JIM LEHRER: And now to our continuing coverage of President Obama's budget proposal unveiled this week, and to Judy Woodruff.
JUDY WOODRUFF: One of the most prominent criticisms of the president's budget from friend and foe alike is that it does little to address the long-term structural fiscal problems contributing to the nation's deficits and $14 trillion debt.
Even President Obama himself acknowledged at his news conference Tuesday that more has to be done. He also said it won't get done without both parties working together.
Well, our guests are attempting to do precisely that. Republican Sen. Saxby Chambliss of Georgia and Mark Warner, Democrat of Virginia, are heading up an effort to tackle the hardest fiscal challenges.
Senators, thank you both for being with us.
Sen. Warner, to you first.
I assume you agree these are the hardest challenges. If so, why are you taking this on?
SEN. MARK WARNER (D-Va.): Well, Judy, I think the question is not if we're going to do deficit reduction and take on the national debt. It's only a question of when.
Are we going to do in a bipartisan, orderly way that will give us a few years to phase in these -- these changes, or are we going to wait until the markets say they no longer have full faith and credit in the American debt and the dollar, and we are forced to do it the way we have seen certain European countries have to take on this challenge?
So I think the time is now. There is a plan that's out there that both does deficit reduction and actually simplifies our tax code and deals with the revenue side of the ledger as well. It's not perfect. There's probably things in it that everybody would dislike, but it's a starting point.
And, you know, Sen. Chambliss and I, he's been a -- we have been great partners on this. We realize this is where the long-term interests of the country have to trump -- trump immediate politics.
JUDY WOODRUFF: Sen. Chambliss, you are meeting in private. Why are you doing this outside the normal budget channels?
SEN. SAXBY CHAMBLISS (R-Ga.): Well, Judy, we don't know where we're going to wind up with this, but certainly Mark and I are not going to solve this by ourselves.
And that's why we gradually expanded our group. And now we've involved some folks who frankly have a lot more expertise about the debt commission report itself than we do, because they were members of it. And they had the -- we have the benefit of what they heard over a period of about 10 months that's now being incorporated into our discussions.
And we're -- we're pretty excited about the opportunity we have got, because, you know, Judy, at the end of the day, Mark was sent here from Virginia, I was sent here by the people of Georgia to get things done and not just to come up here and vote against things, but to try to solve problems.
There is no greater problem than this debt and this deficit issue. And I don't care whether you -- you listen to Adm. Mullen of -- chairman of the Joint Chiefs, or anybody from an economist standpoint talk about this or talk about the issues that are facing us. The number-one issue is debt and the deficit.
So, we're -- we're just trying to do the right thing, which is why people sent us here.
JUDY WOODRUFF: Let's talk about some specifics.
Sen. Warner, is this mainly a matter of turning the recommendations of the Simpson-Bowles deficit reduction commission, turning that into legislation?
SEN. MARK WARNER: Well, it's turning that into legislation, or having that become the consequences if we don't act, because in certain ways, if there is -- as Saxby said, we're not going to do this alone. We're going to need the White House, the House, the Senate, both parties.
And if there's a better way to both get to these deficit reduction numbers, if there's a better way to actually make sure that our tax code keeps American business competitive in the 21st century and actually ends up lowering rates for individuals, but takes on some of the tax expenditures, then we in Congress ought to find that.
But, if we don't act, then we ought to make sure that the -- the recommendations of the deficit commission actually take effect. And, you know, echoing what Saxby has said, every day that we fail to act, we add $4 billion to our national debt.
So, it's not like this problem is going to get any better if we put it off for a couple of years.
JUDY WOODRUFF: Senator Chambliss, The Wall Street Journal reported today the plan you're working on would trigger new taxes and budget cuts if Congress fails to meet a set of -- of timetables or mandatory spending targets and other fiscal goals. Is that accurate?
SEN. SAXBY CHAMBLISS: Well, we haven't agreed on anything. We have a lot of issues on the table for discussion.
