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PIERS MORGAN TONIGHT

House Debate on Fiscal Cliff Bill; Winners and Losers in the Fiscal Deal; Interviews with Reps. Nan Hayworth, Debbie Wasserman Schultz, Steve Israel; Interview with Grover Norquist

Aired January 1, 2013 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


WOLF BLITZER, CNN ANCHOR: Breaking news tonight. You're looking live at Capitol Hill. The House of Representatives. The House expected to vote this hour on the Senate's fiscal cliff bill. And it's not an exaggeration to say that the health of America's economy may hang in the balance right now.

You're going to want to stay right here and see what happens.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer in for Piers Morgan.

This is a real nail-biter we're watching, despite a threat by some Republicans to add an amendment to the bill, an amendment that would have added over $300 billion in spending cuts and would have forced the bill back to the Senate.

The House is now on the verge of simply voting up or down on the Senate bill as it stands. The package would increase taxes on individuals making more than $400,000 a year and couples making more than $450,000 a year. It would also extend unemployment insurance for a year for some two million people.

And that House vote is expected to come this hour. We're watching it very closely.

Let's bring in our senior congressional correspondent Dana Bash on Capitol Hill. She has the very latest on what's going on.

Dana, I take it they started the actual debate, the vote could be fairly soon?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, they have started the debate on the procedural issues, but I just actually am getting an e-mail right now saying that the final vote, it doesn't look like it will happen until much later, until some time between 11:15 and 11:45 Eastern.

So initially we were told in this hour, relatively soon, but it seems to have been pushed back. It looks as though members do want to take the time to debate, to air out their concerns and perhaps their support for this, and so that's why we are, unfortunately, really going to go up to the -- go late into the night just like we did last night. BLITZER: So basically what we're talking about is the exact version that passed the Senate -- overwhelmingly in the middle of the night, 89-8. Here it is. This is the -- this is the actual bill, about 150 pages that now the members of the House of Representatives, Democrats and Republicans, they're considering.

I assume, Dana, that they have the votes between all the Democrats, most of the Democrats, I suspect will vote it -- will vote for it. A lot of Republicans will as well. Although probably not a majority of the majority, as they say. But they probably will have 217 votes necessary to pass this legislation, send it to the president for his signature.

BASH: And there is confidence on both sides of the aisle that that is the case, Wolf, that just like you said, that it's not -- it wouldn't happen with just Democrats, it wouldn't happen with just Republicans. And stop the presses, there will be a bipartisan vote in Congress and in the House, which we don't see a lot of on big, important and divisive issues, but it is because this is something that nobody loves because that's what compromises are, but there certainly seem to be enough House Democrats, enough House Republicans that they're going to come together and vote on this for the simple reason that they understand that this really does matter to Americans because officially, starting today, every American's taxes have gone up.

So they want to correct that for -- as we've seen on press release after press release -- 99 percent of Americans to keep those tax cuts in place.

BLITZER: Is the Speaker John Boehner holding firm to that old rule, the so-called Denny Hastert rule, that you need a majority of the majority in order to bring it up for a vote. If the majority is not there of the Republicans who are the majority in the House, he's not going to bring it up for a vote, or are they discarding that given this current crisis?

BASH: He's never been officially wedded to that majority of the majority idea. That has certainly been his goal in most if not all of the legislation that he's brought to the floor. This and a few others have, you know, tested that goal for sure, but look, this is something that Republican speakers, Hastert included, starting with Hastert, have wanted to do in order to make sure that they have the support from within -- to make sure that there isn't any kind of revolt, that there isn't -- there isn't a question of their leadership.

But even though it has been -- it's not been an easy road for John Boehner, and that is an understatement, I have not detected any real sentiment in the rank-and-file to have anybody but John Boehner as their leader.

And to be honest with you, based on what Boehner has gone through, it's hard to see anybody wanting that job right now.

(LAUGHTER)

BLITZER: It's a tough job indeed. Dana, stand by. Let's go to our White House. Our chief White House correspondent Jessica Yellin is watching.

I assume they're pretty happy over at the White House. It looks like the president is going to get a win out of this.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes, Wolf, this is what they have been waiting for, but they are not breathing a sigh of relief yet because this is not done until it's done. But they have been watching all day, as we have. And this is one time when they're essentially spectators.

Once this hit a snag, once it went over to the House, there was really not much they could do. You know, the vice president was over there this morning talking to -- House Democrats because they knew that ultimately, once it got to the House floor, as Dana pointed out, it would be Democrats who will have to pass it.

And he answered a lot of Democratic questions and concerns there, took some 20 questions, I'm told, for 45 minutes, laid out exactly step by step the process by which he negotiated this and got to this point and really made the case, and I'm told by multiple sources who were in the room that he was very persuasive. And the people here at the very highest levels are very confident that the Democratic votes have been there all day, and they felt they would get here eventually, but it was a grueling process all day long.

