OTR Interviews

Despite promises, does same old 'fiscal cliff' quagmire lie ahead?

With power structure in Washington left unchanged, are Pres. Obama and Congress serious this time about confronting looming defense cuts and tax hikes?


This is a rush transcript from "On the Record," November 7, 2012. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: So will President Obama lead? Will he work with a sharply divided Congress to avoid that fiscal cliff?

Former Mississippi governor Haley Barbour joins us. Good evening, Governor.


VAN SUSTEREN: Governor, a year-and-a-half ago, according to Bob Woodward's book, President Obama, the Obama administration, came up with this idea of sequestration, and it was going to be avoided if a super- committee in November of last year made a decision on how to resolve our problems on the deficit and the debt.

That didn't happen. December, nobody did anything, January, February, March, April, May, June, July. Now we're up to November. We're post- election. We're now on the edge of this thing being put into effect in early January. The two sides are fighting.

Is it the president's obligation to get the two to stop fighting and to work this out?

BARBOUR: Well, Congress can't lead, Greta, 535 people can't lead. The president has to lead. And divided government is not some automatic gridlock. When Ronald Reagan was president, we had divided government, we did the Reagan economic plan, we did Social Security reform, we did tax reform, we did immigration reform. And when Bill Clinton was president, we had a Republican Congress, Democrat president, and we did welfare reform. We did the first balanced budget in a generation.

But in each case, that president led. And in each case, he was willing to advocate and he was also willing to compromise for the greater good. This president hasn't been willing to do that. We'll see. I thought John Boehner said it right. Mr. President, we're inviting you to lead.

VAN SUSTEREN: Well, the thing that is -- cannot be ignored is that we are -- we are a year past when we knew the committee or almost a year past when we knew the super-committee was not going to reach a decision, and there has -- if -- if leadership is -- is what was needed and if you -- and if you assign that to President Obama, he hasn't done that. We're now pushed up against a deadline with very serious decisions.

Do you think that the House and the Senate and the president will actually resolve this by January 1, or are they just going to kick it down the road again?

BARBOUR: Well, congress has a long history of preferring to kick the can down the road. There's no question about that. However, this is a much more serious thing that they've come up against than I've ever seen before in terms of the budget and then the fiscal cliff.

What do I think that'll happen? Hopefully, they will agree on a framework. You're not going to do tax reform in the next six or eight weeks. You are not going to do entitlement reform in the next six or eight weeks. I think what we should hope for, that they get serious together, see a path and say, OK, we're going to take whatever the sequestration would save in six months, we're going to whack that out of the budget. And then at the end of six months, if we're not -- we haven't got the whole deal done, then we'll do another six months.

VAN SUSTEREN: But that's -- but that...

BARBOUR: But it's got to be real action...

VAN SUSTEREN: Yes, but...

BARBOUR: ... based on the belief that they're going somewhere. Otherwise, I don't think conservatives will accept it. They'll say, No. You know, this has to be something real.

VAN SUSTEREN: Well, how -- well, how in the world could anyone possibly believe that? Because sequestration was just that. If something didn't happen, then all of a sudden, we're going to go into sequestration. So why should we believe it now? That's the first point.

The second point is, they've had -- you know, the president's had over a year to do this, and so has everybody else. I do my job. Every American out there who's lucky enough to have a job in a 7.9 percent unemployment environment has done his or her job. If we don't do our jobs, we get fired. And instead, they just keep pushing it down, pushing it down. The president doesn't call up Speaker Boehner and say, Come on (INAUDIBLE) let's solve this. Nobody does anything!

BARBOUR: Well, you got an absolute legitimate, 100 percent correct complaint. I mean, the president sends his budgets up to the Hill and he is so unconcerned that every Democrat senator for two years in a row voted against President Obama's budget? And what was his reaction? Totally unserious.

But this is backs up against the wall. If the president leads, we've got a real chance. But let's don't be kidding ourselves. You're not going to write a tax reform bill in a few weeks.

VAN SUSTEREN: So why should I believe, though, that under your plan, if they push it down the road -- we already did that with sequestration -- that one's not believable, either! I mean, what has changed? Nothing's changed!

BARBOUR: Not my plan, Greta. No offense, but...


VAN SUSTEREN: But I mean, if they push...

BARBOUR: Under my prediction...

VAN SUSTEREN: Under your...

BARBOUR: ... you might say.

VAN SUSTEREN: All right, that's better.


VAN SUSTEREN: All right, you talk about the budget. And you know, I was reading tonight about how the budget -- where we set our priorities, the nation's priorities. We recognize how much revenue we have and we decide how we're going to spend it.

It's been described as a moral document. It's the time where we sort of sit down and decide what we need to do. Under the 1974 Budget Act, we're supposed to have this every year. That's not being done. The president has submitted proposals to Senator Harry Reid. The House has submitted proposals. Even Congressman Paul Ryan passed a budget, or it was his budget that passed.

