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(BEGIN VIDEO CLIP, “MEET THE PRESS WITH DAVID GREGORY”)
DAVID GREGORY, MODERATOR, “MEET THE PRESS”: Could you support a
deal here out of this gang of six on the budget that includes tax increases?
SEN. TOM COBURN (R), OKLAHOMA: Well, we are not talking about it. We
are not talking about raising tax rates at all so.
GREGORY: All right, but here`s — here`s…
(CROSSTALK)
COBURN: So, if there`s a net effect of tax revenue, that would be fine with
me.
GREGORY: Alan Greenspan was on this program last week. He said the
Bush era tax cuts should expire for everybody. Is that not fair?
SEN. KENT CONRAD (D), NORTH DAKOTA: So, you have got to work both
sides of the equation. But we did not raise tax rates in this proposal. What
we did was have tax reform.
(END VIDEO CLIP)
MATTHEWS: Welcome back to HARDBALL.
That was Republican Senator Tom Coburn of Oklahoma and Democratic
Senator Kent Conrad of North Dakota on “Meet the Press” yesterday.
Can Democrats and Republicans find a way to fix the budget?
Former Labor Secretary Robert Reich is a professor at U.C. Berkeley and
author of the new book “Aftershock.” There it is. And University of Virginia
Professor Larry Sabato is the author of “Pendulum Swing.”
Gentlemen, thank you for coming on the show.
ROBERT REICH, FORMER U.S. LABOR SECRETARY: Thank you.
MATTHEWS: This is something that has really gotten sort of bogged up or —
or clogged up in American politics. That is, you can only adjust one side of
the ledger now. That means cutting taxes — or cutting spending, and that`s all
anybody talks about.
Look at these new numbers right now. We have got a “Washington
Post”/ABC poll you might not be shocked by. Forty-three percent — 53
percent opposed to even a small tax increase and small cuts in Medicare. It`s
written as almost minuscule and it`s written as a fair proposition, and people
still reject it 53-45.
Then you ask people, should we go after — sock it to people that make most
of the money, and it`s 3-1 tax people, over 72 percent.
Robert Reich, it seems like people don`t want any kind of an across-
the-board adjustment in anything. They only get excited about hitting people
hard who they are not. In other words, I can read a poll to know that most of
the people who are responding to this are making less than $250,000 a year,
and they`re saying hit the people that do make more.
Is this where we`re at, we only go after the rich, that`s it?
(CROSSTALK)
REICH: Well — oh, Chris, I thought the most part of that “Washington
Post”/ABC poll you`re talking about is that 54 percent, 54 percent of
registered Republicans said taxes should be increased on the rich.
Now, I haven`t seen anything like that for the last 30 or 40 years. And I
haven`t been following every poll for the last 30 or 40 years, but for years
Republicans have been saying and most of the public has been believing that
if you cut taxes on the rich, then you get trickle-down economics that
benefits everybody, and, also, if you increase taxes on the rich, everybody
will be hurt because some day everybody`s going to be a millionaire.
MATTHEWS: Yes.
REICH: Well, those are two methodologies, and they have both gone out of
style and out of fashion. So, even Republicans are beginning to say, look, if
we have no other choice, let`s raise taxes on the rich.
MATTHEWS: So, if that`s the voters` opinion, Larry, why isn`t it happening?
Why do both parties…
LARRY SABATO, DIRECTOR, UNIVERSITY OF VIRGINIA CENTER FOR
POLITICS: It`s not happening…
MATTHEWS: We just saw two members of Congress who are supposed to
be the guys in the middle cutting the deal, they were gun-shy, both of them,
on any kind of tax increase.
SABATO: Yes, because a poll is a not an election. That`s fundamentally the
difference here.
Look, the reason Republicans almost universally, not just Tea Party
Republicans, but mainstream Republicans, oppose any tax increase is
because if they do, they`re guaranteed not just a Tea Party challenge.
They`re probably going to be challenged in a primary by another mainstream
Republican.
And it`s gotten to the point where tax increases are now defined, at least by
some, like our friend Grover Norquist, as being the elimination of tax subsidies
for things like the ethanol industry. So, it`s — it`s getting tougher and tougher
even to raise fees and close loopholes and eliminate subsidies.
MATTHEWS: Well, this is a problem for both parties because, Robert, if — if —
if you can`t get any give from the Republican side on revenues, on taxes,
even on an increase in revenue through reform, if you can`t do that, it seems
to me very hard to get the Democrats to agree to any kind of cut in spending.
So, the president can`t get his own party to do any kind of budget
adjustment, any kind of effort to reduce the deficit that`s real, if he can`t get
the other party to increase revenue. So, both sides get hurt politically
because neither side will move then.