And hard for the White House to just sit here and watch it unfold. But the president is here at the White House at work and ready to -- if it's issue a paper statement, that might be it, come out and speak, if that's it, he is here to do it if that's what they decide to do, but yes, this will be a relief here as well once this vote happens -- Wolf.

BLITZER: So there's a possibility that he might actually go before cameras and make a statement assuming it passes the House?

YELLIN: They're not saying that, but he is -- he is here in the building, and this would be a victory. So it would compute that he could potentially speak if the vote is held in the next couple of hours, which it will be. So we're waiting to see whether he speaks or issues a statement. And I'll keep you posted as soon as we know -- Wolf.

BLITZER: So I speak as a former White House correspondent. I take it there's no full lid, as they say, over in the West Wing at the White House, meaning that there's still a possibility that the TV crew are still there?

YELLIN: They are still there. We have a dinner lid, which means everybody -- it's safe to go out and get dinner and nothing's going to happen. If you go out and get dinner, you're not going to miss something, but you can come back and know that there's the potential for something to happen later. So that means it's not all done for the day just yet. And that -- so we're still -- we're not going anywhere, let's put it that way. (LAUGHTER)

BLITZER: I wouldn't be surprised if we see the president one way or another, especially obviously if this thing passes the House of Representatives, he'll come out and thank everyone and then we'll start moving on and at some point he'll then have a signing ceremony, sign it into law and get ready for the next crisis which is not going to be that far down the road.

YELLIN: That's right. I mean, this is a victory for the White House because it will address the tax concern. The president campaigned on this promise to raise taxes on upper income Americans. It is not the same level he campaigned on. He said $250,000 and up, this is $450,000, but still the broad principle is kept.

Now they are going to turn and pivot and fight over how to bring down the nation's deficit. The president will have to battle with the Republicans. He'll make the case that it should be between revenues and spending cuts, and we all know Republicans argue it should not include revenues. And the debt ceiling is now going to hit -- be hit at the same time that this spending delay is hit in February.

So we're going to have another titanic battle just two months from now. The big question is, will the president take a little break and go to Hawaii in between. We'll wait and see -- Wolf.

BLITZER: His family, you know, is still out there. I'm sure he would love to head back to the state where he was born. Let's see what -- let's see what happens in the next couple of hours.

First, though, Jessica, don't go too far away. One House Republican who said reluctant to support the bill, the outgoing Congresswoman Nan Hayworth, a Republican from New York, a member of the House Financial Services Committee, is joining us now.

Congresswoman, you're going to vote which way for this Senate bill?

REP. NAN HAYWORTH (R), NEW YORK: Hi, Wolf. Hey, Wolf, I didn't hear your entire question, I'm sorry.

BLITZER: Are you going to vote in favor of the Senate bill or are you going to vote against it?

HAYWORTH: I'm a very reluctant yes, Wolf, because under these circumstances which exist, this last-minute situation exists because the folks just back behind me in the Senate chamber, Senator Reid, could not get the Senate to act on any of the great bills for the American people we sent before, this is the best we can do given the Senate and the White House sentiment at this point in time.

And it is at least a partial victory for the American people in terms of some tax relief for 99 percent. I'll take that at this point.

BLITZER: Can I assume, Congresswoman, that those Republicans in the House who wanted to have some amendments, some additional spending cuts added to the Senate bill that you simply didn't have the 217 votes you needed to pass that kind of legislation? Is that a correct assumption?

HAYWORTH: I think that's probably a valid assumption, Wolf. And again everybody in the conference, we've had a lot of very thoughtful discussion, very respectful discussion across the range of opinions within what is a strong and mutually supportive conference. So there certainly is tremendous sentiment within the conference to provide more relief from spending.

It is the spending that has gotten us into this predicament. And it does need to stop, but this -- I think we have concluded that this particular bill will concentrate on the tax relief to the fullest extent we can provide it, and we will tackle the spending issue with all force starting tomorrow.

BLITZER: And so you assume like I do that it will pass the House of Representatives, a bipartisan majority, more than 217 votes and it will go to the president for his signature perhaps as early as tomorrow?

HAYWORTH: That's what I anticipate, Wolf, and I certainly will be glad to get this particular issue settled and now it's on to tackling that hideous problem that we have and we owe it to the American people to do everything we can. The president needs to lead on this. We need to have the right spending plan, the right kind of controls for the present, for the midterm and for the future.

BLITZER: Congresswoman, thanks very much for coming in. Good luck to you down the road as well.

HAYWORTH: Thank you. Happy new year.

