This Week' Transcript: Roundtable 7-17-11
 

MS. AMANPOUR: Blunt words from Senator Minority Leader Mitch McConnell warning that a debt default could, quote, "destroy the Republican brand.  " McConnell, of course, an old hand of Washington brinkmanship but, for many new GOP Congress members these days, compromise equals capitulation. They could very well hold the cards in the debt talks, and the big question is how will they play their hand.  So joining me now to make sense of all of this is George Will; Cokie Roberts; Congressman Raul Labrador, a Republican tea party freshman from Idaho; Matthew Dowd, former campaign strategist for George W. Bush; and ABC's senior political correspondent, Jon Karl.  So you heard what we just played from Mitch McConnell, George, do you take him at that? Is it bad for the Republicans right now? Do you take his warning?
 

GEORGE WILL: I do. I think what the president would like -- let's go back four months. The president was clear and emphatic on what he wanted, a clean lifting of the ceiling, which is to say, so restraint on the spending merry-go-round. Now, he suddenly wants $4 trillion in deficit reduction.  What he would do though in getting that was have the Republicans sign onto tax increases which would demoralize the Republican base and fracture the party and enable him to run as a born-again deficit reducer. So my feeling is that the House will have its say and the Senate will reject it. The Senate will have its say and the House will reject it. And the last proposal standing will be McConnell-Reid, and something like that will be passed.
 

MS. AMANPOUR: Well, let me just then go straight to you. You've said that you would not vote to raise the debt ceiling under any circumstances. You heard what Senator Kyl said. There will not be a default. Are you willing to push it that far?
 

REPRESENTATIVE RAUL LABRADOR (R-ID): I never said I would not raise it under any circumstance. I said that I would not raise it unless we make long-term systemic changes to the way things are done in Washington, D.C.  We just had an election in 2010 where the American people asked us to change the way things are -- the way things are being done here in Washington, D.C. And that's what we came here to do.  I want three things. They're simple. And the president claims that he agrees with them. I want to make sure that we cut spending here in Washington. I want to make sure that we have a cap on the amount of spending that we do. And I want to have a balanced budget amendment.  You were talking about polls just a little while ago. Eighty percent of the American people want us to have a balanced budget amendment. I'm not sure why the president is standing in the way of that.
 

MS. AMANPOUR: Jon, what are your sources saying about where the deal is? You heard both Jacob Lew and Senator Kyl talk about what might be possible, but where are the talks?
 

JONATHAN KARL: Right now, the simple truth is there is not a single plan that can pass both chambers. Nothing can pass; not the president's original idea of a clean debt ceiling, not the Republican idea of cut, cap and balance, nothing, and certainly not this plan, the triumph of politics over policy, that Mitch McConnell has outlined which basic the gives the authority to the president but allows Republicans to score political points. I see virtually no chance, in its current form, of that passing in the House.
 

COKIE ROBERTS: But something has to.
 

MR. KARL: Something has to, but, you know, I don't know that something will by August 2nd. I think it's less than -- MS. ROBERTS: Well, if something doesn't by August 2nd, then I think we are in real trouble. And people who say that they're concerned about the deficit, nothing could be worse for the deficit than not raising the debt limit. I mean, you would then have interest rates go up, they compound and the deficit would climb dramatically.  So how you can get to that point of going to default and say that you're for deficit reduction just doesn't make any sense logically.
 

MATTHEW DOWD: Politically, both sides, I think, absolutely know they have to pass something politically because the risk of not passing something is much greater than passing something that some part of the constituency doesn't want.  So I think, in the end, they're going to go this up against this deadline and crisis which I think actually has been important because most of the time Congress won't do anything unless there's a deadline, and then -- unless there's accountability. But I think, in the end, the politics of this will force something, whatever it happens to be, some small combination of cuts with raising the debt ceiling.  But politically, the president and the Congress both know they have to pass something.
 

MS. ROBERTS: Congressman, I'm curious though. How does it work politically to say that we won't raise taxes on billionaires as the president keeps saying?
 

REP. LABRADOR: Let's talk about this. The House majority, the House Republicans passed a budget that actually talked about reforming the tax system. We already agreed to that. We said that we want to make sure that we broaden the base, which means getting rid of all those loopholes, and we want to lower the rates.  The difference between the Republicans and Democrats is that the president wants to get rid of all these loopholes just to increase spending. That's all he's wanting to do. Everybody gives him credit right now for being the adult at the table. This is the man who came to Congress and asked us to raise the debt ceiling without any spending cuts. This is the man who gave us a budget that didn't even get a single vote in the Senate.  And now he's saying that he's serious -- a serious deficit hawk. I think that's a joke. He has never been a deficit hawk.
 

