Chambliss takes heat for turning from Norquist tax pledge

Georgia senator on pending fiscal cliff


This is a rush transcript from "Hannity," November 28, 2012. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: And tonight, 34 days are all that remain until the United States plunges off the so-called 'fiscal cliff.' And as the January 1st deadline looms large over Washington, Republican heavyweights from House Speaker John Boehner to Majority Leader Eric Cantor announced yet again today that they're willing to make major concessions to the Democrats in order to avert disaster. Take a look.


REP. JOHN BOEHNER, R-OHIO: Republicans are committed to continuing to work with the president to come to an agreement to avert the so-called 'fiscal cliff.' It's one reason why we believe that we put revenue on the table as long as it's accompanied by serious spending cuts.

REP. ERIC CANTOR, R-VA.: We have done our part. We have put revenues on the table. Something that we didn't do two years ago during the debt ceiling negotiations.


HANNITY: Now, we'll get into what exactly, quote, unquote, "revenue" really means, and whether or not it includes tax hikes when Georgia's Senator Saxby Chambliss joins me in just a moment.

But first, agree with them or not, as you just heard from the Republican leadership, they're offering up real solutions on how to avoid falling off the so-called 'iscal cliff.'

Now, the president however, well, he still thinks he's out there on the campaign trail, in fact he's even using the exact same class warfare that we all grew accustomed to during the election. And instead of offering up a single suggestion on how to cut spending or agree to any sort of meaningful entitlement reform, well, he's trying to frighten you, the American people into thinking that there's no alternative other than raising taxes. Watch.


PRESIDENT BARACK OBAMA: The place where we already have in theory at least complete agreement right now is on middle-class taxes. And as I've said before, we've got two choices. If Congress does nothing, every family in America will see their taxes automatically go up at the beginning of next year.


HANNITY: All right. Here's the problem Mr. President, if you don't lead, if you continue to do nothing, America's debt will continue to rise and we could easily hit $20 trillion in the coming years. And I doubt very much that you need to be reminded that $6 trillion of that debt was tacked on under your watch, which is why your hypocrisy on the issue is downright laughable. After all, here's what you, President Obama, what you said about your predecessor.


OBAMA: The problem is that the way Bush has done it over the last eight years, is take out a credit card from the Bank of China, in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents, number 43 added $4 trillion by his lonesome, so we now have over $9 trillion of debt that we are going to have to pay back. Thirty thousand dollars for every man, woman and child. That's irresponsible. That's unpatriotic.


HANNITY: Four trillion, his lonesome? You've given us $6 trillion. By the way, that $4 trillion was in eight years, not four.

Unpatriotic? Well, that was when the debt was only $9 trillion. Nowadays, we're looking at $16.3 trillion. And thanks to the tax and spend agenda of President Obama, there seems to be no end in sight. And if he's serious about tackling the debt, well, he'd be talking about reining in spending. But that's not what he's doing, because he's hell-bent on one thing, raising your taxes.

And by the way, don't dare thing for one minute, or believe the hype, that this is only going to affect the so-called rich. Now, this White House is willing to put any and all tax breaks on the table, including letting the payroll tax cut expire. Now, that would move would affect all Americans. Watch this.


ALAN KRUEGER, COUNCIL OF ECONOMIC ADVISORS: There are many tax provisions that are expiring at the end of the year, and the president has said that the payroll tax cut, among others, should be on the table. You look at a permanent extension of the middle class tax cuts, whereas the payroll tax cuts were exclusively temporary and the economic effects of those are different.


HANNITY: All right. If the payroll tax cut is on the chopping block, nothing is safe. And all Americans, regardless of how much money they make, you're going to be affected.

Now, joining me to give us the Republicans' view on some of the things, is somebody who's made headlines recently when he appeared to distance himself from a longstanding pledge to oppose efforts to raise taxes, and that's Republican Senator Saxby Chambliss. Senator, welcome back to the show, thanks for being with us.

SEN. SAXBY CHAMBLISS, R-GA.: Always good to be with you, Sean. Thank you.

HANNITY: All right. So, Grover Norquist, Americans for tax reform, you signed a pledge when you first ran for office, saying that you would not raise rates or revenue, and then you went on an interview and you said, well, I care more about this country than I do about a 20-year-old pledge. You've taken a lot of heat for this. I want to give you a chance to explain.

CHAMBLISS: All right. Here's my difference with Grover, Sean, it's pretty simple. The Simpson-Bowles plan that came out that said we're going to address the long-term debt of this country, recommended that you eliminate all tax credits and tax inclusions in a major tax reform package. The 'Gang of Six' that I was a part of, still am a part of, followed that recommendation. We think you ought to eliminate all of that. That will generate about $1.2 trillion in revenue. Not new taxes. Revenue. Then you decide whether you're going to add the mortgage interest deduction, charitable deduction, other things back in there.

