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Sperling, Blunt, Menendez and Huntsman on "State of the Union"

Sperling, Blunt, Menendez and Huntsman on "State of the Union"

By State of the Union - December 18, 2011

JOHNS: I'm Joe Johns in for Candy Crowley, and this is State of the Union.

The White House has led a very public campaign for the payroll tax cut extension which would save average and working Americans $1,000 in higher taxes next year. After weeks of negotiations, a breakthrough: the Senate yesterday voted to extend the tax cut and unemployment benefits for just two months.

The House still has to act. President Obama seems satisfied, but he let congress know he is not backing off a full-year extension.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It would be inexcusable for congress not to further extend this middle class tax cut for the rest of the year. It should be a formality and hopefully it is done with as little drama as possible when they get back in January.

(END VIDEO CLIP)

JOHNS: But he made no mention of the Keystone XL Pipeline compromise. To get Republicans on-board, Democrats agreed to a provision which says the president must make a decision within 60 days on extending an oil pipeline from Canada to Texas. The president had initially threatened to veto any payroll extension bill that included the pipeline. So what changed? Some Democrats, like Senator Carl Levin, have a theory. "The president is apparently just going to use the option given to him not to let it go forward."

So, Gene Sperling, is the president going to pass on the Keystone XL Pipeline project?

GENE SPERLING, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Look, the president put his central principle for December was that congress could not go home and allow taxes to go up on 160 million Americans or to let millions of Americans who are out there pounding the pavement every day for a job see their unemployment benefits cut off. This overwhelming bipartisan vote yesterday met that core principle of the president.

You were right that the president did make clear that he was not going to allow congress to tie to that vote something that would mandate or force him to accept the Keystone permit when there was not adequate time to do a health and safety environmental review. Because nothing in this bill mandates the president to do that.

This was, whether wise or not, did not go against his veto threat or his core principle of making sure that we do not see taxes going up on 160 million Americans when the economy still needs to strengthen much further.

JOHNS: Are you of the opinion that the president needs more than 60 days to make a decision on that? And is it likely then that the president will say no?

SPERLING: Well, the State Department -- the experts at the State Department who are authorized for our government to make that very serious and complex review made clear before this legislation was even voted on that if they were only given 60 days to look at the alternative routes in Nebraska, and to do the serious environmental and safety and health reviews, that that would be enough time and it would make it almost certainly impossible for them to extend that permit.

But I can't add or subtract from what the experts at the State Department said.

JOHNS: But likely that he'll say no.

SPERLING: Well again, I just referred back to what the State Department said. They said it was very unlikely that they would have -- that 60 days would be enough time for them to be able to guarantee to the American people that an adequate safety and health and environmental review had been done.

JOHNS: You know waking up this morning, hearing from people on the House side, they're saying they're not so sure this two-month deal is good enough. They'd like to see a 12-month deal. And I've even been told it is unlikely this bill that has been passed by the Senate is going to pass the House.

Do you feel as though there is time for the White House and the congress to work out a 12-month deal between now and January 1st?

SPERLING: You know, the president proposed the American Jobs Act more than 100 days ago. And that was a plan that if fully passed would add 1.3 million to 1.9 million jobs. It had many more additional measures, some with great bipartisan support such as cutting taxes for 6 million small businesses employing 56 million Americans. So of course, the president would like more.

But here's what was significant about the vote yesterday -- it had 89 votes. The compromise to extend the payroll tax on unemployment for 60 days into next year had 90 percent support. The only things that get 90 percent support in the United States Senate these days are mom, apple pie and chocolate ice cream.

So I really think it is very unlikely that the House would disrupt this compromise, overwhelming compromise, six days before Christmas, especially when, as the president said, once congress speaks with such an overwhelming voice of the importance of extending payroll tax relief for 160 million workers, the chances are very small that we would not come to, as the president said, a no-drama compromise to extend it for the full year.

And our economy so needs this. This will affect not only those working families, but it will increase jobs by hundreds of thousands.

JOHNS: The difference between a two-month deal and a 12-month deal apparently was how you pay for it. How close were you with the Senate or the House of Representatives on how to pay for a 12-month deal? What's the hold-up?

SPERLING: Well, I think the majority leader, Harry Reid, who did a tremendous job in getting this compromise, was working together with the Republican leader Mitch McConnell. My understanding is that they'd made a lot of progress, but understanding the importance of what the president said about nobody going home and not coming back until mid-January when taxes would have already gone up on 160 million Americans when hundreds and hundreds of thousands of workers would have lost their UI was unacceptable.

