Guests: Sen. Mark Warner & Gov. Ed Rendell on "Parker Spitzer"

Guests: Sen. Mark Warner & Gov. Ed Rendell on "Parker Spitzer"

By Parker Spizter - December 10, 2010

KATHLEEN PARKER: Joining us now to talk about the president's bravura performance at the podium today, and we're not talking about the current president, is Pennsylvania Governor Ed Rendell.

Welcome, Governor.


PARKER: You look wonderful in purple.

RENDELL: Good to see you.

SPITZER: Thank you for coming in.

RENDELL: You look splendid.

PARKER: So President Obama and President Clinton had a little love fest today. They agree that compromise is the best thing. Are we now in for an era of peace and love?

RENDELL: Well, not necessarily. But it was important for President Clinton to say what he did. For two reasons. One, because all Democrats remember how successfully after the beating that the Democrats got in 1994, how successfully President Clinton -- I won't say moved to the center, but made government work.

PARKER: Made people think he had.


RENDELL: Well, that's right. But he made government work, he got things done and then got reelected by huge electoral landslide. So I think that's number one. And number two, no one worked harder in this election cycle than Bill Clinton for congressional candidates, Senate candidates, and there is a great deal of gratitude among rank and file Democrats for what he did.

So for him to come out and endorse the deal as unequivocally as he did I think is going to make a difference.

SPITZER: Look, I totally agree with you. As a political matter, an endorsement from Bill Clinton is about as good as you can get on either side of the aisle. People just love him and for good reason.

Having said that, the fundamental objection that seems to be uniformed or until today has been uniformed across the members of the House and the Senate Democrats was this deal was not one that you fought hard enough to get.

RENDELL: Well --

SPITZER: And when I speak to senators and members of the House, they are frustrated beyond words that President Obama didn't go to the mat, didn't seem to wring what he could have at the other side.

RENDELL: I think that comes with ill grace on the part of the members of my party in the Congress. Let me tell you why. Number one, I heard Mark Warner earlier today say that if we were going to fight this out we should have fought it out before the election. We ran away from this issue before the election. We should have made this the central issue in the election.

PARKER: Well, there was a strategic decision to do that. Why?

RENDELL: I don't know. And then why if it's so good now -- (CROSSTALK)

PARKER: Why wasn't it then. Exactly.

SPITZER: Look, Governor, some people like you were saying that back then. I was saying it back then.

RENDELL: Absolutely.

SPITZER: Because there is a powerful philosophical argument and powerful economic argument that what President Obama and the Republicans want to give to the wealthy is bad economics. It is bad for the social fabric of this country. Why didn't President Obama --

RENDELL: Bad for the deficit.

SPITZER: Bad for the -- bad at every level. I mean Senator Warner's point earlier today was that the $4 trillion that we're giving away in the deal that the president cut with the Republicans is exactly the amount that the Bowles-Simpson tries to save making all sort of hard cuts.

RENDELL: Eliot, you just (INAUDIBLE) traffic made a little bit of a mistake. We're not giving away $4 trillion.

SPITZER: Why not?

RENDELL: Because it's only two years. And two years is one fifth.

SPITZER: Wait a minute, wait a minute --


SPITZER: No, no, no. This is not a mistake. This is a very clear understanding of what's going to happen. Anybody who thinks this is a two-year deal, and that's why I said $4 trillion, is kidding themselves.

A Republican House is not going to boost back up the tax marginal tax rates on the rich, simply not going to happen.

RENDELL: Well --

SPITZER: This etches into stone.

RENDELL: Except, you're assuming there's going to be a Republican House. The next time this is taken up --

SPITZER: Well, there is for the next two years.

RENDELL: But the next time this is taken up is two years from now after the presidential election, and if I'm the Democrats, it's time to show some spine guys, and let's make this a central issue in the election in 2012. SPITZER: Well, Governor, I could not agree with you more, but I don't see more than a 1 percent shot of that happening. And that's why I do think this is a 10-year. It's an embrace of the tax rates --


SPITZER: -- that are --

RENDELL: You have little faith.

PARKER: He's a pessimist. I know.

SPITZER: No, no, no. I've seen the way --


RENDELL: But there's a second reason I think the criticism that is wrong on the president. Remember last week, the Schumer amendment, which was the best case for us, on millionaires. We brought it before the Senate where it has to pass.

