JIM LEHRER: And now to our interview with the Republican leader of the U.S. Senate, Sen. Mitch McConnell of Kentucky. He joins us now from the Capitol.
SEN. MITCH MCCONNELL, R-Ky.: Jim, glad to be with you.
And sorry that you're going to hang it up after all these many years. It's been a great ride. And we have enjoyed watching you. And the American people are going to miss you.
JIM LEHRER: Well, thank you, Senator.
It's not full. I'm still going to be here on Friday -- on many of the Friday nights. I'm going to explain this at the end of the program tonight. But thank you for your -- for your kind words.
How would you describe your meeting today with President Obama?
SEN. MITCH MCCONNELL: Very good and very candid.
You guys, meaning the press, were not in the room, which, you know, does contribute to candor. And the president, I think correctly, viewed it as more of a listening opportunity for him.
He doesn't have, obviously, as much interaction with Republicans as he does Democrats, which is understandable. And so, it was an opportunity for him to hear from our members how we see where we're headed.
I can speak for myself. I began our discussion by pointing out that, when Standard & Poor's says that they're about to downgrade the U.S. credit rating, that's a pretty big red flag. And also when we know our debt now is the size of our economy we begin to look a lot like Greece.
And when we know that, even beyond that, we have over $50 trillion in unfunded liabilities, that is, promises we have made that we cannot keep, to very popular things, like Medicare and Social Security and Medicaid, the health program for the poor, how much more do we need to know?
And so nothing focuses our attention on debt and deficit like the president's request to raise the debt ceiling. And so what we discussed in a very candid way was how he could achieve the support that he needs to raise the debt ceiling.
And we made it clear that we think the federal government has a spending problem. We don't have this problem because we tax too little. We have it because we spend too much. And we need to attack this, both short-term, medium-term, and long-term, with a comprehensive effort to begin to significantly reduce spending, one that guarantees that our credit rating doesn't go down, one that convinces foreign countries that we are -- the adults are in charge here, and America is not going the way of some Western European countries.
And I think such an agreement, on a bipartisan basis -- and, obviously, that's what it would have to be when you have a Republican House of Representatives and a Democratic president -- would also astonish and please the American people, even if they didn't like the details of what we had to do to get our house in order.
JIM LEHRER: When you say bipartisan and you just pointed out, Senator, that you have got a Democratic-controlled Senate and you have a Democrat president and a Republican-controlled House, and -- but you -- is it correct that you told the president no tax increases under any circumstances?
SEN. MITCH MCCONNELL: Yes, he knows -- he knows that. I mean, that was really decided last November. He understands that the Republican House is not going to vote to raise taxes.
So, this is going to be about spending reduction. And I'm optimistic that we can -- we can come together and reduce government spending. That is the reason for the problem.
JIM LEHRER: But...
SEN. MITCH MCCONNELL: And I'm pretty optimistic.
You know, Jim, let me just say one other thing.
JIM LEHRER: Sure.
SEN. MITCH MCCONNELL: I know Americans sometimes think, well when you have divided government, nothing gets done.
But the fact of the matter is that divided government sometimes is the only government that can do big, tough stuff. And let me just cite a couple of quick examples that you would certainly remember, and many people in your audience would as well.
Ronald Reagan and Tip O'Neill fixed Social Security for a generation in 1983. Ronald Reagan and Tip O'Neill did massive tax reform, which we need to do again, in 1986. Bill Clinton and the Republican Congress did welfare reform in '96. And Bill Clinton and the Republican Congress actually balanced the budgets in the late '90s.
So, divided government, one could argue, is, most times, the only kind of government that can do really difficult things.
JIM LEHRER: But in every one of those cases you just named, Senator -- I went through those, and every one of those cases, a compromise involved both spending cuts and increases in taxes.
SEN. MITCH MCCONNELL: Well...
JIM LEHRER: But you're saying that that's not the case, that you will not -- that the Republicans will not accept as a -- quote -- "compromise" anything that involves what the Democrats want, particularly the president, which is raising taxes for people who make over $250,000 a year.
