Specter, Menendez, Lieberman, Shelby, DeMint , Hoekstra & Van Hollen on "Fox News Sunday"

Specter, Menendez, Lieberman, Shelby, DeMint , Hoekstra & Van Hollen on "Fox News Sunday"

By Fox News Sunday - December 27, 2009

WALLACE: I'm Chris Wallace. We'll have the latest on that attempt to blow up a U.S. airliner, next on "Fox News Sunday."

An attempted terror attack on Christmas day -- a Nigerian tries and fails to blow up a flight headed to the U.S. We'll get the latest from two lawmakers briefed on the situation, Joe Lieberman, chairman of the Senate Homeland Security Committee, and Pete Hoekstra, the top Republican on the House Intelligence Committee.

Plus, we'll get reaction from four key senators, Republicans Richard Shelby and Jim DeMint , and Democrats Robert Menendez and Arlen Specter .

Then, the Senate passes its version of health care reform. Will House Democrats demand big changes? We'll ask one of their leaders, Congressman Chris Van Hollen .

Also, President Obama has almost one year in the books. How did he do? Our Sunday panel -- Kristol, Loven, Ingraham and Williams -- have their report cards ready, all right now on "Fox News Sunday."

And hello again from Fox News in Washington. Christmas brought an unwanted surprise this year -- a Nigerian man claiming to be linked to Al Qaida attempted to set off a device aboard a transatlantic flight that was about to land in Detroit.

Here now with the latest is Fox News' Catherine Herridge, who covers national security.


HERRIDGE: Chris, according to the criminal complaint, the 23- year-old suspect is being charged with attempting to destroy Flight 253. Sources tell Fox it is a holding charge and more charges are expected.

The device, which sources say is being analyzed by the FBI Labs in Quantico, Virginia, does contain PETN, which is a high explosive.

The suspect, identified as Umar Farouk Abdulmutallab, was tackled by passengers and apprehended, as seen in this picture carried by the New York Post. A U.S. official tells Fox the device was strapped to his leg or groin and a syringe is said to be part of the detonation mechanism.

A former senior homeland security official tells Fox the seat selection is suspicious. The suspect was in 19A over the fuel tanks, atop the wing and next to the skin of the aircraft. If there's an explosion, the official, who has not been briefed on the FBI case, said it could be accelerated by the fuel, damaging the wing and puncturing the skin, bringing down the plane.

An administration official confirmed the 23-year-old was put on a federal database in November, but there was not enough negative information about Abdulmutallab to place him on a no-fly list or a list that requires secondary screening.

Sources tell Fox federal investigators are now focusing on Yemen to determine the extent of the suspect's links to known extremists.


WALLACE: Catherine Herridge.

Catherine, thanks for that report.

Joining us are two lawmakers who have been briefed on the attempted terror attack. Joe Lieberman is chairman of the Senate Homeland Security Committee, and Michigan congressman Pete Hoekstra is the top Republican on the House Intelligence Committee.

Gentlemen, thanks so much for coming in.

Senator Lieberman, let me start with you. what's your latest information on Abdulmutallab? And what do we know about possible links to Al Qaida? This morning, the head of homeland security, Janet Napolitano , says that they are a subject of interest in this investigation.

LIEBERMAN: Yeah. Look, I want to briefly set this in context, because we naturally focus on the specific attempted terrorist attack. We really did go to war with the Islamist extremists who attacked us on 9/11, and that war is not only occurring around the world.

This year the American homeland has been the target of an attempted terrorist attack more than a dozen times. We've thwarted most of those because of extraordinary work by our law enforcement, homeland security and intelligence forces.

But three -- in three cases, there was a breakdown, we didn't stop it -- first, the lone wolf who killed an Army recruiter in Little Rock in May; second, the Hasan case at Fort Hood; and now this one.

And let's be honest. This guy, Abdulmutallab, got through the screening, and this would have been -- could have been an enormous disaster if not for our good fortune, a miracle on Christmas Day that this device did not explode.

What we know about this individual leads me to conclude that he was a self-radicalized person, that he reached out to Yemen. He broke ties with his family. We don't know for sure whether he contacted the radical sheik who's now in Yemen, Awlaki, but Awlaki has got to be a subject and a target of our interest.

WALLACE: Awlaki was the U.S. imam who went to Yemen and...

LIEBERMAN: Yeah. WALLACE: ... was in contact with the shooter at Fort Hood.