MS. AMANPOUR: George, though, you think the president and the speaker have played this about as well as they can, right?
 

MR. WILL: Well, given their two constituencies, I mean, the tea party movement -- which I happen to think is the best thing that's happened in American politics since the Goldwater insurgency -- (laughter) -- the tea party --
(Cross talk.)
 

MR. WILL: The problem is the tea party movement -- which doesn't understand the fundamental paradox which is that, if Washington were as easy to turn around as they seem to think it is, we wouldn't need the tea party movement which we do. The president did not get elected to cut entitlement programs, to cut anything for that matter. He has proposed -- you know what he's been specific about? $2 billion of spending cuts in 2012. That's a rounding error on the --
 

MR. KARL: George, what I don't understand here, the big mystery to me is why the Republicans didn't, to use the president's phrase, call his bluff. The president was talking about cuts to Social Security and Medicare. Why -- and I mean, the Republicans pulled out on taxes.  The initial reaction to the leaks on those stories were Democrats on Capitol Hill screaming bloody murder saying that they were not going to let the president and John Boehner touch Medicare. And before that fight could play out, Republicans walked away on taxes.
 

MR. DOWD: What I think is going on here is how broken the process here in Washington is, how badly poisoned it is and how neither side really trusts each other. And even if they were going to call each other, the lack of trust is so big that they can't even reach agreement on some small thing.  Each side, in 2010, the Republican getting elected and a Barack Obama in 2008, basically, the message was fix Washington.
 

MS. ROBERTS: That's right.
 

MR. DOWD: It's broken; fix Washington.  And right now, no matter what happens, nobody is going to win in this.
 

MS. AMANPOUR: So you're right because you see majority say they want to see the parties compromise and reach some kind of an agreement over these big issues.
 

MS. ROBERTS: When Congressman Labrador says, we were elected to do something, what I think the American people keep saying is you were elected to do something, to come together, to make compromises and make government work. And why isn't that a message that you hear?
 

REP. LABRADOR: But why is it that compromise always means increasing taxes today and doing cuts in 10 years from now. I think that's the problem that the American people -- the American people will not stand for that. I think we can do something -- we can come on the table and actually work together, but it is pretty clear that the president is unwilling to not increase taxes. He's unwilling to do something serious.  I want to know what his plan is. So far, we have no idea what his plan is. He has not put anything on the table. All he talks -- they have all used the same phrase, grand compromise, because what's poll tested. Apparently, the people like that but it doesn't mean anything.
 

MS. ROBERTS: But in all of those -- in the meetings with Vice President Biden, lots of specifics were talked about. They have -- what is the number, Jon, 1.4 trillion (dollars) in --
 

MR. KARL: But as George points out, it's only $2 billion in cuts in 2012, which will never fly.
 

MS. AMANPOUR: But can we be clear on the tax issue? Are they proposing raising the marginal rates? Or are they talking about closing loopholes and other such corporate --
 

MR. KARL: Right now, the talk of raising the marginal rate is absolutely dead.
 

MS. AMANPOUR: Exactly.
 

MR. KARL: So it's a question of what you do in tax reform and do you have a net increase in tax revenues by closing these rates, or do you, as the Republicans want to do, simply lower the rates with that additional revenue.
 

MS. AMANPOUR: And, you know, again, we keep talking about polls, but this week there have been a lot of polls saying that the majority of Americans want the so-called balanced approach.
 

REP. LABRADOR: And what does that mean?
 

MS. AMANPOUR: Well, revenues and cuts.
 

REP. LABRADOR: And I don't agree that there's been a lot of polls that say that the majority of Americans -- actually, most of the polls have said that the majority of Americans don't want to increase taxes. If you look at the Gallup poll, it said that 51 percent of people do not want to increase taxes. So I actually disagree with you there.  I think there's been some polls that -- when you use the phrase "balanced approach," everyone wants a balanced approach. I would have answered yes to that question. I want a balanced approach because my definition of balance is different than the president's definition.
 

MS. ROBERTS: But I still think politically -- politically, you're in a very risky place because I do think that the president is getting through by saying over and over again that Republicans want people with corporate jets not to have to pay taxes, people who make a billion dollars not to have to pay taxes. That's not a politically good spot to be in --
(Cross talk.)
 

MR. KARL: But you can't balance the budget by raising the taxes on corporate jets.
 

MS. ROBERTS: But, of course, that's right. But I'm talking about the politics of it.
 