Forget the House for a moment. We got 53 votes. We were seven shot. We lost five Democrats, including Russ Feingold.

PARKER: Yes --

SPITZER: But let me ask you this -- let me ask you this question.

RENDELL: So how are we going to win?

SPITZER: Because the president had not laid the foundation over months and months and months. Instead, he signaled from the get-go, we were ready to concede on the issue of taxes. And it was -- we have yet -- and I think the frustration, Governor, is that we have not yet seen him really walk away from the table, look the Republicans in the eye and say, I dare you, the way President Clinton did with Newt Gingrich, and he said I dare you to shut down the government.

RENDELL: Different time and it's a different issue. Look, what's at stake here -- and I believe the Republican Party is playing hard ball, and would have been venal enough -- and I use the word venal.

It would have venal enough here to let the tax cuts expire, number one, and blame us for it. Number two, to make sure that the unemployed didn't get additional compensation. Number three, to end the earned income tax credit. Number four, to take away the college credit.

It would have been destructive to the people that we're here to protect. And in the end, it's all about governing. It's all about real stuff. It's not about political gamesmanship.

PARKER: Well, thank you. What you -- you say that -- you know, that the deal is the best that President Obama could have gotten under the circumstances. The President Clinton agrees with that.

When you talk about President Clinton, when he was in office, moving toward the center, at least making people think he had moved center, is that what Obama is doing? Is he moving center? Is he just playing his --

RENDELL: I think he's doing two things. I think he's trying to govern. And the test for President Obama, and Elliot knows this. For those of us who were executives in politics, and my day, I've got five weeks to go, and then I'm done.

SPITZER: Enjoy it.

RENDELL: For those of us, it's about getting things done. People want to see leadership. And leadership means more than just screaming and yelling and pointing the finger at the other guy.

It means -- I've got a very progressive agenda through in my eight years as governor, I've had to compromise, because I had a Republican legislature, and each and every piece of that agenda, I put things in that I didn't like. But that's what governing is all about.

What the president has to do -- energy bill and we can get it, we can do it bipartisan energy bill. Education. No Child Left Behind. A new way. If he gets stuff like that done, and does real deficit reduction, he's going to get --


PARKER: OK, so why are Democrats being such whiners? I mean, come on, he's doing --

SPITZER: Wait, let me refine that.

PARKER: He's leading. He's leading.

SPITZER: Let me respond. I agree with every piece of the agenda you just laid out and more importantly, the philosophical principle that compromise is an essential part of governing.

RENDELL: Of governing.

SPITZER: Having said that, you compromise at the right moment when you have made your affirmative case. The president didn't make the case.

Here's what I would have loved to hear him say. The 120. Let's just take the two-year number.


SPITZER: To address your first one. The two-year number, $120 billion that is going to the wealthy through the inheritance tax and the increase -- the decrease in marginal rates. Imagine what that $120 billion that we're going to have to borrow from China to spend to or give back to them. Imagine if we used that on education. Imagine if we used that on energy. Bill Gates and Warren Buffett oppose the tax reduction for the rich because they know that $120 billion would be better spent in those other areas.

I wish the president --

PARKER: Well, because they've got more money than god, too.

SPITZER: Well, but --

PARKER: I mean two people earning $250,000 per household do not consider themselves rich.

SPITZER: I wish the president had made that case and stood with those guys to do it.

RENDELL: Yes, Eliot, in many ways, you're right in terms of making everyone feel good. But government is not about making you feel good. It's about getting things done.

SPITZER: You're caving to the hostage takers and you're making yourself a hostage.


SPITZER: In other words, you need to frame the debate.

RENDELL: No, no.

SPITZER: When you say the Republicans were tough, therefore we caved? No.

RENDELL: Do you think, Eliot, that Russ Feingold didn't know what was at stake here? He didn't vote for the millionaire's amendment.

SPITZER: No, no. But you know what? That's because Russ didn't want to do any of it. Russ came at it from the other side. I think what you could have done was had -- look, the senators, Democratic senators and members of the Democratic House were appalled because the president didn't work with them to negotiate this.

RENDELL: Different.

SPITZER: And at that level --

RENDELL: I agree.

SPITZER: If he had worked with them, then you could have gotten those votes and we could have made this happen.

