What's the Debt Debate Really About?

This is a rush transcript from "Hannity," July 27, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: As part of a $20 million campaign aimed at focusing the national debate on the debt and the economy, Karl Rove's Crossroads GPS group, they launched a brand new TV and internet ad today slamming President Obama's spending policies and arguing our nation is quote, "near the breaking point." Let's take a look at this.


ANNOUNCER: America's economy is hanging by a thread. Under the weight of high unemployment. Soaring gas prices. Medicare nearly bankrupt. Reckless spending. A failed stimulus. And a $14 trillion debt, much of it owned by China. We are near the breaking point. Maybe we won't be crushed when our economy snaps, but someone will. It is time to take away President Obama's blank check.


HANNITY: Now, is this not what the great debt debate really boils down to anyway? And since everything President Obama says these days is practically a campaign speech, what are the political implications for him come 2012?

Joining me now with reaction, two GOP senators, South Dakota's John Thune and Alabama's Jeff Sessions. Gentlemen, welcome back.

SEN. JEFF SESSIONS, R-ALA.: Good evening, Sean.

HANNITY: All right. I appreciate. All right. Senator Thune, the Senate Democrats, your colleagues today sent a letter to john Boehner who has been fighting his own caucus, fighting conservatives to try and make it, so the country doesn't default after he passed the Ryan plan and "Cut, Cap and Balance." The president still doesn't have a plan. Now that Harry Reid says, dead on arrival. The president says, he would veto. All 53 Democrats say no. Where do we go from here?

SEN. JOHN THUNE, R-S.D.: The president sure hasn't provided any leadership in this, Sean. And fortunately, John Boehner and the House Republicans are stepping up to the plate again. We've seen that repeatedly, you mentioned it. They passed a budget, they passed it on time, they passed the "Cut, Cap and Balance" bill, sent it to the Senate. Senator Reid tabled it. They wouldn't get a chance to debate it and get an up or down vote on it. And so, the House Republicans are once again assuming the responsibility for dealing with this crisis, dealing with this mess. And I hope that the Senate Democrats will, if the House Republicans figure out a way to pass this thing tomorrow, at least give it an opportunity to be heard in the Senate. The fact that 53 Democrats are already writing a letter against it, and the president saying, he's going to veto it, is not good for, you know, for our prospects coming up with next week being the deadline.

HANNITY: You know, Senator Sessions, with that said, and I had some issues, a lot of issues with John Boehner's plan. I don't trust the 12 members that are going to be appointed, I don't trust cuts coming later. And we had a very fruitful discussion about it on my radio show yesterday. Why should he waste any political capital when they have zero intention of even taking it seriously?

SESSIONS: I think his plan is to produce a trillion dollar cuts which is about what Harry Reid has said he would accept and send it over there. I can't imagine why these Democratic senators would send a letter saying they would reject cuts over 10 years, which is a very modest cut. And remember, the House has already sent a budget that would have reduced spending by $6 trillion. So, they would prefer to do that. But they are trying to put something forward to avoid a debt crisis and already being rejected by the Democrats I think is just unthinkable.

HANNITY: Well, so they did this to "Cut, Cap and Balance." All right. I know we don't have a lot of time. And I'm going to bring up this fairly complicated issue. And I've had Rand Paul on, Connie Mack. Connie Mack is going to be on either tomorrow or Friday. Connie Mack has laid out a plan. Because I like "Cut, Cap and Balance," both of you support "Cut, Cap and Balance" but you didn't have a chance to vote on it. We are now with our baseline budgeting, projected 7.5 percent increase, pretty much as far as the eye can see, correct? Every year, we're going to go up in increased spending about seven, eight percent a year, is that right Senator Thune?

THUNE: Well, I think in the entitlement programs, that probably is right, Sean. And that's why we have to get entitlement reform undertaken.

HANNITY: What about we have the opportunity, we passed a bill that says we're going to live within the 2011 budget. In other words, this year's budget, which is $1.65 trillion that we didn't even take in. And we are going to live within that budget for the next six years and decrease it every year just one percent, one percent. Can you not find a way to manage the deficit and the debt and get our country off risking its AAA bond rating that way?

SESSIONS: Absolutely, we could do that. It would be reasonable. It would be the kind of steady step-by-step process that could lead us to a balanced budget. It won't be easy. That's most significant Sean, than it might appear. But it is doable. And that kind of thing and that kind of thinking is exactly the way we need to be approaching this. The problem is our Senate colleagues and the president want to tax more and spend more, not less. And they are rejecting anything that you send toward them that actually reduces spending. It would change the debt course of America.

HANNITY: Your reaction Senator Thune, and how did we get this deep into the process five days out now, as of tomorrow and the Democrats haven't even presented a plan?

THUNE: It stars with a budget. The Senate Democrats haven't passed a budget since April 29th of 2009. It's been 819 days. That's why we are here.

We've seen this incredible run-up in spending the last couple of years since this president took office. You talked about his economic record. You look at the debt gone up 35 percent, unemployment is up 18 percent, health care cost is up 19 percent, gas prices are up 100 percent --

HANNITY: An 84 percent increase in Obama discretionary spending since he's been president.

THUNE: Exactly, that's what has to stop. That's what we are trying to get bent back down in the right direction. We are doing it against big odds because he's got the bully pulpit in the White House. The Democrats control the Senate. But the House Republicans are doing everything they can to steer this debate and we want in the Senate, we want to be able to have an opportunity to join them and we hope that we will get that chance when the Boehner plan comes our way.

HANNITY: All right, gentlemen, Senators, thank you both for being with us. Appreciate your time.

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