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Special Report

All-Star Panel: Debate over handling of looming cuts

This is a rush transcript from "Special Report," February 26, 2013. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Across the country these cuts will force federal prosecutors to close cases and potentially let criminals go. Air traffic controllers and airport security will see cutbacks, and that could cause delays at airports across the country.

REP. ERIC CANTOR, R – VA, HOUSE MAJORITY LEADER: Now the president says we can't have any progress on this sequester unless we get second tax hike in eight weeks. That is not compromise. Then he says your choice is going to be taking criminals off -- letting criminals out of jails and on to the streets, or give me a tax increase. That's not compromise. That's a false choice.

(END VIDEO CLIP)

BRET BAIER, ANCHOR: There you see the president in Virginia and the House Majority Leader from Virginia talking about the sequester. The sequester, as we've talked about, is roughly 2.4 percent, $85 billion cuts to future federal spending. That's how we talk about it here. There you see the pie chart for  a $3.6 trillion budget for this year just to give you perspective.

And some more perspective, the federal debt as of this week, this is as of this week, $16.609 trillion. One year ago it was $15.416 trillion. Debt added in the last year $1.19 trillion according to the Treasury Department. That is $3.26 billion a day, $136.19 million an hour, $2.27 million a minute. That comes down to $37,829 a second, $37,000, almost $38,000 a second added to the national debt according to the U.S. Treasury Department.

Let's bring in our panel, Byron York, chief political correspondent of the Washington Examiner, A.B. Stoddard associate editor of The Hill, and syndicated columnist Charles Krauthammer. Byron, that is how we'll start this joyous panel.

BYRON YORK, WASHINGTON EXAMINER: I have to speak carefully we are spending so much money.

BAIER: You just wasted $60,000 by that preamble.

YORK: I think what we've seen today is what we're going to see all the way up until March 1 when this thing happens. We're going to see the president and Republicans in Congress talking past each other. I think the Republicans have decided that this is going to happen. It's already in the law. It's going to happen. They are not going to change it. And we know that a lot of the effects are not going to be felt on the first day, or the second day, or even the third day. Furloughs, for example, require a 30-day notice, so they won't happen really until the first of April. Then we are just going to be seeing how they make the case as they continue this fight seamlessly next week and the weeks beyond.

BAIER: A.B., I want to read a couple of things from senior administration officials telling our Ed Henry that they acknowledge that the pain or the perceived pain will not kick in immediately. They're acknowledging that tonight. Saying it may take days or months before some people really feel some of these changes. And the second point is they see the end game similar to the fiscal cliff and that Republicans, they say, will eventually give in to raising taxes -- essentially closing loopholes.

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Yeah. I think that is actually the calculation of both sides. That I think that President Obama is fooling himself that he thinks he will get Republicans to come in and support new taxes. And I think the Republicans believe that President Obama is going to go past March 1, telling us about how we better look up to the sky because it is going to fall any week now. But find himself – dragging himself back to the negotiation table.

I am not so sure about either scenario. I think that the president has realized Republicans are not going to move by the first. And they are going to put this into a new context next week, which is the budget fight. They are going to be fighting for the end of March. And they are going to tell the public, next week, we are doing what we can to see what we can do to soften the blow of the sequester. We're now dealing with a new amount of money per year that we're allowed to spend, which is going to be lower, and we're going to move on to try to keep the government open, and that will be the rhetoric from the Republican side throughout the month of March.

What you talked about earlier tonight with your guests Senators Toomey and Inhofe about this transfer authority or this flexibility is really the most upsetting part of this. That we are facing the first when Congress has known all along they could have, you know, come up with whatever plan they wanted to use their Congressional authority as their own legislative branch to actually outline the cuts. Now they say when they haven't come to an agreement we can't give in to the president. We just ave to let the chiefs panic over our military readiness, because we can't, we can't agree to let them make their own decisions. I think it's a betrayal of the taxpayer.

BAIER: Charles, it's pretty astonishing when you think about what the senators said on this panel. They had some Democrats very interested and they may still at least privately. But publicly those Democrats are getting a lot of pressure from the White House and from their leadership.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: And I suspect that is why the one Democratic senator you were supposed to have on tonight all of sudden was indisposed. And I think McCain, Graham, and A.B. are right that this is a, sort of a forfeiting by the Congress of its constitutional duties to actually allocate the money to decide where it goes by giving authority to the president.

But let's remember, this is not a failing of the Congress in the abstract. It's a failing of the Senate run by the Democrats that have refused to lift a finger on deciding how to order what things will be cut and what things are less important, to actually have some kind of rational reallocation of these cuts. It's the Senate and the Democrats and the president who have held out for 18 months. The Republicans have been trying again and again two bills in the House, offering for weeks to open negotiations on how to organize, allocate these cuts. No response on behalf of Democrats.

And I think that is where there is an incredible lack of leadership.  I think at this juncture with three days to go, I would sort of respectfully disagree with McCain and Graham and say at this point you have to give the authority to the president even though it's unpleasant, even though it hands him over all of this authority. It's only a one-shot deal.  It's not going to be in perpetuity. But you've got to get something that improves on the across-the-board cuts. And if you did that, then the pain potentially, unless the president and the administration are perverse on this and choose stuff that will hurt purposely, potentially it would be less painful and more doable.

BAIER: As I said at the beginning of the show, Byron, we can tell we're getting closer by the rhetoric and the words chosen. A quick listen to the House speaker and the Senate majority leader today.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, R – OH, HOUSE SPEAKER: We have moved a bill in the House twice. We should not have to move a third bill before the Senate gets off their ass and begins to do something.

SEN. HARRY REID, D – NV, SENATE MAJORITY LEADER: I think he should understand who is sitting on their posterior. We're doing our best here to pass something. The speaker is doing nothing to try to pass anything over there. Let's see what the House comes up with. It's their burden to give us what they are going to do.

(END VIDEO CLIP)

YORK: Well, the two bills that Boehner and the Republicans have been talking about all this time were bills that were passed one last summer and one in December what would have changed the cuts to entitlement spending. It was a complete nonstarter. The president actually threatened to veto it when they brought it up in summer of last year. So that is just not going to happen. And a lot of Republicans are nervous about this giving the president authority to make these cuts not only because it would be giving away a constitutional authority, as Charles said, but also because they believe if they give it to the administration, the cuts will be illusory, they'll be fake, they'll be phony, they won't really happen. And the main appeal to Republicans of the sequester is it's already law, it's going to happen if nothing is done. That is why they're going to do nothing.

BAIER: Next up, the politics of the sequester fight. Stay with us.

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