• With: Kate Obenshain

    This is a rush transcript from "Your World" January 11, 2013. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: All right, a little more than a week after the president said that the nation apparently didn't have a spending problem, we get this from his White House press secretary.

    (BEGIN VIDEO CLIP)

    JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Deficit reduction is not a goal, a worthy goal unto itself.

    (END VIDEO CLIP)

    CAVUTO: Kate Obenshain says that is the problem, that's the whole problem right there.

    Kate, amazing, absolutely amazing.

    KATE OBENSHAIN, FORMER CHAIRWOMAN, VIRGINIA REPUBLICAN PARTY: Well, I didn't think it is that amazing, Neil.

    This is what has been going on all along. What amazes me is that Republicans continue to be flabbergasted that the president has no intention whatsoever of talking about deficit reduction or containing spending or any sort of reasonable budgeting, the Senate maybe passing a budget.

    This president's goal and that of his press secretary and his to-be treasury secretary, Lew, is fundamental transformation. That is what the misunderstanding here is. We seem to think that every president wants a legacy of budgetary sanity, that he wants to leave the country in a better fiscal position than the one in which he found it.

    This president wants to fundamentally transform the United States of America. He said that over four years ago. Everything he has done has been in that direction. And yet Republicans throw up their hands and they're -- as Paul Ryan said, he is shocked at how partisan this president is.

    This president is partisan. He is going to continue to vilify Republicans every time they push back and suggest that we have a little sanity here. He's going to say that they only care about the mega-wealthy and they want to balance the budget...

    (CROSSTALK)

    CAVUTO: Right.

    But you know what is jolting? It would explain -- even if you want to just cynically step back from this, it would explain a posture that presented an agreement like we got on the "cliff" deal that was whatever it was, 40-plus-to-1 tax hikes over spending cuts, because they didn't see the need for spending cuts.

    And, furthermore, they didn't see the need to address the underlying problem with entitlements, when so many blocs of Democrats ultimately decided don't touch them, in this deal, don't touch them. And now we're getting word from a key group of Democratic senators meeting with the president that when it comes to this debt ceiling thing, we are going to give you power, whether it is the 14th Amendment or not, to just raise this sucker yourself.

    OBENSHAIN: Yeah.

    CAVUTO: So that you can find creative hoops around the debt ceiling mess without addressing the underlying spending that led to that mess. It does explain a lot.

    OBENSHAIN: Yeah, the arrogance of Harry Reid today and other Senate leaders when they said we will not allow the Republicans to hold the country hostage by considering unbalanced approaches?

    Unbalanced approaches? Didn't we just see a massively unbalanced approach after the president promised that it would be balanced? These promises mean nothing, Neil. It is time for the Republicans to realize this president is playing hardball.

    (CROSSTALK)

    CAVUTO: Well, are they afraid that the...

    OBENSHAIN: Yes.

    CAVUTO: ... after the sort of humble with the deal they got, and then they didn't want to look like obstructionists, the read Democrats are telling them they got from the election is, we were vindicated, more taxes, not more spending cuts.

    Now, I think I would agree so far as to say the president got the support of Americans to go ahead and hike taxes on the rich. I don't subscribe to that view. I don't support that view. Nevertheless, he probably won on that basis. But -- but he did not win on any basis to just ignore spending, you know?

    OBENSHAIN: Right.

    Well, keep in mind the Republicans did win a majority in the House of Representatives. And so if you are going to say that the president had a mandate, which 50-percent plus is hardly a mandate, the Republicans in Congress also have something of a responsibility and a mandate to...

    CAVUTO: But do they forget that mandate?

    OBENSHAIN: Yeah, I think that they do because they're so...

    CAVUTO: It is one thing to cave on an issue, and maybe because you had to, but come on.

    OBENSHAIN: They are so frightened, Neil.

    They don't understand this approach of Obama of turning them into literally the enemy of the American people.

    CAVUTO: But $4 billion a day, Kate, that's how much we're piling up and...

    (CROSSTALK)

    CAVUTO: ... a day, you know?

    OBENSHAIN: I'm with you. It is time they get a backbone. This is ridiculous. They are cowering.

    And what they don't realize is that they should be more scared of being primaried and losing their seat, because either way, whether they lose it to a more conservative Republican or to a Democrat, they are going to lose if they don't stand up.

    CAVUTO: Yeah.

    OBENSHAIN: But also they should be a little bit concerned about the fact that we are headed at breakneck pace towards Greece. And that's what they really need to be afraid of.