RENDELL: I don't think -- you're right, but he still should have worked with him. That's number one. Number two, he shouldn't have trashed the base. What he should have come out the next day and said, look, to my progressive Democratic friends, I feel your pain. You're right. Part of this stuff just stinks. But we had to preserve our people. We have to get the economy right --

PARKER: You're saying instead of calling them sanctimonious --

RENDELL: Absolutely. Absolutely. You don't do that. I mean they're good people and they care very much about the things that they're talking about. Don't rip them. And I think that was a mistake. But look, 53 votes when we needed 60?

SPITZER: I'm not saying it's easy. But look -- can we switch gears totally for a second?


SPITZER: Is the White House going to bring you in some --



SPITZER: Are they going to let you be the general who's going to drive this -- you know how to do it.

RENDELL: I'm for a general. But I'm for General Powell for chief of staff. And look, Peter Rouse is a great guy and is a terrific guy, but we need someone with the stature to continue to bring the government together.

PARKER: Governor Ed Rendell, thank you so much for being with us.

RENDELL: Miss Kathleen. Eliot.

SPITZER: Thank you. Happy holidays.

RENDELL: Good to see you.

SPITZER: When we come back, well the president's tax compromise takes up all the oxygen in the room, some smart Democratic ideas are being left on the table. We'll talk to one senator with a plan when come back.


SEN. MARK WARNER (D), VIRGINIA: I don't think anybody was surprised that the president -- President Clinton, you know, liked the opportunity to be back in the limelight.

PARKER: He seemed right at home.



SPITZER: The narrative around the tax cut package just changed in the last few days. First, President Obama said the deal had to be made to extend benefits to the unemployed. That didn't go over so well, so his economic adviser Larry Summer said we risked a double-dip recession unless the package was enacted.

PARKER: Virginia Senator Mark Warner is a Democrat on the Senate Budget Committee. He had another idea that would have allowed taxes to go up for the rich and use that income for business tax cuts, but he couldn't sell it.

Senator Mark, welcome. Senator Mark Warner, welcome. How are you?

WARNER: Thanks, Kathleen.


WARNER: Well, you know what? I still think my deal looks pretty good in my perspective in terms of what we're actually going to be voting on. But you know --

SPITZER: It looks great, Senator. You keep pushing it.

WARNER: Thanks, man.

PARKER: Well, so we know that President Clinton and President Obama met this afternoon.

WARNER: Right.

PARKER: And President Clinton came out in favor of the deal, saying it was the best deal possible under the circumstances. And he took questions for a long time. That is, President Clinton did. So what's your reaction?

WARNER: Well, listen, I wish I would have been in the room. I think there could have been a better deal. But the fact is, the deal was made and I think it will pass. I will support it because the alternative, frankly, is the notion that we're going to play Russian roulette or roll the dice with the American economy, because I think the economic uncertainty that could be created, particularly with what's going on in Europe at this point, of allowing the tax breaks for the middle class to expire, and allowing the unemployment benefits to expire, could be really a very, very draconian.

So, you know, let's go ahead and move forward on this deal. What I hope is that -- though is that we in Congress could actually show that we could, you know, walk and chew gum. So my hope is -- and I think there's a lot of bipartisan support for this, that while we do this short term stimulus, we also make a commitment that next year we're going to do the real hard work, which is around real tax reform and deficit reduction.

Because I think any economist that -- even the economists that applaud this deal say if we don't get our fiscal House in order over the longer haul, this is just putting off an inevitable decline of the country.

PARKER: Did President Clinton's enforcement of the plan have anything to do with your conclusion? WARNER: No --

PARKER: Or has you reached that --


WARNER: I got a lot of respect for President Clinton, but I -- when this deal was announced, the reality of this or doing nothing, to my mind, was pretty clear, and that we had to act. And what I'm simply trying to do now is trying to rally folks on both sides to say, if we're going to add $900 billion to the deficit over the next two years, let's all -- so go ahead and in a bipartisan and civil way commit to, you know, doing deficit reduction and real tax reform over the long haul next year.

Because if we don't, the -- every week that goes by, we add billions of dollars to the national debt. And frankly, I thought the Simpson-Bowles commission work that was done last week, I was the first guy not on the commission that would have said, again, not perfect, but I would have voted for it if it would have been on the floor.

