in the room and make the changes that are needed to make this. Look, we faced bigger problems before but we’ve been able to overcome this. I believe we can do this one more time.
GREGORY: Senator, the politics of this are also quite interesting and there's certainly part of the calculation. Here you have the treasury secretary saying, sure, absolutely, the president will go over the cliff if that’s what it takes. When push comes to shove, you really think that’s the White House position? They want to risk recession as well just to drive home the point about raising taxes?
SEN. DURBIN: The president wants to solve the problem. That’s what he said during the campaign. That’s what he is saying now. We cannot lurch as we have for the past two years from one crisis to another. Think of all the times that Tea Party Republicans and Speaker Boehner threatened to shut down the government, shut down the economy over the debt ceiling. Listen, if we’re going to have the certainty for businesses to invest, for workers to know that new jobs are being created, we’ve got to get this behind us once and for all, I plead.
GREGORY: Even if it means going over the cliff?
SEN. DURBIN: I can tell you, I don’t want to do it. The president doesn’t want to do it but we need to solve the problem. We cannot allow…
REP. MCCARTHY: Then senator…
SEN. DURBIN: …a reckless position to drive this economy into another recession, a recession which the Republicans will own.
REP. MCCARTHY: Then senator, ask the president to come off the campaign trail. He’s been to Pennsylvania. Tomorrow he’s going to Detroit. It’s now time to govern. The election is over. That’s why Republicans sent a plan…
SEN. DURBIN: He’s a phone call away and you know it.
REP. MCCARTHY: ...right after the election.
SEN. DURBIN: The president…
REP. MCCARTHY: He is a phone call away. We will come right down to him.
SEN. DURBIN: No, listen.
REP. MCCARTHY: We sent a plan-- it took him three weeks to respond.
SEN. DURBIN: The president…
REP. MCCARTHY: He has not responded to our current one.
GREGORY: Let me-- let me do this.
REP. MCCARTHY: You can’t negotiate with yourself.
GREGORY: The-- the-- the-- this-- this is the public part of the stalemate that, I think, people are-- are-- are so uncomfortable with, even if there’s more action behind the scenes. I want to end on this point, though, Congressman, you’re a Californian. The Supreme Court is going to take up the issue of same-sex marriage in a very big way with the-- the Prop. 8 ban in-- in your state as well as the Defense of Marriage Act on the-- on the federal level. Do you think the days of same-sex marriage being not recognized, unrecognized as a-- as a civil right are coming to an end?
REP. MCCARTHY: Well, I think the Supreme Court will make the decision. You know, prior to this election, every vote has always been and it’s only made it through by a legislator, not the vote of the people and it’s always in California the people voted itself. So we’ll look and see from the Supreme Court itself.
GREGORY: Senator, how do you see it?
SEN. DURBIN: Marriage equality is part of America’s future and we saw that in state after state in the last election. The Supreme Court will take up the issue, and I hope that they understand as most of us do that this is part of our future. Marriage equality and the equal treatment of people who have made this decision is part of what America is all about.
GREGORY: Final point, Senator Durbin. Susan Rice. Will she be the president’s secretary of state nominee and could she get ap-- confirmed in the Senate at this point?
SEN. DURBIN: I can’t-- I can’t say that because the president has not told me what his decision will be. There’ve been two excellent names mentioned, Ambassador Rice and my colleague, Senator Kerry. Either one of them would have a tough job following the great job of Hillary Clinton, but they could both serve this country in an extraordinary way as secretary of state.
GREGORY: But you’re saying that Rice could get confirmed.
SEN. DURBIN: I do believe so. I think at the end, some of the criticisms against her have been unwarranted.
SEN. DURBIN: Many have gone just too far. There is really a basic feeling of fairness. She is an extraordinary person. She’s certainly well-educated and has really served our nation well as ambassador to the United Nations.
GREGORY: All right. We’ll leave it there. Senator Durbin, Congressman McCarthy, thank you very much.
SEN. DURBIN: Thank you, too.
REP. MCCARTHY: Thanks for having us.
GREGORY: And coming up here, the political gamesmanship over the showdown on the debt. You’ve heard some of that frankly right there. So who wins and who loses, including why one prominent Republican observer I talked to this week says the president actually wants to go over the cliff. Who was it? What did he mean? Find out after the break when our roundtable joins us--former speaker Newt Gingrich, Bloomberg’s Julianna Goldman, Helene Cooper of the New York Times is back, Washington Post’s Bob Woodward and MSNBC’s Lawrence O'Donnell. All coming up right after the break.
