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CROSSFIRE

Should Congress Kick Problems Down the Road?

Aired December 9, 2013 - 18:28   ET

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


(BEGIN VIDEO CLIP)

ANNOUNCER: Tonight on CROSSFIRE, should the government keep paying people who are out of work?

UNIDENTIFIED MALE: These aren't people that are -- just don't want to work. These are people that are looking for jobs.

ANNOUNCER: Is it worth shutting down the government if they can't make a deal? All 50 states are waiting, and there isn't much time.

On the left, Van Jones. On the right Newt Gingrich.

In the CROSSFIRE, Neil Abercrombie, the Democratic governor of Hawaii, and Tim Pawlenty, the Republican former governor of Minnesota. Should Congress fix our problems now? Or kick the can down the road? Tonight on CROSSFIRE.

(END VIDEO CLIP)

NEWT GINGRICH, CO-HOST: Welcome to CROSSFIRE. I'm Newt Gingrich on the right.

VAN JONES, CO-HOST: And I'm Van Jones on the right.

In the CROSSFIRE tonight, we've got a current governor and a former governor from different political parties.

Congress has tons to do. Time is running out. And for 1.3 million Americans who are seeking work, nothing is more important than extending those unemployment benefits. Here we are, two weeks before Christmas, and Republicans want to pull the plug on them, including 20,000 veterans.

Here's Senator Rand Paul over the weekend. This guy would make Scrooge very proud.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: You're causing them to become this part of perpetual unemployed group in our economy. And it really -- while it seems good, it actually does a disservice to the people you're trying to help.

(END VIDEO CLIP) JONES: Uh, no. Welcome to the real world, Senator, where there are still three job applicants for every one job out there. Cutting the lifeline for active job seekers is not going to magically create a bunch of new job positions, but it will push many of our neighbors over the edge.

Cutting unemployment benefits right before Christmas? That is a fine ho ho ho, Newt Gingrich, for the Republican Party.

GINGRICH: Well, let me just -- let me just say, first of all, and we'll get back to this, that I believe there are things we could do to dramatically improve the impact of unemployment compensation. To actually prepare people for getting to work and having a better job in the future.

But tonight in the CROSSFIRE, we have Hawaii's Democratic governor, Neil Abercrombie, an old colleague of mine, and former Minnesota Republican Governor Tim Pawlenty, in a different life another colleague of mine. We're delighted to have both of you here this evening.

Governor Abercrombie, let me just ask you. Economists like Larry Summers, who was an adviser both to President Obama and, before that, to President Clinton, have concluded that long-term unemployment compensation actually reduces participation in the work force and makes it harder to get the economy to grow. What's your reaction to that?

GOV. NEIL ABERCROMBIE (D), HAWAII: Well, my first reaction is a lot of economists have jobs telling other people why they don't have one. So I'm not particularly impressed by that.

And I would prefer to refer back to, Mr. Speaker, to what you started out with. We should be about job creation. We can solve the question of unemployment if we move, as we have done in Hawaii, not just to create jobs.

Our unemployment rate on the island of Oahu, where the majority of Hawaii's population is, was 3.8 percent in -- in August. We've brought that down from the high levels that it was at before, the 6- plus, 7 percent. The way we did that is that we invested in infrastructure. We made investments in infrastructure, highways and airports that created top paying jobs for people for people in circumstances in which there was a direct public benefit from the investment. So I'm for job creation. That will get rid of the unemployment.

GINGRICH: Let me just give you one example that's a real case study. This summer in North Carolina, where they ended up actually not having extended unemployment compensation in the middle of the year, and all of a sudden you had a dramatic drop. They dropped almost a full percentage point unemployment -- you can see it in the chart -- where they dropped almost a full percentage point in three months, because people went out and they looked for jobs. Isn't -- and that sort of matches other state-by-state comparisons. You can't do that with Hawaii, because there's no state within 2,100 miles. But if you go around and look at the rest of the country, you look at state-by-state comparisons, you do see that the state that doesn't extend unemployment often has a dramatically lower unemployment rate.

ABERCROMBIE: Why should we be concentrating on how to keep people from being able to have an income that immediately goes into the economy. It's not as if someone receiving unemployment benefits is going to invest in long-term real-estate return or buying paintings for -- hoping that the equity will suddenly appear and -- no, they put the money directly into the economy. They're buying food; they're paying bills. I mean--

JONES: I want to ask you about this, Governor. You've got some economists who say that it has a negative effect. Larry Summers changed his mind, though. He now says that unemployment insurance is good for the economy, because it actually has people going and buying stuff from the grocery. It keeps the economy going. Some people say if you cut the unemployment benefits, you lose a quarter of a million jobs, what is Republicans -- you guys just think folks are sitting around? They're just lazy? All hundred -- you've got 1.3 million Americans are just lazy?

