Interview With Senate Minority Leader Mitch McConnell
KING: I'm John King, and this is "State of the Union." Here are some stories breaking this Sunday morning. An administration official says President Obama will seek to cut the federal deficit in half, to $533 billion, by the end of his first term. The official says most of those savings will come from spending less in Iraq and by raising taxes on people who make more than $250,000 a year. Secretary of State Hillary Clinton is heading home from China after wrapping up her first overseas trip as America's top diplomat. Secretary Clinton went to church in Beijing today before heading back to Washington. During talks with Chinese officials, she said China and Washington must work together to get through the global financial crisis. Headway in the 8-year-old murder case of Chandra Levy. Her mother says an arrest is imminent. A source close to the investigation says an arrest warrant now being finalized. The suspect is a man convicted of similar attacks in the Washington park where the former federal intern disappeared back in 2001. That and more ahead on "State of the Union." GM and Chrysler announced past week -- and you're looking there at a shot of the United States Capitol -- GM and Chrysler announcing they'll need more than $21 billion to stay in business. That's on top of the billions they've already received. Detroit is, of course, the historic home of the automobile industry in America, but its reach and struggles go well beyond Michigan, including Bowling Green, Kentucky, where a GM plant is set to reopen tomorrow after a two-month shutdown. That plant is in the home state of our next guest, the Senate Republican leader, the minority leader, Mitch McConnell. Senator, thanks for joining us on "State of the Union." I'll get to the auto question in a minute, but I want to start with the president's budget and this promise we're hearing this morning to cut the federal budget deficit in half by the end of the first term. To do that, the Obama administration says it will, as he promised during the campaign, let the Bush tax cuts go away for Americans who make more than $250,000 a year. There are some other what you would call I assume tax increases involved in that as well. Let's start with that basic premise. The Democrats have the votes in the House, but they need some Republicans in the Senate as we learned in the stimulus battle. Will that fly, and do you think it's the right approach given the state of the economy?</s>MCCONNELL: Well, I don't think raising taxes is a great idea, and when our good friends on the other side of the aisle say raising the taxes on the wealthy, what they are really talking about is small business. A vast majority of American small businesses pay taxes as individual taxpayers. So we have got to ask ourselves whether increasing capital gains taxes, dividend taxes and taxes on small businesses is a great thing to do in the middle of a deep recession. I think most of my members will think that that's not a smart move.</s>KING: Another question for the government is the continuing financial institutions bailout.</s>MCCONNELL: Yes.</s>KING: And even though the first installment began under President Bush -- you helped broker that compromise -- I know many of your members aren't happy with the way that money has been spent. Now, there's some talk, because the banks, even though they are getting this money, their bottom lines keep getting worse and worse and worse. The administration says it does not want to nationalize the banks in the United States, but your colleague on the Democratic side, Chris Dodd, who is the chairman of the Banking Committee, said this to Bloomberg Television on Friday. "I don't welcome that at all," meaning nationalizing the banking industry, "but I could see how it's possible it may happen. I'm concerned we may end up having to do that, at least for a short time." Have we come to that, sir?</s>MCCONNELL: I agree with the administration. I think nationalizing the banks is exactly the wrong thing to do, and we certainly shouldn't go in that direction. We have been on an incredible spending spree, though. We've spent in this new administration, 32 days, $36 billion a day. If you add all that up, that's as much as the previous administration spent over seven years on both the war on terror and the recovery from Katrina. So I think it's timely that the president is having a meeting at the White House tomorrow to talk about the deficit, because we're spending money at a very, very rapid pace, far beyond anything in history.</s>KING: Do you think that he will listen? I know Republicans complained he did not listen to your specific ideas in the stimulus debate. When it comes to the deficit, can you come to him and say, Mr. President, I know you want to eliminate the Bush tax cuts, which you call a tax increase. Let's not do that. I can show you another way to get that piece of money?</s>MCCONNELL: Well, what we need to do is get a handle on our long- term unfunded liabilities for Medicare, Medicaid and Social Security. We do know that the president has indicated he's in favor of the Gregg-Conrad bill, which basically tackles all entitlements, but you know, if he is willing to at least target Social Security -- because I hear that he'd like to deal with Medicare and Medicaid in the context of health care -- let's go after the Social Security problem. It's going -- it's going to be bankrupt in very short order. The Gregg-Conrad proposal would basically set up a base, a closing type approach, where you appoint a commission, it would come up with a solution, and come to the Congress with an up-or-down vote, which would guarantee a result. That's something we can have a bipartisan approach on. I'm in favor of that kind of a move, to give us the ability to tackle one of our long-term deficit problems. So I hope what the meeting at the White House is about tomorrow is about sobering up here and beginning to re-think the kind of debt that we're laying on future generations.