Rep. Chris Van Hollen, Rep. Jim Jordan on the fiscal fight still ahead

Written by John Roberts / Published January 06, 2013 / Fox News Sunday

Special Guests: Rep. Chris Van Hollen, Rep. Jim Jordan , Sen. Ted Cruz

The following is a rush transcript of the January 6, 2013, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

JOHN ROBERTS, HOST: I'm John Roberts, in for Chris Wallace.

If you think the fight over the "fiscal cliff" was tough, stay tuned for a bruising round two. 

(BEGIN VIDEOTAPE) 

ROBERTS (voice-over): From automatic spending cuts to raising the debt ceiling, to paying for Uncle Sam to open, the battle lines are drawn. How will that fight play out?

We'll ask two key congressmen, Democrat Chris Van Hollen and Republican Jim Jordan.

Then, a new Republican voice challenges the Grand Old Party to find a different vision. He's the new man in town with a message that champions opportunities. Will the party establishment listen? We'll get a fresh perspective from Senator Ted Cruz.

And from spending to immigration and to the gun control debate, will the new Congress be able to get past the toxic partisanship to get things done for voters.

We'll ask our Sunday panel to read the political tea leaves.

All right now on "Fox News Sunday."

(END VIDEOTAPE)

ROBERTS: And hello again from Fox News in Washington. After side stepping the "fiscal cliff", the country now faces an economic triple threat of even greater scale. At stake government, automatic spending cuts, government funding and the full faith and credit of the United States. With bruises still fresh from the last dust up, early jabs are already flying.

Joining me now to talk about this are two influential members of Congress -- Democrat Chris Van Hollen and Republican Jim Jordan.

Welcome to you both.

We were talking before the program started. Mitch McConnell, the Senate minority leader, said just a few minutes ago on another Sunday morning program, the revenue piece of this is done. No more taxes. The president wants more taxes. He wants to close some loopholes and limit deductions.

Chris Van Hollen, how is this fight going to unfold as we go forward?

VAN HOLLEN: Well, if Mitch McConnell is going to draw the line in the sand, it's going to be a recipe for more gridlock. We have to take a balanced approach to long-term deficit reduction -- meaning additional cuts.

And remember, last year, the president signed in law more than $1.5 trillion in cuts, 100 percent cuts. As a result of avoiding the "fiscal cliff", we raised $730 billion in revenue from very high income individuals.

As we go forward, we need to adopt the same frame work as the bipartisan Simpson-Bowles commission. Meaning, a combination of cuts and revenue.

You remember during the campaign when, you know, you saw the Republican candidate and Paul Ryan talking about all those the breaks in the loopholes in the tax code that disproportionately benefit very wealthy people, guess what? They are still there. So, through tax reform, we can raise more revenue matched by additional cuts to address the sequester issue and long-term deficit.

ROBERTS: Congressman Jordan, do you buy the argument?

JORDAN: No, because the cuts that Chris referenced are cuts that have yet to happen, they are scheduled for the out-years. And as Congress typically does, they say, oh, give us the revenue now and we promise -- we promise we'll get to cuts.

That's exactly what this "fiscal cliff" deal was. They got revenue now, no cuts in there. So, the same old, same old.

And I tell folks back at home all the time, remember, this is promises from politicians. It's not a promise from your parents, from your pastor or from your priest. This is politician saying, oh, give us some revenue, we promise we'll get to this balanced approach later. We promise we'll cut spending later.

Mitch McConnell is exactly right. If they're going to go after -- they just got revenue. We've got to cut spending. We've got $16 trillion debt. The credit card is maxed out. We've got to cut spending.

So, he is exactly right. Let's focus on the problem, which is this government can't control spending. We've got to get control of it so we can have a private future from here --

ROBERTS: Congressman Van Hollen, you and I spoke at length during the campaign when you were the president's point person on the budget, and you repeatedly stated and you said it again this morning, Simpson-Bowles, Simpson-Bowles, that is the model. You've got to have revenue and you've got to have spending cut.

VAN HOLLEN: That's right.

ROBERTS: Well, we got revenue. We've got a teeny-tiny a little spending cut along with the "fiscal cliff" deal. Where are the spending cuts?

VAN HOLLEN: Actually, the cuts and revenue that we've taken so far are still far short in both categories from Simpson-Bowles.

ROBERTS: Yes, but the spending cuts are way short.

VAN HOLLEN: Actually, that's not the case.

ROBERTS: You are looking at $4 trillion hole -- in the debt for the next 10 years.

VAN HOLLEN: Look, Simpson Bowles I said as a starting point. We were going to allow the upper income taxes to go back to Clinton era levels. We'd just barely gotten to that starting point. In fact, we're a little short, with the $640 billion. On top of that, they raised over a trillion dollars in revenue combined with cuts.

So, yes, we have to do more cuts. And the president has been very clear. He put on the table $1.2 trillion in cuts proposal, combined with $1.2 trillion revenue.

The only reason we weren't be able to go forward with that was that you had House Republicans deciding not to follow Speaker Boehner in the balanced approach. And, frankly, that is the going forward. The danger going forward is that the House Republican caucus will continue to refuse to take a balanced approach and that's going to deadlock the entire process.

ROBERTS: Another danger going forward, according to many people, is how far you push the spending debate into the debt ceiling limit, whether you're going to pass it. Here's what the president said about that on Tuesday. Let's listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Congress refuses to give the United States government the ability to pay the bills on time, the consequences for the entire global economy would be catastrophic, far worse than the impact of a "fiscal cliff."

(END VIDEO CLIP)

ROBERTS: Congressman Jordan, back in 2012 when he had this debate, you advocated going past the debt ceiling deadline, saying it wouldn't be such a bad thing. Would you advocate that again this time?

JORDAN: I advocate a solution, not a deal. What we always get in Washington is a deal. What Americans wanted is a solution. It's no wonder the president doesn't want to debate this because if I had been the president of the United States and presided over the four highest annual deficits in American history, a $5 trillion increase in the national debt, I probably wouldn't want to talk about the issue either.