TIM PAWLENTY (R), FORMER GOVERNOR OF MINNESOTA: Of course not, Van. You know better than that.

JONES: Then tell me why you want to take this lifeline away from them.

PAWLENTY: Well, let's not lump all Republicans into a monolith in one group. You quoted Rand Paul earlier about his views on this, but let's also Remember that Speaker Boehner is saying, "Look, I'm open to an extension as part of a budget deal or a debt ceiling deal."

On the other side, the Democrats, you had Dick Durbin say, "Look, we don't necessarily have to have this just our way to get a budget deal."

So point one is let's not let this issue upset a budget deal or a debt-ceiling deal, which we need to keep the economy moving more broadly. And then within that, is there room for compromise in this? Of course. And when it was 99 weeks, it's different than when it's now, say, 47, so not at the super-turbocharged level. Now it's just at the enhanced level.

But in terms of the effects, Newt mentioned earlier, well, there are some states that didn't extend the benefits, so there's a difference between correlation and causation. Because those states were probably mostly red states, frankly, with probably better economies to begin with, perhaps like Texas, for example, or Kansas, South Dakota, North Dakota, with other things going on.

So it's hard to separate correlation and causation, but look, if you have somebody out in the job market for two years, they're partially incentivized to stay there, and they walk in your door and say, "I've been unemployed for two years."

Newt walks in, he's been unemployed for three months, which person are you going to look at more seriously, if that were the only fact?

JONES: Well, I still don't understand the argument, though. If you don't believe that you've got 1.3 lazy people out there, if you know -- and I do know people who are in this situation. They're actively trying to find the jobs. The jobs aren't there yet.

What's the moral case for further punishing them? What's the economic case for cutting out a quarter of a million jobs that they're supporting? I just don't understand what you guys are trying to do.

PAWLENTY: I've been a supporter in Minnesota for some extension, but keep in mind there's the basic, there's the enhanced and then there's the turbocharged. When you get to the turbocharged level and say, "Let's keep it at the turbocharged level for two years"?

A lot of people would say, "Wait a minute now." If have an incentive for somebody or a window for somebody to say not just benefit for a year, year and a half but two years, to the extent some of those folks are out of the job market for two years, it may be a disincentive and it may begin to send the signal to the market that they're unemployable.

But to your point, not all Republicans are against this, and I think it should be extended as part of the budget.

ABERCROMBIE: The budget that the speaker was -- first put on the table, because I think we're on the same wavelength here, he's a big supporter of training, and he doesn't mean that just for a rhetorical gesture. And this goes to the point that was -- that both of you made about long-term unemployment. Who are you going to take a look at: somebody three months versus three years? That's where the job creation part comes in.

If we're -- and government should be a stimulus to that. We're in the business of government. People say run government like a business. No, government is a business.

And in terms of infrastructure and meeting the common needs of the community, the government makes investments. If we do that, then the person who's been out of work for a year, say the accountant, who's 55 years old and got let go from perhaps a smaller business; they couldn't keep that accountant. But if we're coming into a situation where, as we're doing in Hawaii, airport expansion, because we want people to have a wonderful experience coming in. Working with the airline committee, with private enterprise there, we can put those people to work.

JONES: Do you have a problem with this stuff?

GINGRICH: This is my question. I would be much more interested in extending unemployment if they would attach to it a provision that every state could experiment with finding ways to say, if we're going to give you money, then you need to be either in an apprenticeship program or a job training program or something, so we're using it as a work-training program, not as a way to warehouse people. ABERCROMBIE: Those thinks are not antithetical at all. We're doing it right now. We're offering that to people right now, and people are taking advantage. As I indicated. We in our own little state, and I'm sure Governor Pawlenty has done the same thing in Minnesota.

We zero in on the -- on infrastructure that meets the common purpose, and we put people to work. And in the process, then, we have training programs at the county, at the state level, which often -- often are with a federal program, right?

PAWLENTY: There's something else that should be said here. Newt raised it, but I think we all could agree on at least this point. The GAO said a couple of years ago that the federal -- not the state, your state, the federal workforce training programs and retraining programs are an absolute mess, organizationally from a managerial standpoint, from a financial standpoint, and they need to be overhauled, streamlined and made more effective. And since that time, not much has been done. And that's unfortunate, particularly in these times.

GINGRICH: Let me just say, everybody has to wait. The last-minute deal making on Capitol Hill--

JONES: Oh, yes.

GINGRICH: -- barely scratches the surface. But there is a way to break out of the Obama economy. I'll share some ideas with you, next.

(COMMERCIAL BREAK)

GINGRICH: Welcome back. In the CROSSFIRE tonight, Hawaii Governor Neil Abercrombie and former Minnesota governor, Tim Pawlenty.