GREGORY: Coming up here, as Hillary Clinton prepares to step down as secretary of state, her popularity has soared to an all-time high. According to a new Washington Post/ABC poll out this week, 66 percent view the country’s top diplomat favorably, up from just 44 percent in April 2008. So what does all that mean for her future? Well, that’s one of Washington’s favorite, what ifs. And a recent campaign-styled tribute video that was played at this Saban Forum here in DC left the political world abuzz, especially after comments like these from Israeli Prime Minister Benjamin Netanyahu and British Prime Minister Tony Blair.
(Videotape; The Saban Forum 2012/Brookings)
MR. BENJAMIN NETANYAHU: There’s someone who knows a thing or two about political comebacks, I can tell you I don’t think we’ve heard the last of Hillary Clinton.
MR. TONY BLAIR: I just have an instinct the-- the best is yet to come.
GREGORY: According to that same poll, 57 percent say they would back a Clinton presidential bid. Later, we’ll talk more about 2016. Whether Clinton will run and what her departure means for President Obama’s second term? MEET THE PRESS continues after this brief commercial break.
GREGORY: We’re back now with the roundtable. The Washington Post’s associated editor Bob Woodward is here. Bloomberg Television’s Julianna Goldman is here as well. Your first time. Welcome. And I know you sat down with the president this week, his first interview since the-- the election was over. Helene Cooper is back, rejoining the conversation and former speaker of the House, Newt Gingrich and host of THE LAST WORD on MSNBC Lawrence O’Donnell. Welcome to all of you. Our former Hill insiders, let’s get right to it. Newt Gingrich, what about this proposition? I keep driving based on my own reporting this week, Republicans are prepared to deal on tax rates if they can get more on the spending side, particularly Medicare. Is that where you think the action is right now?
MR. NEWT GINGRICH (Former Speaker of the House): Well, I mean some Republicans are prepared to do more. But I think as Senator Durbin just indicated they are not likely to get a very big fig leaf. I mean, the administration-- the president won. The president has a very clear simple position, he wants to prove he can dominate and he proves he can dominate getting the rates up. And he has a veto pen and it’s pretty hard for me to see how the House Republicans are going to get past the Senate Democrats to even get to a veto.
MR. GINGRICH: So, at some point, either you’re going to go over the cliff or you’re going to find some kind of dramatic concession to the president.
GREGORY: Lawrence, this-- this idea of how much room the president is willing to give becomes a big question because he wants-- based on what I’m hearing, he wants Boehner to say, okay I give-- I give on the rates. And then he-- maybe he’ll talk a little more.
MR. LAWRENCE O’DONNELL (Host, MSNBC’s “THE LAST WORD”): The problem for Boehner is how does he give on rates. He said this the other day I oppose tax rate increases because tax rate increases cost American jobs. That gives you no room to give on rates. It is, by the way, not an original thought. Who said this? The tax increase will kill jobs and lead to a recession, and the recession will force people out of work and onto unemployment and actually increase the deficit? That’s Newt Gingrich in 1993 on the Clinton tax increase. And those of us who were working on the other side of that tax increase, Newt, have been waiting for your apology for 20 years for being completely wrong about that.
MR. GINGRICH: Well, I don’t agree with you.
MR. O’DONNELL: Well with the-- but the economy soared, no one lost a job…
MR. GINGRICH: Baloney.
MR. O’DONNELL:…because of that tax increase.
MR. GINGRICH: Baloney. Baloney.
MR. O’DONNELL: There was no recession. You said there would be a recession.
MR. GINGRICH: You now see the case.
MR. O’DONNELL: There was no recession.
MR. GINGRICH: The fact is if you look at all the indicators the day I was elected speaker, virtually all the economic growth occurs after Republicans take control, virtually all the increase in the stock-- the matter of fact, all the increase in the stock market is after Republicans take control.
MR. O’DONNELL: You did not reduce the rates, Newt?
MR. GINGRICH: And-- and when we balanced-- wait a second.
MR. O’DONNELL: You said the rates would cause a recession.
MR. GINGRICH: When we balanced the-- when we balanced the budget, we balanced the budget with a tax cut not a tax-- four consecutive balanced budgets with a tax cut, not a tax increase.