So the question is, what do you do with that revenue that's been generated? We owe $16 trillion. I think that you got to pay part of that revenue towards that debt just like every single American that owns a home pays part of their monthly revenue towards their mortgage debt. It's exactly the same thing. The problem that Grover and I have is that he says, if you do that, that's a tax increase, because the rest of it is going to go to lowering tax rates, and that's not 100 percent going to lowering tax rates.

HANNITY: Yes. But if you're talking about $1.1 or $1.2 trillion in new revenue -- and I don't want to get in a parsing words here -- but that's raising taxes. People will going to pay more. And when people pay more --


HANNITY: They're not going to pay more?

CHAMBLISS: No. I mean, Sean, what we do is we lower rates. You lower rates commensurate with the amount of revenue that you take in with the exception of taking some of that money and applying it to your debt. Bowles-Simpson reduced the number of brackets from six to three. You have eight to 13, 14 to 22, and 22 to 29 is the lowest and highest brackets. Everybody is going to be paying at a lower rate. The highest rate today is 35 percent. The lowest rate is 10 to 15 percent.

HANNITY: But Senator, this doesn't -- wait a minute, this math doesn't add up in all honesty here. Look, I understand where the government is. I'm very concerned. This is the first generation where Americans are saddling their kids with unsustainable debt.


HANNITY: And we've got to get off the track. I just as a conservative, I believe in economic growth. I think government spends too much money. But if you're saying the government is going to take in $1.1 trillion more dollars through tax reform, eliminating deductions, but not increasing the tax rates, but lowering them, you're still getting more money, and it's not through growth, so that means people are paying more, right?

CHAMBLISS: No. The money is not coming to the government. The money is coming in to be used to lower those rates as well as to pay down the debt, Sean. And you're exactly right about economic growth. And you just look at what's happened in the last year. We've had just a very slight uptick in economic growth. And we've seen about a $350 billion revenue increase. The problem is, this administration is spending that money instead of applying it to the debt. Can you imagine what kind of economic growth we would see if we had real meaningful corporate tax reform?

HANNITY: This is where I turn to the president. First of all, he didn't lead with the grand bargain the last time. And Bob Woodward wrote a pretty detailed book about the whole experience. The more important thing here is that the Republicans are saying, all right, we will go for increases in revenue. And I don't want to parse terms. It's not a tax increase technically, but if you're taking in more revenue, and it is not from growth, people are paying more, they're paying more money to the government. The president and the Democrats, they will not -- Dick Durbin, Harry Reid, Nancy Pelosi, they're saying no to entitlement reform. If we don't deal with entitlement reform, any deal we get here is going to be a bad deal. Don't you see it that way?

CHAMBLISS: Well, there are two things that the president is talking about that are non-starters, Sean, I just don't see any way forward. One is increasing tax rates on certain individual taxpayers. That's not going to fly. I've never supported a tax increase rate-wise and I'm not going to. Secondly, we're not even going to discuss revenues until they're willing to put entitlement reform on the table. Now, entitlement reform is tough for Republicans, because it's you know, valuable programs we're talking about, but they're sacrosanct for the Democrats.

And you know, you just can't have a hundred percent of everything you want. If Speaker Boehner and Eric Cantor have said, they're willing to put revenues on the table, then it's incumbent upon the president to come forward and say, OK, we're going to put entitlements on the table in a big way, and we're going to get this done, and he's not doing that. And I was disappointed to hear some of my colleagues in the Senate say, yesterday that, well, you know, you give us the revenues, and then we'll talk about entitlement reform later. Ain't going to happen. We're not going there.

HANNITY: And some Democrats have said, look, the Republicans will get the blame if the fiscal cliff hits January 1st, and everybody will lose the Bush tax cuts. So that will be a tax increase. Then they'll blame the Republicans, so they want to use it to their advantage politically. And they get the defense cuts through sequestration that they so desire. But isn't the real danger, the impact it has on the economy and maybe throws us back into a recession by taking all this money out of the economy?

CHAMBLISS: Well, I think everybody remembers very well the ugly process we went through in August of 2011 in raising the debt ceiling, and what happened immediately around the raising of that debt ceiling. We saw the stock markets crash. Well, let me tell you, if we go off this fiscal cliff -- and I put the blame squarely on the president. He's been AWOL on this issue for the last three years. Now, he's coming in and waving a flag, and trying to take the glory, and put the burden on Republicans. Republicans have been willing to negotiate. And if he doesn't come forward and provide real leadership, and we go off the cliff, the economic disaster that we're going to see is going to be squarely on the shoulders of this president.

HANNITY: I would like to adopt something like the Mac Penny plan. Cut one penny out of every dollar Washington spends, and we move to a balanced budget. But with baseline budgeting, you have these increases every year. Can you ever get rid of baseline budgeting?

CHAMBLISS: You know, if any corporation in America operated the way the federal government does with baseline budgeting, they'd be broke in 90 days. It's a disaster.

HANNITY: It would be broke. But they don't have the ability to print more money. Senator, good to see you. Thanks for being with us.

CHAMBLISS: Always a pleasure, Sean. Thank you.

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