SPITZER: Look, Senator, I don't mean to challenge you on where we are. But we still do have about 10 days or so until things really do run out of time. The Democrats in the House have taken a different position, saying no, we're not going to bring this to the floor.

Why isn't there time now to say there are pieces of this package that are not stimulative? And I really don't think that the state tax piece or the reduction in marginal rates or the extension of the lower rates for the super wealthy has any stimulative effect. And meanwhile, we're borrowing money from China to pay for that.

It's a real bad set of facts for the economy. Why can't we push back on those, and substitute your idea, use that money, at least for something that would be stimulative? Why isn't there time for that?

WARNER: Well, Eliot -- Eliot, I'd like to see that, and you know, I agree with you particularly on the estate tax. You know, we could have done something in the middle between the $3.5 and $5 million exclusion rate that would have caused a lot less heartburn, at least amongst a lot of Democrats.

But as we saw, even when we raised -- tried to raise the marginal cutoff to $1 million in the Senate, we only got 53, 54 votes on that. So the fact was, we didn't have the votes on that kind of even higher level on a million-dollar cutoff a week ago.

And with the clock ticking, you know, I do think we're looking at -- with perhaps some small addendum around the side here or there, I think we're looking at the framework of either this or potentially allowing the tax rates to expire and everybody taxes going up.

SPITZER: There was movement, certainly during the Clinton presidency, President Clinton began with some very heavy lift whether it was NAFTA or his budgets or the tax ideas, and he would get certainly members from his own party to come on board and occasionally across the aisle, as well.

This president doesn't seem to be able to do that. Is that his failing or is it just a rigidity and a stubbornness and a uniformity on the Republican side that simply can't be overcome?

WARNER: One of the things that I have been disappointed in, in a lot of my Republican colleagues is, you know, there has been kind of an "our way or the highway" approach. And, you know, the fact is, over the last two years, we've had the numbers to jam stuff through.

The Republicans had the luxury of just saying no. Come January, both parties are going to own both the problems and they're going to own the solutions. And I'm hoping at least on the Senate side there can be a reemergence of the group in the middle, Democrats and Republicans, and it'll be -- you know, we're going -- hopefully form a new caucus, the "let's get stuff done" caucus, which is --


WARNER: -- definitely what I think is needed.

PARKER: You know this afternoon at the press conference, President Obama and President Clinton spoke for a little while and then President Obama excused himself, he kept checking his watch and finally said look, I've got to go, Michelle -- I've kept my wife waiting for 30 minutes already.

And he turned it over to President Clinton who seemed delighted to be back in place. What do you think of that?

WARNER: You know, I found one of the things as a current elected official, it's probably not good to comment on current or former president's in terms of their speaking time. You know --


WARNER: I'll do a quick pass on that one.



WARNER: Kathleen, I don't think anybody was surprised that the president -- President Clinton, you know, liked the opportunity to be back in the limelight.

PARKER: He seemed right at home.

SPITZER: Well, I think there's another reality here, which is that the terms of this deal are not, in my view -- again, I hope I'm wrong about this, but this is not a two-year transaction with the Republican House of Representatives starting in January, hard for me to imagine any political dynamic that has the Republicans in the House moving these numbers up, or making -- raising these marginal tax rates.

So I think we're talking about something that will probably last at least a decade.

WARNER: But if we do that, the -- basically, the amount we add to the deficit now with these other add-ons is -- over the next decade is more than $4 trillion.

SPITZER: Senator, that is --

WARNER: More than $4 trillion. And remember, put this in context. Last week, all of the hubbub about the Simpson-Bowles thing that took on Social Security, took on Medicare, ended up -- you know, closing a lot of tax exclusions. In total, that only reduced the deficit $4 trillion.

So, you know, the idea that these are going to be locked in stone with all of the other things that are kind of hard to get at, will mean that at one point soon, whether it's the next couple of years or five years from now, the bond market and others are going to say, they're not going to buy our debt anymore, and we're going to have the same kind of crisis that Greece and Ireland and potentially other countries in Europe has had.

And if we don't step up.


WARNER: And do our part on that, we all ought to be fired.

PARKER: I couldn't agree more with that. Senator Mark Warner, thanks so much for being with us.

WARNER: Thank you, guys.


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