This is a rush transcript from "Hannity," February 14, 2012. This copy may not be in its final form and may be updated.
SEAN HANNITY, HOST: President Obama's $3.8 trillion budget was unveiled yesterday and it includes massive new spending and nearly $2 trillion in tax increases over the course of the next decade. This morning on Capitol Hill, Treasury Secretary Tim Geithner appeared before the Senate Finance Committee and had the unenviable task of defending this plan. Let's take a look.
(BEGIN VIDEO CLIP)
TIM GEITHNER, TREASURY SECRETARY: The president's plan would lower the deficit from just under nine percent of GDP in 2011 to around three percent of GDP in 2018. A deficit at that level will stabilize the overall level of debt to GDP in the second half of the decade, putting us back on the path of fiscal sustainability.
(END VIDEO CLIP)
CHENEY: Republicans are not exactly buying what Tim Geithner and the administration are attempting to sell. Take a look.
(BEGIN VIDEO CLIP)
SEN. JEFF SESSIONS, R-ALA.: Under the pronouncements that we're hearing from the White House, this budget reduces our deficit by $4 trillion. That is absolutely untrue. It doesn't reduce the deficit at all virtually. Give me a break. It increases spending $1.5 trillion, increases taxes $2 trillion almost 1.9 trillion.
SEN. JOHN BARRASSO, R-WYO.: This is an ambush budget. The president is ambushing the American people by promising to cut the deficit by $4 trillion when in fact over the next ten years, he adds to the debt by $11 trillion.
(END VIDEO CLIP)
CHENEY: Joining me to help break down the president's budget blue print are Stuart Varney from the Fox Business Network and co-host of "The Five," Dana Perino.
It's good to be with you guys. Thank you very much.
Stuart, our country stands clearly at a cliff here. We're on the verge of debt crisis. So the president puts forward a budget that doesn't deal with the debt problem, that in fact expands government spending, includes massive new taxes. The Senate hasn't put together a budget in over a 1,00 days. And we learned this weekend that the president's own chief of staff doesn't even know how many votes it takes to pass a budget in the Senate. Is this incompetence?
STUART VARNEY, FOX BUSINESS NETWORK: What a mess. That's right. This budget adds to the debt, raises taxes and increases spending. At the end of the budget period, at the end of 10 years, we will be $26 trillion in debt as opposed to the $15-16 trillion we are in now.
Now, work the math for a second. At the end of this 10-year period, if this budget goes through, which it won't, but if it did, we would be paying almost $20 billion a week in interest alone. That is not supportable. You can't do that. We are, therefore, given this budget, heading towards a budget crisis. Where lenders refuse to lend us any more money unless they get a huge, much greater rate of return, result a debt crisis just like Europe, we're going in that direction, no question about it.
CHENEY: Well, and if you look at Europe, you know, you look at what is going on in Greece for example, now, you see these massive riots in the streets, you see the fact that essentially people have lost self- determination. You know, these austerity measures are so tough and so difficult but the people really have nothing that they can do about it because they have no choice, because they ignored their debt for so long. Dana, can you understand from a political perspective why is it that doesn't concern the administration?
DANA PERINO, CO-HOST, "THE FIVE": It's almost as if they are living in a different time period, right? And if you go back 15-20 years, you could understand this type of a budget being put forward. But if you look at Greece, which a lot of us are. Some people would say, well, that apples and oranges, the United States are so much bigger and so much more to burst. But it took decades to get to the point where Greece is. We're on an accelerated path to get that way without some change. A budget policy, putting something forward is a policy document, is a statement of priorities, and if you want to increase taxes, fine, make the case for it. If you want to cut spending in certain places like defense, make the case for it but if it's an exercise in futility, if you know that the Congress isn't going to do anything with it. If the Senate Democrats aren't even going to bother to put forward the president's budget, then we just gone to all of this for nothing, and you don't know what the president's priorities are.
CHENEY: Well, it seems that the one area that he in fact willing to cut is in defense. And in addition to the $487 billion in defense cuts we're going see over the next 10 years, we just learned in this evening, Jennifer Griffin reported that the President is now in fact considering cutting our nuclear, strategic nuclear forces by as much as 80 percent. Can you believe that the American people will stand by for this? You know, again as we're going to this election cycle, when he is so clearly putting the nation's defense at risk.
