'This Week' Transcript: Former Florida Gov. Jeb Bush, Powerhouse Roundtable

(CROSSTALK)

STEPHANOPOULOS: Go ahead?

JOHNSON: He needs far more than that. I has to -- he has to bring the House along as well. So this has got to be a bicameral, this has got to be a robust process and again, you've got to take that first step, and the president did that. I think Republicans reciprocated.

STEPHANOPOULOS: If he continues -- if the president lays out more far-reaching entitlement reforms on Medicare, for example, will Democrats in the House follow?

SCHULTZ: Well, I -- I think what needs to be happen, the president is going to come up to Capitol Hill this week and meet with both Republican and Democratic caucuses and conferences, and continue the dialogue. I mean unfortunately what we've had thus far is a paralyzed Republican leadership, particularly in the House, who has not been able to act, not felt that all that they have enough -- enough leeway because of their -- the extremism in -- in their Republican conference to -- to do anything with the president.

So reaching out to the rank and file is extremely important. Building those relationships, and building up some of that trust -- because, you know it's really hard to make tough decisions, and reach consensus when there is such a trust gap.

STEPHANOPOULOS: You're as skeptical as George Will?

KRUGMAN: I'm really skeptical, because I -- I mean this is not -- this is not about bad personal relations. People are perfectly capable of being polite to each other, being nice, having a nice dinner. This is about a fundamental difference in visions about what America should be.

(CROSSTALK)

KRUGMAN: One party really wants to take down the -- the -- the safety net we have. One party really wants...

(CROSSTALK)

KRUGMAN: ...to privatize Medicare, wants to, you know roll back, wanted to try to privatize Social Security back in 2005. The other party wants it somewhat extended, wants Obamacare to go into place, would do more if it could. That's not something you're going to resolve with a few dinners.

GOLDMAN: Look, both sides understand what a grand bargain is going to look like. You're going -- Republicans are going to have to give on revenues, Democrats are going to have to give on entitlements. And so there is some case for optimism now that if the president, in trying to build trust -- once these lunches, these dinners, don't become news events that we're covering, but if Republicans see the president moving forward, putting Medicare savings on the table that doesn't just hit providers, but also hits beneficiaries as well, then -- and also going out and selling it to give Republicans some cover, then there could be a sense that you could get some Senate Republicans to -- to help bring the House along.

(CROSSTALK)

STEPHANOPOULOS: And they'll have to go first, the Senate Republicans.

WILL: Yes. Let's begin the process right here, right now. Is it conceivable that your caucus -- you're from Florida...

SCHULTZ: Yes.

WILL: ...which is full of old people, known as God's...

SCHULTZ: Senior citizens.

WILL: ...known as God's antechamber for a good reason, but anyway...

SCHULTZ: Now, now.

(CROSSTALK)

SCHULTZ: I beg to differ.

WILL: Is it conceivable that your caucus would consider, with any concessions from the Republicans, raising the age of eligibility for Medicare?

SCHULTZ: What -- well the only way we've made any progress in careening from crisis to crisis in the last several years is because of Democratic votes in the House of Representatives. The Republicans have been able to get absolutely nothing done with their majority. They've needed our members -- the majority of our members to actually sit down, be willing to make political sacrifice, actually spend some political capital. We supported $1.2 trillion in spending cuts.

The cuts only approach to the debt ceiling deal in the summer of 2011, we -- we did that because it was important to not let the -- the country go over, and jeopardize the full faith and credit of the United States. We need the Republicans to realize that...

(CROSSTALK)

SCHULTZ: ...they are going to have...

(CROSSTALK)

SCHULTZ: ...no, but...

(CROSSTALK)

KRUGMAN: Is it a condition of any Republican support that you have to go for really terrible policies? Because raising the Medicare age is a terrible policy. It raises medical costs, it does very little to improve the budget. It introduces a lot of hardship. Means testing in Medicare is a better policy. I don't particularly like it, but it's a better policy. There are other things you can do. There are other ways you can cut. Even -- I don't like the business about changing, you know the price index for Social Security, but that's not as bad...

(CROSSTALK)

KRUGMAN: ...of all of the things on the table...

(CROSSTALK)

STEPHANOPOULOS: Let the Senator go, and then...

JOHNSON: To say that the Republicans haven't done anything, is just false. The House has actually passed budgets. You know with -- with proposals to -- to try and save Medicare, bipartisan proposals, quite honestly. The Senate hasn't passed a budget in over four years. Listen, unless we do something, these programs are going broke. It drives me nuts. When I -- when I hear people say that Social Security is solvent to the year 2035, it's not.

(CROSSTALK)

JOHNSON: In the next 20 years we'll be $5.1 trillion...

SCHULTZ: OK.

JOHNSON: ...more -- more in debt than...

(CROSSTALK)

STEPHANOPOULOS: Let me put a version to George Will's question to you then. If the president went along with either means testing of Medicare beneficiaries, more far reaching, he's done a little bit already, and also adjusting consumer pricing index for Social Security recipients, would you as a Senator, be open to more revenues?

JOHNSON: Listen, if you -- if you're taking a look at, in a entitlement reform package, in term -- you know actually bringing in revenue for those entitlement reforms, I might look at that. But the fact of the matter is -- the fact of the matter is, we already have a $1 trillion in middle income tax increases hitting us in Obamacare. They're hidden, but it's middle-class...

(CROSSTALK)

JOHNSON: ...it's certainly true, as well as another $600 billion. So, you've already got $1.6 trillion worth of tax increases hitting us in the next 10 years. That's going to harm economic growth. George, the best way getting out of the situation is economic growth.

(CROSSTALK)

SCHULTZ: No, let -- first of all, that is completely untrue. It is -- there are not $1 trillion in taxes in Obamacare, and what is true -- what is true is that the president in his grand bargain, which is still on the table, which -- with Republicans could take him up on right now, has $360 billion more in savings that ensures that we can add solvency to Medicare. Let's look at what entitlement reform is necessary to reduce the deficit. It isn't Social Security. Social Security's solvency has to be dealt with.

It could be dealt with separately because there is that many years of solvency left in Social Security. So let's not hit the middle-class first. Let's make sure that we take a balanced approach to deficit reduction, and no, the Republican leadership cannot dig in and say that we are done with revenue, because we are not. We got $600 billion, the -- the speaker himself in his proposal in the grand bargain discussion they had with the president, had $1 trillion in revenue, and so there is -- there is another, about $600 billion left that we can do in revenue.

KRUGMAN: Just a question, you say let's start with the facts, but there -- we've just -- we've just run aground right there...

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