SEN. MITCH MCCONNELL: Well, I don't want to get into an argument with you.
JIM LEHRER: Sure.
SEN. MITCH MCCONNELL: I don't -- I don't believe the Republican Congress in the late '90s raised taxes in order to balance the budget. I'm pretty sure we didn't do that. But, look, without -- without...
JIM LEHRER: There were some tax -- OK.
SEN. MITCH MCCONNELL: Without rehashing that...
JIM LEHRER: Sure.
SEN. MITCH MCCONNELL: ... I think that issue was pretty well settled last November. Even if anybody on my side were to advocate a tax increase, it's not going to happen. It won't pass the House. And I think the president understands that.
We have got a serious spending problem here. He's indicated his openness to reducing spending. We need to do it both on the discretionary budget -- that is, the budget we actually vote on every year. And that could have -- needs to have impact in the next budget year, '12, and the next one, '13.
And we need to have an impact on entitlements. They're very, very popular. But if we're going to have entitlements for our children and grandchildren when they reach retirement age, we have got to change the trajectory. Right now, it's going up. It's unsustainable.
We're -- Medicare crisis is near at hand. Social Security ran a $50 billion deficit this year. I think we all know all of those facts. And most of it is clearly, I think all of it frankly, is attributable to spending too much, not taxing too little.
JIM LEHRER: Well, where, then, will the compromise come? Will you -- are you certain that -- do you believe, based on this meeting and everything else that you know that there in fact will be an agreement that will avoid not having the debt ceiling reached?
SEN. MITCH MCCONNELL: Well, if we can reach an agreement, obviously, it will be on a bipartisan basis with the only Democrat in America who can sign a bill into law...
JIM LEHRER: Sure.
SEN. MITCH MCCONNELL: ... the president of the United States. If we can reach an agreement with him, it will certainly pass.
And that, in my view -- again, speaking for myself -- is going to require a significant enough spending reduction to impress the markets, so that they have confidence that the American government is going to get its house in order, impress foreign countries that the United States is not going to go into financial decline.
And, as I said, I think it would also astonish the American people if we could do something of this magnitude together.
JIM LEHRER: But is it going to be done, Senator? I mean, do you feel...
SEN. MITCH MCCONNELL: Oh, yes, I'm optimistic it will be done.
What the "it" is, I can't describe to you tonight. We're in the process of negotiating that agreement. But I believe we will be able to come together and do something that will be viewed as a turning point to prevent further American decline, and -- which is happening. I mean, it is clearly happening.
JIM LEHRER: But, for instance, Speaker Boehner says that he's not going to support anything that doesn't have at least $2 trillion in spending cuts. As you -- is that your position as well?
SEN. MITCH MCCONNELL: Oh, at least that. I mean, we're talking about trillions here, not millions -- I mean, not billions. We're talking about trillions. Of course.
Look, everybody knows that we need to do multiple of trillions of dollars here, medium, short -- medium-term, short-term, and long-term, to have any credibility at all, because the budget is so massive.
Let me put it another way, Jim. The government's taking in $2.2 trillion this year. All that does is cover the entitlements and interest. It doesn't cover the entire discretionary budget, which means defense. It means education. It means, all of the rest of the budget, we're borrowing money for. This is clearly unsustainable and cannot continue.
JIM LEHRER: But I'm getting back -- I want to get back to the point of raising the debt ceiling.
SEN. MITCH MCCONNELL: Yes.
JIM LEHRER: Secretary of the Treasury Geithner and others have said that, if the debt ceiling isn't raised, it will be a catastrophe -- a catastrophe for the American economy and the American financial system...
SEN. MITCH MCCONNELL: Right.
JIM LEHRER: ... and for the world generally.
SEN. MITCH MCCONNELL: Yes.
JIM LEHRER: And are you saying that you, if you all don't get what you want, you're not going to vote to raise the debt ceiling?
