This is a rush transcript from "On the Record," July 21, 2011. This copy may not be in its final form and may be updated.
MARTHA MACCALLUM, FOX NEWS GUEST HOST: In this environment, we could very well be in a situation that I was just referring to, where the ratings agencies may look at this come Monday and they may say, It is our duty to downgrade U.S. debt. Now, that would be the first time that a sitting U.S. president has presided over the downgrade of American credit. And that could hurt our already low approval rating that we have for Congress. I mean, the numbers for Congress are very low, as well as the numbers for the president on that right now.
So let's bring in another member of Congress, Senator Ron Johnson, and get his take on this. Senator, good evening. Good to have you with us tonight.
SEN. RON JOHNSON, R-WIS: Well, Martha, thanks for having me on.
MACCALLUM: You know, you listened to Senator Lee. You listened to the back and forth between Leader Boehner and President Obama today. Where are we? What's your opinion on this tonight?
JOHNSON: Well, first of all, I never believed the president was negotiating in good faith. I mean, if he was really serious about this, Martha, he would have been at the negotiating table six months ago. He would have presented a serious budget rather than the one that he presented to us in February that would have added $12 trillion to our debt. and lost in the United States Senate zero to 97.
So you know, it is the president and the Senate Democrats that haven't passed a budget in over two years, that haven't presented a plan. You take a look at -- you know, my party, the House of Representatives, they actually passed a budget on time. You know, and right now, they passed the "cut, cap and balance" act, which, by the way, that is the solution to the problem.
So I mean, we're in this position because of the president and the Democrats in the Senate have refused to show us what their plan would be.
MACCALLUM: You know, you were elected in the last mid-term election. You know, you come from a business background. You're a businessman by profession. And I've talked to you about this before, you know, I know you say you were a bit surprised -- even you were a bit surprised at how sort of in such disarray things were when you got to Washington. Now that you're watching this whole thing go down, what are your feelings -- you know, put yourself in your old shoes for a moment. What do you think about it now?
JOHNSON: Well, Martha, I'm an accountant by background, and I've produced budgets on time. I've had people produce them for me on time. And to think that a couple folks, you know, a few individuals would actually be able to come up with a budget in a couple weeks behind closed doors to fund the federal government, a $3.7 trillion dollar-a-year enterprise -- it's just absurd.
But unfortunately, this has become business as usual, and business as usual here in Washington is bankrupting this country. And we've got to end this cycle. And again, the Republicans actually have a plan on the table now. The "cut, cap and balance," like Senator Lee was talking about, is the solution. It cuts spending next year. It caps the growth in spending, by the way. We're not really talking about cutting spending...
MACCALLUM: Well, you know...
JOHNSON: We're just limiting the growth, and that's a very reasonable thing to do.
MACCALLUM: Let me ask you this. Take me through the scenario here. So let's say, you know, they have this meeting tomorrow. All of the House and Senate leaders are there, the president's there. Let's say they come up with something. Is there anything that you can imagine at this point, them coming up with, that you would say, Yes, you know, I can get behind that in the Senate, and I would bet that my Republican colleagues in the House will also back that? What would that look like?
JOHNSON: Well, because the president has backed us up against this deadline, I would be willing to, you know, go for a short-term deal...
MACCALLUM: You would?
JOHNSON: ... to give "cut, cap and" -- yes, to give "cut, cap and balance" a longer period in the public arena. As Senator Lee said, 66 percent of the people support that approach, 74 percent support a balanced budget amendment.
MACCALLUM: All right, so tell me what the short...
JOHNSON: So I'd love...
MACCALLUM: Excuse me, sir. Just tell me what your short-term deal looks like. Is it the McConnell plan? You know, what does it look like?
JOHNSON: Well, you mentioned something that Charles Krauthammer proposed. I'm not in those negotiations. I'm just saying that I'd be willing to do something very short-term to give us the time to debate "cut, cap and balance" because I believe the American people will support it. And I believe that is the solution.
MACCALLUM: All right, so what if, you know, you saw something that was in the neighborhood of $500 billion in cuts? What -- so you're -- it would have to be, I would assume, something that had absolutely no tax hikes in it, or would you sign off on something that allowed certain loopholes to expire and certain tax reforms that would, in essence, have some corporations pay more money because there aren't loopholes anymore?
JOHNSON: Listen, the number one component for a solution here is economic growth. And so the last thing we want to do is enact anything that harms economic growth, and that's what tax increases do.
What we need is we need to put a credible plan on the table that restrains spending. That's what "cut, cap and balance" does. That's what brings confidence back to the markets, to consumers to actually get our economy growing again. And so again, we just -- we haven't had anything to fight for because of all these secret negotiations. "Cut, cap and balance" actually gives us something to present to the American people, show the American people what we're for. They'll support it. I think it can pass, if we give it time.
MACCALLUM: All right. You know, it's interesting. When you look at some of the polls on this, congressional Republicans have a 47 percent approval rating on this issue -- no, I'm sorry. They're more to blame, according to this, than President Obama. What do you think about that? Have you had a tough time getting your message across here?
JOHNSON: Every day that we went and negotiated with President Obama when he was not going to negotiate in good faith actually gave him credibility. I think his performance tonight showed he's certainly not the adult in the room. And again, if the American people take a look at what he hasn't done -- I mean, we were bankrupting this country. He was going to add $12 trillion to our debt. And yet he didn't enter the negotiations until what, a month ago? That is not a serious player in these negotiations. He's simply not serious. He's not been negotiating...
MACCALLUM: But people are blaming Republicans, Senator. People are blaming Republicans. They say -- 47 percent say that you are more to blame.
JOHNSON: Again, we haven't had anything to fight for until "cut, cap and balance." Now we got it on the table. I think once we have the chance to show the American people the solution, I think we'll get that support.
MACCALLUM: All right. Well, you got your work cut out for you, as do all your colleagues, it seems. Senator, very good to talk to you tonight, very important decisions to be made over the weekend. We thank you, sir. Good to talk to you.
JOHNSON: Thanks for having me on.