Martin O'Malley and Kay Bailey Hutchison on "State of the Union"

Martin O'Malley and Kay Bailey Hutchison on "State of the Union"

By State of the Union - November 6, 2011

CROWLEY: No one believes him, of course, but there are people who get paid to worry about the president's re-election bid and there is cause for concern.

USA Today and Gallup polled 12 swing states the president carried in 2008. They found that in late October he was running a close race with Mitt Romney, Herman Cain and Rick Perry. Nearly two-thirds of swing state residents say their families are not better of now than when President Obama first took office.

Joining me now for a look at states in play, Maryland Governor Martin O'Malley who heads the Democratic Governor's Association.

Thank you, governor, for being here.

GOV. MARTIN O'MALLEY (D), MARYLAND: Thank you. CROWLEY: Let's talk first about the president's prospects. That is fairly grim at this point. Look at the battleground fields, and that is most of which the president must win. That same poll also showed us that almost three-quarters of the American public are not satisfied with the direction of the country.

So be the president's political adviser. What does he need to do?

O'MALLEY: Well, I think that we have to acknowledge the fact that none of us is really happy with the present state of our economy but the question is, Candy, whether or not our economies becoming better or not. You cannot make the argument that, hey, we're all better of than we were before this huge Bush recession and all of the job losses. However, for the first time since 2005 our national economy has put together 13 months in a row of positive job growth, our unemployment rate just went down...

CROWLEY: 9 percent.

O'MALLEY: Hey, better isn't good enough. Foreclosures though are now down to their second lowest level since November of 2007. Is it good enough? No, it is not good enough which is why the president is still fighting for jobs. Rightly putting forward the American Jobs Act on infrastructure, on education, because look, what's happening, there's a sense out there in our country right now that we're taking two steps forward and one step back. That's because for every three jobs our private sector is creating we're eliminating one job in the public sector so the president's on the side of creating jobs and people will see that.

Once people make a decision between two alternatives, they are going to choose a man who's earnest, who's committed and who's working hard on the things they care about, which is job creation.

CROWLEY: When you look at numbers -- and you look at the administration's own forecast that says we're going to have slow growth and high unemployment through next year's election, that is a fairly grim picture. You can talk about the Bush recession but he's been gone for three years now and the president's been in charge.

There have been -- you're right, there has been some job growth but certainly not enough to make the country feel as though there is a recovery here. There's always talk about a double-dip recession. How does he battle that? I mean it is a huge hill for him, is it not?

O'MALLEY: Well, he battles it every day. And I think what's becoming clear over time as the president puts forward proposals that had been accepted in the past but Democrats and Republicans alike is that we have a very, very obstructionist wing of the Republican Party who's been very successful at keeping the president from accelerating this jobs recovery as quickly as he would like.

CROWLEY: But do you accept that when the economy's bad, the president's holding the bag. O'MALLEY: Yes, except that I think you cannot ignore the fact that we have in this Tea Party Republican congress people who have taken an oath to be obstructionist. They're willing to block the creation of millions of American jobs in order to put the president out of his job.

CROWLEY: They didn't take an oath to put the president out of a job. they took an oath, did they not, to not raise taxes.

O'MALLEY: I was referring more to Mitch McConnell's very direct statement that he has one priority. It is not the nation's priority of job creation -- it is his political priority of putting the president out of a job. And I think that's becoming apparent to people, Candy, and over time as people are looking at this -- Democrats, independents, Republicans alike -- they are all saying you know what we're in a serious problem here in this country, we need a balanced approach, we need to make investments an we need everybody to pay their fair share.

CROWLEY: One more political question. Bill Clinton's coming out with a book soon. The Washington Post got a hold of it and printed some excerpts. And in it they quoted the former president as saying about Wall Street executives -- many of them supported me when I raised their taxes in 1993 because I didn't attack them for their success. The unspoken words there is that President Obama has been pretty hard -- on especially the last couple months.

Has the president made a tactical error in going after the wealthy and going after Wall Street?

O'MALLEY: Well, it's difficult to talk about the gross inequality that's been brought about by the policies of the Bush administration without people who are in that highest income bracket becoming defensive about it.