SEN. MITCH MCCONNELL: What I'm telling you is it would be a catastrophe not to use this opportunity, presented by the president's request to raise the debt ceiling, to do something significant about the debt. That would be the catastrophe.
JIM LEHRER: I understand.
SEN. MITCH MCCONNELL: The American people are waiting for us to act. This is the opportunity. It's an opportunity for both sides to come together and deal with the subject raised by the president's request to raise the debt ceiling, which is the debt.
JIM LEHRER: But -- but my question is...
SEN. MITCH MCCONNELL: I understand what your question is, but I believe what would be catastrophic is to leave -- to miss this opportunity, presented by the president's request to raise the debt ceiling, to do something genuinely significant about the debt, something that impresses the markets, impresses foreign countries that the Americans are going to get their act together.
JIM LEHRER: And that would be a worse catastrophe than not raising the debt ceiling?
SEN. MITCH MCCONNELL: Of course. Of course.
JIM LEHRER: In other words, you -- so you think that -- that raising -- if the Congress fails to pass a legislation that raises the debt ceiling, and all the catastrophe -- that catastrophe happens, that wouldn't be as bad as doing what you and Speaker Boehner want, which is the $2 trillion, no tax -- no change in taxes, et cetera?
SEN. MITCH MCCONNELL: Jim, you're a smart guy, but I'm not going to let you answer for me.
JIM LEHRER: OK.
SEN. MITCH MCCONNELL: My answer is this: To fail to take this opportunity to do something really dramatic and significant about the debt would be a catastrophe. And we're not going to do that.
We are going to do something significant about the debt, something that reassures the markets and other countries that the Americans are going to get their fiscal house in order now, not tomorrow, not next year, but now.
JIM LEHRER: All right. Do you -- do you think all this will happen before Aug. 2?
SEN. MITCH MCCONNELL: I do, yes. That -- that is the point -- this is what makes us act.
You know, we have been kicking the can down the road forever. The time to kick the can down the road is over. The time to act is now. I think the president shares that view. All of my members do. We're going to get this done.
JIM LEHRER: Senator, you know, you famously said in October 2010, I believe it was, that -- in fact, I even have the quote here -- that you asked what -- what you saw as your job as a Republican leader of the Senate -- quote -- "The single most" -- I know you heard this many times -- "The single most important thing we want to achieve is for President Obama to be a one-term president."
My question is how is that working out?
SEN. MITCH MCCONNELL: Well, look, that's -- that's the main goal for 2012. That's what I was asked. And we will -- we will be -- both sides will be trying to win the election in '12.
The challenge at the moment is what are we going to do between now and '12? You know, we have had an election every two years since 1788 in this country, right on schedule. But, yet, at various times, even though there's always an election coming up, we did what was necessary to save the country.
That's what we're about right now. He's the president. He got a four-year term. We're going to work with him to get this big job done this year.
JIM LEHRER: Do you think it's unfair to keep using this quote all the time?
SEN. MITCH MCCONNELL: Oh, I -- no, I would -- I would be happy to say it again, if you want me to.
I don't think it's particularly shocking that the Republican leader of the Senate would like a Republican president. I was always a little bit astounded that people thought that was even worthy of observation on the part of reporters.
JIM LEHRER: Have -- have you taken the opportunity, or do you have -- have you -- the opportunity from the CIA to see the photo, the death photographs of Osama bin Laden?
SEN. MITCH MCCONNELL: Yes, I don't think we ought to be discussing these kind of confidential matters. And I don't intend to discuss them tonight.
JIM LEHRER: In other words, you have -- that you have seen the pictures or you have not seen the pictures?
SEN. MITCH MCCONNELL: In other words, I don't intend to comment on what I may or may not have seen.
I commend the president for making the decision to execute the raid and the soldiers and the military personnel who carried it out. It was an astonishing success.
But I think, frankly, we have quite -- said quite enough about what we may or may not have learned in these intelligence briefings over the last few months. I think, frankly, more has been said than should be said.
JIM LEHRER: I hear you.
All right. Senator, thank you very much.
SEN. MITCH MCCONNELL: Thank you.