LIEBERMAN: That's right, contact with the shooter at Fort Hood and had contact with a couple of the people involved in attacking us on 9/11. So there are a lot of questions to ask.

To me, most significantly, what happened after this man's father called our embassy in Nigeria? What happened to that information? Did -- was there follow up in any way to try to determine where this suspect was?

Secondly, it appears that he was recently put on a broad terrorism screening list, a database. Why wasn't that database activated? Why isn't it activated every time somebody gets on a plane abroad to come to the United States?

The only databases that are activated are -- are the much smaller no-fly and selectee list, which are less than 20,000 names. We ought to -- we ought to, in our age, be able to put 500,000 names on a computer and have everybody who's trying to come to the U.S. go through that list.

That doesn't mean they're convicted of any wrongdoing, but it would be basis enough to take this guy out of the line in Amsterdam and do a full body check, and that would have determined that he was carrying explosives.

WALLACE: Let me pick up on that with you, Congressman Hoekstra. We do know this man was put on a terror database, which includes about a half million people, after his father went -- who was a very prominent banker in Nigeria -- went to the U.S. embassy in Nigeria and reported him, said he was concerned about his extreme activities.

But he was allowed to keep his U.S. visa, and he was not on a no- fly list. Obviously, hindsight's 20/20, but should authorities have acted sooner, particularly given the fact that we're learning today that the British refused to give this man a visa to return to Great Britain, where he had been a student, in May?

HOEKSTRA: Well, I think as -- as the senator said, as Joe said, we're going to have to go and take a look at exactly what happened to this information when our consulate -- our embassy in Nigeria got the information.

You know, Joe and I worked for a long time on putting together, you know, the intel reform bill, where we broke down the barriers between the various agencies that would be tasked with screening these kinds of individuals and identifying the threats to the United States.

Was this a failure of these agencies to communicate, or were the markers that we put on this individual -- were they not significant enough to bring this individual to a higher level of awareness that said, "OK, he needs to be put on a no-fly list?"

You know, this is a very difficult problem. We've seen the different faces of terrorism in the last three months -- Hasan, the five Pakistanis -- or the five individuals who went to Pakistan, and now this individual. It's a very hard problem.

We've got to keep improving our game plan each and every day, each and every week, to identify these new threats.

WALLACE: Let me follow up on that, Congressman, because you were quoted in the Detroit Free Press this morning as saying that, you know, the key is to connect the dots, and maybe the Obama administration will now realize that.

Is it really fair to hold the Obama administration responsible here?


HOEKSTRA: Yeah, I think it really is, because I think the connecting the dots is not necessarily on this particular case. It's connecting the dots that we've seen over the last 11 months, over the last eight years.

What do we have here? This is a international movement of radicalization. All right? The Obama administration came in and said, "We're not going to use the word ‘terrorism' anymore. We're going to call is ‘manmade disasters,'" trying to, you know, I think, downplay the threat from terrorism.

In reality, it's getting much more complex. Radicalization is alive. It is well. They want to attack the United States. That threat is here in the United States. It is lone wolf individuals. It is people that have become radicalized that have had some contact with Al Qaida. And then it is the threat that come from Al Qaida central.

Homegrown terrorism, the threat to the United States, is real. I think this administration has downplayed it. They need to recognize it, identify it. It is the only way we are going to defeat it.

WALLACE: Let me pick up on another issue with you, Senator Lieberman, security, safety on airliners. This fellow was able to get through security in Nigeria...


WALLACE: ... knew security in Amsterdam and got on this plane with this device, with a high explosive, as Catherine Herridge reported, PETN.


WALLACE: Does that mean that the terrorists are coming up with new weapons that can defeat our technology? And what do we do about it?

LIEBERMAN: Well, look. The reality is that Richard Reid had a similar device on him. It's now, what, eight years ago.

WALLACE: The famous shoe bomber.

LIEBERMAN: The shoe bomber. Secondly, a terrorist from Yemen went into Saudi Arabia in August of this year with this same explosive on him, blew himself up within a small distance from Prince Mohammed bin Nayef, who's their counterterrorism leader in Saudi Arabia, killed himself; fortunately, only slightly injured bin Nayef.

So this is something where I -- you know, the 9/11 Commission said to us in its most searing statement, I think, 9/11 happened because of a failure of imagination. We could not imagine that people would do what they did to us on 9/11.