But let's look at the facts. Since the debt ceiling agreement passed 16 months ago, the day after it passed, we got a downgrade from S&P first time in American history. A week after it passed, the market had dropped 1,300 points.

The super committee which Chris voted for and so many members voted for fell apart like we all thought it would. The scheduled cuts, the only scheduled cuts that were supposed to take place, we just suspended them five days ago in the "fiscal cliff" deal. We have yet to cut one dime from the last debt ceiling agreement, and now, here, it is time to do it again.

So, this is -- we've got to stop the madness. I mean, this is the 18-year-old kid on a credit card and he maxed out the credit card. Instead of cutting it up and putting them on a budget, Barack Obama says give us a new credit card, and, oh, by the way, Harry Reid, you don't have to pass a budget in three years. I mean, this is crazy.

ROBERTS: But would you support this year letting the debt ceiling deadline lapse?

JORDAN: What I won't support is not dealing with the program. Americans sent us here to deal with the problem. If you want to keep giving government more free -- this whole, the way this town works, this "fiscal cliff" deal, the only winners in this "fiscal cliff" deal were Washington. They've got more money. The folks I represent in the fourth district of Ohio, they lost revenue, small business owners had money taken from them.

Washington always wins. The politicians, the consultants, the folks here always win. In fact, 10 of -- seven of the 10 wealthiest counties are in the D.C. area. In fact, Mr. Van Hollen represents one of those areas. This area always wins. It's regular Americans who lose and it's about time we said stop this madness, cut up the credit card, we want a solution. Not another Washington deal which helps D.C.

VAN HOLLEN: Look, a couple of points, John. First of all, the sequester was not kicked down the road. It was replaced for two months with the combination of --

JORDAN: Replaced and postponed.

VAN HOLLEN: No, no.

JORDAN: Postponed. Which is why Washington is great at dealing for it.

VAN HOLLEN: Jim, you've got to get your facts straight.

JORDAN: I have them straight.

VAN HOLLEN: We have $24 billion in deficit reduction. Half of it was cuts, half of it revenue, not nearly enough. But the idea is the model going forward is to continue to do balanced approach of cuts and revenue.

Number two, what America go was we didn't go over the "fiscal cliff." I mean, I know you voted not to go over the "fiscal cliff" --

JORDAN: I voted not to raise taxes on anyone.

VAN HOLLEN: Yes, because you didn't want to ask people making a million dollars a year --

JORDAN: You could have stopped every single person from having their tax rates go up --

VAN HOLLEN: Yes, Jim, Jim, Jim --

JORDAN: The president could have stopped it. What you guys decided is we want additional revenue. Washington won again.

VAN HOLLEN: No, what we said was that we need to take a balanced approach high income earners need to contribute a little more to reducing our deficit, because otherwise, folks on Medicaid and Medicare who earn $22,000 a year, median income, would get walloped.

I know you want to wallop them to protect the millionaires.

JORDAN: No.

VAN HOLLEN: But going forward --

JORDAN: I want to fix the problem.

VAN HOLLEN: -- going forward on the debt ceiling, Newt Gingrich had it right on Friday when he said it was a dead loser for the Republicans to threaten to tank the United States economy by refusing to pay our own bills. This is not future payments is it paying bills that are due and owing. This is like we get up one morning say we're not going to pay our mortgage.

That is reckless and irresponsible. And the reason it's not credible, John, it's kind of the mad man theory to negotiations, right? "Give us what we want," is what Republicans are going to say, "or we're going to tank the United States economy."

JORDAN: No, no.

VAN HOLLEN: That's reckless and it's irresponsible and we won't do it.

JORDAN: What's reckless is not addressing the problem. And that's what we want to do.

ROBERTS: Let's look at the way that this may unfold. The president says if this is tide to the debt ceiling, this is not a discussion that I'm going to have. But Speaker Boehner said it's absolutely a discussion to go ahead. In fact, when we talk about raising the debt ceiling, we want an equal offset, equal or greater offset in taxes and other cuts -- and is equal or greater offset rather in spending and other cuts.

Mitch McConnell said the other day, Mr. President, this is an argument that you're going to have. Let's listen to what he said.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, R - KY, HOUSE MINORITY LEADER: Now that he has the tax rates he wants, his calls for balance means he needs to join us in the effort to achieve meaningful spending reform. The president may not want to have this debate, but it's one he's going to have because the country needs it.

(END VIDEO CLIP)

ROBERTS: So, does the country need this debate? I mean, two years ago, we went from $14 trillion to $16 trillion debt ceiling. And everybody said how horrible that was. Now, we're talking about going from $16 trillion to $18 trillion, and that only takes us through 2014, in which point we're going to be talking about going to $20 trillion.

So, a lot of people are rightly asking, I think, when does this stop?

JORDAN: Yes, when does the madness stop? The country needs a debate. We need to solve the problem.

We need to -- I think what you'll see from the House side is we'll put forward a plan that says -- OK, Mr. President, if you want to increase the borrowing authority of this country, here is a menu of options where you can reduce spending of equal or greater amount. You tell us, Mr. President, you've been afraid to put together a budget. Harry Reid hasn't passed a budget in three years.

JORDAN: You tell us for a change where you think it's appropriate that we reduce spending because that's what has to happen if we're going to solve this problem. That's the adult, responsible, disciplined thing to do.

And frankly, it's what the American people are looking for us to do. Let's do it for a change. Instead of just saying, oh, giving us more revenue, we promise, we'll cut spending later.

Give us more borrowing authority. Let us run up the credit card more, we promise we'll cut -- this is the old -- this is Lucy, Charlie Brown and the football. And the American people are saying we are tired of it.

We're not going to try to kick it this time because you guys, you always screw it up. Let's do the right thing, let's actually solve this problem. Put this country on a path to getting to balance so that we can have a growing economy and things we want to see happen.

ROBERTS: Do the president's feet need to be held on the fire here on spending?

VAN HOLLEN: Look, first of all, the president has already put on the table a plan for another $1.2 trillion in spending cuts. They walked away from that proposal, why? Because Jim and his colleagues didn't want to ask people who earned over $1 million to pay a little bit more.