Is that where we`re at? Nobody wants to do anything because nobody`s
doing everything?
REICH: Chris, if you assume that compromise is actually halfway between the
president`s proposal and Paul Ryan`s proposal, then, yes, you are stymied —
you are completely stymied. But if the public and I think a lot of Republicans
and not a few Democrats are getting a lot of news when they go home right
now at town meetings, when the public actually registered what they want —
no cut in Social Security or Medicare, and do tax the rich and let`s get rid of
corporate welfare, let`s pare down military spending — when so many
representatives are hearing that in the town meetings you might actually see
a more, a greater willingness to compromise when they come back.
MATTHEWS: Well, I see that don`t touch Medicare. I don`t see the excitement
of raising taxes. Do you hear it, Larry?
SABATO: No.
MATTHEWS: For the rich?
SABATO: I`m with you, Chris.
MATTHEWS: I mean, do they actually demand at meetings?
SABATO: Well, I don`t know what people are saying in their meetings. I doubt
that`s what the Republican members are hearing — and remember, it would
have to pass the Republican House.
Look, there`s only one open window for a compromise and that is, Bob
mentioned, corporate welfare. I think Republicans would say as Senator
Coburn did, closing loopholes, tax reform. That may be a way to produce
some kind of compromise. But if you`re talking about a general increase in tax
rates, forget about it. Not going to happen.
REICH: Well, Larry, I completely agree with Larry on that. No general increase
in tax rates, but what we`re talking about is increasing taxes on the rich. Not
only getting rid of the, you know, extension of the Bush tax cuts for people
over $250,000, but also, for example, capping home mortgage interest
deductions, maybe, what, $20,000 a year. I mean, there are a lot of things
that can be done that would get in my view a great deal of public support.
MATTHEWS: But you`re not running for anything, Robert. And, Larry, and
you`re not running for anything. And I think Larry made the point a minute, I
think that was crisply stated. There`s a difference between a poll and an
election. If all you have to do is expose yourself as a Republican to any kind
of problem with the voters, they`ll kill you on it. The Republicans will be Tea
Partying you. The Democratic side, they`ll get you on Medicare.
So, I`m afraid that the solution politically for this crowd of people in politics
today is: do nothing. Let the deficit ride.
Robert, don`t you think that`s what`s going to happen, really? They just going
to let this deficit balloon and they`re not going to do anything about it.
REICH: Chris, always the path of least resistance is to do nothing. But if the
dollar continues to drop, if we see that — it`s not just Standard & Poor`s but
capital markets become very afraid that the Republicans and Democrats
doing nothing, then their hands may be forced and may have to do something.
MATTHEWS: Wow.
REICH: And then the question is: what are they going to cut or what tax are
they going to raise? And I think if you can raise any taxes at all, it`s got to be
on the rich.
MATTHEWS: I don`t see any leadership out there from either party cutting a
deal.
Larry, what about Haley Barbour quitting? I thought he might be able to thread
the needle. He might be, to use another metaphor, a Tea Party-appealing
person but without being a Tea Party person. But — what do you think? Why
did he quit?
SABATO: Chris, I think he`s one of the smartest politicians in either party and
he just proved it today. He wasn`t selling. And he picked it up. He wasn`t
selling because of the D.C. lobbyist thing, because of the Mississippi
connections, because of his accent and looks. And he decided I think rather
sanely he didn`t want to go through this tortured presidential selection
process for nothing.
MATTHEWS: So, now, there`s only a couple left. There`s only Jeb and maybe
Christie. Who`s the — what do you call it — the dark horse for you? Who`s
going to come in the race and win it on the Republican side, anybody?
SABATO: I doubt anybody comes in but the person who just keeps being
mentioned is Chris Christie and he loves it no matter what he`s saying.
MATTHEWS: I agree with you completely on that.
Robert Reich, Chris Christie, what do you think? Big surprise —
(CROSSTALK)
REICH: I think he could be a very strong candidate but don`t take your eyes
off Mitt Romney. He looks the part. He acts the part. He has gleaming white
teeth. He is kind — now, wait a minute, I know the public is very —
(CROSSTALK)
MATTHEWS: You are setting him up. You are setting this guy up — duller than
you can imagine.
REICH: Mitt Romney is an empty — Chris, I`m not — I`m not a supporter of Mitt
Romney. I think he`s a very strong candidate. I mean, Mitt Romney is an empty
suit. I think in fact —
(CROSSTALK)
MATTHEWS: You heard what I said the other day? He gives empty suits a
bad name.
Anyway, thank you, Robert Reich. Thank you, Larry Sabato. You`re just
setting this guy up. An ass (ph) and a gold and the horse is what you want.
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