BLITZER: Going -- thank you. Happy new year to you, too.

Going over the fiscal cliff isn't just a problem for the American economy. Global markets are also watching what's going on.

Let's bring in CNN's Ali Velshi.

Ali, what a difference a few hours makes. It now looks like the Senate-passed version will pass the House. The president will sign it into law. The fiscal cliff will be history.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Things have turned upside down about four times in the last 24 hours, 24 hours ago you and I were talking about how we have faith in humanity, and then everything turned upside down.

Listen, I'm keeping an eye on international markets. U.S. markets will open in about 24 hours from now, 9:30 a.m. Eastern Time, but Asian markets are open. Tokyo won't open. It's got a holiday for a couple of days, but we've seen trading in Hong Kong and Seoul open. And by the way they're both up a little bit because everybody is doing what we're doing. They think this seems hopeful. If markets had opened six hours ago, they'd probably be down thinking now what's going to happen? We're going to go over the fiscal cliff. But at the moment it looks hopeful that the U.S. will not go over the fiscal cliff if everything that you've just heard from Dana and Jessica comes to pass. So for the moment international markets are cautious. They are trading, you know, just marginally higher, nobody's all too worried just yet. And of course they've got eight more hours to trade. So we're going to be keeping a very, very close eye on this.

But yes, this will be quite dangerous for the global economy because of the major economies out there, America is growing the fastest. China and India are obviously growing more than two or three times the speed of the American economy, but they are just not as big. Of the major economies America is the one holding things up while Europe is still getting its act together. So a whole lot of international concern on this right now.

And frankly, Wolf, if they hadn't done this vote tonight, which were -- now we're thinking might happen sometime within the next two hours, you might see a very, very strong reaction from Wall Street at 9:30 in the morning.

BLITZER: We'll be watching it closely with you. Ali, thanks very much. Our viewers may be wondering who that man speaking on the floor of the House of Representatives is right now. We'll show the picture. That's David Dreier. He's the chairman of the House Rules Committee. The Republican congressman from California. He's getting ready to leave Congress.

This is one -- going to be one of his last acts in this current 112th Congress. So David Dreier, a veteran member of the House. He's winding up with a big bang. He supports this fiscal cliff Senate version and he's making that clear in his remarks.

We have much more on the breaking news when we come back. The last man you'd think who would be in favor of the Senate's plan, the anti- tax crusader Grover Norquist. There he is. He'll join us. When we come back.

(COMMERCIAL BREAK)

BLITZER: We're following the breaking news. We're awaiting a historic vote on the floor of the House of Representatives. They're about to take up the Senate-passed version of the fiscal cliff legislation that passed overwhelmingly in the Senate last night 89-8 in favor, 40 Republicans voting in favor, including Mitch McConnell, the Senate Republican leader.

Let's discuss what's about to happen on the floor of the House.

Joining us now Congresswoman Debbie Wasserman Schultz of Florida. She's the chair of the Democratic National Committee as well. She's got two hats. She's a very busy lady.

Congresswoman, thanks very much for coming in.

REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: You're welcome. BLITZER: How many Democrats -- how many Democrats do you think will vote in favor of this Senate-passed version?

WASSERMAN SCHULTZ: Well, I think it's hard to say. We've done a whip count. And I think that we will have -- ultimately we have 193, 192 Democrats currently serving in the House, we have one open seat. I would say that we would have upwards of 150 members voting for the -- for the bill very likely.

So we've got to make sure we protect the middle class. This deal, although not perfect, makes sure that taxes don't go up on 98 percent of Americans and 97 percent of small businesses. And it's a good first step towards what should be ultimately a balanced deficit reduction package.

BLITZER: That one empty Democratic seat is Jesse Jackson, Jr. of Chicago.

WASSERMAN SCHULTZ: Right.

BLITZER: That means that you don't need 218 votes to pass it, you need 217 votes to pass it. Do you have any doubt that this legislation will be passed tonight?

WASSERMAN SCHULTZ: Well, I'm pretty confident that the legislation is going to pass, what I'm hopeful is, really, actually anyone watching this, Wolf, should have just taken out some stock in Dramamine because the rollercoaster ride that has resulted from us getting to this process really has been unfortunate and unnecessary but we're here.

I'm glad to see that Speaker Boehner has put aside his requirements that they put a bill on the floor with the majority of the majority and that we can see just exactly what a majority of the House does when it comes to making sure that we avoid tax increases on the middle class and giving some certainty to the middle class families that really need it going into this new year.

BLITZER: And what do you say to the progressives, those liberals in the Democratic caucus and some other outside groups who say this is a bad deal for the United States? The president capitulated, he caved, he went up to $450,000 when he had campaigned on $250,000 being the limit for no new taxes, if you will? What do you say to those colleagues of yours who don't like this deal?

