'This Week' Fiscal Cliff Panel

Good morning, and welcome to "this week." With 23 days to go, stalemate. I want to send a very clear message. I will not play that game. The president digs in. The speaker battles back. The president... See More

Good morning, and welcome to "this week." With 23 days to go, stalemate. I want to send a very clear message. I will not play that game. The president digs in. The speaker battles back. The president is just on my way or the highway, that's not the way to get to an agreement. Is a deal still possible on the fiscal cliff? Does either side have a viable fallback? What will this brinksmanship mean fhe economy and you? We'll get the latest from our decisionmakers. Our capitol hill roundtable. Debbie stabenow. Tom coburn and jeep hensarling. We'll get the decisions with our roundtable. Then, our powerhouse roundtable weighs in on that and all of the week's politics. Tea party stalwart abandons. Conservatives on the hill are counting on us. And the supreme court court takes on gay marriage. We'll break it all down with george will, james carville and mary matalin. Paul krugman of the "new york times" and abc's own matthew dowd . Hello, again, just over three weeks away from that fiscal cliff, we just come off a week of press conferences, symbolic votes in senate, but less than an hour of serious negotiating. What will it take to break the stalemate? We'll get into that this morning, with two big roundtables of elected officials and experts. Let's begin with the lawmakers. Senator tom coburn for the republicans and debbie stabenow for the democrats. And congressman hensarlingg. The president said that for there to be a big deal, tax rates on the wealthy are going to have to go up. If that's his bottom line, can there be a deal? Again, as the speaker has said, unfortunately what we see out of the president is my way or the highway. One dollar revenue for 2.5 of spending reductions. Now, after the election, it's a little bit of bait and switch. Now he's asking for $1.6 trillion. And if you look closely, for every one dollar of tax increase there's about 20 cents of spending reductions. I'm talking about the rates. If the rates go up, can the republicans in the house accept the tax increase? No rep wants to vote for a rate tax increase. What that's going to do, is cause 700,000 americans to go from having paychecks to unemployment checks, because of what that's going to do to the economy, george, hardworking americans are going to see a 2% reduction in their paycheck if they keep them. Listen, the president, again, if he would do what he said before the election, as opposed to the bait and switch, what the republicans feel like is a little bit like charlie brown running to kick the football and lucy pulls it away. Ultimately, it's a spending problem. The american people know it. This talk of taxes is almost irrelevant to the size of the trillions and trillions of debt. But not to the president's negotiating position. Senator coburn, you say, senator, that you could sign on to a tax rate increase provided that the president and the democrats come forward with significant spending cuts and entitlement reform. What will it take for you to sign on to a tax rate increase? Well, significant entitlement reform. The real problem, the president is proposing 7% of the solution. What we ought to be working on the other 93%. Even if you do what he wants to do on tax rates, you only affect 7% of the deficit. What we have done is, we have spend ourselves into a hole and we're not going to raise taxes, borrow money and get out of it. Will I accept a tax increase as a part of a deal to actually solve our problems? Yes. But the president is negotiating with the wrong people. He needs to be negotiating with our bondholders in china. Because if we don't put a creditable plan on this, on the discussion, ultimately, we all lose. Well, you got your colleague debbie stabenow, on the your screen as well, can you just say quickly what it is going to take? I want to see if she can accept the kind of entitlement reforms that you're thinking. Well, we got to quit playing the game, george, you can't continue to lie to the american people. There is no way to fix medicare under the guidelines of aarp with our tax dollars are now advertising to say not fix it. The way we can fix it is to control the cost. The way to control the cost is to have more individual participation. There's a lot of ways to do that. But you can't play the game and hide. Medicare and social security and medicaid, if those aren't fixed, if we're not honest about how to fix them and the fact, that, yes, everybody in this country will have to participate in some discomfort, if we're going to get out of this hole. As long as we continue to lie to the american people that you can solve this problem without adjusting and working on those programs it is dishonest and beneath anybody in washington. Senator stabenow, you heard it right there, medicare, medicaid, social security, all have to significant reform, can you accept that? George, there are three parts of the stool here to solve this problem. One, spending. We've already agreed to trillion dollars in spending reductions. Two, medicare and entitlements. We have already agreed to over $700 billion in spending reductions on medicare. Starting by cutting overpayments to insurance companies. Three, is making sure that the wealthiest in the country contribute to solving the deficit problem. That's what hasn't passed. For us to continue on this, we have to have the senate bill that continues tax cuts for middle-class families, that says to the wealthiest americans, you're going to chip in and be part of the solution. The house needs to pass it. That means, we would have done something on each of the areas that my colleagues are talking about. Then, we have to take another step on all three of those. But right now, the only thing that we see is middle-class families being asked over and over again to be the ones who have the burden in solving this problem and we're saying no. So your position for now is clear, no more reforms in medicare, medicaid until the middle-class tax cuts are