So, the president -- and the president's budget contained spending cuts, the difference --

(CROSSTALK)

JORDAN: Tell me if tax increase has ever created a single job, Chris. Does the tax increase ever create one single job? Tax increases on job creators, does that create jobs?

VAN HOLLEN: Jim, if we don't get our deficit under control, it's going to hurt our long-term economic growth.

JORDAN: We have to grow the economy. You have to cut spending and grow the economy --

(CROSSTALK)

VAN HOLLEN: Look, Jim, you voted to go over the "fiscal cliff." That would have hurt the economy, all right?

ROBERTS: We'll see if there's one point that the two of you can agree on here. Do we need to do something to get our deficits and debt under control?

VAN HOLLEN: Yes, of course, we do, and we need to take a balanced --

JORDAN: Yes. We need to cut spending.

VAN HOLLEN: No -- yes. You need to cut spending. You also need to take the balanced approach. We started talking about Simpson. You support the Simpson-Bowles framework, Jim. That's a bipartisan framework. You support that framework.

JORDAN: Chris, you just got -- you just got -- you just got tax revenue -- I support the spending reduction part of that because you just got the tax revenue you wanted, which is going to hurt the economic growth.

(CROSSTALK)

VAN HOLLEN: Look, we already did $1.5 trillion in cuts last year. We need to do more --

(CROSSTALK)

VAN HOLLEN: No, we cap spending going forward. We cap spending.

JORDAN: Going forward, nothing has happened yet.

VAN HOLLEN: So, you heard his answer. He wants to take half of the Simpson-Bowles recommendations. He wants to take just the cuts. Every bipartisan agreement --

ROBERTS: You already have the spending part of that, though.

(CROSSTALK)

ROBERTS: I said, you already got part of the tax revenue.

VAN HOLLEN: And we got part of the spending. We got $1.5 trillion spending cuts last year.

JORDAN: You got the tax, you didn't get spending cuts.

VAN HOLLEN: That's not true.

(CROSSTALK)

ROBERTS: Well, if this discussion this morning is any indication of how the next eight weeks are going to go, it's going to be interesting time.

Let me shift --

VAN HOLLEN: It's becoming a fact-free zone, that's the problem.

ROBERTS: Let me shift gears for a second here. Gun control, that's going to be a big issue on the president agenda in the next year. Ten bills were introduced in the House on Thursday on gun control. One of the big ones introduced by Carolyn McCarthy of New York.  Everyone remembers her husband was killed in a Long Island railroad shooting, limiting the capacity of magazines to 10 rounds.

But when you look at the language of all of those bills, and this all came out in the wake of the Newtown shooting, would anything in any one of those have prevented that shooting?

VAN HOLLEN: Well, my view is we need to take a comprehensive approach to gun safety issues. That means looking at school security, means looking at mental health situation, it does mean looking at sensible gun control issues.

ROBERTS: Well, why isn't Congress talking about that? Why isn't --

(CROSSTALK)

VAN HOLLEN: Actually, having universal --

ROBERTS: First 10 bills introduced were all about guns.

VAN HOLLEN: Having a universal background checks, so people who have criminal records and who have been found --

ROBERTS: How would that have stopped Adam Lanza from stealing his mother's guns?

VAN HOLLEN: Look, the argument against gun safety provision is always because it doesn't solve everything, we shouldn't do anything. And I don't subscribe to that. I believe we need a comprehensive approach. We need to look at all of the different elements here.

And just because a particular effort won't prevent something in one particular incident doesn't mean you shouldn't do anything that might help in other incidents. Right now, right now, you can be on the terrorist watch list, you can be prevented from boarding an airplane, but you can go down the street and buy a semiautomatic assault weapon. It doesn't make sense.

ROBERTS: Adam Lanza wasn't on anyone's radar screen except for her parents and his doctor's radar screen. So, how does gun control solve that problem?

JORDAN: I don't think it does. I mean, look, every American's heart was broken when they saw what happened there in Connecticut. But more restrictions on law-abiding citizens is not going to prevent this kind of tragedies.

We got to remember, the Second Amendment is about freedom. And that's what we've got to focus on as we move forward. If there's ways outside of this that we can help address the situation, fine. But we've got to remember it's about freedom.

And, frankly, you've got to remember that bad guys aren't stupid, they're just bad. They're going to figure out a way, if they're intent on doing something bad, they're going to figure out a way to get to fire them and use it.

ROBERTS: I don't know if you saw what Charles Krauthammer in what I thought was a very well-thought out opinion piece. He said it's multi-factorial. It's guns, it's mental health, it's society.

You know, he was a psychiatrist who back when he was practicing had a far easier time of committing somebody who thought was potentially violent than you can now. Where are the Republicans on committing people who are mentally ill?

JORDAN: Well, I mean, certainly, we're going to look at that. And you don't want someone with the mental illness getting a firearm. But what I don't want to do is restrict law-abiding citizens from their Second Amendment rights which are focused on freedom.

I point out all the time. Remember, bad guys aren't stupid, they're just bad.

ROBERTS: Great --

VAN HOLLEN: This isn't about restricting people. This is about common sense provision. For example, we have a background check. But right now, there are big loopholes in the background check.

You want to get rid of the background checks, the criminal background checks?

(CROSSTALK)

JORDAN: -- concealed carry permit which required a background check, which required to take a training course before a law-abiding citizen could get a firearm.

VAN HOLLEN: So, why not make that universal? Let's join each other then in making sure we get rid of the loophole, make sure that everybody who purchases a gun has to have universal background check. Would you support that?

JORDAN: I support it for concealed carry.

VAN HOLLEN: No, I'm talking about before you can go buy a semiautomatic weapon. Why wouldn't we have a background check?

JORDAN: You've got to remember what the Second Amendment is about, it's about freedom. It's like First Amendment is about freedom. It's like Fourth Amendment is about freedom.

VAN HOLLEN: If you've broken the law and violent act, you should be able to go out and buy semiautomatic assault weapon?