WASSERMAN SCHULTZ: Well, I'm a progressive. I represent a progressive district. So I say to them don't let the perfect be the enemy of the good. There are things in this deal that I don't like. We have been here before. We've been saying all along that a balanced deal is going to mean that we're going to -- we'll be supporting things that not all of us really love, but my way or the highway politics is not the right way to go. That's what we've been criticizing Republicans for.

And so I think this is a good deal. We get the tax rate increase for the first time in more than 20 years, getting Republicans to the table to agree to that on more than -- you know, people making more than $450,000 a year. We have extensions of the unemployment benefits for two million people. We have extensions of the employment opportunity tax credit. That's more higher education opportunities for young people. The child care tax credit, the earned income tax credit. We have a permanent fix for the AMT which is another big tax break for middle class families.

This is a good deal. It's not perfect, but it's a good down payment on what should be the work that we need to do to finish the job on balanced approach to deficit reduction.

BLITZER: Debbie Wasserman Schultz, the congresswoman from South Florida. Thanks very much for coming in.

WASSERMAN SCHULTZ: Thank you, Wolf.

BLITZER: Let's get a different reaction right now. Joining us a man you'd never think would have something good to say about tonight's bill, the anti-tax crusader Grover Norquist, president of Americans for Tax Reform.

But you agree, Grover, with Debbie Wasserman Schultz, if you were a member of the House or the Senate, you'd be voting for this legislation as well?

GROVER NORQUIST, PRESIDENT, AMERICANS FOR TAX REFORM: Yes. Keep in mind how much of a treat this is for the modern Democratic Party. The Democrats have spent 12 years attacking the 2001-2003 Bush tax cuts. They all voted against it. Obama attacked it regularly. Now they're out there helping to preserve about 84 percent of those tax cuts and making them permanent.

The Republicans and the taxpayers in this country have lived with a Damocles sword over their head because the Democrats so hated these tax cuts for the middle class and everybody else, that they made them temporary. And they ended several times. Two years ago Obama let it go out for another two years. And now we're getting permanency for about 98, 99 percent of Americans with the Bush tax cuts and Obama's presidential campaign in 2012 changed his promise from 2008.

2008 he'd never raise any tax on anyone who earned less than $200,000. 2012 he said he wouldn't raise income taxes on anyone earning less than $200,000 this year, meaning 2013. He had only promised people he would protect the middle class from income taxes for 2013.

What the Republicans have won with this fight is permanent protection for most Americans on those taxes.

BLITZER: But the reason that a lot of these conservative Tea Party Republican types voted against it or are not going to vote for it tonight and they don't like it is because for the first time Republicans in effect are going along with a tax increase, a rate increase of 35 percent to 39.6 percent, 4.6 percent tax rate increase for those individuals making more than $400,000 a year and families making more than $450,000 a year. So in effect they're going along with a tax hike. NORQUIST: No, absolutely not. They -- the Republicans in the House and the Senate have made it very clear they wanted to extend those tax cuts permanently for everybody. They voted that way in 2001, 2003, again several times this last year. The Republicans are on record, all of them, that all of these tax cuts should be extended -- this is Obama's pound of flesh because he won the presidential election.

He's the one insisting that taxes go up. They're going to take $500 billion out of savings in the United States over the next decade and give it to the federal government. This is not helpful to the economy, and it will hurt the economy. But remember Obama is not just raising taxes on the rich right now. We're about to enter a decade where a trillion-dollars is going to be taken away from the American people in higher taxes to pay for Obamacare.

This was passed only by Democrats. It is entirely a Democrat tax increase. And it includes many taxes that directly hit middle income and lower income people. So Obama's tax increase is not just the top tax rates. It's people -- if you have bad health problems and you spend more than 7.5 percent of your adjusted gross income on out-of- pocket health costs, you used to be able to deduct anything above that.

Thanks to Obama's law, Obamacare, that's now 10 percent. So $2 million to $3 million will be taken out of people average income $53,000 a year, who are lower income, middle income and sick. They're going to be paying taxes for Obamacare. There's an avalanche of Obama tax increases coming next year.

BLITZER: But -- I just want to make sure -- I just want to point out, Grover Norquist, though, having said all that and everything you said, you are giving cover to those Republicans who will vote in favor of the Senate legislation in the next hour or two?

NORQUIST: They're not -- they're not voting for a tax increase, they're voting to save tax cuts for as many people as they can over Obama's objections.

BLITZER: All right. Grover Norquist would be voting with the president, would be voting with Debbie Wasserman Schultz if in fact he were a member of the House of Representatives.

Grover, thanks very much.

