'This Week' Transcript: Madeleine Albright, Sen. Lindsey Graham, Sen. Kent Conrad and David Cote

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AMANPOUR: You know, Americans are worried that their jobs are going overseas. You've said that it can't be seen as a zero-sum game.

COTE: Well, that's one of my issues. And, quite honestly, I think the media helps to perpetuate this, is that economics is viewed as a zero-sum game, my loss is your gain, my gain is your loss.

And the only reason you do things economically is because both sides win. When you go to the store and you buy something, the store's happy, you're happy. You both benefit. And that seems to get lost when we start talking about economics on a grander scale.

AMANPOUR: Senator Conrad, there has been so much talk now about the recommendations by the co-chairs of the -- of the -- of the deficit commission, the fiscal commission. Is there any area you think that there's going to be any compromise on this? I mean, they're attacking and talking about really sacrosanct parts of the American political sphere here.

CONRAD: You know, a certain amount of this is shock therapy. You know, there are different options. And, of course, what everybody has fashioned -- fastened on are the most extreme of the options.

But, look, the important thing for people to know is we are borrowing 40 cents of every dollar we spend. That's utterly unsustainable; it can't continue much longer, so it's got to be dealt with.

If you look at our spending, it's the highest it's been as a share of our economy in 60 years, revenue is the lowest it's been as a share of our economy in 60 years, so we're going to have to work both sides of the equation.

It's critically important we do or we will become a second-rate economic power. That is the hard reality.

AMANPOUR: But in terms of things like mortgage interest and all those things that the panel is recommending, these are things that Americans have really relied on forever, just about, and so many of them. Is that even a starter?

CONRAD: Well, there is -- as I referenced earlier, there is one proposal that eliminates all the tax preferences, all the tax deductions, all the tax exclusions, and uses 90 percent of the revenue to reduce rates, only 10 percent to reduce the deficit. I don't favor that approach.

I think we need something that represents a continuation of the mortgage deduction, although reformed, to apply only to primary residences, for example, but we need to continue the child credit, we need to continue the earned income tax credit.

But fundamentally, if we're going to raise revenue, I don't think the way to do it is to raise rates. I think the way to do it is to eliminate some of the loopholes that exist in the system. We have a tax system now that is just loaded -- chockablock full of preferences, loopholes. We're allowing $100 billion a year to be lost to offshore tax havens, another $50 billion to abuse of tax shelters. That can't be allowed to continue.

AMANPOUR: And on another -- well, on the same issue, but Paul Krugman, the economist, Nobel Prize-winner, who's going to be on our roundtable, has written this week that it really is basically tax breaks again for the rich and more onus on the -- on the middle class dressed up as something new.

COTE: Well, in my view, democracy seems to be uniquely suited to putting a traffic light up after the fourth accident. Now, we can't wait for the fourth accident here.

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