This is a rush transcript from "Special Report," July 11, 2011. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: It's not going to get easier. It's going to get harder. So we m ight as well do it now. Pull off the band aid. Eat our peas.
Now is the time to do it.
REP. JOHN BOEHNER, R-OHIO, HOUSE MAJORITY LEADER: There was never any agreement to allow tax rates to go up in any discussion I've ever had with the White House. Not once.
(END VIDEO CLIP)
BAIER: The president today repeating that he still wants a big deal, meeting again this afternoon at the White House with both sides, Speaker Boehner saying tax increases, a nonstarter for his caucus. It just can't get through.
Meantime, there is word that to reach a grand debt deal, sources say President Obama offered to raise the Medicare eligibility rate from 65 to 67. Late today, House Minority Leader Nancy Pelosi said this, quote, "We continue to oppose benefit cuts in Social Security and Medicare. These pillars of the economic and health security should not be used as a piggybank to subsidize tax cuts for the wealthy."
Where are we on this? Let's bring in our panel, Steve Hayes, senior writer for The Weekly Standard, Juan Williams, columnist with The Hill, and syndicated columnist Charles Krauthammer. Charles, let's start with you. First of all, the tone and tenor of the president's news conference -- you have written about this, about the chances he has had to address this big issue up until now. What were your thoughts about it?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, he adopts this position of being the Olympian observer of all of this, above all the squabbling. Everyone else plays politics, but he acts in the national interest. And he says, you know, if not now, when?
All of a sudden, he has decided we have to have a big deal, not a small deal. For months he insisted we have no deal. For months he insisted that we have a debt ceiling increase with no cuts at all, and now all of a sudden, only a big deal. And he says, if not now, when? How about in February when he as president submitted a budget that increased the deficit? All of a sudden he is a man who wants to be the one who cuts the deficit and the debt. It's a farce.
And you see it in the threat he made where he said, I will not sign a short-term extension. Let's say we are in negotiations and we are approaching and we want something real like tax reform, which takes a few months, and Republicans will pass a tax reform -- will pass a debt ceiling increase for say three months to allow negotiations. He says he will veto it because he is acting in the national interest, has to be a big deal.
I think the Republicans are gonna call the bluff on this. There is no way in which that if the House approves a three-month extension with cuts, commensurate relatively small cuts, that the Senate will oppose it this and the president will veto it, because then he gets the blame for the catastrophe that he and Geithner have been protecting.
BAIER: Juan, what about that? I mean if this deal does not work out and both sides stick to their points and the House moves forward a short-term deal that the president says he is not going to sign, it doesn't get past the Senate. Even if it does, it gets stopped at the White House. Then is it in White House's political court in dealing with this crisis?
JUAN WILLIAMS, SENIOR EDITOR, THE HILL: No. It will come across as a prank, as basically a ploy by Republicans to try to save face and cover for the fact that they have blocked what everyone sees is a deal that really met the needs, the demands of Republicans up front.
BAIER: But do you really believe there was a deal as of Saturday before John Boehner stepped out?
WILLIAMS: They were close, I don't think there was an actual deal. But they were closer. And I think John Boehner is much more about let's get something done. Let's say that we, a divided government, a Democrat in the White House, Republican majority in the House, were able to achieve something for the American people at a time of crisis. I think John Boehner really believed that, wanted that to happen.
I don't think that's the case with Eric Cantor who I think is challenging John Boehner's leadership. And I think when I listen to Charles, I think, you know, Republicans get off on hectoring President Obama. President Obama is not perfect. He has lots of flaws. But the idea to go back months and say, well President Obama should have done this months ago. Wait a minute, he has conceded on everything from entitlement reform, right, which is what Republicans said they want, to spending cuts, and yet Republicans say, no, we can't have a deal, we refuse to have a deal. And he's made it bigger in terms of the entitlement reform than Republicans ever thought was possible.
KRAUTHAMMER: What has he conceded on entitlement reform?
WILLIAMS: He was talking about Social Security. He is talking about Medicare.
KRAUTHAMMER: What is he going to do on Social Security? Give me one specific--
WILLIAMS: Specifically, he was talking about raising the age, raising the age at which you would qualify.
KRAUTHAMMER: [INAUDIBLE] Right. He talked about it in public, he said he wants to do it?
BAIER: No, he hasn't --
WILLIAMS: -- in a negotiation Charles.
KRAUTHAMMER: He has never said one thing --
WILLIAMS: Charles, I don't know what you want. You want them to negotiate on Fox News?
KRAUTHAMMER: He's told us the tax increases he wants. He's told us exactly what he wants Republicans to do on taxes. He has never once stated a cut, a structural change in entitlements. He had an hour of a press conference in which he could do it. All we got was a leak, an hour after implying that he might do X. How about doing one statement in public?
BAIER: The suggestion, Steve, is that this is all kabuki theater.
STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: It is. I mean, this is exactly right. If the president wanted to give anything specific, he could have done it in public. It suggests to me that he is not actually serious about it.
It polls well. When you say you want to get serious about entitlements, people say well I like that. And if you say, I want to get serious about debt and spending, people say, well I like that. It's when you actually offer specifics, like Paul Ryan did in his budget, which was passed by the House Republicans, that is when you run into potential political peril.
And the president is totally unwilling to do that. So he is in favor of general vague entitlement reform. He's not in favor of anything specific in any way that he can be held accountable for it.
But I think there was a very important moment today in this press conference when he's talking about his unwillingness to assign something that was shorter, something 60 days, or 90 days, or 120 day. Think about that. Think about what that means in terms of the president's position now. He has warned that if we don't have a deal, the United States faces economic catastrophe, ruin. We're off the precipice. But he doesn't want to sign something that's some arbitrary time limit because -- why? Because he doesn't want to? Because he doesn't think it would be not good for the country? It would be better if for the country to go into default, to see the consequences that Timothy Geithner has laid out now over the past several months? I mean how serious is the president?
WILLIAMS: Wait so you are saying kick the can down the road one more time. And if you don't --
HAYES: I'm not arguing -- no no, I'm not arguing for that. I'm not arguing for that.
HAYES: I'm saying as a measure of what the president thinks, he's willing to -- if the Republicans don't adhere to his arbitrary timetable, which I don't think they would anyway, he is willing to take the country off the cliff. That's what he said today.
KRAUTHAMMER: And this is a president who's kicked the can for two years and all of a sudden has to decide it has to be long-term. You know what his definition of long-term is? The day after Election Day. Anything shorter is short-term because it would hurt him politically. This has nothing to do with [INAUDIBLE] --
WILLIAMS: One last point Bret. I know you're in a rush to go. But one last point.
BAIER: Well we have another panel on this.
WILLIAMS: OK but --
BAIER: You know what, I'm going to tease it, I'm gonna tease this one last point.
HAYES: Nobody is turning.
BAIER: Nobody is turning, stay here. We'll be right back.
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