JORDAN: You shouldn't be able to get a concealed carry permit, that's for --

(CROSSTALK)

ROBERTS: Gentlemen, I've got to call time on this. But as I say, if this discussion is any indication of what lies ahead --

VAN HOLLEN: Oh, goodness. It's going to be a problem.

ROBERTS: We'll have an interesting time. All right.

JORDAN: Thank you, John.

ROBERTS: And we'll leave it there. Thanks so much for joining us this morning. We appreciate it.

Up next, Senator Ted Cruz, a no nonsense Texan, comes to Washington.

(COMMERCIAL BREAK)

ROBERTS: He may have joined the club just four days ago, but there is no mistaken that there is it a new Texan in the Senate, from government spending to gun control, this Tea Party Republican is ready to make his mark in a town that he has been none too shy to criticize

Joining me now to talk about the future of his party and his stand on the issues is Senator Ted Cruz.

Welcome back to "Fox News Sunday" this time as a senator.

TED CRUZ, R - TX: Good morning, John. I'm very glad to be here.

ROBERTS: You know, one of the first orders of business for you will be to consider nominees for the president's second term cabinet. Among them, expected to be, former Nebraska Senator Chuck Hagel. It's expected the president will make that announcement the next couple of days.

How will you vote on Hagel?

CRUZ: If Hagel is nominated, it is very difficult to imagine the circumstance in which I could support his confirmation.

It's interesting. The president seems bound and determined to proceed down this path despite the fact that Hagel's record is very, very troubling on the nation of Israel. He has not been a friend to Israel. And in my view, the United States should stand unshakably with the nation of Israel.

And he has consistently advocated weakness with respect to our enemies, with respect to the nation of Iran. He has opposed sanctions over and over again.

CRUZ: And the job of the secretary of defense is to be a serious credible strength and deterrent and, unfortunately, I think weakness in a secretary of defense invites conflict, because bullies don't respect weakness.

ROBERTS: What's your problem with Hagel on the issue of Israel?

CRUZ: With respect to the issue of Israel he repeatedly opposed Israel, criticized Israel, placed all the blame on Israel in dispute after dispute after dispute, and in fact, he's publicly said U.S. policy is dependent on what he called the Israel lobby which is a pejorative term that I think does not reflect the realities of the strong U.S. national security interest in maintaining that alliance.

ROBERTS: That statement that he made was to Aaron David Miller, former U.S. diplomat. I was going to save this for the panel, but maybe we could bring it up now.

Here's what he said to David Aaron Miller regarding Israel. It was quoted on his new book, "The Much Too Promised Land". He said that people in Capitol Hill, I'm paraphrasing here as we try to get this up. People on Capitol Hill are afraid of the Israel lobbyist. I'm a U.S. senator -- here we go here.

"The Jewish lobby intimidates a lot of people up here. I'm a United States senator. I'm not an Israeli senator."

But in an article in "Foreign Policy Magazine" back at the beginning of December, Aaron David Miller said, well, what he was talking about there wasn't as dire as many people are making it out to be. He's opposed to some Israeli policies, but he's certainly not anti-Israeli, he's not anti-Semitic. And this is the guy who he said it to.

So, do you buy Mr. Miller's argument?

CRUZ: Look, I don't know. I'm not going to speak to Mr. Hagel's heart. But what I am concerned about is his record and his past policy positions and he's previously expressed that, that with respect to Iran, with respect to Israel, that he doesn't want criticism from other nations of the world.

You know, that's not the job of the defense secretary. He's not being nominated to be secretary of state.

You want to talk about the most effective diplomacy that the nation has seen in modern timings -- it was Ronald Reagan standing up and winning the Cold War without firing a shot. And that was through strength.

Not through -- if you are an Iranian mullah right now and you're looking at a Chuck Hagel who thinks that sanctions are too harsh, you've got to be laughing of any harsher than sanctions.

ROBERTS: All of that said, Senator, do you think he will be confirmed?

CRUZ: You know, I don't know. I do think it is interesting that the president seems hell-bent on nominating him despite of the fact that a number of prominent Republicans have criticized him and the Democratic senators have been surprisingly silent on it.

I think this is a president right now who has drunk the tea. On election, he is feeling very good about himself, he is feeling like there can be no opposition to his position. And so, it doesn't seem -- he doesn't seem terribly concerned that there's not a lot of support for Chuck Hagel in the Senate.

ROBERTS: Another big nomination coming forward will be for treasury secretary as well. Tim Geithner expected to leave, perhaps before the debt ceiling debate takes place. Jack Lew, who is currently the chief of staff over at the White House is the leading candidate. How would you vote on Lew?

CRUZ: You know, I would have to look at his record and listen to what he has to say. I'll tell you my view on any treasury secretary, would be that I would want to hear some real proposals for growth.

You know, and this whole debate about the "fiscal cliff", we've been talking about taxes, we've been talking about spending -- noticeably absent from this equation has been growth. And the biggest economic problem of the last four years has been the dismal economic growth.

Under Barack Obama our economy has grown 1.5 percent a year for four years. That is less than half the historical average.

ROBERTS: This gets to your whole idea of retooling the Republican Party into the heading of opportunity conservatism which I'd like to get into that in just a second.

But do you share the distaste of the Jack Lew that a lot of your Republican colleagues have over the way that he conducted himself during the debt ceiling debate of 20l1? A lot of people say he was arrogant, impossible to work with, rigid.

CRUZ: Well, I will confess, I was not there during that debate. So, he wasn't arrogant to me, but I had not dealt with the man. So, I'll keep an open mind.

And with any treasury secretary nominee, my view is going to be looking to the substance -- and this is not a popularity contest. This is about fixing the problems that are affecting millions of Americans.

You know, people all over the country, I don't think they are interested in the political squabbles in the Capitol. They are interested in getting the economy going, getting jobs back, and that's where the focus needs to be.

ROBERTS: So, we've got a debt ceiling debate that's coming up again. You probably heard Mitch McConnell or heard of Mitch McConnell saying this morning the revenue piece is done, no new taxes. Are you going to hold to that line, that the president will not get anymore revenue and the only thing that the president has to deal with here is spending cuts?