extended. Congressman, is that your position? Yes. When I talked to the business folk in my district, the guy who sells furniture up the street in neighborhoods hit hard by this recession, they're not asking, oh, what's going to be my tax rate? What's the tax situation? They're looking for customers. Part of this crisis that we're talking about is jobs. And the ability to generate jobs to put americans to work and put americans back in a secure place for their families and correspondingly to help the businesses of this nation. I really think that we're doing is ignoring other sources, we're ignoring the loopholes and we're ignoring all of the breaks that have happened over a decade-plus. Now, we're asking the middle class, the elderly, the poor, to carry the brunt of the mistakes that were made 10, 12 years ago. 800 billion by closing deductions and loopholes for the wealthy. Another thing that he's going to put on the table, congressman hensarling. Bottom line is, he's not going to negotiate over the debt limit. You have two big bottom lines for the president. I have been around capitol hill and washington for a long time. It's hard for me to see with those two big absolutes out there that you can get this done BY DECEMBER 31st, IS THERE A Fallback position right now for the republicans? I must admit, that I didn't know that the president can surprise me once again. In other words, we no longer need a speed bump on the highway to bankruptcy, I mean, let's look at greece, greece has been very adept at increasing their debt ceiling. Now, they have 25% unemployment. 50% youth unemployment. There are people who can't even finds jobs in cities who are having to move out, according to press reports, to rural areas. That could be our future. As tom said, if you gave the president every job-forming tax increase that he's asked for, it's about 3% of the spending. And the president himself has said that the drivers of our debt are medicare, medicaid and health care. Nothing else comes close. Senator stabenow pointed out -- you can't get it done, george. You have to deal with the structural reforms to our entitlement spending, protecting current seniors but helping to insure my 10-year-old daughter and 9-year-old son that these programs are around for them. But senator coburn, in president obama's health care act, $116 billion in medicare savings, which a lot of republicans, not you, but a lot of republicans in the last campaign, including mitt romney, ran against. Well, george, first of all, the $700 billion in savings doesn't save the government a penny, because it takes that 7$700 billion and spends it on other people. What -- it's really important that people look. The government is twice the size it was 11 years ago, we have seen the president demand that we're going to solve 7% of this problem, but he's totally inflexible on the other 93%. It doesn't really matter what happens at the end of this year, because ultimately, the numbers and the bondholders throughout the world, will determine what we'll spend and what we won't. We can play the political game that is being played out in washington right now. Or we could actually be absolutely honest with the american people, and say medicare is going bankrupt, social security bankrupt in two years, social security trust fund will be bankrupt in five years, social security total will be bankrupt in probably 16, 17 years. Those are worst-case scenarios by the trustees of both those organizations. We can play that game. But the fact is, we're spending money that we don't have on things that we don't absolutely need and there's no grown-ups in washington that will say time-out, stop the politics, let's have a compromise rather than to continue to play the game through the press and hurt the country. We're already going to get another debt downgrade just from what's happening now because no willing to do what's important and necessary for our country. You know what, george, if i might just jump in, george, on that one, first of all and say, social security isn't going bankrupt, we're making reforms in medicare, in fact the cost of medicare advantage has gone down by 7% for seniors because what we have done. But what's going to happen at the end of the year, if the house doesn't act, middle-class families will see a tax increase, that's going to be at least $2200 per person. One of my constituents said, that's four months groceries for one family. That's a lot of talk. I agree with my colleagues. One thing that's very clear, at the end of this year, if the house of representatives does not pass the middle-class tax cut, we're going to see middle-class families across this country paying at least $2200 more in taxes that they can't afford. All because they're trying to protect the wealthiest few from getting another round of tax cuts that we can't afford. So, let's start there. I want to bring in another congressman grijalva. You'll get the last word. What if they call the president's bluff? No extension of unemployment benefits. The sequester kicks in. Cuts in both domestic and defense spending. The president will have no more leverage after that fact, isn't that true? I think the leverage is there for the president, george. I really do. I'm happy the president and the democrats are not negotiating with themselves this round. They're actually negotiating with people that are in a position in the house to make the decisions. And, if the middle class is -- if that's the vote we take, that's a good vote and that's a step toward in the direction. But, I think that one of the issues that's being left alone in this whole discussion is the amnesia of how we got into this situation, who's responsible for the situation? And to blame the three programs that we're talking about, medicare, medicaid and social security, as the drivers of this deficit, is a mistake. The drivers happened long ago. Two wars and a credit card, financial institutions that took -- abused the american people and now we're being asked to go back to the same people who have endured this crisis and ask them to pay up again. No, no. Differences are still wide on you four. Thanks for coming in today.