'This Week' Transcript: Sens. Patty Murray, Saxby Chambliss; Powerhouse Roundtable

STEPHANOPOULOS: And Senator Chambliss, you said there could be riots in the streets if this isn't done right. So what is the right way to do this? You just heard Senator Murray say the defining principal for the Democrats, the president has said exactly the same thing, is that the wealthy are going to have to pay more.

CHAMBLISS: Well, what's going to have to happen, George is, that because there's no silver bullet, as was discussed in is the Simpson-Bowles commission and ultimately a recommendation of the Simpson-Bowles commission to do this -- we got to look at cutting spending. We still spend way too much money in Washington. What is choking our economy and what is choking the economy of Greece, and this is why I referred to it the way I did, even though it was a figure of speech, but, entitlements are choking us. And we've got to make the real right kinds reforms there to make sure that we do it right, that we protect these programs.

And then thirdly, listen, Speaker Boehner said it I think very well, I thought he showed great leadership by saying that revenues need to be on the table.

Again, we need to do it in the right way. Bowles-Simpson said, look, eliminate all these tax credits and tax deductions. You can generate somewhere 1 to 1.2 trillion in additional revenue. You can actually lower tax rates by doing that. And I think at the end of the day, what's got to happen, George, we've got to get this economy going again.

We have had an outside group, Ernst & Young, look at the raising of the taxes on the highest-income earners. What they concluded was we immediately lose 700,000 jobs in America. Now, is that the kind of economy that this president wants to start out with in his second term? I don't think so. President Obama said two years ago, now is not the time with a sluggish economy to raise taxes. We need to consider the fact that the folks who he's talking about raising taxes on are the job creators, the small business community. So there's a right way to do this and there's a wrong way to do it. And Speaker Boehner was absolutely correct, that you do have to have revenues on the table, but that does mean raising taxes. There are other ways to do it to get the economy going.

STEPHANOPOULOS: Senator Murray, let me come back to you, then, because you said that it might be -- the best way might be to go off the cliff, have the tax rates expire, and then to come in and cut taxes. But what about the concern that going off the cliff will create financial chaos? Equity markets will drop, during the month of December, and of course that could have an impact on economic growth?

MURRAY: Look, no one wants to go off the fiscal cliff. But a fair deal is absolutely critical here. I'm delighted to hear Speaker Boehner and I know Senator Chambliss has said repeatedly revenue has to be a part of it. That is a good step forward. But how that revenue is collected is critical. If it's just eliminating tax loopholes that affect middle-class families, and they don't have a mortgage deduction or a charitable deduction or we raise their copay on Medicare, all of that revenue falling on the middle class isn't a fair and balanced way to get to a deal.

So, how that is distributed is a critical part of that.

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