Interview with Senators Tom Coburn and Mark Warner; Debt Ceiling Disaster
ERIN BURNETT, HOST: OUTFRONT next --</s>UNIDENTIFIED MALE: I'm here. I'm ready to do it. Let's go.</s>BURNETT: In Washington tonight, deal or no deal? President Obama called the first female president, sorry, could have fooled me. And a young student being at being attacked by a flesh eating bacteria and tonight her parents come OUTFRONT. OUTFRONT tonight, crisis in America. Just take a look at this video, sort of sums it all up.</s>REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: The next two years could be the most consequential two years we see in Washington and have seen in the last 50 or 60 years.</s>BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: And interest rates will go up so fast you won't be able to catch your breath.</s>BURNETT: How much? How much are they going up? Well some Wall Street investors, the most bearish, say that Americans could relive the late '70s or early '80s. And one investor told me he's making big bets in the treasury market, 17 percent for a mortgage. Now that may be incredibly dire, but it's happened before in this country. Debt on debt on debt means interest on interest on interest. So we did the numbers. Current projections from the CBO say the U.S. will spend, prepare yourself for this one, $624 billion in interest in 10 years. We will spend more on interest than on Medicaid in six. This is absolutely not OK. I interviewed Speaker Boehner and asked him whether Armageddon is avoidable.</s>BOEHNER: We all know Social Security, Medicare, Medicaid, they're all bankrupt. And it's not like there's money in the Social Security Trust Fund or the Medicare Trust Fund. It's all been spent.</s>BURNETT: Still, the speaker told me that to approve the debt ceiling increase this year he's going to demand spending cuts and reforms dollar for dollar.</s>BURNETT: Is the debt ceiling going to go up?</s>BOEHNER: I think I've made it pretty clear right here. Allowing the debt ceiling to go up without addressing our fiscal challenge would be the most irresponsible thing that I could do.</s>BURNETT: OK. The reality is it this. The debt ceiling must and it will go up, but is there a solution that isn't just talking politics and not getting anything done. Yes.</s>B. CLINTON: And I've read every word of the Simpson-Bowles report. I believe could you put together enough Democrats if you could make the simple argument that you simply cannot spend all your money on the present and the past.</s>BURNETT: Yes, Virginia, there is a Santa Claus solution to the debt crisis. It's called Simpson-Bowles and it would cut taxes to three brackets, 12, 22 percent, 28, tax cuts for all. There are places where we'll all pay more. And there will be cuts to Medicare, mortgage interest deductions are also on that list. But it's better than that cliff. Sometimes I wonder myself if the democracy our country is so proud of, the democracy that happens here in this building where I'm standing tonight isn't what is -- isn't actually what's putting the wind behind the lemmings tales (ph).</s>BURNETT: Is democracy going to be what sends us over the cliff?</s>BOEHNER: We're in -- you know we're in our 223rd year of our experiment in democracy in representative government. And you know it's not worked well. You could go back to the days of the Greeks or the Romans. There's some point at which they had problems.</s>BURNETT: The view from America's cliff makes the view from Everest look like a little hill. Because this is the world's greatest and most free economy and if we fail, all the opportunities, liberties and luxuries of being American are at risk of becoming history. Sort of like the Greeks and the Romans. So let's do a deal. Playing for the Democrats tonight Mark Warner, Democrat from Virginia and playing for Republicans Tom Coburn of Oklahoma, good to see you both.</s>UNIDENTIFIED MALE: Good to see you.</s>UNIDENTIFIED MALE: Good to see you, Erin.</s>BURNETT: And I know you've both been on this show a lot talking about ideas and compromise, "gang of six" and here you are tonight. So let's see what we can do. You're right now in the middle of conversations, right, Senator Coburn?</s>SEN. TOM COBURN (R), OKLAHOMA: That's correct.</s>BURNETT: And how close are you to something that could be significant in your group?</s>COBURN: Well I think we're close. The point is, is to get the politics out of it, the presidential politics out of it and actually work on the real problems. And that still has some influence as we work because there's political jockeying for what's going to happen in November and what we need to do is throw all that out and start thinking about the best long term position for the country.</s>BURNETT: Senator Warner, both of you have been doing that and it seems like you've accepted a lot of cuts, he's accepted some tax increases, revenue increases. I mean this is a deal --</s>SEN. MARK WARNER (D), VIRGINIA: We found a plan to get us between four and $5 trillion over the next 10 years off our debt. It's not perfect. It wouldn't be exactly what Tom wanted or exactly what I wanted --</s>BURNETT: Right.</s>WARNER: But at the end of the day, the alternative, go back to the lemmings (ph). We're going over this cliff. There should be no elected official that will have any excuse come the end of this year to say they didn't see it coming. So we have got to get out of our foxholes. I think there is a majority in the Senate. I think there's even a majority in the House. We have got to make it safe for folks to do the right thing and as Tom has said, that means you're going to probably make some folks mad along the way, but at the end of the day, the value add not just to our economy but just the overall confidence in our institutions would be enormous.</s>BURNETT: And do you think that the American people now are ready to hear they'll be cuts to Medicare?