What we need to do as a people, though, is to realize that it's really not about the -- I mean the inequality, there are those that will debate the morality of that inequality. But I think what all of us should be concerned about is what our country has been unable to do because of the huge windfall that has gone to the 1 percent. We have been unable to make the investments that a modern economy requires in order to create jobs. And I hope that's where the president -- in fact I believe that's where the president's trying to move this discussion.

CROWLEY: Let me ask you about the state of Maryland where you have proposed or supported at this point a -- almost a 15-cent per gallon increase in gas taxes, a hike in the fees per car registration, hike in inspection fees, hike in mass transit fares and a hike in the sewer tax as well. Is this not the very kind of regressive sort of tax that Democrats always rail against?

Because pretty much everybody -- most people have to use either mass transit or their own car and that's a tax hike on the middle class which Democrats are always saying we can't do this, as well as Republicans. O'MALLEY: Right. Well, it is all about balance. And those items that you just ticked through were recommendations from the blue ribbon commission and I said -- yes, we do need to consider these things. We have in Maryland I think about the -- in the mid range in terms of our tax on gasoline and most importantly..

CROWLEY: This would make you probably the highest gas tax in the nation.

O'MALLEY: If we were to go to 15 cents. But we need to figure out what the right balance is. All of those things you rattle off, all of those suggestions, those various fees and the like, have to be contrasted with the mission we have right now of creating jobs. And last month, Maryland had the second biggest improvement in terms of private job creation...

CROWLEY: You could then argue you don't need all those. If you're improving it already without all these taxes, couldn't you argue it why do it then? Because are you going to hurt folks with this.

O'MALLEY: It depends on how it is done, doesn't it? I mean, there are ways on some of those things to do it in a more progressive way. In Maryland we have a more progressive income tax. We actually lowered income taxes on lower earning families when we did that. We have right now the 32nd lowest sales tax in the nation.

So it is all about balance. It is all about protecting our quality of life and also making together those investments that only we can make in a modern economy, our economy, in order to create jobs and expand opportunity. And that's what we need to be able to do as a country as well, to acknowledge that this is a great nation, a country that can generate jobs and opportunities but we have to be willing to do the hard work and make the investments in our own time to make that happen.

CROWLEY: What one thing can you name me that the state of Maryland would give up that it's getting from the federal government in order to try to bring down the federal debt?

O'MALLEY: Well we...

CROWLEY: What will you do without?

O'MALLEY: Well, we've made suggestions that we can do a much better job of managing health care costs when it comes to dual- eligible citizens, those citizens that are eligible...

CROWLEY: For Medicare and Medicaid.

O'MALLEY: Right. And the federal government now has incentives that go at cross purposes and actually bring down the quality of that care while driving up its costs. And other Democratic governors have been advancing that as well, and some Republican governors. We can save a lot of money by better care and better coordinated care for dual-eligible citizens. CROWLEY: And finally the word is that you're interested in national office and are eying the 2016 race. Yes?

O'MALLEY: I am eying the 2012 race, and I'm going to...

CROWLEY: After that will you eye the 2016 race?

O'MALLEY: what's in my power to help President Obama get reelected so he can accelerate this nation's job recovery.

CROWLEY: So not no. I'll take that as a not no.

O'MALLEY: I am going to do everything I can to help President Obama get reelected. Our country needs leadership. We need to create jobs.

CROWLEY: Thank you so much.

O'MALLEY: Thank you, Candy.

CROWLEY: Appreciate it.

Coming up, Republican Senator Kay Bailey Hutchison on what happens if the super committee can't find compromise on spending cuts.


CROWLEY: Joining me from her home state of Texas, Republican Senator Kay Bailey Hutchison.

Senator, thanks so much for being here. I wanted to start off with a little bit of politics. As you know, the Republicans are having a primary race and one of the things that happens when you run in a primary is that you say things about fellow Republicans, you then are asked about later.

So you ran against Governor Rick Perry for the Republican nomination for governor in Texas. You said he was soft on immigration. You said that you were the real conservative in the race and not him, and that he was basically a good old boy, backroom politics.

Does any of that change now that you're looking at the presidential race? You've said this is a man you can support, but does that criticism still hold?