CRUZ: I'm going to suggest a slight tweak to it.

ROBERTS: OK.

CRUZ: I am happy for there to be lots of new revenue. I'm not happy for there to be new taxes. The best avenue for new revenue is economic growth. If the economy is sputtering along at 1 percent, 1 1/2 percent, 2 percent GDP growth, tax revenues plummet, people hurt, people out of jobs.

If we get the economy up to the historical levels, since World War II, the average has been 3.3 percent. In the fourth year of Reagan's presidency, our economy grew 7.2 percent. If we can get GDP up to 3 percent, 4 percent, 5 percent, that will dramatically more revenue to pay off the deficit and debt. But the way to do it is through pro-growth policies. Not new and additional taxes.

ROBERTS: Senator, are you willing to risk default on our debt by taking the debt ceiling battle right to the limit?

CRUZ: No, let me be clear about this -- I do not support default on the debt. We should never default on the debt. And the only players who are threatening to default on the debt are President Barack Obama and Harry Reid.

This is it an issue -- and earlier in the show, you played the president's threatening default. In any given month, federal tax revenues are $200 billion a month. Interest on the debt is $30 billion or $40 billion. There is it plenty of revenue to service the debt and any responsible president would have stood at that podium and said under any circumstances, whatever happens with the debt ceiling, we will always pay our debt. We will never default on the debt.

And the reason that the president isn't doing that is he's trying to scare people. He is trying to raise the specter of a financial apocalypse.

ROBERTS: I want to get into a couple of other issues, quickly, because we are running short on time -- despite the fact that we have lot of time on this program.

Gun control -- you probably heard the last segment. We're talking about 10 bills introduced in the House of Representatives regarding gun control. Joe Biden is leading a study group at the White House. You are a fierce defender of Second Amendment rights. You were in like 2010, given the NRA's Freedom Fund Award.

Is there any new gun control that you would accept?

CRUZ: The reason we are discussing this is it the tragedy in Newtown. And every parent, my wife and I, we've got two girls aged 4 and aged 2 -- every parent was horrified at what happened there. To see 20 children, six adults senselessly murdered, it takes your breath away.

But within minutes, we saw politician running out and trying to exploit this tragedy, try to push their political agenda of gun control.

I do not support their gun control agenda for two reasons. Number one, it's unconstitutional.

ROBERTS: But is there that you would accept?

CRUZ: I don't think the proposals being discussed now makes sense. Look, are there things we can do? Sure. One of the things we can do is we could improve the quality of the federal database.

Right now, a lot of states, a lot of local jurisdiction are not reporting criminal conventions, not reporting mental hill barriers to ownership. So, the federal database is not nearly as good as it should be. That would be a common sense improvement.

But that's not what is proposed. Senator Dianne Feinstein's bill would create a national gun registry. I don't think the federal government has any business of having a list of law-abiding citizens who choose to their right to keep and bear arms.

ROBERTS: In the time we have left, Senator, I want to talk to you about the future of the Republican Party, because after what happened in November, lot of people are talking about, wow, what do we need to do? Some people are saying, look at changing demographics in the country, the more minorities, they traditional vote Democratic. We've got to be more moderate.

You wrote an op-ed piece in "The Washington Post" the other day that, no, you need to retrench conservative values and develop opportunity conservativism to try to help people live the American Dream.

Is that really the right way to go when you look at changing demographics in the country?

CRUZ: I think it's exactly the right way to go. The reason I am a conservative is because conservative policies work, and they improve opportunity. They are the avenue for climbing the economic dream. And what I have been talking about for many years is opportunity conservatism, that every policy should focus like a laser on easing the means of ascent of the economic ladder that we should be championing the 47 percent, to take that now infamous comment.    Look, the great thing about Americans -- Americans don't want to be dependent on government. Dependency zaps the spirit. It doesn't work.

Americans want to stand on their own two feet. And the best way to do that is have policies that allow entrepreneurs and small businesses to thrive and to create jobs and advance the American Dream.

ROBERTS: Senator, you said famously a couple of times, we don't have time to play the actual sounds, but so many politicians get elected, promising to go up to Capitol Hill, cut spending, live conservative values, and then turning into spineless jelly fish.

What's to prevent you from becoming a spineless jelly fish here in the climate of Washington?

CRUZ: Well, you know, the great thing about the election we just went through is that we saw hundreds of thousands of grassroots activist across in Texas and across the nation stand up against a mountain of money and mountains of attacks. We weren't supposed to win this race. And so I -- I feel like I'm coming into office surrounded by and lifted up by those grassroots conservatives who I am happy to stand with over and over again.

ROBERTS: But as Mitch McConnell proved the other day, governing requires compromise, particularly when you're in the minority in the Senate and a Democratic president just got re-elected for another four years. So, you know, how -- it's one thing to criticize Washington when you're a candidate, but when you get here, you've got to govern. How do you do that?

CRUZ: Well, I think the "fiscal cliff" deal was a lousy deal, but I think, moving forward with the debt ceiling, I think those who believe in limited spending and in solving the debt and not bankrupting our kids have the advantage in the negotiation on the debt ceiling.

If we can stand strong and insist on, number one, structural reforms to fix the problems, and, number two, pro-growth policies so we can grow the economy, we can get jobs back; we can get people back to work, I think we can win that debate and win that argument.

I don't think what Washington needs is more compromise. I think what Washington needs is more common sense and more principle.

ROBERTS: Senator Cruz, it's good to get to know you. Thanks so much for dropping by and -- and good luck.

CRUZ: Well, thank you. Thank you for having me.

ROBERTS: All right. Appreciate it.

Up next, a new year, a new Congress. We'll ask our political panel if the political well is still poisoned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Our economy can't afford more protracted showdowns or manufactured crises along the way.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, R-OHIO, SPEAKER OF THE HOUSE: The American dream is in peril so long as its namesake is weighed down by this anchor of debt. Break its hold and we begin to set our economy free.

