Interview with Senator Max Baucus

Interview with Senator Max Baucus

By The Situation Room - November 30, 2012

BOLDUAN: Joining me now is Senator Max Baucus, the chairman of the Senate Finance Committee, the very important tax-writing committee in the Senate.

Senator, a very busy week, not a lot of progress to show for it. As you well know now, Republicans have soundly rejected the offer coming from the White House, even calling it absurd.

This offer, do you view it as a serious offer?


I think we're in the initial stages. There are about 30 days left before the so-called cliff hits us. I think, in about a week, we will get down to serious negotiations.

BOLDUAN: Why does it take a week? Why not now? Many would say that we're way beyond opening bids, that we have already time since the Thanksgiving break.

BAUCUS: Well, I agree with you, frankly. I think we should start talking right now, and both the president and the speaker should do so.

But for whatever reasons, it's a little slower. I think it's part on the speaker's side. His people are not quite certain what to do about rates, as opposed to capping deductions as they're going to get revenue, if at all, and how much. And I think the Democratic side is, gee, how much in spending cuts and entitlement cuts can there be, and they're trying to figure that out.

But I agree with you. I think that we should start -- they should start speaking and negotiating right now.

BOLDUAN: And to that point, in this White House offer, the White House is calling for -- is offering about some $400 billion in Medicare and entitlement savings, but when you take that on balance with the revenue and the tax increases that they're looking for, that doesn't sound like a whole lot of pain on the part of Democrats. So where is the compromise?

BAUCUS: Well, if you look at the president's budget, there is more than what the numbers you just suggested by a couple hundred billion.

So, that's a start. And don't forget, these are negotiations. That is, they're starting points. One side is going to probably go up a little, the other side is going to go down a little bit, if we have to, to get to the middle. And that's the way you have to be.

I was home in my state of Montana a couple weekends ago at a great big football game, the biggest event we called the brawl in the wild, Montana State verses the University of Montana. Everybody there that I saw walked up and said, "Max, just solve that fiscal cliff. Get it done." There were no special pleaders. Nobody said, "Protect my income or don't cut my Medicare." They said, "Get it done. We need a solution, get it done." And that's, I think, what has to be done, and I think it will be done before we reach the end of the year. BOLDUAN: Now I have to ask you, as the chairman of the Senate Finance Committee, you will play a major role in any changes to tax policies. The last time any really major tax reform effort happened was back in 1986. Do you think any substantial tax reform is possible in this partisan Congress?

BAUCUS: I do. I think so. I hope so, and I also think so. And that's because, probably since 1986, it's become so much more complicated. Something like 15,000 new additions to the code since 1986. It's getting weighted down. It's got to be cleaned up. Lower some rates and broaden the base. Get rid of some of those deductions and credits. Make it cleaner, simpler.

Same on the corporate side. We're not that competitive worldwide. We can lower the top corporate rate down in a revenue- neutral way. And that's also, I think, very important for American credit in this and to get more American jobs.

BOLDUAN: In the terms of getting to that point of averting the fiscal cliff, almost every major negotiation and battle today has really come down to President Obama and House Speaker John Boehner, the Republican House speaker. Do you think it helps or hurts that key lawmakers like yourself seem to be left out of this deal making?

BAUCUS: Well, I'm in constant consultation with -- with Secretary Geithner, with the White House, just a few minutes ago came back from meeting with Congress, and Dave Camp, the chairman of the House Ways and Means, meet with Reid very often. So there are a lot of conversations going on where I gave my views, and learn, and so it's -- there are more people involved.

BOLDUAN: Now this is really coming down to, as is no surprise, the issue of tax rates. Will Republicans agree to raising tax rates on the wealthy as President Obama has made clear he is standing firm on? Are you willing to go over the fiscal cliff if Republicans do not agree to that?

BAUCUS: I think if there's no agreement whatsoever, that the other side is completely intransigent, that the president has probably no choice but to say, "OK, we're going to go over the cliff."

That would not be my first preference. My first preference is that, as we get closer to the cliff, that we find an agreement that makes some sense, so we don't have to go over it. Because if we don't go over the cliff, then we're entering very uncharted waters. Who knows what the markets will -- how they will react, what other positions people would take, what will happen -- I hope we don't have to go over.

BOLDUAN: And it -- and it could hit almost every single American, which is why, when people are watching this, they are so frustrated why Congress can't do what they want -- the American people want them to do, which is compromise. So are you telling me that, as you know, Congress needs a deadline often and very much likes to go right up against the deadline. Is all of this high drama just posturing? BAUCUS: No, no, it's not posturing. Just the world is run by deadlines, you know. It's kind of human nature sometimes not to do when you know you should do until you get closer to that deadline. It would be better if we did not push by a deadline. It'd be better if we work right now, and we are working now, but the deadlines help.

BOLDUAN: We're all watching in the process. Senator Max Baucus, the chairman of the Senate Finance Committee, we are -- we thank you for your time, and we're all counting on you guys getting deals done. Thanks so much.

BAUCUS: We're all counting on each other. This is -- takes teamwork. Thank you very much, Kate.

BOLDUAN: Thank you. 

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