This is a rush transcript from "Hannity," December 3, 2012. This copy may not be in its final form and may be updated.
SEAN HANNITY, HOST: There are late breaking developments tonight related to the 'fiscal cliff' battle being waged in Washington. Now, late this afternoon House Speaker John Boehner sent a letter to the president detailing a bold counter offer to the administration's plan. Now, the GOP proposal does not include a tax increase on the so called wealthy but does contain $800 billion in revenue through tax reform, another $600 billion in health savings and much more.
Now all told, the net savings amount to around $2.2 trillion. Now, the White House responded to this letter by saying that the president is, quote, "willing to compromise but not on the subject of making job creators pay more in taxes." However, what our tax and spend commander-in-chief fails to understand is that putting money into the hands of you, the American people, is the single best way to spur economic growth.
And it's not just people like Ronald Reagan who understand this principle. Well, Bill Clinton famously said that the era of big government is over and the end of welfare as we know it. Now, why? Because government is not the answer. Government is the problem.
And then, there was that other iconic Democrat, you know, the one that occupied the Oval Office back in 1962. He also spoke of the benefits of cutting taxes. President Obama, I hope you're watching this.
(BEGIN VIDEO CLIP, AUG. 14, 1962)
PRESIDENT JOHN F. KENNEDY: This can be the most important step we could take to prevent another recession. That is the right time to make tax cuts both for your family budget and the national budget. Resulting from a permanent basic reform and reduction in our rate structure, a creative tax cut creating more jobs and income and eventually more revenue.
It will include an across the board top to bottom cut in both corporate and personal income taxes.
The billions of dollars this bill will place in the hands of the consumer, and our businessmen, will have both immediate and permanent benefits to our economy. Every dollar released from taxation that is spent or invested will help create a new job and a new salary, and these new jobs and new salaries can create other jobs and other salaries.
(END VIDEO CLIP)
HANNITY: Right. Now, that is the message that President Obama needs to hear. Unfortunately, there is growing evidence to indicate that he's not interested in striking any deal at all. Now, he may, in fact, want us to all go over the 'fiscal cliff.' After all, he would be able to point the finger of blame at the Republicans to get all the tax hikes that he wants, all the defense cuts that he's always wanted, and some Democrats, they are just stating flat out they want to go over the 'fiscal cliff.' Watch this.
(BEGIN VIDEO CLIP, NBC NEWS, NOV. 29)
HOWARD DEAN, FORMER DNC CHAIR: I personally think you'll get a lot more deficit reduction if we do the 'fiscal cliff.' I actually think the markets will reward the 'fiscal cliff' over a period. There will be some panic and some moaning and groaning -- but first of all, the 'fiscal cliff' is not a real cliff. It's a slope. And you're going to get the biggest bank for the buck in terms of deficit reduction. And I do believe it's time to be a deficit hawk. I really do. I think the economy can stand it. Yes, we will go into two quarters of recession the CBO says, and I believe that. But, you know, we're in deep trouble here. Somebody is going to have to pay the bill. And I think it's going to have to be all of us.
(END VIDEO CLIP)
HANNITY: All right. Joining me now with more on all of this, columnist and author Patrick J. Buchanan, as well as former Clinton special counsel, Fox News contributor Lanny Davis.
All right. So, the president campaigns on $800 billion in new taxes. He now wants $1.6 trillion. He wants twice the amount, Lanny. He wants a blank check and Congress to give up its authority as it relates to money and say no, no, let me raise the debt ceiling any time I want. He wants $150 billion in new stimulus but he wants no entitlement cuts at all, no spending cuts at all. Now that sounds to me like somebody that's not really serious.
LANNY DAVIS, FORMER CLINTON SPECIAL COUNSEL: I don't know where to begin to correct some of what you just said, but let me at least start with Ronald Reagan.
HANNITY: Tell me where I'm wrong.
DAVIS: Well, you're certainly wrong that he didn't campaign to cut 98 percent of the American people's taxes with the upper two percent paying. He won the election based on that explicit proposal.
HANNITY: And the House also won their election to stop him. The House also won, Lanny.
DAVIS: Well, 535 Congressional districts, most of which have little opposition, can't be compared to the American people voting for president. But let me go to Ronald Reagan if you will.
HANNITY: Lanny, they were not voted to give him a rubber stamp.
DAVIS: He won the election based upon -- to go back to your question, 98 percent tax cut. And by the way, John Kennedy cut taxes to a bracket about twice where we are today, so it's really an apples and oranges -- but Ronald Reagan is responsible for the greatest tax increase in American history, and joined with Tip O'Neill in raising taxes on Social Security in order to make Social Security solvent. So, let's not talk about Ronald Reagan as being anti-taxes.
HANNITY: All right. Let me give you the Ronald Reagan real story because your facts are off. And Patrick J. Buchanan was actually in that White House. Patrick J. Buchanan, top marginal rates went from 70 to 28 percent during his presidency, true or false, sir.
