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President Obama’s Second Term Agenda Begins With Stressing Compromise on Budget

November 14, 2012 at 12:00 AM EST
With automatic spending cuts and tax increases scheduled to hit in January 2013, President Barack Obama hopes to find a "grand bargain" solution to U.S. budget woes. Gwen Ifill talks to Sen. Dick Durbin, D-Ill., and Sen. Kay Bailey Hutchinson, R-Texas, about President Obama's latest efforts to push compromise on Capitol Hill.

TRANSCRIPT

GWEN IFILL: The president has a full plate as he prepares to begin his second term. Today, he said he will enter negotiations on his own terms. But will that fly on Capitol Hill?

For that, we turn to two senators, Democrat Dick Durbin of Illinois and Kay Bailey Hutchison of Texas, whose three terms in the Senate will end in January.

Senator Durbin, the president said today his only mandate is to reach out and serve the middle class. What does that mean?

SEN. RICHARD DURBIN, D-Ill.: Well, I think the president made it clear during his campaign. We want to provide protection, so there will be no tax increases for families making $250,000 a year or less.

These are families which certainly include most, if not, all middle-income families struggling paycheck to paycheck. There’s no reason their taxes should go up. In fact, we ought to give them tax relief. That’s just exactly what the Senate passed. The House is sitting on that bill. The president is calling on them to pass it.

GWEN IFILL: Senator Hutchison, I’m going to ask you the same question because I get the feeling your interpretation may be a little bit different. But when the president says, I want to raise taxes on the wealthiest, people who earn over $250,000 a year, and that’s a deal breaker if that doesn’t happen, does that sound to you like you’re moving forward?

SEN. KAY BAILEY HUTCHISON, R-Tex.: Well, I hope that we can come together on our joint goal of bringing down the deficits and getting our fiscal house in order.

What Republicans are saying is, we need to do this in a way that encourages jobs and hiring people. And if you tax the people who create jobs, who can give jobs, people who are not hiring right now because there is no indication of where we’re going with this, where are these taxes going to be — and I think we’re in a on an economic sort of humdrum, and we need to show businesspeople that they can count on low taxes, they know what their costs will be.

They will be able to put more people to work, and then that will stimulate the economy and the buying of those people and create more revenue because people are working. That’s our approach.

GWEN IFILL: Senator Hutchison, one of the things the president said today and has said a couple times since last election night was that the one thing Americans knew what they were getting when they voted for him was this — to keep this promise to not extend the Bush tax cuts.

Are we on the same page here?

KAY BAILEY HUTCHISON: I don’t think so.

I don’t think that that is what people voted on. I think he was honest about saying he wanted to raise taxes on the rich. That’s what he said in the campaign. And he is trying to be honest about that. But I don’t think that that’s why people voted for him.

I think people voted for him because they believed he would help the middle class and they know that jobs are scarce, that we have almost an 8 percent unemployment. And I think what they want is for him to fix this. And what we want is for him to fix this with our help and in a way that will be pro-growth and pro-economic vitality.

GWEN IFILL: So, Senator Durbin, help me here. How is what is being said up on Capitol Hill today — which everybody says, we’re going to work together, we’re going to compromise — how is that different from where we left this play last time we were sitting in the audience?

RICHARD DURBIN: We are edging closer to the cliff.

GWEN IFILL: How?

RICHARD DURBIN: December the 31st is the deadline. On that date, there will be dramatic changes in the tax laws as they affect middle-income and upper-income families.

And we’re going to see some spending cuts, automatic spending cuts, going in place. So we voted for this. Democrats and Republican alike voted for it, said we want to make things so ominous, so foreboding that we will do something. I think that is going to move us to action.

What the president has said, the first move should be protect middle-income families from a tax increase. If Speaker Boehner says, I will go along with that, that’s where we will start. I think the conversation is under way for a solution.

GWEN IFILL: Senator Durbin, are you kicking the can down the — the ball, whatever that cliche is, down the road by only talking about the tax cuts and not talking about the spending cuts as well?

RICHARD DURBIN: No.

Let me tell you something. I was on the Bowles-Simpson commission. I voted for it, the bipartisan commission that included spending cuts, as well as revenue increases. I know that to reach $4 trillion or $5 trillion dollars in deficit reduction, you need to put everything on the table, not just taxes for the wealthy. That’s a piece of it, an important piece of it, but it isn’t all of it. You need much more.

GWEN IFILL: Senator Hutchison, the president said today in his news conference that he was well familiar — he was very familiar with the literature on the overreach of presidents in their second term or the potential for overreach.

Do you think that’s a possibility here? Do you see that? We have heard, for instance, Republicans saying, hey, we can talk about immigration now. Is it possible that some things actually are in reach?

KAY BAILEY HUTCHISON: Oh, I do think — I think immigration reform is in reach.

Senator Durbin and I have worked on a DREAM Act alternative called — something that I think would be acceptable to the American people and help these kids who are in this kind of never-never land that we need to get them out of, Senator Kyl, Senator Rubio, Senator Durbin. I think we can do that.

I want to just say on the Simpson-Bowles commission, I think they are a starting place. And every Senate Republican that was on that commission also voted for Simpson-Bowles. So you have a bipartisan potential as a starting point. Maybe you don’t like everything in it. But, honestly, Gwen, entitlement reform is going to have to be part of an overall deal if it’s going to impact the deficits and the long-term debt.

And I think if we have tax reform and we really look at entitlement reform, then we would be able to work together, because I think Republicans will certainly come to the table if we have a fair tax system and also we know that the cuts in entitlements that must be made will be made. You know, it’s — actuarially, Social Security can’t hold the way it is now. And we all want it to.

GWEN IFILL: I would love for one or both of you to take a whack at explaining to our audience, starting with you, Senator Durbin, what is different now than was different before the election? A lot of the — what I’m hearing, including the gauntlets being thrown down about the president’s potential choice of secretaries of state, it sounds like people are digging their heels in, in opposite corners.

And I don’t see things coming together. Am I missing something?

RICHARD DURBIN: Well, the folks that are trying to hit a new crescendo when it comes to political rhetoric weren’t listening on November the 6th, because one thing that was loud and clear across America, people are sick and tired of all of these political gymnastics. They want results.

And they are hoping that Democrats and Republicans will work together. What has changed? Well, the American people have spoken. And under our system of government, a democratic system, small-D, that’s an important historic milestone. The president prevailed. He won the majority of the popular vote and an overwhelming majority of the electoral vote.

And, secondly, we face a deadline with a cliff on Dec. 31. I think those are the two factors that should move us toward working toward a compromise.

GWEN IFILL: Senator Hutchison, your thoughts on that?

KAY BAILEY HUTCHISON: Yes, I think the Republicans lost big time.

And that’s a difference. I think we’re near the fiscal cliff. I think that’s a difference. And the president is looking at his legacy and the president can step up to the plate now and be the leader that brings people together. That’s what he promised in his first campaign. It has not happened.

Now is the time with, his legacy before him, that he can lead. Put something on the table and let’s start working on something that is a proposal from the president that Congress can then begin to go back and forth with him on.

GWEN IFILL: Senator Kay Bailey Hutchison, Senator Dick Durbin, thank you both so much.

RICHARD DURBIN: Thank you.

KAY BAILEY HUTCHISON: Thank you.