MR. O’DONNELL: A tiny tax cut compared to the biggest tax increase in history which is what Bill Clinton did. You didn’t dismantle it.
MR. BOB WOODWARD (Associate Editor, Washington Post/Author, The Price of Politics): ...to re-litigate the 1990s.
GREGORY: Well but the-- but the point-- but the point here is that this was-- Clinton did go-- did face the charge that-- that--- that the economy would sour if he increased taxes. But he also cut defense spending over 250 billion dollars over 10 years. And he has said recently, one of the reasons they lost the house in ’94 was that ’93 deal.
MR. WOODWARD: Yeah.
GREGORY: But-- but-- but here, where is the action, Bob?
MR. WOODWARD: Well, having tried to do some reporting on this, first of all, I think the staff, the White House staff and the House staff have met or talked five times. It really is down to Obama and Boehner at the table. I-- I think you can only take a snapshot right now and try to look at what the experience the president has had recently. He won re-election. He’s had lots of CEOs in to meet with him. And this is interesting. They are telling him, most-- mostly Republicans, let’s give on rates. It’s not a big deal. I think the house leadership may have lost the parade that is supposed to be following them on that.
MR. WOODWARD: I think lots of Republicans feel that that can be done. And then the-- the CEOs are worried to death about another debt ceiling fight like in 2011.
GREGORY: Julianna, you asked the question, though, in your interview with the president, when do you and Boehner get into a room and he basically had said, well, that’s not as important as him basically giving on tax rates and then we can get together.
MS. JULIANNA GOLDMAN (White House Correspondent, Bloomberg Television): Because that’s the big question now is when, when is either side going to blink?
MS. GOLDMAN: The president is saying, okay, they still need to give-- they need to acknowledge that rates need to go up, and the Republicans are saying, okay, the president needs to lay out what specific entitlements and spending cuts he would agree to. And what the president signaled in that interview was that he’s willing to play hardball in his short-term with long-term flexibility. So, he’s saying, okay, at-- by the end of this year, to get a deal to avoid the fiscal cliff, let rates go up for top earners. And then, hey, I’m willing to be flexible, I’m willing to revisit what was on the table in the summer of 2012, the changes to Medicare and Social Security. And also I’m willing to bring those rates back down to somewhere in between the 35 percent where they are now and the 39.6 percent that that they’d go up to as part of a broader tax overhaul.
GREGORY: But Helene, is he really willing to go off the cliff? I mean, is the feeling in the White House, say, hey, sure we’ll do that because Republicans will get the blame? Here’s-- the Pew survey came out this week indicating who would get the blame if you do go over the cliff, if you extend the deadline, squarely against the Republicans. They would more likely get the blame. And that’s what you heard as Bob pointed out a minute ago, from-- from Senator Durbin as well, that they would own the recession that would follow.
MS. COOPER: I don’t know what-- how that ends up playing out, but I think when you talk about the feeling at the White House, there’s a palpable difference now compared to 2011, the summer of 2011. They-- they are so much cockier right now at the White House than they were a year and a half ago when they were doing this. They really believe they’re set out. We’re not going to negotiate. You know, you come to us, we’re not going to negotiate against ourselves. We’re not going to like put-- you know, keep putting out more proposals. I mean, remember-- remember the summer of 20-- 2011 when President Obama was perceived, and they believed at the White House, that he kept-- he kept making concession after concession and didn’t get anywhere. They’re definitely not doing that now and they think that they’re…
GREGORY: Well, and Lawrence (Unintelligible) how they came out so strongly, right. I mean, they came out so strongly and basically said this is the deal. And, by the way, I mean, there’s legislative guys going back up on the Hill and saying we’re not giving on Medicare, we’re not giving on the spending side either.
MR. O’DONNELL: Well, what people are forgetting is there is already a deal. This thing we call the fiscal cliff is a law that Republicans voted for and that the president steered them to vote for. And strategically, he was victorious in that, the-- the theory of this-- this thing was, no one wants it to happen. No one wants anything in this bill to happen, the rates to go up or-- or all the spending cuts. But it turns out that the Democrats and the president like more of what would happen on January 1st than Republicans.
GREGORY: Well, you know-- and, you know who agrees with you? Rick Santorum agrees with you. I spoke to him on PRESS Pass. This is what he said. And Newt Gingrich, you respond to your former challenger here after you hear this.
