Full Episode: Political Maneuvering Over The Looming Fiscal Cliff

Oct. 28, 2014 AT 5:18 p.m. EDT

Fiscal cliff negotiations between Congress and the White House have reached a standstill as both sides clash over spending cuts and tax increases. Also, the potential nomination of Susan Rice to succeed Hillary Clinton as Secretary of State has left Obama and Republicans at a political stalemate. Joining Gwen: Gloria Borger, CNN; Michael Viqueira, NBC News; Susan Davis, USA Today.

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GWEN IFILL: Are we really heading for a fiscal cliff and is the Senate prepared to reject the presidential nomination before it’s even made? Welcome to post-election politics, tonight, on “Washington Week.”

PRESIDENT BARACK OBAMA : I’ve been keeping my own naughty and nice list for Washington.

MS. IFILL: For the Democratic White House, Republicans in Congress are the naughty ones.

REPRESENTATIVE JOHN BOEHNER (R-OH): No substantive progress has been made in the talks between the White House and the House over the last two weeks.

MS. IFILL: Each side drawing lines in the sand, now testing the other. Some Republicans peel off.

REPRESENTATIVE TOM COLE (R-OK): My view is, you know, 98 percent of my constituents don’t – certainly don’t need a tax increase.

MS. IFILL : Some dig their heels in.

SENATOR MITCH MCCONNELL (R-KY): It seems like our friends on the other side are having some difficulty kind of turning off the campaign.

MS. IFILL: The standoff extends to presidential appointments, as U.N. Ambassador Susan Rice struggles to defuse opposition to her possible nomination for secretary of state.

U.S. AMBASSADOR TO THE U.N. SUSAN RICE: I relied solely and squarely on the information provided to me by the intelligence community.

SENATOR BOB CORKER (R-TN): I would just ask the president to step back for a moment and realize that all of us here hold the secretary state to a very different standard than most cabinet members.

MS. IFILL: Who will win the first rounds of the post-election battle?

Covering the week, Gloria Borger of CNN, Susan Davis of USA Today, and Michael Viqueira of NBC News.

ANNOUNCER: Award-winning reporting and analysis, covering history as it happens, live from our nation’s capital this is “Washington Week” with Gwen Ifill, produced in association with “National Journal.”

(Station announcements.)

ANNOUNCER: Once again, live from Washington, moderator Gwen Ifill.

MS. IFILL : Good evening. Perhaps you took a break for the holiday; perhaps you gave thanks that the election was over. Then, you dialed back in this week and discovered, no, we have apparently just entered a new phase in a political year that never ended. Two big stories this week: the impending fiscal cliff and the Washington debate over who will succeed Hillary Clinton as secretary of state.

First, to the fiscal cliff. At the end of the year, Bush era tax cuts will expire and the first wave of $1.2 trillion in spending cuts is scheduled to kick in. CEOs and economists alike worry this will send the nation spiraling back into recession. The president’s short-term solution, $1.6 trillion in new revenues, much of it to come from raising taxes on wealthy Americans.

PRESIDENT OBAMA: If Congress does nothing, every family in America will see their income taxes automatically go up on January 1st, every – every family, everybody here, you’ll see your taxes go up on January 1st. And it’s not – it’s not acceptable to me and I don’t think it’s acceptable to you for just a handful of Republicans in Congress to hold middle class tax cuts hostage simply because they don’t want tax rates on upper income folks to go up.

MS. IFILL: House Speaker John Boehner’s response: no ways. They are, he said, at stalemate.

REP. BOEHNER: The White House spent three weeks trying to develop a proposal and they send one up here that calls for $1.6 trillion in new taxes, calls for a little –not even $400 billion in cuts, and they want to have this extra spending that’s actually greater than the amount they’re willing to cut. I mean, it’s – it was not a serious proposal. And – and so, right now, we’re almost nowhere.

MS. IFILL: Both men say Americans voted for growth and responsibility during the last election, but each apparently is reading the same message differently. What a surprise? So how much of this standoff is about policy, Gloria, how much is about politics?

GLORIA BORGER: Right now, it’s a little bit of each, but I would have to say right now, it’s a lot about politics and it’s a lot about political theater. I mean, you just showed these guys. OK, so they have given their opening round. We all know where they stand. This is for the base of their parties now, which the president, of course, has been meeting with his liberal base. Republicans have been meeting with conservatives, who say don’t cave. They’ve all been meeting with CEOs. They’re taking the show on the road, as the president did.