We've got to constantly be thinking like the terrorists here. You know, there's such a thing as a whole body scanning machine, contrary to just the magnetometer. We're using them in some places. They use them around the world in some places.

There have been privacy concerns expressed about the use of these whole body imaging devices, but I think those privacy concerns, which are, frankly, mild, have to fall in the face of the ability of these machines to detect material like this, explosive on this individual.

Just think about it. Three hundred people could have been killed and untold more on the ground in Michigan if this plane had crashed.

WALLACE: We've got about a minute left and I want to ask you both a quick question about Yemen.

This is not the first time that we have seen possible ties between Yemen and terrorism. We've got the U.S. with Obama attacking -- air strikes in Yemen. On the other hand, the Obama administration sent six Guantanamo detainees back to Yemen.

Your thoughts about Yemen and what the U.S. role should be, attitude should be, towards that country?

HOEKSTRA: Yemen is a hot spot. We need to do everything we can to work with that government. We have about 90 Yemenis left in Gitmo. They should stay there. They should not go back to Yemen. If they go back to Yemen, we will very soon find them back on the battlefield going after Americans and other western interests.

WALLACE: And, Senator Lieberman, final 30 seconds?

LIEBERMAN: Well, I agree with Pete on this. I know the president made a promise that he'd close Guantanamo because of what it represented in world opinion.

But today it's a first-class facility. It's way above what's required by the Geneva Convention or our Constitution. It would be a mistake to send these 90 people back to Yemen, because based on the past of what's happened when we've released people from Guantanamo, a certain number of them have gone back into the fight against us.

Yemen now becomes one of the centers of that fight. I was in Yemen in August. And we have a growing presence there, and we have to, of Special Operations, Green Berets, intelligence. We're working well with the government of President Saleh there.

I leave you with this thought that somebody in our government said to me in the Sana'a, the capital of Yemen. Iraq was yesterday's war. Afghanistan is today's war. If we don't act preemptively, Yemen will be tomorrow's war. That's the danger we face.

WALLACE: Senate Lieberman, Congressman Hoekstra, we want to thank you both for coming in today and sharing the latest on this situation with us.

Joining us now to talk about the failed attack and more are four key senators, and let's get right to it.

Senator Arlen Specter of Pennsylvania, you've heard our reporting and the comments from the congressman and the senator. Do you have anything to add about the specific incident or what we need to do in the fight in the war on terror?

SPECTER: The full-body examining device is with us and it should have been used. There could be a simple pat-down and this fellow could have been detected.

We've got to sharpen up our procedures all around to figure out, when we get notice from a man's father and the embassy knows, what is pursued.

Senator Lieberman tosses out a fascinating idea when he talks about preemptive action. That's a big, complex subject but one we ought to be considering.

WALLACE: Senator Menendez, your thoughts both about this specific incident and what it says about the larger war on terror, especially in what Senator Lieberman identifies as perhaps the future war, the next war, Yemen?

MENENDEZ: Well, I'm glad to see the Obama administration has been paying attention to Yemen. I do think that we need to be one step ahead of the terrorists.

They only -- they need to be successful only once. We have to be successful 100 percent of the time. So we've got to be thinking ahead of the curve -- what are all of the potential scenarios in which we could be attacked, in terms of what vehicles could be used, what instruments could be used against us?

Secondly, and clearly, the question is, "Is there real in-time use of this intelligence? Should this person not have been elevated based upon the family's presentation to our embassy in Nigeria?" And so those are some of the questions that have to be answered in the upcoming hearings.

WALLACE: Senator Shelby?

SHELBY: I believe this is a jolt for us. This is probably more than a wake-up call, noticing what's happened -- what happened at Fort Hood and others. We have come a long way since 9/11, but we've got a long way to go. We've got to -- we've got to believe -- I believe, get better at sharing information between the State Department, people who issue visas, and the law enforcement, homeland security, FBI and so forth, that track these people.

We can do better, but this -- this war is going to go on 50 years. We better wake up again.

WALLACE: And, Senator DeMint, you heard Congressman Hoekstra just say that the Obama administration had downplayed the war on terror, had not done as good a job as it should have in connecting the dots. Your thoughts?

DEMINT: Well, Chris, I am concerned because it's related to another issue that we're dealing with now in the Senate.

The administration is intent on unionizing and submitting our airport security to union bosses, collective bargaining, and this is at a time, as Senator Lieberman says, that we've got to use our imagination.

