• With: Robert Wolf, Former Chairman of UBS Americas

    This is a rush transcript from "Your World," January 21, 2013. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: Robert Wolf, he is the former chairman of UBS Americas, a very, very important, influential financial player for the Obamas and one of that so-called kitchen cabinet type of advisers on all things business community.

    Very good to see you, my friend.

    ROBERT WOLF, FORMER CHAIRMAN, UBS: Great to see you.

    CAVUTO: Thank you very much for coming.

    WOLF: I don't think I have seen you since election night.

    CAVUTO: It's been a long time.

    WOLF: It's good to be on.

    CAVUTO: It's been a long time.

    WOLF: It's good to be on.

    CAVUTO: Chuck Schumer outlined said today that the Senate will have a budget, it will include more taxes on the wealthy. Republicans just have to deal with it. The president intimated as much, that there is still this chasm between the rich and the poor, speaking in the clearest terms that the rich are going to have to do more than they have already done.

    Do you think your old buddies in the financial community are ready for that? Because that might be a news alert to them. They feel they have already gotten their taxes hiked.

    WOLF: I would be surprised if we are talking taxes.

    CAVUTO: Then what are we talking about?

    WOLF: I think you're looking at itemized deductions, a little different. I don't think we're talking rates there.

    CAVUTO: Well, they were already trimmed back in this deal, right?

    WOLF: Well, first, I think the goal would be to get $4-plus trillion. I think everyone wants that. It would be great if we could get somewhere around 2.5-1 spending cuts to revenues.

    CAVUTO: Not 40-1 tax hikes to spending, right?

    WOLF: Well, it's not 40-1 now. You know that.

    CAVUTO: But you think the ratio is going to be a little bit more even?

    WOLF: I actually think it will be -- if you include the first $1.2 trillion, which was part of the Budget Control Act, I think you will end up seeing that is already -- probably the next set would more 1-1. So I think you're going to see around 2-1.

    CAVUTO: All right, you and I could argue over how realistic that math is.

    WOLF: We argued before. And I think I won that one.

    (CROSSTALK)

    CAVUTO: Whatever.

    But, seriously, could I get your sense of where this is all going, though? Because I get a feeling that with the Republican move today to try to postpone the debt ceiling deadline by another months, to bring it to May, they are trying to get their ducks in order.

    WOLF: Yeah.

    CAVUTO: They are trying to get the immediate pressure off as much themselves as much as the country, but what do you think the markets, which are closed today, do in reaction to this constant kicking the can?

    WOLF: Neil, I am actually surprised by the buoyancy of the markets. I think the next 45-60 days has incredible uncertainty, obviously the debt ceiling. Three months is not a long period, if that is all the extension is. I don't think it should be part of the negotiation.

    As we recall, Reagan actually raised it 17 times. The sequestration would be negative for GDP.

    CAVUTO: By the way, did you feel that way when every Democratic, including then-Senator Obama, voted against raising the debt ceiling?

    WOLF: I actually would have told him he was wrong then.

    CAVUTO: OK. All right. All right.

    WOLF: I think the debt ceiling shouldn't be part of the negotiations.

    (CROSSTALK)

    CAVUTO: But you do not even like the extension because it doesn't address anything, right?