MR. RICK SANTORUM (2012 Republican Presidential Candidate): The greatest leverage he has is that he put together a deal with the Republicans over a year ago that gives him pretty much what he wants, which is a dramatic incr-- which is taxes back to the-- to the pre-Bush rates.
MR. SANTORUM: So he gets all his tax increases and he can blame the ones that are not popular on Republicans for not negotiating. He gets something he’ll never get, he’ll never get in a negotiation.
GREGORY: The rest of that conversation online, by the way, with Rick Santorum. Newt Gingrich, is that why the president and Geithner are saying, sure, go over the cliff?
MR. GINGRICH: Well, I-- I think first of all, if you are a liberal Democrat, going over the cliff is not nearly as bad as giving up on some other values such as tax cuts. Sa-- second, the House Republicans didn’t understand what-- what a fundamental moment they’re at. This is the beginning of the next four years. I think the president believes that he-- that he can in fact block Boehner into-- into collapse, which then leads me to ask the question, so what’s the inaugural address going to be like, what’s the State of the Union going to be like, and what’s the budget going to be like? Because if they decide that they’re going to be able to run over the House Republicans for the next two years, they-- you’re-- you’re going to see very dramatic demands that are different than if in fact they’re facing a group that’s prepared to fight them.
MR. WOODWARD: But this does real damage to the economy and to millions of people if going over the cliff. This is not an abstraction. You could begin a recession. And Senator Durbin’s idea and-- and the polls support him that the Republicans will own this recession will last about one month because presidents own recessions, presidents own dramatic improvements in things. We live in the Obama era, not the John Boehner era.
GREGORY: The other thing, John, is that the potential political blood that could be spilled, you know, if the president gets tax hikes, which he can do, a couple of different ways. He could muscle this through by the end of the year. Then all of a sudden you face another debt ceiling debate, where the Republicans can use that to try to extract concessions and then we get into this other standoff again after the first of the year.
MS. GOLDMAN: Well, and that’s why there’s actually a split in the White House right now when it comes to the debt ceiling. There’s one camp that says the debt ceiling has to be part of the deal now because we can’t risk it being part of it, shaking confidence. Then we’ll have a credit-- the question of credit rating agencies, how they’ll respond. And then there’s another camp that says, no, let’s make it part of the negotiations. Let’s wait until next year. And we’ll get the pressure from the business community is going to be threatening. And so they’re not sure which way this is going to shake out. And that’s why the president actually hasn’t issued the veto threat when it comes to debt ceiling as being part of this deal at the end of the year.
MR. O’DONNELL: But going off the cliff is only dangerous if you stay off the cliff and Wall Street has already figured this out. They’ve already begged into the idea that hey we’ll probably go off the cliff probably for a few days because that’s the way Congress is. On January 2nd, there will be these emergency phone calls. We’ve got to do something. The first thing that hits is you’re withholding on your paycheck. Your very first January paycheck. You’d start to see that. However, the treasury secretary has the authority to overrule the IRS on withholding tables and hold people immune from the immediate impact of this. They will be able to do that for a week or two. I think Congress could solve this in a couple of days. Those days may be January 3rd and 4th.
MR. GINGRICH: But the time Bob Woodward has spent his career covering-- personalities matter. This president has a chance as he did in ‘09 to come in and say I’m going to sit down and work with you. We’re going to be bipartisan, we’re going to put the country first, or he has a chance to do what he did in ’09, which is say, I’m going to write a stimulus package with only Democrats and ram it through (Unintelligible) unread. He can continue down the road he’s on right now. He-- he guarantees a permanent war because everybody on the right at every level sooner or later is going to get sick of it.
GREGORY: Newt, can I ask you the other piece of this? Let’s assume that there’s more give there on the president’s side.
MR. GINGRICH: Mm-Hm.
GREGORY: You’ve been in the position as speaker of the House. How much juice does Boehner have? Now back in the day, you could really twist arms by saying you want money for your reelection. I can withhold that. You can do all kind-- but how much juice does he have now to go back to (Unintelligible) Republicans and say you need to get onboard with this?
MR. GINGRICH: Look, if Boehner works out an agreement with-- with Obama-- President Obama, it has to be an agreement that brings 120 or 140 house Democrats.
MR. GINGRICH: I mean, if he does that, he’s going to pass it. I mean, he can be the speaker of a block of Republicans working with Democrats or he can be the speaker of the hard right fighting the Democrats. There’s no middle ground here. He will not carry the hard right for any deal.