And I think they realized that if they could come together with an overwhelming bipartisan compromise to extend this for two months, it would, as the president suggested, make it a virtual certainty that we would all work together to extend this unemployment insurance and the tax relief for 160 million working Americans, as you said, up to -- averaging $1,000 per family, that this would be extended for the full year.

JOHNS: Can you categorically rule out then that there will be a 12-month deal before the beginning of the year?

SPERLING: Well, this is Washington, D.C. don't categorically rule out anything. But as I said, this had 80 -- this compromise in the Senate passed 89-10, 90 percent compromise. And I think the reason why I think this will go forward is because, what I think everybody understands is that it is not hard for one side to pass a bill, what would give us -- what gives you confidence that the payroll tax cut will be extended for a full year and that 160 million Americans will get that tax relief next year when they and our economy need it is the fact that there was a bipartisan compromise.

So I think if somebody cares deeply about ensuring that the tax -- payroll tax cut is extended for the year, the best thing they can do to give confidence of that is support this overwhelming bipartisan compromise in the senate.

JOHNS: Now, the speaker himself of the representatives was saying on another program this morning that he doesn't agree with this two-month extension. It doesn't sound like this is going to be so easy to do. No way to go back to the drawing table?

SPERLING: Well, as I said, of course this president would like a full year. He'd like much more. He'd like to see everyone agree to the full measure of his American Jobs Act which, as you know, included saving hundreds of thousands of teacher and first responder jobs, including hundreds of thousands of construction workers putting them back to work rebuilding our roads, schools and businesses, giving 6 million small businesses tax relief. So we'd like more.

But what we can do to get a win for the economy, for jobs, for working families is find that bipartisan compromise. So again, by supporting this bipartisan compromise, I think that is the best way to send a clear signal to the American public that we are going to put the economy first, jobs first, and politics last for a change.

JOHNS: All right. Gene Sperling, I thank you so much for coming in. Great to talk to you and happy holidays. Hopefully we'll be talking to you again soon.

SPERLING: Well, thanks for having us. We appreciate it.

JOHNS: And we'll get perspective from the senate with Roy Blunt and Robert Menendez after the break.

(COMMERCIAL BREAK)

JOHNS: Here to talk about the work of the Senate and that payroll tax extension, Democratic Senator Robert Menendez of New Jersey, and Senator Roy Blunt of Missouri, who was recently elected to the Senate Republican leadership.

And, Senator Blunt, start with you. House passage of this payroll tax deal is just not a done deal yet. We're hearing from the speaker of the house on another program saying he's not happy with this two-month extension.

Did you all in the Senate leadership communicate with the House leadership on this or how did all this get messed up?

SEN. ROY BLUNT (R), MISSOURI: Well, you know, I don't know. I really don't officially become a member of the Senate leadership until we start the year next year. It is my first year in the Senate, trying to figure the Senate out still. But I do understand the House pretty well. And in fact I had a couple of calls from some of my buddies in the House this morning saying, we don't want it do this, we liked the one-year extension that the House voted for and that was bipartisan, too.

It wasn't as bipartisan as the Senate vote, but several Democrats joined Republicans and said, let's do this for a year, let's include the Keystone pipeline, let's pay for it so there is no tax increase.

And, of course, that -- the Senate bill also was a paid-for bill, so no tax increase, a paid-for bill, some job creation added to it. And I guess we'll just have to work this out.

I heard Gene Sperling say it is Washington, and you can't determine for sure what -- anything could happen and it still might, but I think our friends in the House are going to have to work through this.

JOHNS: All right. So, Senator Menendez, are you planning on coming back to town here? How likely is it that the Senate is actually not out of here for the holidays yet?

SEN. ROBERT MENENDEZ (D), NEW JERSEY: Well, look, in 24 hours middle class families in this country went from relief that they had, a continuing payroll tax cut and $1,000 in their pockets, to seeing Republicans in the House, because, in their own words, they're itching for a fight with Democrats and the White House, to undermine that relief.

You know, I'd love to see a year, too, but I want to see a year in which we pay for it in a way that doesn't take money from the middle class to give it to the middle class. I mean, in the House version, they take money from middle class families in Medicare, they take money from middle class families in health care, they take money from middle class civil servants.

And so, you know, the question is, yes, I'd love to see a year, too. We had proposals for a year. If they're willing to stop, you know, fighting for millionaires and billionaires and finally start fighting for the middle class, we could have a full year extension, which we all want.