You know, once again, we're facing yet another deadline, the prospect of a potential government shutdown. The House of representatives leaves town at the end of the week, but there's still a lot of work to do.

A narrow budget agreement, and a piecemeal deal of unemployment benefits isn't what we should be looking for. We need a breakout to really big ideas and big solutions.

Let me just give you three quick examples. It drives me personally crazy that we have at least $200 billion a year given to crooks. This evidence is pretty clear. Recently, it was reported the IRS, for example, spent $4 billion last year in refunds for taxes to people who shouldn't have gotten them, 353 checks to one address in Shanghai, 650 checks to an address in Lithuania. I mean, this is a level of incompetence on a scale that is -- because you have bureaucrats with paper competing with crooks who have iPads.

Second example, the State Department, which I've talked about for years, going back to American Enterprise speeches around 2002.

We were just told with the passing of President Nelson Mandela that, even though he had visited five times, he was not delisted as a terrorist until 2008. Now, how bad does the State Department bureaucracy have to be in order to not notice that a sitting president is visiting the country and is still on the list?

Finally something I want to ask Governor Abercrombie about as an example--

ABERCROMBIE: I can't wait.

GINGRICH: I think this -- I think this is one you're going to be 100 percent with me.

If you had a limited amount of money in the defense budget, wouldn't you rather see it spent at Pearl Harbor on real folks in the front lines than see it spent in the Pentagon? I mean, everything the president has said about I.T., for example, as it relates to Obama care, relates to the Defense Department, which has a terrible procurement system. Wouldn't you rather the money go to the frontline troops in Hawaii rather than be spent across the river here?

ABERCROMBIE: Speaking as an alumnus of the Armed Services Committee, as I am, I've had precisely those kinds of -- not arguments, but discussions, to how do we really advance the strategic interests of the United States in terms of the Pentagon.

And often we got involved in programs, particularly in the acquisition of capital assets -- planes and ships and combat systems -- that got into the billions of dollars, which actually undermined our readiness, in my estimation, and undermined or capacity to be able to respond to whatever military emergency was there.

So not only do I not argue with that. I think we existed in an atmosphere in the Armed Services Committee, when I was privileged to serve with you, in which Republicans and Democrats did work to do exactly that.

The atmosphere in the Congress now, I'm sorry to say, from your side of the aisle, Mr. Speaker, is not conducive to that kind of efficiency.

JONES: Which brings me to you, Governor. I am -- first of all, I agree with you 100 percent. You know, certainly, there are things that government could do better, but it's very difficult when you have a party that's really committed to seeing government as the enemy rather than government ever being a part of the answer.

But I am curious. There seems to be now, a possible thaw. Paul Ryan, who has been the Paul Revere for these harsh cutbacks and take no prisoners approach is now apparently waving the white flag a bit. It looks like this deal that's coming up, we're going to raise a little bit of revenue, they're calling it fees, not taxes. We're going to bust these spending caps.

Are we now seeing the beginning of a more reasonable Paul Ryan, a more reasonable Republican Party? And will you support Paul Ryan when the crazies come after him?

(LAUGHTER)

PAWLENTY: Well, let me first applaud the speaker for a classic example of Newtonian insight and description. That was --

(LAUGHTER)

PAWLENTLY: So, (INAUDIBLE) hats off.

On the issue of competency, you know, if you and I went to dinner right after this show, Van, and I paid with my Visa card or American Express card, you know, we would have a charge that would be instantly registered almost 100 percent accurate and on my doorstep, 28 days later, on a detailed invoice that you'd be very proud of, to say, I'll pay without even looking at it, because it's always accurate, almost always accurate.

And people look at that and go, why can't government do something even close to that from a competency, accuracy, efficiency standpoint? So, that's Newt's point.

And on your last point on the budget deal, look, they're arguing between pretty narrow differences and amounts of money. So to be able to split the difference on that, soften some of the defense cuts, take care some of the emergency needs, like the unemployment issue, that's not hard. They should do that and yes, I encourage them to do it.

JONES: He almost -- I'm glad to hear you're saying that.

But your party shut the government down over --

PAWLENTY: When you touch the stove and your hand guts burned, you generally don't go back to the stove very quickly after that. So, their -- they don't have many appetite currently for another showdown over a debt ceiling government shutdown. They're not going to do that in January. They got spanked pretty bad last time.

JONES: So, you agree with me then that Paul Ryan is now waving the white flag.

PAWLENTY: No, he's not waving the white flag. He's being a constructive leader and taking some heat for it, because he wants to close the gap in a divided government. And guess what? That takes leadership and courage.

So, waving the white flag -- he's standing up and being a leader, Van.

GINGRICH: OK. The risk of --

ABERCROMBIE: I think the governor is suggesting that we accept yes.