And by the way, I want to point out that that roll call that's going on right now, and you see it up -- we'll put it up on the screen and show you the roll call that's going on. This is a procedural vote on a resolution to go forward and begin the actual debate before the official roll call takes place in the next couple hours on the Senate language, the Senate version that passed last night overwhelmingly, but this is just a procedural vote in advance of the real vote that's coming up.

I don't want our viewers to be confused when they see the yays and the nays, the present, not voting -- that's what's going on right now. We have a lot to follow on the breaking news. Up next, I'll speak with a key Democrat who says House Republicans right now -- this is what he says. House Republicans are in a state of chaos.

(COMMERCIAL BREAK)

BLITZER: We're awaiting a vote on the floor of the House of Representatives on the fiscal cliff bill, a vote that could come some time after the 11:00 p.m. Eastern hour tonight.

Joining us now is New York Congressman Steve Israel. He's the Democratic chairman of the Democratic Congressional Campaign Committee.

Congressman, thanks very much for coming in.

REP. STEVE ISRAEL (D), NEW YORK: Sure, Wolf, good to be with you.

BLITZER: Yes, I assume you're in favor of this Senate-passed language?

ISRAEL: Oh, I'm going to vote for it. There are things in the bill that I don't like. But unlike Republican, I am willing to compromise. I'm willing to inject some pragmatism and some consensus into this process rather than obstruction it every step of the way.

This day has been like a new year's day television marathon of the Congress of chronic chaos with roller coasters and twists and turns and fancy footwork and high drama. It's unnecessary. The American people deserve compromise; they deserve pragmatism. At the end of the day, Wolf, Democrats will provide the votes necessary to protect the middle class, pass this bill, move us forward.

BLITZER: You agree with Debbie Wasserman Schultz, about 150 Democrat will vote in favor? Is that the number you're hearing?

ISRAEL: Well, I'm interested in seeing how many votes the Republicans are going to provide. After all, they are in the majority. They do have a responsibility and accountability to the American people for governing. I want to see how many votes they provide.

But at the end of the day, it will be Democrats. Enough Democrats will vote on this in order to rescue the middle class from this cliff and move the country forward. We provided some adult leadership and adult supervision to a process that was essentially run by children up to now.

BLITZER: You say children, you're talking about the Speaker of the House and the Majority Leader?

ISRAEL: I'm talking about Tea Party Republicans who continue to throw temper tantrums and delay this and refuse to move forward in the spirit of compromise. Every time we move towards them, they moved away from us. At a certain point, you have to be able to take yes for an answer, especially when we're giving you what you wanted. BLITZER: You are making, at least for 98 percent of the American people or so, those Bush era tax cuts, the tax cuts that went into effect in 2001, 2003, you're making them permanent now. And that's something that Republicans always wanted. So you're giving them, in effect, that because the Democrats by and large almost unanimously back in 2001, 2003, opposed those tax cuts.

You know there's going to be another huge battle in the next month or two when raising that raising the debt ceiling comes up. And the Republicans think they're going to have the upper hand in that battle.

ISRAEL: Well, look, I'm not interested in who has the upper hand. I'm interested in doing what needs to be done to protect the middle class, to strengthen, improve and reform Medicare and Social Security. And frankly, as the Chairman of the Democratic Congressional Campaign Committee, I'll take a battle where the Republicans continue to protect special interests, oil corporation subsidies, big farm subsidies instead of the middle class, if that's the fight they want.

I hope they've learned their lesson from today and the past several weeks that compromise and cooperation and pragmatism works and that obstructionism, it doesn't work for them, it doesn't work for the middle class, it doesn't work for the American people. Let's get to solutions.

BLITZER: You think the Republican leadership, the speaker, the majority leader, some of the other leaders, they're all on the same page or are they fighting amongst themselves?

ISRAEL: Oh, I think a good part of this has had nothing to do with an economic strategy. It's been a political strategy by House Republicans. This has been internecine warfare by Republicans. They've put their own partisan interests and parochial interests ahead of those of the interests of the middle class and the American people. We could have done this a week ago. And the proof positive is when, after rejecting the president's compromise, which is what we're very close to tonight, Speaker Boehner put a bill on the floor to create a $1 million trigger for tax increases, and they wouldn't even pass that.

So this is more about internal Republican dynamics than it is moving the economy forward. Thankfully, we have a new Congress coming in on Thursday, fewer Tea Party extremists, and I hope that that bodes well for the American people and the new Congress. Because this Congress that we've had up to now under this Republican leadership just has not worked.

BLITZER: Steve Israel, we'll see you in the new Congress starting on Thursday, as well. Thanks for joining us.

ISRAEL: Thanks, Wolf.