GREGORY: Go Helene.
MS. COOPER: And I really do think at the end of the day, Larry, I mean, what you-- what you described sounds like sort of the White House negotiating right now. Easily say, yeah, we can go over the fiscal cliff. But at the end of the day, this is a-- this is a president-- he would have to own it. He may not think he has to own the recession. But he-- if we go over that, he is going to have to own that.
MR. O’DONNELL: I think he knows that.
MS. COOPER: And that’s-- that’s something he definitely knows.
MR. O’DONNELL: I think he agrees with Bob that the recession would be his problem.
MR. WOODWARD: It mean be a giant disaster. He needs to improve things and show that he’s a leader. And, you know, here’s the big question, whether he’s miscalculated by coming out and saying, we have to raise taxes on the upper brackets. That is a red line.
GREGORY: All right.
MR. WOODWARD: And, you know, for-- Newt knows this way too well. There are so many Republicans in the House that that is against doctrine. That will get the Wall Street journal editorial page spinning, and that means a lot to…
GREGORY: Let me just-- let me do this. Let me get a break and we’ll continue this. I also want to talk about some other politics too because 2016 is taking shape. If you look at the future of the Republican Party, some of the moves made this week. Jim DeMint and others. We’re going to get into that. Of course, the election is a little sooner than we think. Even though, the immediate election has been over. We are back with more in just a moment.
MR. BRIAN WILLIAMS: It was a rare event late on a Friday afternoon when we learned the U.S. Supreme Court is going to wade into one of the most talked about and emotional issues of our time.
MR. PETE WILLIAMS (NBC News): The fact that the court has agreed to take out both cases could mean that the justices are prepared to get to the heart of the same-sex marriage issue, and that could result in what would essentially be the Roe v Wade of gay rights.
GREGORY: We’re back with our roundtable. NIGHTLY NEWS Friday night on a big story that will become an even bigger story as we move forward, and that’s the question of-- of marriage equality for gays and lesbians in this country. Speaker Gingrich, you’ve opposed same-sex marriage. Do you think the tide is turning? We know it’s turning in terms of public opinion. What does it mean that they’re taking this on?
MR. GINGRICH: I think it means the justices looked at the question, if you’re an American citizen and you are legally married in Iowa, what happens if you cross the state line, what if you’re-- what if you happen to be visiting another state and you end up in the hospital? Do you have any visitation rights? I mean, once this has begun to move, it is going to be-- it is so complicated that I think the court felt almost compelled as a national institution to look at it.
GREGORY: I-- and I-- and I think, Lawrence, as-- as I have talked to lawyers about this, what people need to understand is that there is the question of your ability to have benefits. This is not whether the Defense of Marriage Act is completely thrown out. That’s that question. And then Prop. 8 in California is about whether the courts can intercede and say the will of the people it expressed in a referendum is something that is not right and uphold the marriage equality there.
MR. O’DONNELL: Yeah. And so there’s a very narrow ruling available here that basically would only apply to California. And so this may be the first of what becomes a generation of cases or 10 years of cases. We do know this that if the Supreme Court rules against marriage equality in any fundamental way, that will not stand. The kids going to law school now who will be Supreme Court justices will overrule this. The ultimate end here is simply a matter of time.
GREGORY: Interesting. Bob Woodward, the broader political landscape is what this is part of and became, I think, I pretty clear this week in terms of who’s doing what. Hillary Clinton, I talked about it earlier. Here’s her approval rating now or rather-- would you vote for Hillary Clinton as president? 57 percent according to Washington Post/ABC New poll saying, yes. She is leaving. She is-- she is pretty hot right now politically. Is she not?
MR. WOODWARD: Right. She should take that 57 percent and bank it and go…
MR. WOODWARD: …write a book for three and a half years and say, now I’m running. I mean, she has got the perfect resume. And, as I’ve talked about in one of my books, when she decided that she would become secretary of state for Obama, which surprised lots of people, her advisers said, look, this is the perfect resume-building action. And number two, if you run in 2016, you will be younger than Ronald Reagan was…
MR. WOODWARD: …when he was inaugurated. And as we know, women are so much healthier than men, particularly at that age.
GREGORY: Helene, I talked to a democratic senator this week who said, she’s absolutely running. Given everything that she’s doing, how she’s reaching out to-- to supporters and positioning herself, it will put a lot of pressure on other Democrats as to whether they want to try to stand in the way.