But there's no wonder that Frank Luntz, the Republican -- the key Republican pollster has said, you know, the public doesn't trust you on the middle class. This is the latest example.

JOHN: I'd just ask you to respond to that, Senator.

BLUNT: Well, I don't know what Republicans in the House were saying they're itching for a fight. I think what they're saying they wanted the one-year extension. They paid for it. There was no tax on anybody in the Senate bill, either.

I know Bob Menendez would love to increase taxes as part of any package but this package in the Senate didn't do that. They were both paid for and they both had this huge job creator. The Keystone pipeline is a big thing if it could happen. The shortest path to more American jobs is more American energy and more jobs that relate to American energy. The Keystone pipeline is 20,000 of them without a single tax dollar involved.

Republicans in the House and the Senate and apparently a bunch of Democrats in the Senate as well would like a situation where we get a decision on that and can move forward.

JOHNS: Do you think you've just sort of given the president of the United States a way out if the House were to take this bill, that he could simply say, well, 60 days, not enough time, I'm not going to sign off on this, end of the story?

BLUNT: No, I think he would sign off on it, though a week ago he was saying he wouldn't sign a bill that wasn't for a year and he wouldn't sign a bill that included the Keystone pipeline. I think the president would sign this if it got to his desk and we'll see in the next week whether it gets to his desk or not.

I think the House has to deal with it and look at the fact that it was paid for, it extends not just the payroll tax but also the unemployment insurance and there is a doctor issue that has been out there since 1997 that has always been a phony pay-for that would be taken care of as well so that doctors don't have their Medicare reimbursement cut back to 10-year-ago levels on January the 1st. And nobody wants any of these things to happen, so I believe this will be worked out in a way that doesn't raise taxes, that hopefully helps create some additional private sector jobs, as well as just spending tax dollars.

JOHNS: Now I have to ask you both, you've seen, I'm sure, the polls that talk about congressional approval ratings. They're really at historic lows right now. And we have a graphic we can show you.

This is a CBS News poll that shows 11 percent approval of the United States Congress right now. And I just asked the staff to go back and look at the approval ratings of the only president who ever resigned his job in disgrace. This is Richard Nixon's job performance approval ratings 24 percent, actually higher than the United States Congress right now, which seems to be extraordinary.

Start with you, Senator Menendez, why don't people like the Congress?

MENENDEZ: Well, look, people are hurting in the country. And that is very clear. I see it in my state of New Jersey as I travel throughout the state, and listen to people who sometimes with tears in their eyes tell me, Senator, this is the first time in my life that I've been unemployed and for a long period of time. And the fundamental American promise has been shaken for them.

That's why we as Democrats are trying to restore that promise. That's about getting people back to work. That's what the president's job package was about. That's what this payroll tax that we have been leading the fight on and that Republicans have largely fought us tooth and nail.

And I know Roy made the comment that, you know, I would want to increase taxes. The bottom line is what I don't want to see is a greater pound of flesh being taken out of the middle class. That's what the House Republicans do.

They do it in so many different ways. And so it seems to me that this is a question and that will go to the question of the next elections, whose side do you stand up for? Are you standing up for millionaires and billionaires who got some of the biggest tax cuts? And -- or are you going to stand up for the overwhelming middle class?

And that's why every economist says to us you need to extend both the payroll tax and the unemployment compensation because not do so, as Mark Zandi said, would throw us back into recession.

Ameriprise says the extension of the payroll tax would create a million jobs. That's far more than ultimately would be given to giving more money to the millionaires and billionaires.

JOHNS: Senator Blunt, just go ahead, I'm sure you want to talk about that.

BLUNT: Well, you know, I don't know who the 11 percent are. The Congress is almost totally dysfunctional right now. All we've done this year, in my first year in the Senate, and I'm in the minority in the Senate, is barely keep the doors open. And of course people are not satisfied with that.

I do think the president's obligation to lead has not been met. His numbers are lower than any president in the history of the country at this point in his presidency. They're not nearly as low as the Congress but the Congress as an institution will not be on the ballot next year. The president of the United States will be.

JOHNS: Now, Senator Blunt, let me ask you, the question of the tea party in Congress, the tea party movement, a lot of controversy there.

JOHNS: And some people would blame the Tea Party for at least partially bringing down the numbers of the approval.

But you also defeated a Tea Party supported member of the Senate for your leadership position. Do you think we're in a zone now where the Tea Party bubble is about to burst?

