Watch the latest video at FoxNews.com CHRIS COTTER, GUEST HOST: With both sides digging in, it appears Senate Minority Leader Mitch McConnell's backup plan is gaining a little momentum, a plan he says will save the Republican Party from defeat next year. (BEGIN AUDIO CLIP) SEN. MITCH MCCONNELL, R-KY., MINORITY LEADER: Default is no better idea today than when Newt Gingrich tried it in 1995, is -- it destroys your brand and would give the president an opportunity to blame Republicans for a bad economy.
Look, he owns the economy. He’s been in office almost three years now. And we refuse to let him entice us in to co-ownership of a bad economy. (END AUDIO CLIP) COTTER: Reaction now from Newt Gingrich. Newt, are you surprised by Senator McConnell's comments? NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Well, it fits a Washington version of reality that’s just not true. In 1995, the government was closed for five days in November. It was closed for 21 days in December and January, but it was done in an orderly way. Social Security checks were paid. Everything continued to operate that was essential. And the country at large thought it was the right thing to do. When we collided with a liberal Democrat in the White House, Bill Clinton, the country thought it was a sign we were serious. Now, again, this is not a default. This was a closing in an orderly way of some -- of the non-essential aspects of the federal government. What was the result of that? Well, Bill Clinton came into the State of the Union and said the era of big government is over. We signed welfare reform, the first big entitlement reform in your lifetime. We signed the first tax cut in 16 years, which had the biggest capital gains tax cut in history, the opposite of Obama's policy. Unemployment came down from 5.6 percent to 4.2 percent when I left office. And we balanced the federal budget for four straight years, paying off $405 billion in debt. And here's the key thing. While doing everything right for America and policy, America rewarded the House Republicans. We became the first reelected majority since 1928. So I think it’s a fundamental mistake in Washington to misread the 1990s. Now is the time to stand up to President Obama. I don't know what country he thinks he’s president of if he believes 80 percent of this country is in favor of raising taxes. I spent this week in South Carolina and in Iowa -- talking to you right now from Des Moines -- I don't run into anybody who rushes up to me and says, oh, please raise my taxes. And I think the president, I don't if he thinks he’s the president of Sweden or where, but he certainly does not understand the American people if he thinks that, at 9.2 percent unemployment, we’re eager for a tax increase. COTTER: You know I was just speaking with Congressman Weiner about this Cut, Cap and Balance proposal that will be voted on, on the House floor next week. I mean, do you get a sense -- I don't see that moving anywhere. It might move out of the House, but it’ll die once it gets to the Senate. Do you get a sense that we have got an 11th-hour deal on the table that we’ll come to, or not... GINGRICH: No. COTTER: ... that we will get to August 2 without a deal? Because I feel like both sides are so far apart. (CROSSTALK) GINGRICH: Well, I think, first of all, it’s backwards to start by asking, what can possibly be signed by a left-wing radical president who believes in big government, high taxes, has crippled the American economy? This is the Obama depression. He's not going to be able to escape ownership of it. The numbers last Friday were terrible on unemployment. And his policies further kill jobs. So let's be clear. This is the Obama depression. It's not a bipartisan problem. But I think the House Republicans should be setting the benchmark. They should not worry about the final deal, because the truth is you don't know until 2:00 in the morning the night before you’re at the deadline what might happen. COTTER: Right. GINGRICH: What the House Republicans should have done, the minute the president threatened senior citizens with Social Security, the House Republicans should have passed a bill called the Social Security Payment Guarantee Act, sent it to the Senate, and said, all right, Senator Reid, do you and the Democrats want to pass a bill to guarantee Social Security payments and then send it to the president? And call his bluff. But I think legislation is more important than press conferences. And I think that it’s important for the House Republicans to provide leadership. It’s clear that the Senate cannot lead and it’s clear that the president refuses to lead. And I think that means that the House Republicans have to lead. COTTER: You know, Newt, we're going to talk about this a little bit later on the show, but it seems to me -- and there is part of the Democratic Party right now that is looking at this McConnell deal as a bad thing for the president, that it is politics, that the Republicans believe that the only way they can really affect real change in this country is to win back Washington in 2012, and this is how they are going to do it, and this is a shrewd move on McConnell's part. And I hate the blame game, especially now. I just despise it, after this last month, but it seems like that’s what we're playing right now and that’s what we're looking forward to over the next year. GINGRICH: Well, I think that's historically the wrong way to approach this. When you 14 million unemployed Americans, when you have 16 percent unemployed, underemployed, and dropped out of work, the so-called U6 number, when you have the most people on food stamps in American history, when you have housing prices dropping deeper than in the Great Depression, I think there’s some responsibility to America to try to get things fixed. I am -- I think the time to act is now. The time to get things done is now. If the most they can do is pass a 45- or 60-day, cut some spending, they could increase revenues by allowing offshore development of gas and oil, which pays royalties to the federal government. That would give them a substantial increase in revenues. So, you could find a way to put Americans back to work, create more American energy, and cut spending to some extent. That would tell you the size of your -- that you could raise the debt ceiling. Do that for 60 days, come back again, do it another time. There are ways to manage this, to get the economy growing again. But I don't -- I'm not very comfortable with the strategy that says, boy, in January of 2013, we’re going to do something, not when you have this level of unemployment and this level of pain among the American people. COTTER: Newt, stay cool out there in the upper Midwest. I know it has been a hot month. Take care of yourself, all right? GINGRICH: Thank you. COTTER: All right, Newt Gingrich, thank you so much, sir, in Iowa. Content and Programming Copyright 2011 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2011 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.