We've got to -- we have to be constantly flexible. We have to out-think the terrorists. And when we formed the airport security system, we realized we could not use collective bargaining and unionization because of that need to be flexible. Yet that appears to be the top priority now of the administration.

And this whole thing should remind us, Chris, that the soft talk about engagement, closing Gitmo -- these things are not going to appease the terrorists. They're going to keep coming after us, and we can't have politics as usual in Washington. And I'm afraid that's what we've got right now with airport security.

WALLACE: Gentlemen, let's turn to what we thought was going to be the big story this weekend, and that, of course, is health care reform.

Senator Menendez, as a member of the Democratic leadership in the Senate, will the House basically have to accept the Senate compromise, given the fact that you passed your version without a vote to spare?

MENENDEZ: Well, I'm sure the conference will yield some changes, but the reality is, having served in the House and its leadership, I understand sometimes its frustrations with the Senate, but if we are going to have a final law, it will look a lot more like the Senate version than the House version.

And I'm sure there'll be some compromises, but at the end of the day, I would expect that it will look very much like the Senate version.

WALLACE: Senate Shelby, there are big differences, obviously, as we know, between the House version and the Senate version. Let me run through perhaps the three biggest of them.

The House bill includes a public option. The Senate does not. The House bill has a surtax on people who make more than $500,000 a year. The Senate taxes high-premium insurance plans and raises payroll taxes on high earners. And the House bill is more restrictive than the Senate on banning abortion.

Senator Shelby, how will Republicans in both the House and Senate try to exploit those differences to block health care reform?

SHELBY: Well, I'm not in the House anymore, but I can tell you I'm proud of a lot of the House members who fought hard against the original House version and now will have to be definitely involved in this conference.

I don't know what's going to happen, but there are some -- as you pointed out, some big differences between the two bills. I think both of them are bad bills. I hope that something happens that we don't see either one come out of a conference, but I'm afraid we will.

WALLACE: Senator DeMint, you have raised questions about whether or not either of these bills are constitutional. Do you plan to file a lawsuit if something is passed to block the enactment of health care reform? DEMINT: Chris, this fight is not over right now, and the only thing worse than the policy itself has been the process that the Democrats have followed to get this passed.

We all heard last week about vote buying and different things going on in secret. So there are a lot of problems with this bill. Whether -- who files a suit or what happens if they pass it is one thing.

But my hope now is as we reveal to the American people what's actually in this bill, what it will cost them, what it will do to our Medicare and health care system, that we'll get a few Democrats to stand up in the House that maybe didn't before and help us stop this thing.

It is really bad, and it -- and it is not the answer. It doesn't meet the goals of the president. We need every American to have a health insurance plan they can afford and own and keep. This bill doesn't accomplish that.

WALLACE: Senator Specter, as our legal expert here -- not to diminish in any case any of the other senators that are appearing -- are there constitutional issues here? And let me ask you specifically about one. How can the government mandate that every individual has to buy health insurance?

SPECTER: I do not think there are serious constitutional issues. The mandate provision is very similar to what was done in Massachusetts when they had mandatory reform.

I'd like to pick up on what Senator DeMint says about the process. I think the process was very bad, but the process is really caused in large measure by the refusal of the Republicans to deal in any way.

Senator DeMint is the author of the famous statement that this is going to be President Obama's Waterloo, that this ought to be used to break the president, so that before the ink was dry on the oath of office -- and I know this because I was in the caucus -- the Republicans were already plotting ways to beat President Obama in 2012.

Now, effective government in a democracy relies upon some bipartisanship, but there simply isn't any. And the process which was used was not good. The lead story today in the Washington Post is that after you reform health care, you ought to reform the Senate. And I would start with the process.

And if some of the Republicans would come forward with suggestions, offer a vote or two, or three or four, to take away the need to have every last one of the 60 Democrats, you'd have a much better bill in accordance with the tradition of the Congress, especially the Senate, on bipartisanship.

WALLACE: Well, let me bring in Senator DeMint as a matter of personal privilege. You get 30 seconds to respond, sir.

DEMINT: Well, thank -- thank you, Chris. I never wanted to break the president. We just wanted to break his momentum as he took over more and more of our economy and created more and more of our debt.

The reason the Republicans didn't have any ideas in the bill is that the Democrats didn't allow it, Chris. There was nothing that they would consider other than a government takeover of health care. Whatever words were used, that was their intent.