(END VIDEO CLIP)

ROBERTS: The president and the speaker of the House on the perils and possibilities of the tough fiscal battles that yet lie ahead. And it's time now for our Sunday group, Brit Hume, Fox News senior political analyst; Nina Easton of Fortune magazine; Bill Kristol of The Weekly Standard; and Charles Lane of The Washington Post.

Well, if the discussion over the "fiscal cliff" and the discussion we saw this morning between Chris Van Hollen and Jim Jordan is any indication, there is still a large measure of toxic partisanship alive and well in this town.

Nina, how do you think that is going to play out over these next couple of months as we see these three big deadlines grow?

EASTON: A continuation of what the president claims he doesn't want, which is looking over cliffs. When you look at this deal they came up with this week and which the president took the lead on, what does it do for economic growth? Not a lot.

In fact, the increase in the payroll tax -- everybody's seeing a smaller paycheck this month -- that's going to put a damper on the economy. Does it do anything to take uncertainty out of the economy and help businesses start investing and -- and adding jobs again?

No. What it does is it creates more uncertainty. We've got this fight over the debt ceiling you mentioned looming out there. We've got a fight over the spending cuts still looming out there. We've got entitlement reform hopefully looming out there that we haven't seen much leadership on that.

I think all this did this past couple weeks was show that this president is extremely adept at exploiting weaknesses and divisions in the Republican Party. That's about it.

ROBERTS: Brit, when you look at the potential effects of going past the debt ceiling and defaulting on our loans, it's the difference between peering over the edge of the Grand Canyon versus peering over the edge of your bed with the "fiscal cliff" deal.

I mean, how much is at risk here if they don't get this done?

HUME: Senator Cruz was right. There's no danger of default on their debt. The...

ROBERTS: Despite all the warnings?

HUME: We hit the debt ceiling, we can't borrow anymore. Tax receipts continue to flow. They cover about 60 percent of the federal spending. Debt service is about 6 percent or 7 percent. So there'd be plenty of money, as Senator Cruz pointed out, to cover the debt service.

So what you'll hear, John, in the weeks ahead, is that we'll be defaulting on our obligations. That doesn't -- that's not reference to the kind of default you'd have if you didn't make payments on the national debt. That means you can't pay for all federal spending.

And there would be, no mistake, major, major disruptions. But we need to be careful about the use of the term "default" because it's -- it really is scare talk.

Now, that's not to say it would be a desirable outcome. And if the Republicans want to try to extract real spending cuts as a price for raising the debt ceiling, they're going to have to be pretty tough about it because they're going to be accused of shutting the government down, and it might shut down in part. They're going to be accused of...

ROBERTS: And the president, as we were discussing in our preliminary conversation, the president gets to decide what's shut down...

(CROSSTALK)

ROBERTS: ... and you had a very interesting example.

HUME: Right, one example would be suppose, you know, suddenly you can't finance about 40 percent of government spending. So the president and his Treasury secretary decide that one of the things that has to shut are the meat and poultry inspections done by the USDA, right? That shuts the meat and poultry industry down in this country overnight, which -- and that affects a lot of red states and a lot of red state members.

So this is going to be very tough and it's going to be bloody; it's going to be ugly. And I am not sure -- I think a lot of Republicans have to recognize, if you control one house of the Congress, you can't really wag the dog from that position. You can do some things. What they need to do is win some elections.

ROBERTS: Bill, who's got the leverage here?

KRISTOL: Well, a re-elected president whose party controls one of the two houses Congress has more leverage. And he's won on taxes. He got most of what he campaigned for in terms of tax increases on the wealthy. I always thought that was going to happen.    The good news from a conservative point of view is that's done. And he can say he wants to raise taxes more on the wealthy. He could even have a plausible way of getting a few hundred billion dollars over 10 years in curbing deductions. I don't think there's any appetite for that among Republicans or conservatives.

And Obama -- this is pretty amazing -- has given way on the notion that taxes have to go up on the middle class. This is it. I mean, he -- ultimately, it's bad for liberals who want to expand the welfare state that they have said the current level of taxation for everyone below $400,000 is appropriate. They can't raise that now over the next two or four years, I would say. They can't -- they can, I guess, try to run trillion-dollar deficits over the next two or four years and hope the Fed can keep financing them.

But I think that was a hidden victory for conservatives and Republicans in the "fiscal cliff" deal. Going forward, I think Republicans need to be -- think hard about what they want to ask for on the debt ceiling negotiations. And it should just be these spending cuts. They should ask for -- they should ask for pro-growth measures, it seems to me.

The single best thing they -- look, President Obama is not going to -- we're not going to have big entitlement reform in the next two months, probably not in the next two years. We're probably not going to have big tax reform in the next two months, next two years. What could Republicans ask for that would actually be good for the country. Some pro-growth regulatory relief, delaying ObamaCare for a year, some pro-energy policies. I think there are some practical things they could try to ask for that would have some Democratic support that they could -- giving the government the ability to issue more bonds, a reasonable deal.

ROBERTS: You know, Charles, the one thing that hasn't been talked about at all in here, except that it didn't show up in the "fiscal cliff" deal, was what are we doing to create jobs in this country?

LANE: Well, as Nina mentioned, the end of the cut in payroll taxes, which is now being called an increase, the restoration of the old rate, is probably contraction for the economy, probably not good for jobs, but in my view probably necessary. It had to be reinstated at some point. And, you know, although the administration treated it as a concession. It was something privately they actually were willing to accept all along. So yeah, that's going to be a little -- there was a little of contraction generally built into this "fiscal cliff" deal.

The big variable in what is about to happen in the next few months is the Republican position. What is it going to be? Nina is also exactly right, the president has become very adept and actually very enthusiastic about exploiting their differences. In that context, it is amazing to me how the Republicans continue to have so many differences. And before I think we can have any intelligent discussion, or anybody can have an intelligent discussion, they have got to get in a room, if they can, and figure out what they want and then stick to it.

HUME: The issue is spending, purely spending.

KRISTOL: They have honest differences on some policies and I respect those differences. And it is amazing we're having this discussion here and everyone taken for granted the president of the United States reelected in his second term, no electoral pressures on him now, that his main preoccupation is causing trivial splits, incidentally, among House Republicans. It's fun us to talk about. Is it going to matter two years from now? No, of course not.