But Senator Harry Reid -- he won't even consider it and he won't encourage his Senate Budget Committee to do anything, absolutely nothing. He has a pocket veto and stops the budget from going forward!

BARBOUR: And in fairness to Paul Ryan and John Boehner, every year the Republicans have been in the majority in the House in this administration, the House has passed a budget -- both times. The Senate, the majority leader won't even bring it up! And the Republicans bring up Obama's budget as an amendment to force the Democrats' hand.

But if the president leads -- I happen to believe the president must be telling the Democrat leader, Don't do it. If the president starts telling him now, We're going to really try to get something done, I assume the Democrat leader will do what the president says.

VAN SUSTEREN: Well, why doesn't -- you know, I know it's -- I'm not - - you're not here to defend why the president didn't do it. But you know, all these budgets is that it would have been so simple. He's the leader of the party. If the holdup is Senate Majority Leader Harry Reid, a Democrat, couldn't he call Senator Harry Reid and say, Let's get a budget, let's put it up and let's do it now? I mean, we hear now that he's telling Governor Christie he's going to answer the phone in 15 minutes, but we can't get a budget in three years!

BARBOUR: You've got a very good point. Maybe it's like Mr. Medvedev that he's -- now that the election's over, maybe he will take a different attitude. I hope so. But your point is exactly right.

It isn't just on this. I know the show's about the fiscal cliff. You know, on immigration reform, on so many other things, they haven't even offered any legislation!

VAN SUSTEREN: But you know, when -- when you stall things -- I mean the fact that -- let's just take the tax cuts. Whether the taxes go up or taxes go down, frankly, to tell you the truth, I really don't care. And probably, my taxes would go up.

But I do know one thing, is that while we're in this period of indecision, and everybody's known about this, nobody's doing any investing. No one's making any decisions. You can't do any planning because the president and the House and the Senate have not -- you know, fish or cut bait, so nobody can make decisions. That stalls the economy, so people can't get jobs. People aren't hiring. No one's doing anything because they won't do their job!

BARBOUR: I think you're really giving the government a break here when you say it's just uncertainty because it's not just uncertainty. They've got the sword of Damocles hanging over their heads with ObamaCare that the president wants (INAUDIBLE) biggest tax increase in American history and that'll fall primarily on potential job creators.

It's not just uncertainty about policy. It's that they've got bad, bad policy staring them in the face. The government can't spend itself rich anymore than your family can spend itself rich. But the government is sucking all of the energy out of the economy when the government spends $10 billion a day and only takes in $6 billion!

VAN SUSTEREN: But every time it just sort of does something -- advances something three months or six months, it really puts a stall on the economy and because people can't make decisions. You know, we have some long-term planning. Every time they do that, it hurts any American who wants a job, every -- every single time! And it's selfish! And you know, it's -- it's not doing their job!

BARBOUR: I don't take issue with what you're saying. This should have started a long time ago. But let me just say we have to be -- try to be accurate. You're not going to see an entitlement reform bill or a tax reform bill that can be written and decided on and done right...

VAN SUSTEREN: Within six weeks.

BARBOUR: ... in a few weeks. You just...

VAN SUSTEREN: No, I -- no, I understand that.

BARBOUR: You can't!

VAN SUSTEREN: I understand that. But this whole sequestration thing started in July of last year. And it's because they didn't do their job that we're now up against this window and it's a few weeks. So it's the American people who suffer because they all, and the president's the leader, didn't do their job! I'm here every night! I'm doing mine!

BARBOUR: Well, you are. You're doing it well. You're grilling me and trying to act like it's my fault. But that's OK.


BARBOUR: But look...

VAN SUSTEREN: I got to blame somebody!

BARBOUR: You got to go back to where this all has to start. The president has to lead. And I saw on your screen when you started the show the word "compromise." Compromise is not a dirty word. I ran the political office of the White House for Ronald Reagan. And Ronald Reagan, who many thought until Obama was the most ideological president -- Ronald Reagan had to compromise on everything we've talked about.

VAN SUSTEREN: Yes, but then the -- I mean, just talk about compromise -- today, right after Speaker Boehner gave his statement about how he wants to reach out and compromise, is that a -- the Ways and Means Committee ranking member, Sander Levin, Democrat from Michigan, puts out a press release in which he refers to the Republicans must end their intransigence. So he just insults them right away!

So how in the -- how do they even begin to have -- have any sort of communication and compromise when they send out sheets insulting each other to the media!

BARBOUR: That goes back to presidential leadership. If the president doesn't crack the whip, get his own people in line, then how does he expect to be able to get the other side to -- to work with him?

VAN SUSTEREN: And I appreciate you coming, Governor, so I could yell at you for my frustration for the government!

BARBOUR: Well, that's good. You know, governors...

VAN SUSTEREN: I feel much better, thank you!

BARBOUR: ... ex-governors...

VAN SUSTEREN: I feel much better now. Thank you!


BARBOUR: Thank you, Greta.

VAN SUSTEREN: Thank you, Governor.