BLUNT: Well, no, I don't think that at all. I think the Tea Party has brought important issues to the table. I think their concern about fiscal responsibility, about paying the bill is a concern that they keep building that fire under. And Ron Johnson, who was my opponent in this recent leadership race, is a great member of the Senate. I look forward to working with him.

I think that the focus on where are the private sector jobs and why is the federal government spending so much money was the focus of the Tea Party in 2010. It will be a big focus of voters in this election as well, and the Tea Party will continue to drive that message.

JOHNS: Senator Blunt, Senator Menendez, good to see you both again, and hope to talk to you again soon.

Coming up -- Jon Huntsman on his conservative credentials and his strategy in New Hampshire.

(COMMERCIAL BREAK)

JOHNS: Jon Huntsman is pinning all his presidential hopes on New Hampshire. He moved his campaign headquarters there a few months ago and he's held well over 100 events. And while the latest New Hampshire poll shows a slight boost for Huntsman, he still trails Mitt Romney by 25 points.

He did make a rare trip to Iowa this week to participate in the latest debate. A former ambassador for the Obama administration, Huntsman was asked to persuade his critics that he could energize a Republican base.

(BEGIN VIDEO CLIP)

JON HUNTSMAN, GOP PRESIDENTIAL CANDIDATE: I am the consistent conservative in this race. They are coming around to find that I'm not going to pander, I'm not going contort myself into a pretzel to please any audience I'm in front of.

(END VIDEO CLIP)

JOHNS: Jon Huntsman joins me now from New Hampshire. And, Governor, a lot of people say you send mixed messages. You're also openly courting independents while you say you're conservative. Which side are you on?

HUNTSMAN: Now, Joe, first of all of, it's an honor to be with you and I'm putting you on early notice that we're going to win the New Hampshire primary. Things are very, very exciting in the state and it's great to be here once again.

I am who I am. I have a track record. I have a history as governor. I've lived overseas four times. I've served three times as a U.S. ambassador. My record is what it is, so I'm not going to pander, I'm not going to sign pledges. People can look at what I've done and they can make their own decision on who I am.

But let me just tell you, early on I think there were a lot of people who may have glossed over me as a candidate because I'd crossed a partisan line to serve as U.S. ambassador to China which, by the way, is just part of my world view. I believe in putting my country first and I always will.

And now a lot of those folks are coming around, and they're giving us maybe a legitimate first look, and they're saying they forgot to take a look at my record, my history as governor. And as they reflect upon that, they're saying, he's kind of the conservative we were looking for. He's the consistent conservative, as opposed to some of the others in the race, who have been on both sides of the major issues of the day, who are running for panderer in chief more than they are anything else.

So that puts us in good stead, Joe, because with weeks left as we approach the New Hampshire primary, we're picking up the ground game here. We're now in third place. We've just overtaken Ron Paul for third place, while at the same time we've got a lot of folks in the party who are now looking at us, I would argue, giving us the first legitimate look.

And I think those two elements combined put us in a very, very strong position as we move toward January 10th.

JOHNS: Well, that's my next question. It seems that a lot of other candidates have really gotten their day in the sun. They've been, if you will, the flavor of the week or every two weeks or so. Why hasn't it happened to you, at least so far?

HUNTSMAN: Well, maybe because I don't light my hair on fire. You know, maybe because I don't sign pledges, and I'm just not going to do that. So what you're going to see happen, Joe -- and if this fails I'll come back on your show and explain why -- everyone gets their Warholian 15 minutes of fame. They go up and they go down.

And I'm getting whiplash watching all of my friends go up and down. I don't want that to happen to me. I want a steady, consistent, substantive rise, which is exactly what we are seeing in New Hampshire. We've gone from zero to now number three, which is a great place to be, and I think by the end of the month we're going to be in an even stronger position.

That speaks to sustainability. It means when the cameras are on, and when you're ready, you know, to do what needs to be done to carry over a victory in this primary state, you will have the ability to sustain that momentum as opposed to just going up and down.

I don't want the up and down. I want sustainability. We will prove the point that we are the electable Republican who can go on and beat Barack Obama.

JOHNS: Among those comments that some might characterize as hair on fire, the former speaker of the house, Newt Gingrich, has talked about the courts, and he's gotten a lot of attention for that recently.

He said he wants to subpoena certain judges for controversial decisions. He wants to abolish courts for certain decisions, or what have you. What do you think about that? Do you agree that the courts are out of control, as some conservatives would suggest?