PERINO: It's a hard argument for them to make when there is so much other nuclear activity happening all around the world in places that are not friendly to the United States. I don't think -- they have not made a good case for it. And, you know, certainly, I'll sit there and listen, but I've feel like, do you want to have a place in the world where you are in a position of leadership. The only reason people respect you is that you have more than they do. And we're on a precipitous decline.
VARNEY: Why would we do this? Why would we retreat on the nuclear front so dramatically? What's the point? Is this for saving financially? Is that what it is? Because it is a retreat. If you don't have a forward posture that is one of strength, then I think you are inviting, not attack, that's too strong a word, but you are inviting someone to go against you. As you retreat, somebody else will step forward. If that is what we're doing with nuclear weapons, that is very dangerous. The Washington Post report on this calls it disarmament.
VARNEY: A very strong wood.
CHENEY: No, it is.
VARNEY: I'm not sure that is going to be politically popular in America right now.
CHENEY: Right. And I think the thing we have got to remember with nuclear weapons is survivability, that you've got to be sure that your enemy understands if they ever were to launch an attack that we would have enough in an arsenal to respond.
VARNEY: Do you reduce the threat of nuclear war by reducing weapons that you have?
CHENEY: Well, I think the president clearly believes that that's the case, and I think that is what's so dangerous. The other thing that he's doing obviously is class warfare. I think that you know, you look at the extent as which the president can't run on his record. He can't go out there and say, here are my accomplishments, so instead he talks repeatedly about making sure that those at the upper income levels pay more. But isn't it in fact the case, Stuart, that people at the upper income levels include many millions to small businesses across this country who file as individuals and we're going right after the job creators.
VARNEY: Yes. I'm so glad you came to me with a question on class warfare, because I know all about this.
CHENEY: It sounds that you know that.
PERINO: And because he will tell you, it will not work.
VARNEY: Listen to this. This is directly from the president. We don't begrudge success to Americans, success in America, we don't envy wealthy people, but we expect everybody to pay their fair share. That is divisive. The president is trying to convince people that the Rich A, don't pay their fair share. And if they paid more, he's trying to convince those that they could pay for all these goodies that he is going to spend money on. Both are false premises. And both are a form of class warfare. It's highly divisive. It's picking a target, those wicked rich people, those banks, those oil companies, let's run against them. It's divisive, it's class warfare, and I hope, I really hope it does not work in America. Because it doesn't belong in America.
CHENEY: Yes. And I think that's exactly right. Dana, what do you think the Republicans have to do in order to fight back against that? In order to explain what's wrong.
PERINO: In some ways, they are pushing uphill. Because an incumbent president is powerful. The economy through its natural course is starting to do better. And they're going to have to make the case that in spite of Obama's policies and Obama's record, the economy is getting better. How much better we don't know, how much of a possible risk is there due to Europe. It's impossible to say. And so, the Republicans have to find some sort of passionate way to describe what they are for in terms of a vision for America, that decline is a choice. And there is a way forward where we would all be able to have a good education, good strong safety net. By safety net, I mean in the entitlement spending for Medicare and Social Security that in this president's budget he doesn't even address. And something that if you went back to the Simpson-Bowles plan that he asked for and then kicked to the side of the road, would have dealt with. So, the Republicans definitely have a difficult job on their hands, but if you look at the battleground states, where unemployment is still up, housing is terrible. Trade numbers are not good. The deficit numbers that are just projected in this budget are tough. Everybody wants America to do better. There are two very strong competing visions for how that could be.
CHENEY: Well, and we could be doing much better where not for the Obama economic policies.
PERINO: And that is the difficulty that the Republicans will have in order to try to illustrate something that you can't show.
CHENEY: But they've got the facts on their side.
VARNEY: It's spending the debt that will do us down, that is what our problem is. Spending and debt.
CHENEY: Yes. Well, listen. Thank you guys very much. I appreciate it.
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