Whip Hoyer on CNBC Discussing the CR Negotiations and the 2012 GOP Budget Proposal

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Joining us now from Washington is House Minority Whip Steny Hoyer of Maryland and also Budget Committee Member Jeb Hensarling from Texas. Thank you both for joining us at a point when so many people are trying to figure out what's happening. Steny, I’d like to talk with you about some of the comments you made yesterday. You said it would be demoralizing to face a shutdown. What are the odds you think we do face a budget shutdown?

A couple of weeks ago I would say they appear to be small but right now they appear to be large. There’s a large faction in Mr. Hensarling's party who are saying do it my way or take the highway. i thinking that's pretty unfortunate. i think we're close in numbers. It’s the largest cut in nonsecurity spending in history. We’ve come a long way toward agreement and I would hope we could reach agreement and reach it very, very soon today.

Congressman Hensarling, how close do you think the two sides are at this point?

Well, if there's going be a government shutdown, you'd have to ask Harry Reid. I don't know. They’ve passed the bill not once, but twice to keep the government open. On within hand they're historic. On the other hand we're funding government at over 98% of last year's level. Clearly there are factions in the party who are willing to shut down the government because they don't believe any savings are necessary. Again, we're funding government at 98% of last year's levels. If we're going to create jobs and save the American dream for the next generation, we have to put the nation on a fiscally sustainable trajectory. He has said he wants the government to shut down. We had Senator Schumer, a top senator caught on tape saying he wants to call Republicans extreme. What’s extreme is leveraging at this moment to shut down the government because we're only funding it at 98%.

Congressman Hensarling, how far apart are the two sides?

Let me respond to that. Clearly as the Republicans say we put our proposal on the table. it didn't pass the Senate. we're going to take that or nothing. it was the tea party who came from Washington and said they're going to shut down the government. Nobody on our side wants to shut down the government. We’ve been working very hard to come to an agreement, and we've come more than halfway toward the Republicans' request. they have one third of the government. the Senate is controlled by Democrats. the president of the United States has made his decision clear. it's the my way or the highway.

It sounds like both sides.

We've come far and away toward that.

Let me ask. What’s the difference right now?

The Republicans haven't moved.

What is the difference right now between the two sides? What are we talking? $10 billion?

The Republicans have moved. We have passed a bill. Where is your Democrat bill? I have yet to see one Democrat bill. People who take civics 101 know there has to be a Democrat bill and a House bill. The Senate has yet to pass any decision. We put a bill to fund the government to keep it open. The Democrats haven't. Those are the facts.

Jeb Hensarling takes the position that because the Republicans need not a majority but 60 votes in the United States which means that harry reid has got 53 needs the Republicans to cooperate. What he's saying the you won't cooperate.

Steny.

Therefore you're at fault.

Steny, the Senate passes bills every single day. The 60-vote hurdle has been there. If there was leadership, if the Democrats wanted to get it done, they've had six weeks to keep the government open. They haven't done it. It looks like to me they want to shut down. I hope we can avoid it. Negotiations are taking place in earnest.

The last time the government shut down surprisingly was when the Republicans took control of the House of Representatives in 1995. Isn’t it ironic that we're having exactly the same repeat of the government shutting down possibly because of Republican –

Gentlemen, let me try and cut down to where we really stand right now though. we know about the back and forth and the two numbers, but we know these negotiations are taking place and that both Boehner and read said that yesterday's conversations were making progress. so what's the real number split between the two sides.

Hold on. I hope that's the case that we're making progress. Let me say that when Mr. Boehner put a bill on the floor to keep government moving, which i supported, 54 of his Republicans did not support it, and as a result, if they hadn't had Democratic support, it wouldn't have passed then. Again, there's so many Republicans taking the position that you either take what we passed, we'll not compromise, or we're going to shut down the government. That won't work. I think we're close and I think frankly if Mr. Boehner would put on the floor a bill, which goes almost three quarters of the way toward where he wanted to go, three quarters of the way to where they wanted to go between their zero and 100, i think we could pass it.

Probably within a couple of weeks we figure -- you know, no matter what happens, sooner or later the government is going to be running again. i want to go onto the next -- I’m worried about 2012. with 2011 like this and then I’m going to start with you, congressman Hensarling. Paul Ryan put that forth yesterday, and a lot of people are conjecturing that his fellow Republicans aren't going to be -- especially some running for president may not be that quick to embrace it because of the political risks. Where do you stand? And then I’m going to go to Leader Hoyer. But where do you stand on what Ryan proposed yesterday?