The Republicans have a number of bills, Chris, that would allow insurance to be more available and affordable to every American, but that was not the goal of the Democrats here. They want the government to run it. They want 80 or 90 percent of Americans on government health care. That's not a good thing for our country.

WALLACE: Let me -- let me -- let me...

SPECTER: Twenty -- twenty -- twenty -- 20 seconds...

WALLACE: Gentlemen...

SPECTER: ... 20 seconds in reply?

WALLACE: No, no.

SPECTER: Twenty seconds in reply?

WALLACE: Senator Specter, no, because, in fairness, I've got to bring in your two other colleagues, and I know you wouldn't want to take time from them.

Let's turn briefly in the time that we have left to the question of the agenda for next year.

Senator Menendez, the White House talks about making a hard pivot after health care to jobs and to trying to reduce the deficit, but how do you reduce the deficit at a time when you keep spending trillions of dollars?

MENENDEZ: Well, Chris, first of all, let's put some things here in perspective. You know, this president inherited over $2 trillion of both tax cuts to the wealthiest people in the country, unpaid for; two wars raging abroad, unpaid for; and a spending spree of the last eight years, and people seem to forget that...

WALLACE: No, but wait -- wait a minute. Wait a minute.

MENENDEZ: ... in very short...

WALLACE: ... Senator Menendez...

MENENDEZ: ... in very short order. WALLACE: ... and we are -- we are almost out of time, and forgive me for interrupting, but you've got a $787 billion stimulus. That was an Obama plan. You've got...

MENENDEZ: Of course. Of course.

WALLACE: You've got health care, which is...

MENENDEZ: Of course, but let's put it...

WALLACE: ... going to be more than a trillion dollars once the whole program starts. You've got a $174 billion jobs program. I mean, yes...


WALLACE: ... I agree, you inherited a lot...

MENENDEZ: Chris...

WALLACE: ... but you're also spending a lot.

MENENDEZ: Well, Chris, first of all, the reason that we ended up with a stimulus package is that we were on the abyss. You know, the chairman of the Federal Reserve said we were going to have a global economic meltdown, so we needed to move away from that.

And every indication shows us that GDP growth is growing and that we are getting back on track in terms of jobs. Look, this will be focus number one, jobs and the economy.

But in terms of reducing the deficit, the Congressional Budget Office says that the health care package that we will pass will reduce that deficit by $132 billion in the first 10 years, by $1.2 trillion in the next 10 years.

And I would simply say to my Republican friends what are they going to campaign on, that they're going to repeal 30 million people who have health insurance under this package, that they're going to repeal closing the gap on Medicare...

WALLACE: But let me -- let me...

MENENDEZ: ... prescription drug coverage that...


WALLACE: ... Let me bring in Senator Shelby.

MENENDEZ: That's what -- that's what they'll have to run on.

WALLACE: Senator Menendez, I've got -- I've got to bring in Senator Shelby, because we've only got about 30 seconds left.

How credible are the president and Democrats when they talk about reducing the deficit? SHELBY: They're not credible at all. As a matter of fact, even our record as Republicans wasn't the best, but they're making us look good each year.

We're on a financial disaster path. Make no mistake about it. We keep going that way, we're -- we're ruining -- ruining our country. We're going to destroy our economy and we're going to have no growth.

WALLACE: Gentlemen, I want to thank you all so much. Sorry I had to cut you off a bit, but obviously we're also covering the breaking news today. Thank you for coming in on your holiday weekend, and we wish you all a happy new year.

SPECTER: Good to be with you. Thank you.

DEMINT: Thank you, Chris.

SHELBY: Thank you.

MENENDEZ: Thank you.

WALLACE: Health care reform passed a major hurdle this week with Senate passage of a bill. Now comes the new challenge, how to hammer out the big differences between the House and Senate versions.

For answers, we turn to Congressman Chris Van Hollen , a House Democratic leader and head of the party's Congressional Campaign Committee.

And, Congressman, welcome back to "Fox News Sunday."

VAN HOLLEN: It's good to be with you, Chris.

WALLACE: You say -- you went on record this week as saying the House is not going to rubber-stamp the Senate version, but you also just heard Senator Menendez say, "Hey, look, we passed this thing by the skin of our teeth, just the 60-vote majority that we had," and that whatever ends up coming through and becoming law is going to look a lot more like the Senate version than the House version. Do you agree?