BLITZER: Let's bring in CNN contributor and "New York Times" columnist Ross Douthat right now. Douthat, I should say. Ross, who's the big winner and who's the big loser in this fight? ROSS DOUTHAT, CNN CONTRIBUTOR: Well, I mean overall the big loser, sir, obviously, are the Republicans, because they have to swallow tax increases that they didn't want to swallow. But we've known that that was going to happen ever since Barack Obama was re-elected President of the United States.

So given that context, given the fact taxes were going up no matter what, I think that Republicans did a decent job of negotiating the president and Senate Democrats upward on the threshold for tax increases, and I think that they can walk away tonight thinking, well, if we were going to lose, you know, we lost a little -- you know, we didn't lose as badly as we could have.

I was listening to the Congressman. Obviously he's right that in many ways the Republican Party is dysfunctional right now. It's a defeated party. It lost the last election. It doesn't really know exactly what it stands for. It's having to swallow policy changes it didn't want to accept. But given that dysfunction, I think you could actually make a case that John Boehner has handled things fairly cleverly over the past week or so, dealing with a revolt from his right, sort of passing the buck over to the Senate, letting the Senate negotiate a bill and then letting his own membership basically spend the afternoon venting and then sort of coming around to what looks like will actually be the passage of the compromise that averts the scary fiscal cliff that everybody's been talking about for weeks now.

So you can make a case that in terms of sort of managing the politics and sort of the internal dynamics of the House and Senate, the Republican leadership has done the best job they could have.

BLITZER: Were you surprised the president was willing to go up to $450,000 from $250,000, which he had spoken of for months and months and months during the campaign?

DOUTHAT: Well, I wasn't completely surprised because there are a lot of Democrats particularly in the Senate, particularly representing wealthy states like New York, Chuck Schumer, for example, who always kind of wanted that threshold to go up a bit. Americans making between, say, $100,000 and $350,000 a year living in New York, San Francisco, Los Angeles and so on, those are actually key Democratic constituents, key Democratic funders and so on. And so I think there's always been a bit for resistant to tax increases among Democratic politicians than you'd sometimes hear.

And I think that could be a problem for the Democrats down the line because, in the end, if you're going to preserve the government we have in the form that Democrats like, they're going to have to raise taxes on somebody besides the people they're raising taxes on tonight.

BLITZER: Hey, Ross, thanks very much for coming in.

DOUTHAT: Sure, thanks so much, Wolf.

BLITZER: And coming up, I'll ask my panel of political all-stars who comes out on top in this messy chapter of American politics.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. DARRELL ISSA (R), CALIFORNIA: The CBO has already said 3.967, in other words, $4 trillion, will be added to the debt over ten years with this tax cut unless we do some spending cuts to help offset it. Right now the president's still in a spending mood. We need to get him in a savings mood.

(END VIDEO CLIP)

BLITZER: That's Republican Congressman Darrell Issa of California. He's hammering home the Republican message of spending cuts above all else.

But let's talk about what's going on, the breaking news we're following. Joining us now is Ben Smith, editor-in-chief of BuzzFeed, also Carol Roth, radio host, former investment banker, and best- selling author. Maria Cardona, the Democratic strategist and CNN contributor, and of course, Ali Velshi, our chief business correspondent.

What do you make of this deal that looks like it's going to be a deal, the House looks like it's going to follow the Senate's lead? Carol, let me go to you first and tell us what you think. God deal or bad deal?

CAROL ROTH, BUSINESS STRATEGIST AND NY TIMES BEST-SELLING AUTHOR: Well, I guess it depends on for who. For the American people, I think that this is a mediocre deal at best, Wolf, because it doesn't have a solution. I have a very hard time throwing a parade for a Congress that took 13 months to get a mediocre solution that doesn't address spending, doesn't address the debt, raises taxes not only on the wealthy, but I keep hearing it's not raising taxes on the middle class. That's not true. The payroll tax cut is expiring. So taxes are going up for everybody. And we're going to end up in a situation where we end up fighting over the debt ceiling and sequestration in two months. So maybe the market makes out OK but the American people didn't make out OK with this.

BLITZER: Yes, but that payroll tax cut was only implemented as stimulus for a year. It was also seen as a temporary measure. Neither Republicans nor Democrats, Carol, were really pushing to keep it going.

ROTH: And I agree.

BLITZER: Yes, I want Maria to -- yes, go ahead.

ROTH: I was going to say that I agree. I think it's a good thing. But I do think that we should be honest and not let the political rhetoric get in the way and be very, very clear that this is a tax hike on everybody.

BLITZER: Go ahead, Maria. You want to respond. MARIA CARDONA, CNN CONTRIBUTOR: Sure, absolutely. It is not a tax hike on everybody. Yes, people's paychecks will go up a little bit but to your point, Wolf, we knew from the very beginning when we had the payroll tax cut that that was going to be temporary.