</s>KING: You mentioned the spending that you don't like, that you think it's excessive. Another question for the administration and for the Congress is whether to give billions more to the auto industry.</s>MCCONNELL: Yes.</s>KING: G.M. and Chrysler want money. G.M. wants the most. You have a plant in your home state, in Bowling Green, that's been shut down because production has been shut down. Those workers come back on Monday. There's a question of whether that plant survives. I was in Michigan this week. And when I brought up the question of should Washington give you the money, an autoworker named Mike Huerta -- I met him -- he's going to be out of work in a few weeks. He specifically mentioned you by name and some other southern senators who he thinks are not as sympathetic as they should be. Let's listen.</s>MIKE HUERTA, AUTO WORKER: Maybe somebody like Bob Corker or Mitch McConnell who has a -- a plant in Bowling Green, Bob Corker has a plant in Spring Hill, Tennessee, if those plants end up closing and coming -- that product comes north, you know why. You can't spurn a corporation, an American corporation who gives Americans jobs and -- and puts money back into our economy. You can't -- you can't treat them like that.</s>KING: You said you wanted to see proof that G.M. and Chrysler understood what they needed to do to restructure before you would support giving them money. Have you seen the plans? And are you now willing to support giving them more money? Or will you go home to Bowling Green and say, "I'm sorry, but your jobs may disappear because they don't deserve it"?</s>MCCONNELL: Well, in Kentucky, we have Toyota, we have Ford, and we have G.M. We have a diversified automobile industry. Everybody wants to see the automobile industry succeed. The question is, can it do it with this kind of approach? I opposed the bailout back in December because it was no indication that the companies that were seeking the money -- in this case, G.M. and Chrysler -- were willing to make the kind of restructuring decisions that were needed.</s>KING: And so are they now...</s>MCCONNELL: They came back -- they came back earlier this week, and those decisions have still not been made.</s>KING: Still not made?</s>MCCONNELL: No, they've still not been made, and they've -- they've doubled their request from December. So the question is not whether we want to save the automobile business, but how do you best do that? And it strikes me that, at least at this -- at this -- at least at this stage, the companies are not doing what needs to be done to save the companies. So that puts us on a long-term policy of the government simply propping up this industry endlessly.</s>KING: I want to ask you about a piece of Senate business. It's not your business directly, because he is a Democrat, but Roland Burris took the seat previously held by now-President Barack Obama. The governor of Illinois, who has since been impeached, appointed him to that seat. Senator Burris now has given what many would say are inconsistent accounts of whether he tried to raise money for the former discredited governor who put him there. And a number of Democrats, including the new governor of Illinois, have said he should step down and resign, that he is not fit to serve in the United States Senate. Should he?</s>MCCONNELL: Well, look, I felt that there should have been a special election in Illinois to begin with. That didn't happen. The appointment occurred. Senator Burris is now a senator. The Ethics Committee has jurisdiction over it. I hope they will look at it, and I hope they'll look at it quickly.</s>KING: But leaders have to take -- sometimes set the tone. You're the Republican leader. I know it's more of a Democratic question than a Republican question. But would you -- if he were in your caucus facing the same circumstances, would you look him in the eye and say, "Sir, you must leave"?</s>MCCONNELL: Look, I'm willing to accept responsibility. I was chairman of the Ethics Committee when we asked a member of my party who was chairman of the Finance Committee to be expelled from the Senate. I think the Ethics Committee can work. I think, in this particular instance, it ought to work quickly, and resolve these differences, and make a recommendation to the full Senate.</s>KING: But you don't think he belongs in the Senate?</s>MCCONNELL: I think the Ethics Committee ought to give us a recommendation quickly.</s>KING: All right, we'll leave it at that. Senator Mitch McConnell, the Republican leader, we'll have you back. Many, many more issues to talk about in the weeks and months ahead. Thank you, sir.</s>MCCONNELL: Thank you, John.</s>KING: So far Republicans haven't bought into President Obama's plans. Is Tuesday's big speech to Congress a chance to turn a new bipartisan page? When we come back, we'll talk to two veteran political strategists who know just how hard that can be. And later, a conversation with one Republican governor who says being post-partisan is the only course that works, California's Arnold Schwarzenegger.