And so this is sort of that moment where they’re kind of getting ready to do battle. Because, I would argue, when they finally do get in that room, they all know what has to be done. The question for them is how do you talk about revenues? How do you talk about it? Do you have to raise the rates, which of course the president says you have to do? Or can you find the money in a different way, as Republicans say –

MS. IFILL : Loopholes.

MS. BORGER: Or you know, changing deductions, right, or capping deductions for the wealthy. So we all know there are different ways to do it. We just wish that you could wake us at the moment they actually decide to get to work.

MS. IFILL: Mike, so you were with the president today –


MS. IFILL: He took this on the road. He went to Pennsylvania to a toy company at Christmas time.

MR. VIQUEIRA: Yes, great pictures.

MS. IFILL: And it’s great pictures. And said what?

MR. VIQUEIRA: Well, I think the election is over, but the campaign goes on and I think that the president went to Philadelphia – keep in mind that these are the classic sort of collar suburban counties that are swing counties that decide elections, not only for the control of the House and the Senate, but of course the presidency. I don’t think he’s too worried about that at this point. Yes.

MS. IFILL: Yes, that’d be one, yes.

MR. VIQUEIRA: Obviously, he’s not there for electoral votes, but he’s there to move votes. He’s there to move votes in the House of Representatives. Sue can tell you that there are three moderate Republicans who represent three of the four districts that surround Philadelphia to the west. I think that was clearly a part of it. I think the opening gambit, if you will, from the White House over the course of last couple of days, when Tim Geithner and Rob Neighbors, the White House liaison, that Congress went up there and presented this plan, which incidentally it was agreed it was gales of laughter apparently by Mitch McConnell. I mean

MS. BORGER: (Guffaws ?).

MR. VIQUEIRA : Yes, I agree with you. It says, number one, we’re still in the exhibition season here. And number two is the White House really does thing that they have the upper hand politically –

MS. BORGER: Which they do, by the way.

MR. VIQUEIRA : Yeah. And they are going to drive this advantage. I think they see Republicans in disarray, scattered after the election. They’re like a Civil War general. They’re going to chase them into the woods and try to route them now that they have the chance.

MS. IFILL: Sue, December 1st is tomorrow. He said we’re still in exhibition season, but there are not that many days left. So how is this shaping up on the Hill?

SUSAN DAVIS: Four weeks is also a really long time, whether we like it or not, in legislative negotiations on the Hill. Your point, which is a very good one, is that I think the White House feel very confident of their negotiating hand. And Republicans on the Hill are angry about it. I don’t think that they’ve – they’re not at a point yet where they feel like that they have to give on what President Obama said he won this election on, which is having wealthier Americans pay higher tax rates.

They wanted to talk about entitlements. They wanted to talk this and that. But the tax rates on the rich are more about just this policy debate. They’re sort of this philosophical thing of like I won the election – and Obama – I don’t see any scenario by which he’s going to back down.

MS. IFILL: Well, one of the things that he did, which I found interesting, which seemed a necessary poke in the eye, was to say, you know what, part of this deal I think we really should not have Congress anymore have to approve raising the debt limit. Now, that was certainly not going anywhere.

MS. DAVIS: Well, this is where I think when you go to a negotiation; you don’t come in with your compromise to start. You know, you kind of have to start –

MS. BORGER: He’s done that before, by the way.

MS. DAVIS: Right and it never worked for him before. So the offer – Mitch McConnell, minority leader, was said he laughed – laughed at Timothy – the treasury secretary when he presented this offer. But you have to sort of start from your negotiating ground to get to the middle. I will say that it was rejected out of hand on Capitol Hill, so it’s not necessarily a good start. And I would say, at least among from the Republican view, it puts them off when Obama goes on the road and does this. There’s a sense of why not just keep drawing them back over to the White House. If you want the optics –

MR. VIQUEIRA: Yeah, you know, the White House – I mean, the president sort of can’t win on that. Remember the health care debate?

MS. DAVIS: Right.

MR. VIQUEIRA: I mean there were millions – it’s always the communicators. What you need to do is go out and sell it to the public. He went out and sold it to the public or tried to sell it.

MS. IFILL: Campaigning

MR. VIQUEIRA: Yeah and you know – I mean, he got the bill passed obviously, but, you know, it’s always the communicators that – and it really is – he said he had to change Washington from the outside, but he really is playing an inside game.

