'This Week' Transcript: Gene Sperling and Sen. Kelly Ayotte; Plus Dennis Rodman on His Trip to North Korea

They're supposed to be for long term entitlement reform? This does not long term entitlement reform. And when I talk to CEO's around the country, they tell me that this is leading them to put projects that would create jobs on hold. They think it's going to hurt their small business suppliers dramatically. So this is not a win for anyone. The only win, if you can call it that, that this gives is the -- those on the Republican side who are willing to let all of this harm be inflicted...

STEPHANOPOULOS: But...

SPERLING: ...just so they can stand by this principle, that there should not be one dime of deficit reduction...

STEPHANOPOULOS: ...but as you know...

(CROSSTALK)

SPERLING: ...from closing loopholes...

(CROSSTALK)

STEPHANOPOULOS: ...the Republican leaders...

(CROSSTALK)

SPERLING: ...closing loopholes, or deductions. That's just a -- an unreasonable position.

STEPHANOPOULOS: As you know, the Republican leaders say that's not the only option. That they say the administration could cushion the blow of these cuts if it wanted to. Here's -- here's Senate Republican leader Mitch McConnell just the other day.

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MCCONNELL: The president is ready to make it bite as hard as possible, all to send a simple message to the public, you want to control Washington spending America? Fine, let me show you how much I can make it hurt.

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STEPHANOPOULOS: Why not take the kind of flexibility the Republicans are offering?

SPERLING: Because I think that as you've heard, independent economists say, from the Chairman of the Federal Reserve, Ben Bernanke, to the independent Congressional Budget Office, there is no way that you can move the -- the deck chairs around in a way that will not cost our economy as CBO projects, 750,000 jobs. When you have those types of harsh spending cuts in such a short, concentrated period of time, it's like saying to somebody, you can cut off three of your fingers, but you can have the flexibility to choose which ones you want to cut off.

If you're cutting $42 billion from defense, you're going to dramatically hurt operations, and maintenance in our military training. If you have to cut as much is as required on -- on the domestic side, you could eliminate Head Start, the FBI, and the National Science Foundation, and you still would not get there. Now, you know if they want to talk about real flexibility that would allow the president to actually reduce the deficit in a way that didn't hurt jobs, and most importantly, to be able to reduce loopholes, corporate tax expenditures, tax expenditures for the well off, in a way that didn't hurt jobs, that would be one thing.

But what they're saying is, the only way that we can do cuts are in very harsh, devastating ways that would cost 750,000 jobs, and that their flexibility does not include the ability to ask for one dime of revenues...

STEPHANOPOULOS: As you....

SPERLING: ...to lower the deficit from corporate loopholes, even though George, it was only 10 weeks ago that Speaker Boehner said that we could reduce the deficit by up to $1 trillion from exactly this type of tax reform that closes loopholes, and reduces taxes.

STEPHANOPOULOS: ...as you know, Gene, even the president's allies have accused the administration of hyping the pain caused by these cuts. Here's New York City Mayor Michael Bloomberg.

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