VAN HOLLEN: Well, let me say again, we're not going to rubber- stamp the Senate bill. On the other hand, we recognize the realities in the Senate.

Look, first let me stress the fact that there are great commonalities between these bills. I mean, about 90 percent of these bills are the same in terms of prohibiting people from being excluded from insurance coverage based on preexisting conditions. Both of them reduce the deficit. Both of them cover another 30 million Americans. Both of them will reduce premiums because right now you and I and everyone else with private insurance is paying for the people who don't have it but still show up for care.

So those bills will do those things. There are some differences in the bills, of course.

WALLACE: Right. Let's explore...


WALLACE: Let's explore the three...


WALLACE: ... big differences. Is the public option dead?

VAN HOLLEN: It's not dead, but we also recognize that the Senate was able to just muster the 60 votes. So before the House was to give up the public option, we would want to be persuaded that there are other mechanisms in whatever bill comes out that will keep down premiums.

We've got to make sure that the final product is affordable. We're asking everybody to have health insurance. It's got to be affordable.

WALLACE: Won't the House have to accept the Senate provision for an excise tax on so-called Cadillac high-premium insurance plans?

VAN HOLLEN: No, there's a common thread between the two bills in terms of how it's paid for. The House bill has a surcharge on people who did very well under the Bush administration with tax breaks. We raise -- have a surcharge on people over half a million dollars for individuals and over a million for couples.

The Senate bill, in addition to having a tax on high-cost insurance plans, also increases the Medicare surcharge for very high- income individuals. So you can see room for a compromise there.

Would you have to have some threshold where you -- on so-called Cadillac plans? Yes, but we believe that the Senate plan unfairly treats many individuals in terms of where the cap is.

WALLACE: OK. Abortion, which may be the toughest issue, because Congressman Bart Stupak , a Democrat, led the fight in the House for a provision sharply restricting any use of public funds to provide for abortions, but some House liberals and a lot of Senate Democrats said that goes too far.

How can you pass a version that perhaps moves a little bit more lenient than Stupak when he gave you the 64 votes to put you over the top?

VAN HOLLEN: Well, let me be clear. As you know, Chris, on both sides there's a clear effort to make sure that no public dollars go for abortion coverage. I mean, that is -- that is clear in both bills. How you accomplish that has been a matter, of course, of great dispute between the two bodies and among different groups who are looking at this issue.

It's not clear exactly how this will be resolved in the final analysis, but I'm confident that it will be. One thing people predicted from the very beginning was that we wouldn't get as far as we have in terms of providing health reform.

I believe at the end of the day we will -- we will resolve this issue in a way that meets that principle that taxpayer dollars will not go to pay for abortion.

WALLACE: Let's turn to the agenda for the new year. You and other Democratic leaders talk about focusing on two prime issues -- one, jobs, and two, the deficit. How do you accomplish both at the same time?

VAN HOLLEN: Well, the first thing you need to do is get the economy going again. If people are out of work, if they don't have a job, they not only can't put food on the table and pay the rent, but obviously government revenues go down.

So just like doctors have to engage in triage, number one, get the economy moving again. And we have made substantial progress. We all know that back in January when the president was sworn in, the economy was going through the floor. I mean, it was in total free fall.

Things have begun to stabilize. The unemployment numbers have improved. And so number one is continue to produce jobs.

WALLACE: But, Congressman -- but here's my point. And it was what I brought up with Senator Menendez. Health care -- once all the benefits kick in in either 2013 or 2014, it's going to cost a trillion dollars over the next decade.

The House just passed another $174 billion jobs program. That's on top of the $787 billion stimulus program. How do you cut the deficit when I just mentioned $2 trillion in federal spending?

VAN HOLLEN: Well, first of all -- and this is a very important point on the health care bill -- there's a distinction between spending and cutting the deficit, because the health care bill is paid for. The nonpartisan Congressional...

WALLACE: Well, it is...

VAN HOLLEN: ... Budget Office...

WALLACE: ... to a -- but there's a trick, which is that you start getting all the revenue in the first years and you don't start the benefits until...


WALLACE: ... 2013 or ‘14.

VAN HOLLEN: The CBO said not only in the first 10 years but also in the second 10 years, the House and Senate bills will reduce the deficit.

Look, we can all argue about the surcharge on the wealthiest Americans. We can argue about whether you should provide the charge on high-, you know, cost health plans. But the fact of the matter is they do pay for themselves. In fact, they more than pay for themselves and reduce the deficit.