MS. BORGER: But it’s also a way of reminding the public exactly what they voted for. I mean, if you look at the polls, 67 percent of the American public believes that there should be a plan that combines tax increases and spending cuts. Over half of the public wants to increase taxes on the wealthy. So he’s got the public on his side and he’s going to remind them about it at every opportunity

MS. IFILL: And Nancy Pelosi said today, elections have consequences, and the president’s said some version – has said some version of that ever since –

MR. VIQUEIRA: It wasn’t an overreach. He’s read the literature. But talking about Lincoln, I just want to say one thing. In 1864, he had the Cabinet Room. He could bring cajole and twist arms and maybe even threat. In 1964, LBJ had the Oval Office to do the exact same thing. Now, what does the president have – the end of earmarks. He doesn’t have that kind of leverage. He’s got Twitter, hash tag my – you know.

MS. DAVIS: But the theatrics surround it, too, in part of because it’s important to remember that fiscal cliff was a problem Washington created.

MS. IFILL: That’s true.

MS. DAVIS: This is not the 2008 financial crisis, where the markets started to crumble and Washington had to act. They created this problem. I think one of the reasons why this is so closely watched and we’re all so intrigued in it is there’s a much bigger fight on the horizon looming that has much more economic consequences, which is the debt limit. And I think part of the reason why people are watching this is that if they blow up fiscal cliff, if we go over it, if this is chaos, if they punt, if it’s a small deal, it’s going be a sign that we’re not going to get the kind of deficit reductions that we need and that the debt limit’s going to be another big fight.

MS. BORGER: And that’s the challenge for the president, because, yes, he does have all the levers. We talked about that. He won the election, of course. But this is a test of leadership and the American public does not want to go over that cliff because, by the way, they want the tax cuts for the middle class to remain in place. That’s the ultimate – that’s the ultimate cliff there –

MR. VIQUEIRA: Bottom line –

MS. BORGER : – and the bottom line that you don’t want those to expire.

MS. IFILL: So as we approach it, we begin to kind of read tea leaves. So he brings CEOs to the White House and the head of Goldman Sachs, Lloyd Blankfein, says, I’m pretty optimistic we’re going to come off with a deal. On the other hand, people like Erskine Bowles, the – one of the co-authors of the great deficit reduction plan, he’s not pessimistic at all. He thinks we’re going to go over the cliff. What do we read –

MR. VIQUEIRA: You know, there’s a rule that, you know, Denny Hastert enunciated and people were outraged, but it’s always been true. The former – it’s always been true. The majority – it’s a majoritarian institution. The majority – the speaker is not going to put something on the floor that doesn’t get a majority of the majority. And if John Boehner puts something on the floor that raises taxes – they’re going to explode.

MS. BORGER: Well, but you know, you could do it in two steps. You could do –

MS. IFILL: Just the middle class.

MS. BORGER: Kick the can – kick a very big can down the road.

MS. IFILL : This is what the president is basically saying.

MS. BORGER: Right. And the Republicans don’t want to do that because they feel if they – if they do the middle class, then they lose all their leverage, or you could potentially cut a deal like Bill Clinton used to do, which is with not a majority of each party, but the leaders have to be leaders.

MR. VIQUEIRA: I want to see it.

MS. IFILL: But you know, you make a really good point about leadership, which is that people are waiting to see who wins, who has the upper hand in an argument like this, because there’re other post-election standoffs brewing.

Another one of them continues to brew over who will take over when Hillary Clinton steps down as secretary of state. The president has come to the strong defense of his rumored frontrunner – rumored – say that three times fast – (laughter) – rumored frontrunner, United Nations Ambassador Susan Rice.

PRESIDENT OBAMA : Susan Rice is extraordinary. Couldn’t be prouder of the job that she’s done at – (inaudible). (Applause.)

MS. IFILL: By the way, that was Hillary Clinton who started that round of applause around the cabinet table. But if they’re applauding on Capitol Hill, they’re doing it very quietly, as Republican senators make their doubts known loud and clear. At issue, Rice’s role in providing a preliminary and ultimately incorrect explanation of the circumstances surrounding the attack on the U.S. mission in Benghazi, Libya, that resulted in the deaths of four Americans, including the U.S. ambassador.

SENATOR LINDSEY GRAHAM (R-SC): Bottom line, I’m more disturbed now than I was before that the 16th September explanation about how four Americans died in Benghazi, Libya, by Ambassador Rice, I think does not do justice to the reality at the time and in hindsight clearly was completely wrong, but here’s the key. In real time, it was a statement disconnected from reality.

MS. IFILL: Back to our original question, Gloria, which we asked about the fiscal cliff, which is how much of this is about policy? How much of this is about politics?