HUNTSMAN: Well, listen, that's going to be debated and argued for a very long time. As for me, this takes our eye off the ball of the -- of the core issues that are at hand, and that will ultimately allow us to win the election. Whenever we talk about that, it kind of takes the energy out of our economic deficit, which I think is the issue of this election cycle. It takes our eye off the trust deficit, which is, I believe, a driving issue of this election cycle.

So I'm not going to spend any time talking about court reform. That will be debated and discussed for a long time. As for me, when people see me, and when they consider supporting me, I want them to remember two things.

HUNTSMAN: One, I'm going to attack this economic deficit, because we need to start looking at it as a national security problem.

When you've got 70 percent debt to GDP, your economy just doesn't grow much anymore. And I want people to -- when they look at me I want them to know that we're going to deal with the trust deficit in this country, because, as you mentioned in your earlier segment, Joe, nobody trusts Congress anymore.

Everybody knows they need term limits. Everybody knows we've got to shut that revolving door that allows members of Congress to go into the lobbying profession. And everybody knows we need to dock their pay until they can balance the budget.

Nobody has any trust in our tax code. People don't have trust in our wars abroad. They don't have trust in Wall Street because we've got banks that are too big to fail.

And I'm going to focus on all of those, because I think, longer term, they are absolutely critical to allowing us to pull together as Americans based on trust, and tackling the issues that really do matter for the next generation of Americans.

JOHNS: But just to put a finer point on it, do you agree, as many conservatives do, that activist courts tend to rewrite the laws written by Congress?

HUNTSMAN: Listen, I don't like legislating from the bench. I don't think that is good. There is an impeachment process for those who are caught up in ethical violations. At the end of the day, these judges are appointed by people who were elected officials.

And I say if you don't like who's in there, then start at the grassroots level and elect the kind of -- the kinds of representatives, governors and presidents who will get the kind of judiciary that will do what needs to be done for this country longer term.

JOHNS: Now I have to ask you, because you were the former ambassador to China. Governor Romney has made some statements that people have seen as controversial. He's talked about currency manipulation and how China should be handled. If we could just listen to this sound bite, and I'll come back and talk to you about it.

(BEGIN VIDEO CLIP) FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: I will designate China as a currency manipulator. Under our law, that allows the president to apply tariffs where the president believes that Chinese currency manipulation has cost American jobs or is unfair.

(END VIDEO CLIP)

JOHNS: Now you, Governor, have said you don't agree with that notion. However, what would you do? Are we just to allow China to continue to do what it wants and hope the situation gets better? How would you resolve the issue of currency manipulation by China?

HUNTSMAN: Well, like with all things dealing with the Chinese, you got to sit down and you've got to negotiate your way forward. You slap a tariff on China for currency manipulation, it's an egregious problem. There's no doubt about it. We've got to deal with it.

But the way you deal with it isn't by slapping a tariff on goods coming in from China, because they're going to take the same tack and they're going to put tariffs on our products. And that sends us into the kind of environment that is exactly what we don't need when this economy is trying to get on its feet again.

It punishes small businesses, it punishes exporters. And that, longer term, is a price that I don't think this country ought to be paying.

Instead, you sit down at the negotiating table, you put the issues before the Chinese, whether it's currency manipulation, whether it is IPR violations, whether it's North Korea, whether it's Iran, whether it's Burma, whether it's Pakistan, whether it's the South China Sea-related issues, and you negotiate your way forward.

That's just the way the relationship has run for 40 years, and it's the way things are going to be handled going forward.

So, you know, this speaks to somebody who clearly doesn't have any experience in dealing with the Chinese, because if you had any experience with the Chinese, you would know that it is a relationship these days based on what they like to say is reciprocity.

We slap a tariff, they slap a tariff, so you have no choice in today's environment, other than to sit down with real leverage in the -- in the negotiation. And we don't have that leverage today, Joe. We need a strong economy.

We need a strong core here at home in order to give us the kind of leverage this country desperately needs at the negotiating table. That's what I want to do in improving the U.S.-China relationship.

You can say all you want about tariffs this or tariffs that. We are in a weakened position because our economy simply isn't working as it should, and, therefore, we simply don't have the leverage of the negotiating table.

JOHNS: Former Governor Jon Huntsman of Utah, out in New Hampshire right now, campaigning. And I'll probably see you out there real soon. HUNTSMAN: Joe, we'll look forward to it. Thank you. 

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