That's what the president of the United States thinks his job is, not to actually be serious about entitlement reforms?

LANE: You may not like that, but that's what is happening. OK. Call it pathetic if want, but you can't act as if it is not happening.

KRISTOL: It is happening. But I don't think it's a -- do you think it's a great political victory for Democrats two years out that John Boehner is having squabbles in his caucus now? It's such a trivial thing to take pleasure in for the left.

ROBERTS: But if you listen Charles Krauthammer, the aim of the president is to neuter the Republican leadership, divide the Republican congress so that essentially he's got a minority in the majority. What do you think?

EASTON: That's what he's doing. And can I go back to something that one measure that we haven't talk would about that has support on both sides and within the Republican ranks will be corporate tax reform, lower corporate rates, plug loopholes, and actually add jobs to this economy and that's not being talked about.

HUME: I would just say that that's a good point. That is something that they might be able to agree on. But let's be clear going forward, now he successfully exploited the differences over taxes in the Republican ranks on this round. Going forward, the Republicans of all stripes are going to resist any tax increases, Republicans of all stripes, particularly those House Republicans, which passed the two Ryan budgets which have serious reforms and cuts in them will unite on that.

So what will happen is they will pass a bill that raises the debt ceiling, but with a price of major cuts. That will go to the Senate and then we'll what happens. Now in the end, of course, the debt sealing is going to have to be raised. But I think the Republicans will be far more united this time around than they would the last time around.

ROBERTS: Yeah, I wanted to talk about gun control in this section, but you were so good on this let me kick that to the next panel. We're going to take a quick break. When we return we're going to be talking about battle lines being drawn over the new defense secretary as the president remakes his cabinet for his second term. And gun control, should armed guards be in schools? Wait until you see the results of a new poll, you'll be very surprised. We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I served with Chuck Hagel, I know him. He is a patriot. He is somebody who has done extraordinary work both in the United States Senate, somebody who served this country with valor in Vietnam.

SEN. LINDSEY GRAHAM, R - SOUTH CAROLINA: I can tell you there would be very little Republican support for his nomination. At the end of the day there will be very few votes.

(END VIDEO CLIP)

ROBERTS: Praise from President Obama and deep concern from Senator Lindsay Graham over the man likely to be tapped for the top job at the Pentagon. We are back now with our panel. The announcement expected to be made in the last couple of days. Some reports out this morning the president has settled on Chuck Hagel.

Brit, why do you think he pick him given all of the Republican opposition and some from the left flank as well?

HUME: The only thing I can think of is that he believes that Hagel as a kind of a maverick would not drink the Kool-Aid as the White House may see it, on Pentagon, military spending and so on. That he would be a counter force over there and not an advocate for the armed forces in the way that even Leon Panetta has become.

You know, the warnings that we are hearing, for example, about the effect of the sequester so-called on the Pentagon, the dire warnings have come from Panetta, not from the White House, you'll notice. The president isn't going around warning about that, Leon Panetta is.

So I think that that's the reason, because otherwise, it is it a very peculiar choice, highly controversial guy, really not a particularly distinguished record in the Senate or really anywhere else.

Now I am not suggesting that he didn't fight valiantly when he was himself a soldier, I'm not suggesting that, but he is an odd guy, there is this tinge of suspicion about his views on Israel which politically is very dangerous and problematic. So that's the only thing I can think of.

ROBERTS: Bill you wrote in the Weekly Standard, you said there is no case for Hagel, eliminate him?

KRISTOL: Well, the defenders of Chuck Hagel have attacked his critics like me. But they haven't actually made a substantive case for him. Is he one of the most distinguished senators over the last 12, 15 years on foreign policy, or defense policy? Not at all. Is there any Hagel legislation the way there's Lugar legislation or Sam Nunn legislation? No. Has he written anything memorable, said anything memorable? I mean, no. He's not -- has he run anything big like the Pentagon? No.

It is actually a mystery why President Obama wants to appoint him. There are better qualified former legislators, there are very well qualified people in his own administration who served him well in his first term who have some have bipartisan support -- Michele Flournoy, or Ash Carter or Ray Davis, all of them serving or recently served in the Pentagon. There are people who served in the Clinton Pentagon who are very well thought of on a bipartisan basis.

I really don't know why the president wants him except I think he maybe he likes the fact that Chuck Hagel has complained about the power of the Jewish lobby and was one of very few senators to voted against Iran sanctions, a policy the president now claims as his own and refused to vote to designate the Iranian revolutionary guard as a terrorist group and the like, maybe President Obama likes that part of the Hagel record.

ROBERTS: One of the things that Hagel gets dinged on is this idea of having negotiations with them -- one on one negotiations over the nuclear program. But he also said this in an interview with Vietnam magazine. He says I am not a pacifist. I believe in using force, but only after a very careful decision making process. I will do everything I can to avoid needless and senseless war."

Nina, is that an unreasonable position for a secretary of defense to have?

EASTON: Well, I think it's very much in line with where we're seeing the president going in terms of using -- he doesn't want to put troops on the ground anymore. He's pretty much made that clear. He wants to rely more on unmanned drones, for example, in Afghanistan and so on. And fight terrorism that way.

I think Brit is right, he's in line with the president on a lot of these issues. And particularly as you go forward and you look at the kind of spending cuts that are going to have to come down in the Pentagon, it's interesting, too, by nominating Hagel, he'll be overlooking a chance to nominate the first woman secretary of defense which as Bill said, Michele Flournoy, who actually does have a lot of support in conservative ranks.

HUME: And a lot of experience in the building.

EASTON: Yeah, and a lot of experience in the building.

ROBERTS: You know, one statement that Hagel made back in 2007, Charles, and has really upset Republicans was over the Iraq war. He initially supported it and then he turned around on that. Here's what he said, he said, "people say we are not fighting for oil. Of course we are. They talk about America's national interest, what the hell do you think they are talking about? We are not there for figs." For some people, it was refreshing candor, but for many others why would you ever want somebody as secretary of defense who said that?  