I think they're united in embracing the path to prosperity. We have two different paths. We have the trillion dollar deficit at the start of the budget, end of the budget, takes the road that we're already on and adds $400 billion of new spending to it, increases the size of government. Then we have Paul Ryan’s government, the path to prosperity which actually puts us on a spending trajectory. One of the greatest impediments we have today is the uncertainty about this huge national debt. i mean already our debt is 90% of our economy, which by historic standards leads to cuts in economic growth. and let's not forget. What Paul Ryan’s budget does is cut $6.2 trillion off the president's spending trajectory. And guess what? Government still grows each and every year of the budget, but it grows at a sustainable path that assures that we're not just focused on the next election, but we're focused on the next generation in ensuring that their tax rates are not so burdensome that they have a lower standard of living than we have.

Leader Hoyer it's DOA in the Senate right now, Senate Democrats are not going to go for it. Some are going so far as to say thank you for the gift for 2012. Some of you guys have just gotten here are going to be gone in two years. What are we going to do about Medicare?

I think we need to be adults. We had a commission that made an adult proposal and unfortunately Mr. Ryan has ignored that commission. This path to prosperity they talked about was exactly the same language they used in 2001 and 2007.

If I could, Steny made a point the president took zero, zero percent of the recommendations of his own fiscal responsibility of the commission. That’s the Democratic budget. Paul Ryan’s Republican budget –

You were never a leader. Let leader Hoyer talk Hensarling, come on.

He wants to filibuster because he doesn't like the facts.

I just gave you the facts.

In 2003 they proposed exactly the same kind of economy. What happened? We had the worst economy since Hoosier, lost a million jobs and put the country in deep recession. The fact of the matter is we have to get out of there.

What do you propose?

I’m going to tell you. Eliminating Medicare, which the [Republican] proposal does, is not the way to go. The Wall Street Journal says it eliminates Medicare as we know it. Giving the wealthiest of America a trillion dollar tax cut is not going to get us there. The Commission said you have to pay attention to the entire budget. They totally exempt defense. Nobody thinks there's an ability to save defense, including Mr. Pence, one of the most conservative Members of their Conference, including Mr. Cantor who said the same thing. They ignore that. They give big tax cuts to the wealthiest Americans. They undermine Medicare and Medicaid. Seniors' long-term care is undermined. And they haven't dealt in a bipartisan way

Wait a second. No. One second. I want to know, Congressman Hoyer, how come the Democrats haven't put together a plan that takes from what the proposal of the Bipartisan Commission put out and said, okay, here's a plan we'd like to go with.

Very frankly you've got Democrats. I’ve been talking to them. We’re prepared to move forward. As a matter of fact, we've tried to talk. I’ve set up a couple of appointments. I hope we're going be. I’ve talked to Paul Ryan. We need to deal with this on a bipartisan basis. it is a very serious fiscal crisis that confronts us. We’ve got to contain spending but we've got to look at the entire budget. Not just a small sliver of the budget.

What Paul Ryan and the Republican budget has done, we're looking at the entirety of the budget. Unfortunately Steny didn't answer your question. That is what are we going to do about one of the largest drivers of insolvency in our budget and the Democrats are no plan? The only thing they voted for in Obama care is take half a trillion dollar out of Obama care to the budget. Here’s the answer. We kept it to shore up the finances. Don’t take my word for it. The trustees of Medicare and Social Security say these are programs that are going broke, so here's what we do. We say, seniors and near seniors, it is fair, it is right. Let’s keep the program we have. But programs that have been of great comfort to my parents and grandparents frankly are morphing into cruel Ponzi schemes for my third grade daughter and first grade son. the Democrats have put no plan on table. Again, one of the reasons we don't have jobs today that we need to put millions to work is because job creators know that this massive debt leads to massive taxes which leads to massive unemployment. And so the Democrats have put forward no plan. And if they protect the status quo, the status quo in social security and Steny knows it is an automatic across-the-board cut of 22%. Raid Medicare, take half a trillion dollar. It cuts 22% for the next generation. Now, as soon as the Democrats put a plan on table and quit defending the status quo, we'll have something to debate.

In point of fact, the president's commission has put a plan on the table.

The president rejected it.

I talked to Mr. Ryan about it. He didn't reject it at all.
That's not in his budget, Steny.

You and I know that. You and I have talked about trying to move forward on this.

I agree, Steny. The president doesn't have it in his budget.

Let me say this. The American people are not to be fooled. it lead to the deepest recession this country has seen, an extraordinary loss of jobs and tanking of the stock market. Very frankly it's not a path we want to go down again.

Gentlemen, I’m sorry. We’re out of time. We love having you here. We hope you both come back together. Very quickly as we're on our way out, tell me quickly your odds for a government shutdown or not.

I hope they're small, but I’m not too encouraged by what's happened lately.

I don't know how to handicap that. I hope both sides will avoid that and both sides are working.