This is a very good deal for the American people because it avoids huge tax hikes for 98 percent of the American people, American families who are hurting, 97 percent of small businesses who are also hurting. That is a very good thing for the majority of the American people tonight who now know that their taxes are not going to go up.

For the long term, I agree, and the president agrees, and Democrats agree, a lot more works needs to be done. Nobody deserves a parade tonight. But we can at least sleep soundly that our taxes and the majority of the taxes for the American people are not going to go up.

We do need to deal with spending. That was always going to be part of a grand bargain. And let's remember, the Speaker Boehner is the one who has actually walked away more than three times from a grand bargain with this president that would have dealt with trillions in spending. Let's hope that we can get to dealing with spending and job creation.

BLITZER: Who is the big political winner tonight, Ben?

BEN SMITH, EDITOR-IN-CHIEF, BUZZFEED: I think President Obama played a much stronger hand and won with it in this sort of shoving match over -- particularly forcing Republicans to go ahead and raise taxes on the rich. He won that. What he didn't get which he wanted was kind of a clean legislative slate for the year. A big deal today and then moving forward other legislative priorities. Instead, he's going begin his second term fighting over taxing and spending and the same things they've been fighting over for the last two years.

BLITZER: There's going to be a whole bunch of fights, Ali, coming up, including raising the debt ceiling in February or March. The president says he's not playing that game with Republicans anymore. But what can he do? You got to pass legislation in the Senate and the House to raise the debt ceiling otherwise the country, at least technically, goes into default.

VELSHI: Yes, the president's got to be careful about not saying things he's not going to do that he gets forced to do a corner on. The debt ceiling is absolutely one of those things. You and I have discussed this many times, Wolf. The debt ceiling is not a sensible way of dealing with borrowing. There are other ways to do it. Other countries have much more effective ways to of doing this. But the bottom line is, if he doesn't get an agreement on raising the debt ceiling, which we, by the way, hit on the 31st of December, the treasury can play around with this for a couple of weeks, about $200 billion, they can move things around the board -- but if he doesn't get that increase, the government could come the a shutdown and we could be sitting around one night at 9:45 like we are right now talking about that.

So the president is going to have to deal with that. I call that that the Valentine's Day fiscal cliff, the Valentine's Day cliff. And then we're going to have the St. Patrick's Day cliff because they've kicked the sequester two months down. And then we'll have a budget fight.

So there are going to be three fights that are going to look very much like this one. So for anybody who thinks they lost any battles tonight, we're going to have three more battles like this. There are no particular winners in this. We have status quo and, in fact, with that payroll tax holiday having expired, everybody who works is going see a little less money in their paychecks. So no real winners. It's just who lost less today.

BLITZER: If you like this fight, get ready. There are going to be two, three, four more fight in the next few weeks and months that are going to be very similar. Some people calling it the new normal here in Washington.

All right, everybody stay put. We have a lot more to discuss. When we come back, I'm going to ask all of you what you think this big battle means for the Speaker of the House, John Boehner.

(COMMERCIAL BREAK)

BLITZER: All right, they just passed the rule on the floor of the House of Representatives. So now the real debate on the Senate-passed legislation can begin. There you see Senator Levin, the Congressman from Michigan, who's speaking right now. He's a Democrat. Carl Levin's brother. Carl Levin the Senator; Sandra Levin, the member of the House of Representatives.

We're back with our excellent panel. We expect the final vote, by the way, in about an hour or so from now, maybe a little bit more than an hour from now.

But let talk about political fallout. Assuming it passes, Ben Smith, what do you think the future for John Boehner, the speaker, is?

SMITH: I think he was just overheard on the floor of the House calling tonight a nightmare for him. I think it's been that kind of day. But there's no challenge to his speakership. I don't think anybody wants the job. I think some of them kind of like the idea of a weakened speaker, which is what he is. I mean, his break with tradition to allow this to go forward not with a majority of Republicans, but with a majority of all members, including Democrats, was a sign of weakness. I mean, that's the reason that Republicans tried to keep it -- to keep legislation with a Republican majority, has been to show the speaker's control of his caucus. And that seemed a little frayed tonight.

BLITZER: My own sense, Carol, is that John Boehner is a patriot and he thinks this vote is actually very good for the country right now. He doesn't love it, doesn't love everything about; the president doesn't love necessarily every aspect of it, but he recognizes that a vote against the Senate bill would be a disaster for millions and millions of Americans, whose taxes would go up rather dramatically. It could send the economy into a recession right now.

So I think the speaker is doing what he thinks is the right thing to do, even if a majority of Republicans don't agree with him.