In terms of the jobs we just passed, what we did was we used some of the unspent money that was going to go to the big banks under TARP and said, "Let's use this money instead to generate more jobs..."

WALLACE: But that's still borrowed money.

VAN HOLLEN: "... on Main Street." This was already accounted for...

WALLACE: I know, but it's still borrowed money. VAN HOLLEN: ... in terms of the -- yes, but if you don't get the economy moving again, if you don't get people back to work...

WALLACE: I mean, you could have spent -- you could have spent that money to reduce the deficit.

VAN HOLLEN: But the near-term priority is to get the economy going again, because if it continues to slide, the deficit's going to continue to get worse. If you don't get the economy on an upward trajectory, the fact of the matter is not only will people not have jobs, but the government will...

WALLACE: So is that...


WALLACE: ... plan is you're going to keep spending more money?

VAN HOLLEN: No, absolutely not. Now, in the next year, in terms of the long term -- there's the short-term priority, get the economy moving again. Long term, we absolutely have to put in place mechanisms that is will reduce the deficit in a predictable way, and this is going to be a big issue.

The House has passed what we call statutory pay-go, pay as you go, meaning you've got to pay your bills just like any family has to pay their -- and the commission idea is something that's very much in play, create a commission that will make recommendations...

WALLACE: All right, let...

VAN HOLLEN: ... that people will then vote upon.

WALLACE: ... let me -- because we're almost out of time, and I want to...


WALLACE: ... just bring up politics, because that's your role as the head of the Democratic...


WALLACE: ... Congressional Campaign Committee this coming November.

Let's review some of the challenges the Democrats have, and let's put them up on the screen. Eleven Democrats, most in swing districts, are retiring.

Last week Democratic congressman Parker Griffith switched parties.

According to the CQ Roll Call, there are 70 competitive Democratic races next year but only 32 competitive Republican races. And according to the Gallup Poll, this year Democrats have gone from plus eight in generic ballots -- which party do you favor for Congress in your district -- to minus four, to now a slim plus three. Aren't those all signs Democrats are in trouble?

VAN HOLLEN: Well, first, I've said from the beginning, and Democrats have said from the beginning, that this is going to be a challenging year. Historically, first midterm, new president, is always a challenging year.

WALLACE: Average is 20 seats.

VAN HOLLEN: That having -- that having been said...

WALLACE: Would you be happy with 20 seats?

VAN HOLLEN: No. No, I'm not going to be happy with losing 20 seats. No. But that having been said, let's put these numbers in perspective.

You said there are 11 Democratic retirements, people who aren't running. There are 12 Republicans who are not running for their seats, including people like Mike Castle and Mark Kirk in very competitive seats for Democrats.

Number two, we're not going to be surprised like in 1994, and we've been preparing from day one. And number three, Republicans -- their views of -- in the public of the Republican Party right now are very, very low, and that contrasts with 1994.

So is this going to be a tough year? Yeah, and we're ready to fight. Is it going to be another 1994? No. Let me just say a word about Parker Griffith .

WALLACE: Well, let me just ask...


WALLACE: If you talk about Parker Griffith , because we talked about this one congressman, Parker Griffith of Alabama, first-termer, switching parties -- they're already reaching out to Chris Carney of Pennsylvania. How confident are you that neither Carney nor any other Democrat will jump ship in the next 12 months?

VAN HOLLEN: I'm very confident that no other Democrats are going to jump ship. And Parker Griffith -- let me just read the headline from his local conservative newspaper, the Huntsville Times.

WALLACE: Which you just happened to bring with you.

VAN HOLLEN: Which I happened to bring with me. It says, " Parker Griffith 's Party Switch About Self-preservation, not Conviction." I know he dressed it up as a matter of principle. The fact is he did a poll that showed that he might be in trouble. My view is he miscalculated politically because the fact of the matter is people will respect a person who will have differences. What they don't like is people with a finger to the wind.

And this guy voted 85 percent of the time with Democrats, and he's going to have a little trouble with the Republican Party, not to mention a Democratic...


WALLACE: I take it you didn't give Congressman Griffith a Christmas present.

VAN HOLLEN: I'm sorry I didn't. He got coal in his stocking from us.

WALLACE: Congressman Van Hollen, thank you so much for coming in today, and enjoy the rest of your holiday, sir.

VAN HOLLEN: Good to be with you.

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