MS. COOPER: I think it is. And what I think is so interesting is just how skillfully she has navigated all of the foreign policy crises of the last four years and managed to come out of the last four years relatively unscathed. She’s stayed away from the Israel-Mideast, the most contential-- contentious politic-- domestically-politically national security issue…
MS. COOPER: …which is, you know, the Palestinians and the Israel. She stayed away from that. So she hasn’t been dragged into any of that. She has somehow managed to come out of the Benghazi thing unscathed. Susan Rice is taking-- is taking most of the political heat for that. So if you look at how Secretary Clinton has navigated the last four years as secretary of state…
MS. COOPER: …it’s been-- it may not have been-- it’s not-- I don’t think it’s going to go down in history as, you know, one of the most influential secretaries of state ever, because I don’t know what I would say right now about what, you know, huge things that have been accomplished. But she’s certainly managed to come out of it, you know, without a lot of nicks at all.
MS. GOLDMAN: And in the poll you just cited, she gets the backing of more than 60 percent of Republican women. So if Hillary Clinton decides that she wants to get in, she clears the field. You could be seeing other Democratic potential candidates like Governor Brian Schweitzer, Governor Martin O’Malley trying to test the waters, in case she decides not to run or auditioning to be a vice presidential nominee also.
GREGORY: Right. Let me… yeah.
MR. O’DONNELL: The reason it’s easy for you to get Democratic insiders to say she’s absolutely running is because she’s absolutely running.
GREGORY: No doubt about it?
MR. O’DONNELL: No, there’s no doubt about it.
GREGORY: Right. Newt-- Newt as you look at that-- as you look at her prospects, you look at the demographic shift that was evidenced by this last election, she has a perfect opportunity to-- to harness that and become the first female president.
MR. GINGRICH: Yeah. She-- look, she-- first of all, she is very formidable as a person and is a very confident person. She is married to the most popular Democrat in the country. They both think it would be good for her to be president. That makes it virtually impossible to stop her for the nomination, I think. But-- and I thought she was frankly going to be the nominee in ‘08. And I-- I-- all through the spring I was always thinking she would beat Obama.
GREGORY: Let me…
MR. O’DONNELL: The poll numbers were so different…
MR. O’DONNELL: …and she had a negative that was higher than her approval rating. That's completely reversed.
MR. WOODWARD: She-- she knows how to seize the moment also.
MR. WOODWARD: In 1991, she was the one who persuaded Bill Clinton to run. He was telling her, no, I’m not sure this is my moment. And he-- and she said, this is your moment, take it. And of course he did.
GREGORY: Let-- let me talk about the Republican side because a couple of interesting things happened this week. The-- the question of the Tea Party’s influence in-- in the party and certainly in the Senate was an issue, as Jim DeMint left. He is going to run heritage. You have Paul Ryan and Marco Rubio speaking at a Jack Kemp dinner and I want to play a piece of sound from each of them. And it says something about how they see the future of the Republican Party. Let’s watch that. I want your response then.
(Videotape; Jack Kemp Foundation Award Dinner, Tuesday)
SEN. MARCO RUBIO (R-FL): Now I’ve heard it suggested that the problem is that the American people have changed. That too many people want things from government. But I’m still convinced that the overwhelming majority of our people, they just want what my parents had, a chance.
REP. PAUL RYAN: (R-WI): Both parties tend to divide Americans into our voters and their voters. Let’s be really clear. Republicans must steer far clear of that trap. We need to speak to the aspirations. We must speak to the aspirations and the anxieties of every American.
GREGORY: So Newt, that’s a long way from the 47 percent of Mitt Romney.
MR. GINGRICH: Well, let me say, first of all, every Republican should be focused on what we just talked about. I mean, if their competitor in ‘16 is going to be Hillary Clinton, supported by Bill Clinton and presumably a still relatively popular president Barack Obama, trying to win that will be truly the Super Bowl. And the Republican Party today is incapable of competing at that level. And it’s part of this cultural thing with our consultants. I mean, if you start out thinking giving away 47 percent of the country, by the way, which included retirees, it included veterans. You know, it was an absurdity. And-- and I think this is-- this is much more than Mitt Romney. We didn’t blow it because of Mitt Romney. We blew it because of a party which has refused to engage the reality of American life and refused to take-- to think through what the average American needs for a better future.