ROTH: Right, I think there are different ways you could have negotiated this and this is the olive branch strategy. And I think what it comes down to is is it is the right strategy? However, it's unfortunate again that we're here 13 months later and that Boehner/Obama couldn't get this done; Boehner/Reid couldn't get this done. We had to bring in Joe Biden to get this done.

I do agree with what Ben said, though. I'm not sure anybody else wants the job, so I think the job is safe for Boehner. But I don't think this is something that really bodes well for his effectiveness, at least within the party's thought process.

BLITZER: I think one of the win winners, Maria, is Joe Biden, the vice president of the United States. Those 36 years he spent in the Senate; he's the president of the Senate. Clearly, he's had a huge impact in getting this deal done.

CARDONA: I completely agree, Wolf. I think Joe Biden has done a spectacular job of bringing people together, but I will also say this is a win for Senator McConnell, because he was part of that team that made this deal come together, and he assured that the majority of Republicans in the Senate were going to support this deal.

I mean, let's think about that. Who knew that, in this divided Congress, that we were able -- that we were going to be able to get a deal on the fiscal cliff, where in the Senate it was going to pass with the majority of Republican support. And Mitch McConnell, I actually -- my hat goes off to him because I don't think we expected that that was going to be the case. So I think Vice President Biden, as well as Senator McConnell, are big winners in this.

BLITZER: Say what you will, Ali, but it's nice to see so bipartisanship in Washington last night on the Senate side, and now we're going to see some dramatic bipartisan in the House of Representatives.

VELSHI: I'm very impressed. Like I said, economically, there are no big winners. Everybody is a bit of a loser. But politically, you're seeing the brighter side of most of these people.

The one very interesting story is a guy that you and I have spoken to several times in the last couple days, Grover Norquist. Grover Norquist has absolutely been a loser in this equation because he made everybody swear they would never, ever, under any circumstances ever, no matter what happened, if there was an asteroid coming to hit Earth, raise taxes and he signed off on this. He said it's OK. He told you himself he would support this plan. That's very strange.

I think Grover Norquist is trying to save face here, but Grover Norquist and about 50 hardliners in the Republican Party have had to give up something that they never wanted to give up. But everybody else has come out smelling a little be more like roses. They're all sounding like compromisers all of a sudden.

BLITZER: What does this say for the Tea Party movement then? . SMITH: I mean, that's the first I've heard of the Tea Party movement for quite a while, Wolf. It's -- this was a decision by Boehner to go around the right side of his party. I mean, you know, they're not going away. Conservative Republicans in House, particularly because of gerrymandering, have very safe seats; they're very conservative, going to be there for a long time. But there's certainly been a rebalancing after the election, a shift kind of away from that power base.

BLITZER: Hey guys, thanks very much for joining us. An excellent, excellent discussion. Ali's going to be back at 11:00 p.m. Eastern. He's filling in for Erin Burnett tonight.

There will be a live "ERIN BURNETT OUTFRONT" 11:00 p.m. Eastern. We're watching this debate. Anderson Cooper coming up at the top of the hour. We're not going away. History unfolding on the floor of the House of Representatives right now. Stay with us. Much more after this.

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REP. NANCY PELOSI (D-CA), MINORITY LEADER: We appreciate the leadership of the Republican and Democratic leaders in the Senate -

BLITZER: All right, there she is, Nancy Pelosi, the Democratic leader in the House of Representatives. She supports vote in favor of the Senate-passed legislation. She's making that clear on the floor of the House. We're getting ready for a vote within the next hour or so.

Dana Bash, arguably the hardest working woman in televisionnews right now, is joining us once again from the United States Capitol.

All right, Dana, give us the latest. Around 11:00, 11:15, that's when roll call will take place?

BASH: We just got a little bit of good news that it might happen in the 10:00 hour, a little bit earlier. Perhaps that just means that members are as tired as everybody else and they're willing to give back debate time to vote.

But one thing that's happened since you and I last talked is you mentioned there was a vote on the rule, which is a procedural vote that needs to happen before the actual legislation. What was significant about that is that the vote was 408-10. That almost never happens around here. That means that it was a procedural vote that got big bipartisan vote, big Democratic votes. And so that really is a signal about how this is going to be, not necessarily the final vote, but a signal about how much Democrats want to be a part of this final compromise.

BLITZER: Good to see bipartisanship, Dana, breaking out on both sides of Capitol Hill. Last night in the Senate, now in the House of Representatives. It puts a smile on my face, puts a smile on your face. I assume once the House passes it tonight, and I think they will, the president will sign it into law right away. We'll see if he then heads out to Hawaii to meet up with his family. Thanks very much to everyone for joining us. "ANDERSON COOPER 360" starts right now.