MR. DOWD: I think part of the problem is is that the premise of both parties right now is actually not true. The premise of the Democratic Party is you can't cut -- in the middle of an economic downturn, you can't make cuts in the budget because it'll make it worse. That's actually not been demonstrated to be true historically.  Republicans say you can't raise taxes in the midst of an economic downturn because it's going to make it worse. And that's not been demonstrated true historically. So both sides' talking points aren't really true.
 

MS. AMANPOUR: So, George, when it comes to the Republicans presidential contenders, they've been curiously quiet, well, certainly the frontrunner, Mitt Romney. What's all that about?
 

MR. WILL: Well, getting involved in this is optional folly because they can't control what's going to be said by people who will then soon be their surrogates. It's very clear that, if you're going to win the Republican presidential nomination, you're not going to be in favor of raising taxes at all. This is not just, Matt, about what's good for the economy in the next six months. This is a vision of what we want to have in the way of a government.  And this, by the way, is why we have elections and we are teeing up the 2012 election which is going to settle this -- not this action-forcing moment on the debt ceiling.
 

MS. ROBERTS: Well, that's exactly right. So let the 2012 election settle it and, now, let's get off of this precipice and go ahead and act like grownups in Washington.
 

MR. DOWD: But the problem with that -- to me, the problem with that is I think this is going to unfold and bleed out all over the Republican nomination process. But the problem with that is that's what we've been doing for 20 years. Every time we say we're going to settle this out, we're going to settle this out, we're going to have another commission, we're going to do this, and we get to the point, we have this crisis, we have a deadline just like everybody has in their lives, whether their work or their relationships or their kids, they set a deadline and, if they don't meet the deadline, there's accountability.  Washington doesn't seem to have the capacity to, when they don't meet a deadline, to have accountability for their actions. I think this -- people on both sides ought to -- leadership -- they ought to get something done whether it's small or whether it's big and not just punt the ball again to another election because that's what we've been doing.
 

MR. KARL: It's actually maddening to think you would go through another election to solve this. Right? (Laughter.)
 

MS. AMANPOUR: Well, let me talk about another issue. We played a little bit of what Michele Bachmann has said, you know, it's time to stop scaring the American people; I'm not going to raise the debt ceiling, et cetera. But she's also -- and she's making that the focus of her campaign.  But she's also been talking about other things -- or at least a lot of other things have been talked about this week. A lot of attention on Michele Bachmann's husband and whether this has clinic advocates the controversial therapy to turn gay people straight. But what hasn't got much scrutiny yet is the candidate's own past comments on homosexuality where Michele Bachmann has called it personal bondage, personal despair, personal enslavement.  Do you think, George, Matt, that this issue she's going to have to start talking about more, that it's going to start becoming a big issue as people put more scrutiny on her?
 

MR. WILL: What she said several years ago is, A, of dubious relevance at this point I think but, B, will not hurt her in the Iowa caucuses.
 

MS. AMANPOUR: Matt?
 

MR. DOWD: Well, first of all, if we really -- I mean, she's prejudiced against homosexuals. From her statements, with her actions and all, that's absolutely true. She believes it's somehow some bad behavior or something, whatever she thinks. So that's the truth.  It may not hurt her in the Republican primary. As an issue, I think it hurts her because people are looking -- the first thing Republicans are looking for is somebody that can beat Barack Obama, and whenever these things come up, it makes it less likely that they're going to vote for, and not because they disagree with her on this issue, but they think it's less likely that she could win a general election which, actually, I think helps potential candidate, Governor Perry.
 

MS. AMANPOUR: Well, I was just going to ask you about that. Do we think he's going to get in?
 

MR. KARL: Yes.
 

MS. ROBERTS: Yes.
 

MR. DOWD: If I were betting in Vegas, I'd put a large amount on it. (Laughter.)
 

MS. AMANPOUR: So, Representative, the last question to you. How will the dynamic then be affected between a Perry and a Bachmann?
 

REP. LABRADOR: I think it should be interesting. I have kept my powder dry. I have not endorsed any candidate yet. I want to make sure -- I was hoping that a couple of other people got in. One is not going to get in, Chris Christie. Rick Perry will probably get in, and then I'm going to wait a couple of months to see how he does and how he performs.
 

MS. AMANPOUR: All right. On that punt -- (laughter) -- coming up --
 

MS. ROBERTS: Women's soccer.
 

MS. AMANPOUR: We have that coming up, women's soccer, exactly, and also Rupert Murdock on the ropes. His two top executives have resigned. Others have been arrested, including this morning. Will the media titan be next to fall as the phone hacking scandal engulfs his empire? He's going to be called before a parliamentary commission next week, and we have special insight from the top media reporter who's covered Murdock for years.
 

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