House to Take Swing at Tax Cut Compromise

This is a rush transcript from "Hannity," December 13, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Tomorrow, all eyes will be on the U.S. Senate as a final vote is likely to take place on President Obama's tax cut deal. But even if the measure passes, waiting in the wings are some very unhappy members of the House of Representatives. And unlike the Senate, opposition in the House appears to be growing. Fifty four House Democrats have sent a letter to the San Francisco speaker opposing the framework. Calling it quote, "fiscally irresponsible and grossly unfair." And just this morning, House Majority Leader Steny Hoyer described the unease his party feeling over this so-called compromise. Take a look.

(BEGIN VIDEO CLIP)

REP. STENY HOYER, D-MD.: This deal is giving Democrats some pause. Having said that, I believe that action is necessary and compromise was inevitable. There are a lot of things in this bill that we want to see passed. We are obviously having an argument about some other aspects of the bill.

(END VIDEO CLIP)

HANNITY: And that's just the left talking. As you know, Republicans are not so happy about the so-called compromise either. And for good reason. And tonight, I'm happy to be joined in studio by one of them, Congressman Steve King of Iowa is here. Congressman, welcome to the program, good to see you in New York, how are you?

REP. STEVE KING, R-IOWA: Thank you Sean, good to be here.

HANNITY: I kick at a straight answers, on the radio today talking about this. And reading from the AP article, about the ethanol subsidies, about 55 million dollars supposedly in the Senate version. And I got a note from Mitch McConnell's office saying, no, that is not going to be in there. Is it in there or not in there?

KING: I don't have any way of telling. I mean, it's a movable thing tonight. And look, I'm going to suspect that it is in there because I've reported it but I'm not read the language, Sean. We'll have to see if that is in. And we've got of course the extension of these brackets, all of them for two years. I say that's not enough. If your investment capital and you've got a two year return on investment on business plan, you've already invested that money. But otherwise, most of these are five, 10 of 15 years, more likely 15 year investment returns. So, I want to see this permanent. I want to make sure we play the best cards we can.

HANNITY: Is that your biggest argument against the fact that we can't, business can't decide where to go with a temporary economy? Is that your biggest argument against? My biggest concern, I'll take this because Obama said, he's going to run on this and Axelrod confirmed this. This is going to be his issue in 2012. And I think that may be a healthy debate for the country. They want to raise taxes and the Republican Party, the conservative movement wants to keep the tax base low. So, my biggest concern is that $200 billion in new spending.

KING: We have that. We have the transfer payments in part of that. The unemployment that $54 to $56 billion. We have had unemployment just 26 weeks, now it's 99 under Pelosi. We find out that most of the people will get a job at about the time the unemployment runs out. You've got $40 billion worth of refundable tax credits that goes to people who aren't paying taxes. So, almost $100 billion dollars there if you add that piece to it.

HANNITY: So, you're saying that statistics show that when people know their unemployment is running out, they run out and get a job?

KING: That's what happened, Sean. In about 15 weeks of unemployment, they will spend about 20 minutes a day and as our unemployment goes to 26 weeks, and that's when it runs out 26 weeks, they spend 70 minutes a day.

HANNITY: We have two extensions. So, basically, you can go for about two years now, this will, correct me if I'm wrong, this will extend it out to a third year.

KING: As I understand this. This is 99 cumulatively and then rolls for the next group. But I have it again, without my hands on the language and that's another argument that we ought to have and that is, this language that seems to be movable in the Senate, we need 72 hours to read the bill.

HANNITY: Yes.

KING: That's something that we --

HANNITY: Well, John Boehner is -- and I think he ought to, look, that's standard operating procedure. We've been down this road before. You have to pass the bill to know what's in the bill. That's Nancy Pelosi's House. And I think, you know, even though this is a lame duck and she is still speaker, I don't think it is fair for the American people. What do we know in terms of 54 Democrats now writing this letter to Pelosi? What do the numbers show, are the Democrats going to end up killing this thing?

KING: I would think all the Democrats that oppose this negotiated settlement between apparently Mitch McConnell and President Obama didn't sign the letter. I think that number is larger than 54 because to walk down around to get that many signatures is a pretty difficult thing to do. And if they're putting Christmas tree ornaments on this bill over in the Senate as we are pretty confident they have, and it goes over to the House side if that's enough ornaments to buy more liberals, more progressives on that, they are going to lose more conservatives on the Republican side. It's hard to balance --

HANNITY: Why? I guess the average person at home, maybe this is very naive in terms of the workings of Washington. Why can't we have a straight up or down vote on simple issues? Should we extend unemployment? Straight up or down vote. Do we raise taxes at the end of the year? Straight up and down vote. Do we eliminate the estate tax? I know that's not the way Washington works. But I think a lot of people like myself, you know, watch the way the process works. You have to buy votes as intensively in my mind, it's the moral equivalency of blackmail or some sort of bribery would be a better word. Why can't we have straight up or down votes on these things?

KING: I'm hopeful that under Speaker Boehner, these kinds of things will start to happen. These nice, clear stand alone pieces of legislation can come along. And my preference would be to take all of these tax brackets that expire at midnight, when the ball drops here in the city, in December 31, I would like to take all of them and set them up and make them all permanent just as they are. I'll vote for something like that.

HANNITY: What if this is not done by the end of the year? New Congress will be sworn in January 5th. The issue could be taken up, it could be made retroactive going back to the start of the year. Would it be better to wait until then? In other words, rather than take a bill with spending that you don't want and things that you don't want in the bill, would it be better to wait?

KING: I think it is better for extending all the tax brackets. The problem I have and it's a moral conundrum is, that if you see a estate taxes that kick in and go from zero estate tax now to a million dollar exemption in a 35 percent bracket or what is really is hanging out, there's five --

HANNITY: Fifty five percent --

(CROSSTALK)

KING: Yes -- what happens with us, yes, is you know, $1 million exemption at 55 percent. If that rolls over at the first of the year, there will be probably thousands of families around a death bed and making end of life decisions instead of their priest and their pastor and their doctor there, they're be there too, the tax man looms over that bed.

HANNITY: Isn't that amazing, that if you died last year, correct me if I'm wrong, it's 45 percent. This year, if you die zero percent, next year, it's going to be 55 percent. Only Washington could think of this mess.

KING: And some people will decide they don't want treatment. And others will.

HANNITY: Do you think people will decide not to have treatment the end of this year, and die so that they don't have to pay taxes?

KING: Absolutely. I hear those anecdotes now, Sean. And I'm not hearing enough discussion about it. That's the component of this tax discussion that bothers me the most, is what happens with the estate tax and what happens to the moral decisions that people have to make?

HANNITY: Congressman King, why do I think I will be seeing a lot of you in the next two years?

KING: Well, because one thing, we are going to repeal Obamacare and pull it out by the out by the roots.

HANNITY: I was thinking more of a presidential election in two years.

KING: That's true too.

HANNITY: Congressman, I appreciate you being with us. I appreciate it.

KING: Thanks, Sean.

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