But, as Mark just said if -- doing nothing is not an option. This issue is not going away. So, our thought has been from day one that the least we ought to do is what the debt commission recommended. And we would like to put into legislation some specifics that hopefully we can agree to in a bipartisan way.
But if we're unable to agree, then you have that failsafe of falling back to what the debt commission recommended. That's kind of a way to keep everybody moving. We know there are great ideas coming from House members. We know the White House has got good ideas.
And we're moving in a direction of getting us to the point where, hopefully, we can get everybody to rally around the debt commission report as the basic concept that we rely on.
JUDY WOODRUFF: Well, Sen. Chambliss, I know that you're already hearing some criticism from Republicans for even being part of a conversation about increasing revenues. I saw Grover Norquist with the Americans for Tax Reform group sending out a memo today saying to you, you're betraying your trust with the voters to even be engaging in these conversations.
Are you -- are you -- how much flak are you catching from your own party?
SEN. SAXBY CHAMBLISS: You know, Judy, it's kind of interesting. I'm doing exactly what I said I would do when I signed that pledge that I'm now being criticized about by this one individual.
What I said I would do was to seek lower rates. And what Mark and I are doing is seeking a program that the debt commission outlined that will eliminate some of the tax expenditures. And by virtue of that, according to the recommendation of the debt commission, 85 percent of all those savings go to reduce corporate rates, as well as personal rates.
We can reduce taxes that every individual has to pay simply by reforming the tax code. It's very, very complicated. It's outdated. It needs reforming. And this is a way to do it and actually lower tax rates, instead of increasing. So, it's -- you're going to have criticism.
Gosh, if you make anything happen in Washington, you're going to be criticized, but we're prepared for that.
JUDY WOODRUFF: By the same token, Senator Warner, I'm sure you're hearing from Democrats who don't like the idea that you're looking at cutting entitlements, at least considering it, including raising the retirement age for which people would be eligible to get Social Security.
Are you -- how much of that are you hearing? But I'm really interested to know about the president. Do you think President Obama is open? Are you getting signals? Are you in communication with the White House about any of this?
SEN. MARK WARNER: Well, listen, Judy, I do think both Saxby and I will take some arrows.
And one of the things I think the American public needs to know is most of our fights about spending cuts that the Congress focuses on is only on domestic discretionary spending, which is only about 12 percent of the budget. Unless we want to whack a lot of programs that are -- actually do some good, you have got to take on the entitlement issues as well.
And I think there's a growing recognition of that in both parties. And I -- I do think the president has continued to say he's open to this. I think you will see some back and forth between the president's approach, which does actually freeze domestic spending, and -- and has said he would look at entitlements as well.
But you may need some of us, in a bipartisan area, to kind of go out in front and, again, take some of these initial arrows. But, at the end of the day, we won't get this done unless the administration is part of this long-term solution set.
JUDY WOODRUFF: And...
SEN. MARK WARNER: And I think he'll be there.
JUDY WOODRUFF: And, Sen. Chambliss, are you getting positive signals from the Republican leadership in the Senate? And what's the timetable for this? How quickly can you get something done?
SEN. SAXBY CHAMBLISS: Well, we want to do it sooner, rather than later. But we didn't get into this thinking we would have a deadline of meeting the C.R. timetable, the debt ceiling vote. None of that was really our focus at the time we started these discussions and as we have gone through it.
So, we're going to make sure we get it right, Judy. And however long it takes us, Mark and I are committed to make sure that we do the right thing.
My leadership has been apprised of these conversations from day one, as Mark has -- has been in touch with his leadership. The -- the discussions have been in private, simply because we didn't want media exposure out there.
We wanted to be able to get people to sit in a room around the table and discuss the most serious issue facing the United States of America and do it in a very sober and in a way which didn't invite the media to look at it until we were really to the point to where we could start getting into the specifics of it.
JUDY WOODRUFF: Well, Senators, when you are ready to say more, we would welcome you to come back on the program.
Sen. Chambliss, Sen. Warner, thank you both.
SEN. MARK WARNER: Thank you, Judy.
SEN. SAXBY CHAMBLISS: Thank you very much, Judy.