This is a rush transcript from "On the Record," December 6, 2012. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Should anyone in Washington be going on vacation in the middle of this fiscal crisis? Should the president be jetting off to Hawaii? Now, both sides created this mess, and they are the only ones who can fix it.
Former senior adviser to President Reagan, Pat Buchanan, joins us. Pat, any problems with the president if he leaves town before this is solved?
PAT BUCHANAN, FORMER REAGAN ADVISER: I think the president is taking a tremendous risk here, Greta. And the reason is, if this is not solved and it looks like it's going to come apart, say, on the 20th or 21st of December and he's splashing around at Waikiki, you could have a 1,000-point drop in the Dow Jones average and people's 401(k)s being wiped out and their portfolios being wiped out. And if he's sitting out there, I think he's in real trouble politically.
This is a show of a certain amount of arrogance and confidence that he's not afraid we're going to go over the cliff, and if we do, he'll take care of it after that. But I think he's taking a risk, and my guess is there are advisers in there telling I mean, Mr. President, you better keep that plane gassed up out there at Honolulu.
VAN SUSTEREN: You know, I think if he goes on vacation, or anyone else, that he has a tin year, that anybody else does. They've known about this problem for 18 months. They've created the problem. They're are the only ones that can solve the problem, and that the idea that they would jet off to vacations and just think that it's going somehow solve themselves, where people across America are worried about their jobs, worried that if we do go off the cliff that the markets are going to respond very spastically to it, and causing lots of heartache, the idea -- to me, it's, like -- it's not -- it's not even a question of doing -- of politically, that it's bad politically, I think it's indecent.
BUCHANAN: Well, it's not only a tin ear, it's hubris. Barack Obama's never going to run for president again. He won a victory. He said, Look, they rubbed my noses in it at the -- my nose in it at the end of 2010, forced me to extend those tax cuts, and now they're coming to me.
And Boehner offers $800 billion, and they brush it aside and say, We need $1.6 trillion, and we need the rates to go up. Go back and do your paper again, Mr. Boehner.
I think, again, you're getting arrogance and hubris on the part of the president, who has the whip hand in this. And I think that if he goes off -- I think that's a bridge too far for him. If he goes off to Hawaii and spends three weeks there, and no deal happens and the fiscal cliff hits, and we've got the largest tax increase in history and the markets plummet, and he's sitting over there splashing in the surf -- I don't think he can do it!
VAN SUSTEREN: You know, I wonder what other nations think about us? You know, this is -- you know, this it a terrible problem that we're going through right now, but we look like we can't handle our own business. We can't talk to each other. We can't figure out our own economics. And I can't think what kind of moral authority do we have in the world when we look so pathetic, so pathetic in terms of how we handle things and the fact that we don't?
BUCHANAN: Well, the problem with the American people is that today, they are -- Greta, they are as deeply divided and polarized as we have almost ever been.
I mean, look what Boehner is doing right now in trying to make a deal. He's is violating his fundamental principles. He's violating a commitment he made to the American people. He's doing something he thinks will hurt the American economy, put $800 billion in taxes on job creators. He is splitting his party. He is demoralizing his base. And he is doing all this to try to cut a deal that he can't in his heart really believe in.
VAN SUSTEREN: But is it not -- is it not better to at least try to come to some sort of -- you know, to come off a little bit -- and I'm not saying people should be unprincipled, but the president, by changing his goalposts -- because first he said it was $800 billion, when he was running for office, now it's $1.6 trillion. Then the president says that he wants to have a credit card with no limits in terms of the debt ceiling...
VAN SUSTEREN: ... because the president looks as -- the term you used is arrogant. I think the president has a grudge because Speaker Boehner has said, You want to get $800 billion from the rich. Let me get $800 billion from the rich, but instead of raising the tax rate, let me get $800 billion, the same people, the same amount, but I'll get them differently through loopholes -- closing loopholes and getting rid of some deductions.
And the president, the White House says no because the president, I think, wants to rub his nose in it and wants to extract it in increased rates, when I don't think it makes a difference! He'll get the money!
BUCHANAN: Well, he could get more money by cutting the deductions or capping the deductions. He wants the rates up. Why? Because the Republicans said, We cannot raise the rates. It violates our principles. It's something we just...
VAN SUSTEREN: But that's the grudge part!
BUCHANAN: ... cannot do.
VAN SUSTEREN: That's the grudge part and the lack of -- and the lack of leadership. And so I think -- you know, I think he ought to come off it, but I think that Speaker Boehner, to the extent he gives a little, it helps the nation if they both come off the grudges. But I assign it more to the president.
BUCHANAN: Well, the president is rubbing Boehner's nose in it. He better watch it because he's giving -- he's denying him an honorable avenue of retreat.
But my feeling -- let's get back to Boehner. Do you believe in your heart that raising tax on people making over $250,000 and hammering them with a 5 percent tax increase now is good economics when you've got an economy that may have an 8 percent unemployment rate on Friday?
VAN SUSTEREN: Is it better -- is it better to go off the cliff? I think that he's got to balance it. I mean, which is more damaging? He's got a president who for some reason wants the -- wants the revenue coming from the rich, but from tax rates, not through closed deductions. Same deal, but the president is sort of fixated on the rates thing.
BUCHANAN: He'll get the rates. All he's got to do is take us over the cliff, he'll get the rates. So they'll go up on everybody. I think he's not afraid of that because he'll say, Then I'll go in and I'll cut taxes on the 98 percent who raise -- who make less than $250,000, and I'll restore some of the defense cuts that were made by the sequester. I will be Mr. Peace Through Strength. I'll -- they'll be the Obama tax cuts will replace the Bush tax cuts.
VAN SUSTEREN: Do you think Boehner's s getting hoodwinked on this?
BUCHANAN: I think he's -- well, look, it's hard for me to see how the Republicans emerge from this well. They are turning the retreat they began at November 6th into a Republican rout, I think, right now because in their hearts, they don't believe what they're doing is right, Greta! It's like a doctor coming in...
VAN SUSTEREN: So what do they do?
BUCHANAN: Well, it's like a doctor coming in and saying, Look, you can't give this kid any more heroin, it's going to kill him. That's what's hurting him. And the other doctors come in and say, Look, we've got to steady and put him on a diet of a little more of this stuff, and the other doctor says, No, I'm not going to help you out, I'm not doing that! That's what the -- the conservative Republicans are saying in the House to Boehner. You're going the wrong way!
VAN SUSTEREN: Then we go off the cliff and we go into exactly what you said.
BUCHANAN: Yes, and it could be a terrible blow! But I think what the Republicans should have done at the beginning is say, Look, Mr. President, what do we agree on? We agree this budget's got to be cut.
VAN SUSTEREN: Well, we -- they agree -- there's no discussion of cuts. I'm going to talk about that with our next guest.
BUCHANAN: Well, that's the only thing they agree on! They disagree on taxes. Why would you get into an argument on taxes and not work on what you agree on?
VAN SUSTEREN: I can understand they want -- President Obama wants $800 billion from the rich, Boehner says, OK, give you $800 billion from the rich, and the president, because he has a grudge, says, That's not -- that's not how I want to do it.
BUCHANAN: Well, and Geithner says, We want $1.6 trillion and we want rates.
VAN SUSTEREN: Oh, I know. Then they...
BUCHANAN: They want rates...
VAN SUSTEREN: Then they move the goalposts, which is a whole 'nother problem. But anyway...
BUCHANAN: Boehner will go over -- if they go over a trillion dollars, then take it to 37 percent, I think Boehner can't go home again.
VAN SUSTEREN: Nice to see you, Pat.