MR. WOODWARD: But recall what you said about 1964. In December 1964, Lyndon Johnson was re-elected. Goldwater was finished. It was the end of the Republican Party. And at the end, the Republicans nominated a man named Richard Nixon. And he became president. Unthinkable.
MR. GINGRICH: So you could have a…
MR. WOODWARD: Exactly.
MR. GINGRICH: …futurist campaign between Hillary Clinton and Jeb Bush representing 36 years of Bush’s on national tickets and I think 38 years of the Clinton’s at state federal government.
GREGORY: Back to the future. What about Chris Christie? Helene, what about Chris Christie as he-- he was on Jon Stewart this week.
MS. COOPER: The Daily Show?
GREGORY: Yeah, I did, we have a clip. Let’s show that clip because it was a funny moment.
(Videotape, Thursday: The Daily Show)
JON STEWART: The week before the storm, you were out there, President Obama couldn’t lead his way out of a paper bag with a fistful of 20s and then right after the storm was over, you were like, this man is a leader. He is a leader. Like, doesn’t that-- doesn’t that tell you something about the game? What does that tell you about the game?
GOV. CHRIS CHRISTIE (R-NJ): What it tells me is that people have different skill sets at different times. That’s what it tells me.
MR. STEWART: I see. So-- so he wasn’t a leader until you needed leadership.
GOV. CHRISTIE: Maybe until-- maybe until he was presented with an stark opportunity to lead.
GREGORY: Chris Christie is a very popular politician right now, Helene.
MS. COOPER: He is on a roll right now. He was on Saturday Night Live like quoting lyrics from Springsteen, "Meet me tonight in Atlantic City." He was on The Daily Show. He was like, this is hilarious. Um, I-- it’s-- I-- I certainly-- he certainly seems to look the most vibrant of anybody I see on the GOP side right now. But it’s 2012, David. Why are we talking about this so early?
GREGORY: Don’t be so negative. Don’t be so cynical that way. Lawrence.
MR. O’DONNELL: I don’t see how he moves out of New Jersey into a national Republican campaign. I-- I-- I just don’t see. He has things that he’s done on his record there that just would just not appeal to the base out there. But I defer to Newt on-- on the frontrunner.
MR. WOODWARD: And Newt’s point, it’s about personality. And he’s got a very large personality…
MS. COOPER: And that electability, I mean…
MR. WOODWARD: …and he goes out there. And the perception is it may not last that he tells it like it is.
GREGORY: But Julianna, one of the things that I tried to get to with Congressman McCarthy is what kind of Republican civil war is there going to be, especially if there’s some give on tax rates? Because there-- there is a signal to that. I mean, you know, Jim DeMint leaves the Senate because he thinks he can do a lot more work in terms of Tea Party activism from the outside in. So all of those primary challenges, all of that pressure doesn’t go away.
MS. GOLDMAN: And that’s why it will be interesting to see how Paul Ryan navigates…
MS. GOLDMAN: …this budget battle because he is the leader of economic conservatives right now. And what does he do? Does he side with John Boehner because they’re going to certainly have to make concessions on tax rates? And then what does that mean for him? How does that box himself in for 2016?
GREGORY: Tea-- Tea Party, too?
MR. GINGRICH: No, look. First of all, there are 30 Republican governors.
MR. GINGRICH: I mean, there is a huge base of competency building out there. And if the president’s not careful, by 2014, five or six of those state capitals are going to look a lot more competent than Washington, DC. And so there’s a real bay-- and these are people who are winning elections with broad-based coalitions. Christie is an example. But-- although, he didn’t do all that well in this last round. Rick Perry is another example. Perry is a smart guy. He has learned a lot. It’s the second biggest state. He is eagerly awaiting Californians migrating to Texas in large numbers, which they will, you know.
GREGORY: It goes with the high tax rates though. Yeah.
MR. GINGRICH: The high-- the tax rate of California is one of the great opportunities for Texas and Florida of all time, and they’re both going to take advantage of it. So, I mean, you-- you’re going to see a very different Republican Party. It’s not just going to be the House and Senate Party, it’s going to be a state capital party.
MR. WOODWARD: It-- it’s changing and adapting. Maybe you can try again.
MR. GINGRICH: I doubt that but one never knows.
GREGORY: All right. I’m going to leave it there. We have to take a break. We’ll be right back in just a moment.