</s>COBURN: Well, I think that's one failure of the president is one of the things we lack right now on this problem is leadership. If the president were to stand up and say folks we have this big problem</s>BURNETT: The confidence of a debt rating --</s>BURNETT: -- count up. We're going to get to 365 days soon since we lost --</s>WARNER: Remember, we have got American business is sitting on $2.5 trillion in cash on their balance sheets. Giving them the predictability that we've kind of got to rationalize tax code --</s>BURNETT: Right.</s>WARNER: -- that we're going to meet our obligations and a tax code that's simpler as well as entitlement programs that can be sustainable</s>BURNETT: Are you frustrated and do you think the conversation would be different if the president had come out early and endorsed Simpson- Bowles?</s>WARNER: I think the president -- I think the president should have done more to explain the problem. He did come out and endorse our "gang of six" plan.</s>BURNETT: Yes.</s>WARNER: I think that maybe cost us some votes. I think there are some folks particularly in the House that if the president endorses anything, it will be immediately assigned why they can't be for it. I think in many ways it falls then to a group of bipartisan senators who are willing to take the first set of arrows from both sides and both of us have, you know to lay out a plan and I hope and I think the president will be supportive of that.</s>BURNETT: And I want to ask you all about something, this issue of democracy, which I brought up with Speaker Boehner today, that you know we've got a payroll tax cut that is important to people right now, but once people have these things, it becomes hard to take them away. The Bush tax cut is a great example.</s>WARNER: That's why I voted against it because</s>COBURN: I did too. I voted against it as well.</s>BURNETT: There you go. All right, so you're on the same page on that as well. I wanted to just play a sound bite though about what President Clinton said about the Bush tax cuts and get your reaction. Here he is.</s>B. CLINTON: You could tax me at 100 percent and you wouldn't balance the budget. We are going to have to contribute to this and if middle class people's wages were going up again and we had some growth in the economy, I don't think they would object to going back to the tax rates that obtained when I was president.</s>BURNETT: Are we eventually going to be able to have those tax rates go away? Because we've all looked at the numbers, if they go away for everybody, it's $2.8 trillion --</s>BURNETT: That's more than half of the country --</s>WARNER: Cuts about $4.5 (ph) trillion. So you know and no one's talking about putting them all back in, but I agree with President Clinton. You know beyond 2-X (ph) of poverty, everybody is going to have to have some skin in the game and even if it's a deminimous (ph) amount because this a national crisis. Admiral Mullen, former chairman of the Joint Chiefs of Staff, said this debt and deficit issue is a greater threat than terrorism.</s>COBURN: I think the approach ought to be is how do you stimulate the economy and have a fair tax system.</s>BURNETT: Right.</s>COBURN: And I don't think we had it right during the Clinton years. I don't think we had it right during the Bush years. But first of all, we passed the Bush tax cuts and didn't cut spending to pay for it, so we widened our deficit.</s>BURNETT: Right.</s>COBURN: So it's easy to pass a tax cut. It's hard to pass a tax cut that you pay for. So you know one of the things Speaker Boehner --</s>BURNETT: A lot of people like in your party --</s>COBURN: Sure.</s>BURNETT: -- some of them tend to believe that a tax cut just pays for itself --</s>COBURN: Well sometimes it does especially -- but the key is, is how do you create long term certainty and confidence so that the money that Mark talked about sitting on the side actually gets invested and we create wealth. If you create jobs without creating wealth, you haven't done anything for the economy, so you have to do it. And my worry even though I'm for let's have the free for all, let's have the debate --</s>BURNETT: Yes.</s>COBURN: If you tax the people who are the job creators, you've actually hurt our growth and you've hurt the rise in tax revenues that would come to the government. What we know in the Reagan years is when take you away a lot of these deductions and a lot of these special things that people have lobbied for and you flatten and broaden the base, what you have is significant increased economic growth, 4.6 percent over 70 months.</s>BURNETT: Yes.</s>COBURN: I mean unbelievable.</s>WARNER: You can actually have both because disproportionately --</s>BURNETT: Yes.</s>WARNER: -- folks at the top end were on that take more advantage of the tax breaks than others. So you can have a simpler code. You can have that predictability --</s>BURNETT: Right.</s>WARNER: -- and you can maintain the progressivity (ph) that I think is important that allows those of us who have done well to say, all right, we're going to chip in to make sure that the next generation does well --</s>BURNETT: All right well thank to both of you. I'm going to switch the -- the Shakespeare line now. First thing we do is kill all the lawyers. How about let's just kill all the lobbyists --</s>COBURN: The lobbyists aren't the problem. The members of Congress are the problem.</s>BURNETT: Oh all right --</s>WARNER: And the business community and others who need to step up and say this has to get fixed. We've all got to have some skin in the game.</s>BURNETT: All right. Thanks to both.</s>WARNER: You bet.</s>UNIDENTIFIED MALE: Thank you.</s>BURNETT: And ahead OUTFRONT is President Obama the first female president? And a new twist in the controversial pardons involving Mississippi Governor Haley Barbour, tonight a man freed by Barbour is facing new charges in a murder and the FBI now getting involved in the massive losses at JPMorgan.