PATRICK J. BUCHANAN, SYNDICATED COLUMNIST AND AUTHOR: True. It went from 70 and then it went down to 50 and then it went to 28 percent. I was there on the plane when we got word that we had a deal to cut to 28 percent and I said take it.
Let me add one point, Sean. I was looking over my editorials from 1962 just yesterday, and I have endorsed Jack Kennedy's proposal. You know what it was? Take the top rate on individual income taxes from 91 percent to 71 percent.
BUCHANAN: I think Kennedy died before it happened. But I think the corporate rate was, if I recall, 43 percent to take it down to 35. I'm not sure about that, but I know I endorsed it, and I endorsed Kennedy's argument because it sounded right.
HANNITY: All right. But here -- hang on a second. The Republicans, they now offer 2.2 trillion in debt to the president's lack of serious proposal here. The president said, he wants some type of grand bargain. He wants it to be fair. He's willing to work with the Republicans. Show me in his proposal where he's moved at all because, what Geithner presented was basically their old budget.
BUCHANAN: Well, it's not only that. Look. The president, they demanded 1.6 trillion in new taxes. They want to rub the Tea Party noses of the caucus in their no new taxes pledge. And they want to get new taxes. And I think the president is showing that he seems to have a whip (ph), Sean, by virtue of the fact that he seems to be more willing to go over the 'fiscal cliff' than the Republicans are. Why should he? Because then taxes would go up on everybody in the country. They would go up on the rich, and Barack Obama steps in and says, I'm going to rescue the country from what the Republicans did to save their rich folks from a haircut. I'm proposing tax cuts for 98 percent of the American people who deserve that.
HANNITY: But there's a way to head that off. Isn't it the Republicans should pass a bill that extends the Bush tax cuts for everybody?
BUCHANAN: They should pass two bills. First, they should pass a bill extending the payroll taxes which are going to take $2,000 off the top of a family that makes $100,000 a year.
DAVIS: You mean, the cut?
BUCHANAN: One thousand -- the cut, that's going to go back into effect, Lanny. But the second thing is, they should pass -- hold it. They should pass the -- they should reenact the Bush tax cuts. Send it over to the Senate and say listen, Harry Reid, you can do what you want. You can accept these and send them to the president or you can offer to negotiate or you can reject them and we can go over the cliff, but that's your call now. We don't want to take this country over the cliff.
DAVIS: Can I counter my friend, Pat Buchanan? First of all, you did not deny my fact in 1982, Ronald Reagan passed the greatest tax increase in American history. True or false because the same question Sean asked you.
BUCHANAN: It's one of the ones, Bob Dole tax increase -- I talked to the president about it.
DAVIS: I thank you. True.
(TALKING OVER EACH OTHER)
HANNITY: Let me go on. Let me ask you the second question.
BUCHANAN: Hold it, Lanny, because this is an important point. He was offered $3 in spending cuts for every dollar in taxes increased. He got the reverse.
DAVIS: The answer is true.
Secondly, John Kennedy, just was shown on television because Sean liked the speech. And you said, a reduction from 90 to 71 percent. Bill Clinton increased taxes from 35 to 39 percent, started with a $300 billion deficit, ended with a trillion dollar surplus.
BUCHANAN: All right. Let me ask you --
DAVIS: And that bill, all of you and I think you on television Pat predicted there would be a recession by that increase in taxes, 23 million jobs later, there was no recession.
BUCHANAN: All right. Lanny, if what you say is true, Lanny, that the Clinton tax cuts did it, why doesn't Barack Obama say, let's have back all of the Clinton tax hikes?
DAVIS: Tax increases.
BUCHANAN: Well, yes, you're right. Let's have back all of the Clinton tax increases on everybody and we'll really have a boom because he knows in his heart what he knew in 2010. You raise taxes on everybody and a weak economy like we've got, and you will send it into the dumpster. And that's what he's threatening to do.
DAVIS: That's the reason. No, that's a fair point. And that's the reason it's a weak economy. But Bill Clinton when he raised taxes from 35 and 39 percent and ended up with a trillion dollar surplus, conservatives like yourself love the fact that we had a surplus rather than under the last two administrations --
BUCHANAN: All right. Let me ask you a question --
DAVIS: -- both Bush and President Obama, we now have a $16 trillion national debt.
BUCHANAN: One question, Lanny. One question. Under Bill Clinton, they cut defense spending from Reagan six percent of GDP to three percent. Cut it in half as a percentage of the economy. That's why he got a balanced budget. He hatched defense.
HANNITY: All right. We've got to take a break. Guys, stay right there. We will
DAVIS: Twenty three million new jobs too.
HANNITY: -- and by the way, don't forget, Bill Clinton had Newt Gingrich and the Congress and -- Domenici (ph) and they were a big part of it. And actually, Clinton sat down with Newt Gingrich. I don't see that happening here.
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