MS. BORGER: Well, again, I’d have to give you the – I’d have to give you the same answer. I think it’s about policy partly, clearly on the part of Lindsey Graham and John McCain, but a lot of it is about politics. They didn’t get the chance that I think that a lot of them wanted to during the campaign, because Mitt Romney, actually, did not lead the charge on Benghazi. John McCain led the charge on Benghazi. And they have a sense there’s nothing you could do to a senator than keep them out of the loop. And there is a sense there that not only were they not told the truth, but the American people were not told the truth, and they decided – I mean, the White House calls it an obsession. Jay Carney has called it an obsession. But I do believe that there are lots of Republicans who don’t want her to be the secretary of state. And whoever thought there’d be a Republican caucus to get John Kerry named secretary –

MS. IFILL: Well, he’s part of that club. If you’re a member of the Senate, you’re part of the club, and that’s part of what’s going on probably. But I’m curious whether folks at the White House, Mike –

MR. VIQUEIRA: Michael, Mike, take your pick.

MS. IFILL: I could call you Michael, like your mother does. Mike, it seems to me that at some point, the people at the White House also are just trying to decide is this worth it?

MR. VIQUEIRA: You know, you ask Gloria if it’s policy or politics. I don’t often say this, because every time I do think it, I end of being wrong, but I think there’s a visceral aspect to this. I think that the president, when this came up at his first post-election press conference, was genuinely upset. I know – you know, I hear that –

MS. IFILL: Ferocious –

MR. VIQUEIRA: Yeah, come after me, come after me, almost like Joe Pesci moment there.

MS. IFILL: Right, right.

MR. VIQUEIRA: And you know –

MS. IFILL: And if it’d been anybody other than John McCain, it wouldn’t have been quite the same response.

MR. VIQUEIRA: Right, which also sort of may have pushed the presidential buttons a little bit as well. I think that there is a strong contingent among the upper echelons at the State Department and the White House that think that the president should go forward with that nomination.

MS. IFILL: Should go forward.

MR. VIQUEIRA: Should. I think that there are others, who say, let’s not pick this fight now. We have plenty to work on, the upcoming fiscal cliff, of course, immigration. I think when Susan Collins appeared after a meeting, I believe it was on Wednesday, who – you know, is not exactly a red meat Republican who voted for the stimulus, for crying out loud – was one of only three Republicans to do so – came out and expressed reservations about Susan Rice. I think that that was a red flag.

MS. IFILL: But, Sue, let me ask me about what’s happening on the Hill, because we have heard quite loud and clear from people like Kelly Ayotte and people like Susan Collins, Bob Corker, John McCain, and Lindsey Graham, and where’s everybody else? In the end, this comes down to nose counting, right?

MS. DAVIS: Where are the defenders?

MS. IFILL: And where are her defenders?

MS. DAVIS: There are – I think there are an element of defenders. I don’t think that there’s much out there because she hasn’t been nominated to anything yet. So this is sort of a – it’s a weird argument because it’s about someone that we’re not sure is going to get nominated to a position. But I do think that one of the facts that Democrats bring up a lot is that if the issue is that she misinformed Congress or misled, that they draw a parallel to Condoleezza Rice and that she misinformed and misled on Iraq and she was still confirmed with the support of people like Hillary Clinton and Barack Obama.

MS. IFILL: And John McCain.

MS. DAVIS: And John McCain. And there’s a question of whether should a president have the priority to have people in his cabinet that he wants to have in his cabinet. I would say that there is just an interesting – as you said, sort of this visceralness about this. It’s very interesting that McCain has taken the lead, I think both on a policy level, he has very strong views on this, and it comes back to his former 2008 appointment. And Susan Rice was a very strong critic of John McCain and his foreign policy views when he was the nominee.

MS. IFILL : She was. And he was close to Chris Stevens, the ambassador who was killed.

MS. DAVIS : Yeah. And I think there’s a personal feelings for a lot of this to try to separate.

MS. IFILL: But how much of this is about what the UN ambassador said on a Sunday talk show and how much of this is about what the Intelligence Department did or didn’t do and what the State Department did or didn’t do?