LANE: Well, the other maybe set words he wish he could to take back was the full throated denunciation of the surge in Iraq. I mean, again, for somebody who voted for the war and then denounced the surge as potentially the worst mistake since Vietnam I think were his words was also not particularly well chosen.

I agree with Bill that sort of given all of the baggage that Chuck Hagel brings, whether you approve of him or not generally, it is it a bit of a puzzling choice. But I think the best explanation is what it is what the president himself said right at the beginning of that clip you ran. I like Chuck Hagel. They served together in the Senate. They sort of bonded over Iraq issue and opposition to it. They traveled to Iraq together. They seem to trust each other. And I think he just likes the guy.

In addition, it's also true that he's been a critic of what he calls bloat at the Pentagon. And that's the way the spending thing is going to trend. And finally, at least nominally, he is a Republican. That whole sort of purchase a little bipartisanship in this....

HUME: Nominally is right.

ROBERTS: If Harry Reid doesn't manage to change the filibuster rule on the 22nd do you expect that this nomination will go through or will it get filibustered?

KRISTOL: I think Republicans will want take a really close look at this. And I think most Republicans right now would be inclined to oppose Chuck Hagel.

I'm not sure it can't be defeated on an up or down vote. It's not as if the whole Democratic -- most -- there are Democratic senators -- Senator Menendez of New Jersey, Senator Schumer of New York, who have fought very hard for tough Iran sanctions, which Chuck Hagel doesn't believe in.

I mean, do you really want a secretary -- isn't this one of the main priorities of the next Secretary of Defense?

HUME: All other things being equal, if the president really wants him, he could probably have him except for the possibility that in the course of the confirmation hearings, Hagel, who is fully capable of doing it, steps all over himself, which could happen and the atmosphere changes and he becomes highly controversial, suspect in the country and that would liberate Democrats of the kind that Bill described, to vote no which can happen.

ROBERTS: So tough sledding ahead for Chuck Hagel, expected also to be tough sledding if Jack Lew is nominated to replace Tim Geithner.

I want to switch gears and get into gun control, which you were talking about earlier, because the results of a new Rasmussen poll are very, very interesting. It came out just at the end of the week. 51 percent of the Americans now support stricter gun laws, but also have a look at this, when asked would posting an armed guard in every schools more safe, 48 percent said yes and 54 percent said they would feel safer with an armed guard at school versus no adults with guns.

Wayne LaPierre from the NRA was castigated for suggesting that, but it would appear at least from this poll that the greater number of the American people are with him on this.

EASTON: Yeah, but the American people are actually quite smart in that poll. Wayne LaPierre was saying armed guards instead any kind of controls on guns. The American people -- look, they are supportive of gun control. If you go back and you look at studies and impact of gun control, there are not a lot that shows it works in terms of controlling violence. But there is one case where it did work, and that's Australia where there was a mass shooting in the 90s, 35 tourist were killed. They put in an assault weapons ban that was much stricter than it was here. And did a buy back program.

Politically, I agree it would be tough sledding here. But it would get guns that put multiple bullet holes in these children at Newton, out of the system.

ROBERTS: Brit.

HUME: That's probably true. The problem is, that none of the measures that are talked about and could gather serious support would go as far as Australia went. And when you begin to do that.

ROBERTS: Right, no one is talking about confiscation or buy backs.

HUME: Exactly, and if you -- now buy back I suppose is possible . But I think it would be very hard to pass that. That's -- you know, Dianne Feinstein, for example, has a measure to ban assault weapons which is similar to the measure that was in affect 10 years with no appreciable effect on gun violence.

So, I just think that nothing that's being talked about seriously or is likely to pass would make a difference. That's the problem.

EASTON: And just to add quickly, the Australian law, there were 13 mass murders before that law and none in the decade since.

ROBERTS: We have just got 60 seconds left. Everybody goes after guns when a shooting like this happens, but as Charles Krauthammer pointed so eloquently pointed out, it's multifactoral. You have got to address mental health and the ability to commit people. You've got to talk about society, violent video games, movies. Why does congress always take aim, if you will, at guns.

KRISTOL: Well, I mean, these murders are mostly committed by guns and so there's a distinctive...

ROBERTS: They are committed by guns, or by people with guns.

KRISTOL: Well, no, exactly, but I mean, people have -- it's not, you can't blame people for saying can't we do something about guns? I do think a serious look at the social science would suggest that most of these gun control efforts are going to be in vain. And that we're kidding ourselves for doing much.

And you can turn around these correlations, but in the years before schools became gun free zones there were almost no mass murders in schools. Since then, there have been I think 22 since 1990. And so things -- I mean, but that doesn't prove that you should not make schools gun free zones either. It suggests that a lot of these correlations don't really prove what they are...

ROBERTS: We have to go. We'll pick up Charles's thoughts in the Panel Plus section coming up.

Thanks so much for joining us, really appreciate it. They will be back against next week.

And don't forget to check out Panel Plus where our group picks up with the discussion on our website, FoxNews.com. We will post that video before noon eastern time.

And please make sure to follow us on Twitter @FoxNewsSunday.

Coming up, the people most upset by the down to the wire "fiscal cliff" negotiations.

(COMMERCIAL BREAK)

ROBERTS: Well, for the past few weeks, he term "fiscal cliff" has made its way into the American lexicon. And as the deadline neared, more and more Americans grew upset about how congress was handling their money. But our friends over at The Tonight Show made a good point of who should be really upset about it.

(BEGIN VIDEO CLIP)   

JAY LENO, TONIGHT SHOW HOST: Well, you know, Americans from all sides of political spectrum seem to be upset about this "fiscal cliff" deal. Well, imagine how the Chinese must feel, huh? I mean, it's their money. Yeah, they're the ones. You know, what do we care? We're out of this thing.

(END VIDEO CLIP)

ROBERTS: And that's it for us today. Have a great week. Thanks so much for joining us.

Be sure to watch when Chris Wallace returns on the next "Fox News Sunday."

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