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Well, I'm not going to backtrack on anything I said. I tried to give Texas a choice. I didn't think he was going to run for re-election. That's what I had been told. So I wasn't challenging him, but it was a very tough race and he was pretty brutal on my record, and I took on his record. And so that's the way politics is and it does come back.

But I thought that we needed a choice in Texas. And I certainly feel the same way about the United States. CROWLEY: There is a poll out in Texas about the Republican presidential primary race which essentially shows that Herman Cain is tied with Rick Perry, the governor of Texas, the sitting governor of Texas, in the presidential primary race there. Does that surprise you?

HUTCHISON: Well, you know, I think that if you ask Texans about this race, it's more mixed than it was, for instance, when George W. Bush was running. And...

CROWLEY: Why is that?

HUTCHISON: I guess -- well, I think when you've been in office for a long time, you have a record and that record is fair game. And I think that some of the things in his record have certainly not been helpful. And certainly the Trans-Texas Corridor was something that I had talked about and it was running over private property rights. And I think that that's something that has stuck with the farm bureau and people who own land.

So I think those are some of the things that you just -- you have a record, just like I have a record. And any senator who is running has had votes that are controversial. And I think that you have to make choices and you do make choices, you make people mad, that's part of the political process. And so I think that it's just different and it is what it is.

CROWLEY: Let me ask you about Herman Cain specifically. Is anything that you've heard publicly over the past week disturbed you or made you think, I'm not sure Herman Cain is the best answer for the Republican Party in 2012?

HUTCHISON: Not at all. I just don't see anonymous sources as fair against a candidate. I think if someone has a real concern, they should come out and say it. But nothing that I've heard, in the press that I have read is other than off-color remarks which, you know, I think that he paid a price for that, as maybe he should, but I don't sense that there is something, so far that has come out, other than from anonymous sources that he spoke badly.

And so I don't think that -- I kind of think that this is a presidential campaign thing where his, you know, opponents are coming forward and trying to dredge things up. But unless there's something that's really sexual harassment, which I would stand firmly against, and say that would be a problem.

But until something comes out that's concrete, I think it is politics as usual.

CROWLEY: OK. Let me turn you to somewhat politics as usual up on Capitol Hill, where we have 33 senators who have written the super committee and said, listen, rewrite the tax code with no net tax increase. Does that letter not doom the super committee to failure given what the Democrats want and this is supposed to be a compromise?

HUTCHISON: No, I don't think it dooms it to failure. I think if we are going to realistically get our budget house in order, we've got to cut spending, we have to have a fairer tax code, one in which it is lower and promotes growth in business, but does catch people who aren't paying taxes right now who should be paying taxes.

You get revenue increase by increasing the growth in our business sector, our private sector. You increase growth in the private sector and you'll get new revenue, because people will be working and paying taxes rather than having to be on unemployment.

CROWLEY: Which has been the Republican position for some time now, but the super committee is supposed to come up with a compromise. And if 33 senators, and we know there's probably more than that, are going to say, listen, you know, fix the tax code, don't raise taxes, and keep it net revenue neutral, it just seems to me that there is not -- to a lot of people it seems that there is not a compromise there. So what is the point of the super committee?

HUTCHISON: Well, I think you're saying revenue neutral means no added revenue. I don't think anyone is saying that. Republicans are saying we want new revenue to come from growth in the economy. And growth in the economy requires that we don't increase taxes, that in some cases, like corporate side and even individual small businesses, we want to lower taxes.

We want people to be hired. We want jobs to be created by people having more of the money that they're earning to plow back into the business. That means that we're going to have a fairer tax code which will bring in revenue through growth in the economy.

CROWLEY: Senator, if the super committee does not come to any kind of agreement, there will be across-the-board cuts split evenly between domestic spending, with some programs protected, and defense spending. Are you willing to live with that? Is that all right with you?

HUTCHISON: I don't like it. I do not like it, 1.2 trillion...

CROWLEY: Would you try to change it?

HUTCHISON: That would be $600 billion in cuts in our military when we are in a conflict and we've got our troops in harm's way. I don't like that at all. And the reason that we need for the super committee to succeed is to keep that from happening.

CROWLEY: Senator Kay Bailey Hutchison, thank you so much for joining us this morning. I appreciate it.

HUTCHISON: Thank you, Candy. 

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