'This Week' Transcript: Senate Minority Leader Mitch McConnell

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STEPHANOPOULOS: Roundtable coming right up. What's their take on the new Congress? The late-night comics have already had their first say.

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FALLON: Today, members of the 113th Congress were sworn in at the Capitol, after which they were like, "Well, that's enough work for the year."

LENO: How many are in favor of this deal?

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How many -- how many against this deal?

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How many are happy you don't have to hear the stupid phrase "fiscal cliff" anymore?

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PELOSI: I present the people's gavel to the speaker of the House, John Boehner.

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BOEHNER: So if you've come here to see your name in the lights or to pass off a political victory as some accomplishment, you've come to the wrong place. If you come here humbled by the opportunity to serve, if you've come here to be the determined voice of the people, then you've come to the right place.

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STEPHANOPOULOS: Speaker John Boehner getting a little emotional after accepting the gavel after a surprisingly close vote, one of the things we're going to talk about this morning on our roundtable. Joined by George Will -- happy new year to you -- Gwen Ifill of PBS, ABC's new chief White House correspondent Jonathan Karl, Greta Van Susteren of Fox News, former Labor Secretary Bob Reich and now the chancellor professor at U Cal Berkeley.

Thanks, all, for coming in. We've got to start out with this detail. I think, George, it was the first time that Congress was in on January 1st since the Korean War. And you say the deal -- and this is kind of a contrarian view -- was actually a triumph.

WILL: In this sense, I think people will look back on this deal as where liberalism passed an apogee and went into decline for the following reason. In the Bush tax rates were passed in two tranches, 2001 and 2003. In 2001, only 28 Democratic members of the House voted for them. In 2003, only 7 did. And they did it to make for only 10 years, they were to expire.

Under this deal, 172 House Democrats voted to make the Bush rates permanent for all but 0.5 percent of American taxpayers. What that means is, is that they can no longer tax the middle class. And we have here an endangered species...

(CROSSTALK)

REICH: He's pointing to me. I don't know why.

WILL: I'll tell you why. There are only about three liberals in the country -- and you're one -- who aren't actively hostile to arithmetic. And therefore, you know that you cannot fund a state that liberals want, the entitlement state, without taxing the middle class at least. And now you've given up that -- with the locking-in as permanent law the Bush tax rates, that's off the table.

REICH: Well, let me first...

(LAUGHTER)

Let me, first of all, say in a slightly more -- more nonpartisan approach, I think that the problem really with the deal is that what we needed most from an economic standpoint is, number one, a stimulus in the short term, number two, serious deficit reduction in the long term, and, number three, some stability and some certainty about the future. And we got none of this.

And that really is a major problem. We are going to be up against continuous trench warfare, and we have not dealt really at all with the deficit, the long-term deficit problem, and in the short term, we've got a huge employment issue. I mean, jobs should be the number-one issue right now in the country. It's still is -- we saw that unemployment report -- it still is a terrible jobs picture. And yet we have virtually no stimulus. In fact, you know, the Social Security taxes are going up.

STEPHANOPOULOS: And, Jon Karl, clear from when I was talking to Senator McConnell that even though he doesn't want to accept the possibility of another massive confrontation over the debt limit in February, that it's coming, the divisions are as wide as they ever were.

KARL: We are absolutely on a collision course. You have this amazing situation, George, where the White House is saying they will not negotiate on the issue of the debt limit. That's just something Congress has to do, period, no negotiations. They're not scheduling meetings on it. It's not going to happen.

And the speaker of the House, John Boehner, is now saying he's through with negotiations, that they're going to go through, they're going to pass in the House what they're going to do and move on, but there are going to be none of this long...

STEPHANOPOULOS: So Mitch McConnell is talking to himself?

KARL: Yeah, so Mitch McConnell is basically talking to himself.

IFILL: And so's President Obama, because President Obama came out and said I believe that there are loopholes which still must be closed, other -- basically fees and taxes which still can be raised, and you heard the speaker -- the Senate majority leader, Minority Leader Mitch McConnell, say, oh, no, no, no, we're done with taxes, taxes are off the table. So there is a collision coming, and it's coming really soon. I'm not sure anybody has the appetite for it.

VAN SUSTEREN: And it shows that everyone really -- you know, really no success stories in this. Everyone was a big, fat loser. It's disgusting. From the White House on down, this whole fiscal cliff resolution that took 18 months to get to where we are, even Simpson-Bowles said it was a missed opportunity. And you talk about we need some short-term stimulus. Actually, there was short-term stimulus in this fiscal bill. Goldman Sachs, NASCAR, Hollywood, they all got some short-term stimulus.

STEPHANOPOULOS: Through tax extenders.

VAN SUSTEREN: Yeah, yeah. So why did they get the short-term stimulus? And so the big...

(CROSSTALK)

IFILL: The Puerto Rican rum industry, as well.

VAN SUSTEREN: Right. And so the big losers are, you know -- is from top down. I blame the White House. I blame Capitol Hill. And the American people saw how the sausage is made, and once again, they were had again, because they don't do their work, and they just -- all they do is take advantage of the American people.

WILL: Don't neglect electric scooters, because this really tells you how Washington works. The fiscal cliff deal -- scooters are made in Oregon. Senator Wyden of Oregon said it is unfair that the federal government uses tax credits to bribe people to by electric cars. That's discrimination. Therefore, we ought to have a tax credit to bribe people to buy electric scooters, which we now do.

VAN SUSTEREN: But so -- but the point is that this fiscal cliff is a big, fat lie. It did have some stimulus for its special interests, its little sort of -- its pets. Its -- Congress's and the White House's pets. And that's disgraceful.

And they didn't do their job. They've known about this for a long time. If you don't do your job, you don't do your job, you don't -- none of us, we'd be out of jobs, and instead -- and the media lets them off the hook, saying that's the way it's always been done. Well, maybe it should stop being that way.

REICH: Well, the real question -- a practical question is, what are they going to do now, faced with not only another fiscal cliff, but also this debt ceiling? I mean, I think that the showdown over the debt ceiling could be much, much worse than anything we've seen so far, because they're just dug in. Both sides are dug in.

STEPHANOPOULOS: And, George, there does seem to be a division inside the Republican Party right now. You do have some voices saying, you know, that phrase the Wall Street Journal used, shoot the hostage, you should be willing to shoot the hostage, go over and default if you have to. Senator Cornyn calling about a partial government shutdown. Others, like Newt Gingrich, saying that would be crazy, that is a losing strategy.

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