MS. BORGER : You know, you’re 100 percent right. I mean, I’ve talked to Republicans this week about this and foreign policy expert Republicans who say, why are we picking this fight? This is – what we need to be asking is did the intelligence community decide to use the different language because they were playing politics or did they not know? We’ve heard that General Petraeus said that he immediately assumed that this was a terror attack, al-Qaida. So the question is – this Republican said to me – why are we making this about her? This needs to be about something bigger that is actually bigger than Susan Rice. Did we get it wrong? Did we pay no attention to it because there was an election? I mean, those are very important issues that, of course –

MR. VIQUEIRA: And didn’t it feed those suspicions, when after they had testified, there was a clarification issued by the intelligence community as to who actually changed the intelligence –

MS. IFILL: This week.

MS. VIQUEIRA: Yeah, after Susan Rice had gone up there and made this presentations – yeah, with Mike Morrell and made this presentation, later in the afternoon, they came back and clarified exactly how it all transpired in the organizational part of that.

MS. IFILL: Yes, there are still, no question, a lot of unanswered questions about Benghazi. I just wonder whether this is going to be the real avenue for it or whether folks are just trying to get to something else.

MS. DAVIS: It’s curious – it’s also curious because – and we talk about this earlier, but where’s Hillary in all of this?

MS. IFILL: I don’t know.

MS. DAVIS: It’s partly what makes me put the thumb on the scale, well, right now this is more about politics, is if this was really substantive and they were trying to answer these big questions, why isn’t the secretary of state being brought in to Capitol Hill to –

MR. VIQUEIRA: Well, we can go further back, then why didn’t she go to the Sunday shows?

MS. DAVIS: Yes. You know, like there’s a certain element of theatrics to it.

MS. BORGER: She doesn’t like to do Sunday shows, as you know, and – but Susan Collins raised that exact question, which is why were you putting the U.N. ambassador –

MS. DAVIS: Right.

MS. BORGER: – out there.

MS. IFILL: And then defend her by saying, oh, she didn’t know anything. Not so good.

MS. BORGER: That’s the point.

MR. VIQUEIRA: She was just saying – doing what she was told.

MS. IFILL: Well, there’re two questions here. One is whether in fact there is any precedent for the president’s not – pick – if he were to pick her, being rejected and whether there are the votes to do that, not clear yet, but also just like with the fiscal cliff, is there something going on away from the cameras that’s not going on in front of the cameras? Are there conversations being held? Are there – oh, come on, we know what we’re going to do? Is that happening on any level that we can tell?

MR. VIQUEIRA: I think on the fiscal cliff, you – you know, the president and John Boehner spoke over the weekend. I think it was the second consecutive weekend when they spoke – 28-minute conversation, variously described as curt or short. I think they’re – and there are people who already suspected John Boehner’s strong reaction against the proposal that was sent up today was something that they had planned together, because now Boehner can look as though he’s fighting this crazy, outrageous proposal. And when he has to come back to $800 billion as opposed to $1.6, but you know, it’s all set up. I don’t think so. I’m very pessimistic about a resolution. I might be one of the only ones.

MS. BORGER: Yeah, I am too – look, given everything that we’ve covered over the last –

MS. IFILL: Am I the only optimist at this table?

MS. BORGER: Given everything that we’ve covered over the last couple of years, you saw what happened with the debt ceiling, for example, I mean, there was in the lame duck session, after the 2010 midterms, there was sort of a productive lame duck session, but then again the president was accused of caving. So the Bush tax cuts were extended, so –

MS. DAVIS: The atmosphere has not changed despite the election and that we do live in a Washington right now where they don’t – we don’t do big things anymore. Big bills – they take too much leadership. It’s incremental. And why I’m not – I’m pessimistic for this idea that we talk about a grand bargain. I don’t think that’s going to happen at this – as far as the eye can see –

MS. .BORGER: But they’re up against the wall.

MS. DAVIS: But they know how to punt. They really know how to punt.

MS. IFILL: We’re going to keep talking about this – (inaudible) – thing. Sorry, everybody. We’re leaving – we have to leave a few minutes early just to give you the chance to support your local PBS station, which in turn supports us. But the conversation, as you can tell, will continue. It’s going to be online on the “Washington Week” Webcast Extra, where we’ll talk about what they’re calling the Obama-Romney turkey chili summit. You know you want to see that.

And before we go tonight, we want to send out fond retirement thank yous and farewells to four “Washington Week” stalwarts, Lynn Allison (sp), Al – (inaudible) – Mike Smith, and Ken Yohara (sp), who, all together share more than a century service here at WETA in Washington. Enjoy your Friday nights, guys. Let us know what it’s like.

Keep up with daily developments with me on the PBS “NewsHour” and we’ll see you right here again next week, on “Washington Week.” Good night.

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