(LAUGHTER)

GINGRICH: The risk of discouraging Van here, but you were with us in the '90s when Bill Clinton and I worked, and the only four balanced budgets at the federal level in your lifetime came out when you were in Congress.

ABERCROMBIE: Yes.

GINGRICH: As governor, you have to balance the budget.

ABERCROMBIE: Yes.

GINGRICH: And I think you announced proudly you balanced the budget this year without raising taxes.

ABERCROMBIE: Yes.

GINGRICH: So, let me ask you, do you think the government --

ABERCROMBIE: Come from a serious deficit to a positive balance of more than $1 billion in three years.

GINGRICH: So, should that be an explicit goal of both parties in Washington, D.C., to get back to a balanced budget?

ABERCROMBIE: Yes, to a degree. I'll refer back to defense, for example. At the federal government level, we need to balance our priorities. Now, whether the budget in any given year is balanced in the sense that both Governor Pawlenty and I have to do it at the state level is another matter for discussion.

What we -- in balancing priorities, then we have to balance what our expenditures are in terms of what is the return from investment. So, an absolute commitment to a balanced budget in accountancy terms may not be in the interests of the United States at a given point.

JONES: Let me --

ABERCROMBIE: So, I agree, we need to balance priorities, balance expenditures against revenues and then be reasonable about what we are willing to invest in terms of getting revenues. Just to be against taxes per se means to be against our own national interest.

JONES: Well, speaking of balance, we did have a guy who ran for office saying that he would take a balanced approach, President Obama won based on that. I think there's still a grand bargain out there to be had. Liberals like myself might not like it.

But Republicans just can't seem to meet this president half way. And even you, I want to show a picture, even you, given the opportunity to raise your hand to say that you would reject a 10-1 deal, $10 of spending cuts for $1 of tax revenue, you said you would even take that deal.

How can we get to a grand bargain? Would you raise your hand today on this show if Democrats came forward and said, we'll give you a 10-1 deal? Would you raise your hand today?

PAWLENTY: Well, it's not that simple, Van. So, you say, 10-1 for what? Do we get any reform? Or do we just put more money in the machine and have it distributed like it is? So --

(CROSSTALK) JONES: I need your help on this because the president of the United States has actually offended the liberal wing of our party, where I am. He stood for it. He said he's for a grand bargain. He's willing to do entitlement reforms, all kind of stuff we don't like. Why won't Republicans --

(CROSSTALK)

PAWLENTY: Look, this thing has been white papered, think tank lectured, you know, to death for 30 years. Everybody knows that component parts. The question is, what are the components? Isn't what are the component parts -- the question is, do you have the will to do any of it?

So, here's what it looks like. The tax code has to be flatter and you need to de-special deal the tax code. That sounds easy, conceptually, but when you get into the details, everybody balks. And on the entire, Republicans aren't going to raise taxes as in raising tax rates. But they might be for tax reform that lowers rates, expands the base and over time grows the economy.

And the Democrats won't touch entitlement reform. Meaning, you can put that together, you've got the possibility of a grand bargain.

JONES: You sound like my president. All that sounds great, but why did you raise your hand when obviously that question was, are you willing to do even a deal that was 10-1, negative for Democrats, positive for Republicans? And you felt the pressure to raise your hand. Why did you raise your hand, sir?

PAWLENTY: Well, when I was the governor of the state of Minnesota, we raise some revenues. We didn't raise tax rates. But obviously, I had a divided government, we had to compromise and solve some very difficult circumstances.

But the question isn't, will Republicans never raise one dime of revenue? In fact, they already have in this Congress. The question is, what are you getting for it by way of reform and accountability and change?

JONES: Well, stay right there. We're going to come back and try to finish this question up. I've got a couple more questions for you.

(LAUGHTER)

JONES: But next, the final question for both of you guys -- I also want you folks at home to get involved. You can weigh in on today's "Fireback" question. Do you support extending unemployment benefits for the long-term unemployed? You can tweet yes or no using #crossfire. We're going to give you those results after this break.

(COMMERCIAL BREAK)

JONES: We are back with Hawaii Governor Neil Abercrombie, and former Minnesota Governor Tim Pawlenty.

Now, time for the final question.

Now, you mentioned earlier in the show that Republican also burned their hands on the stove. And I thought that was really fascinating. Don't you agree that the shutdown was such a disaster that it's given Democrats so much leverage they're going to be able to push Republicans to go farther than they might have gone in terms of busting (ph) the spending cap, which is where Paul Ryan is now, raising revenues? How far would you go in this new environment created by this terrible Republican --

PAWLENTY: That was all true for about 48 hours until Obamacare imploded.

JONES: Oh, we almost got through a whole show without you mentioning that.

PAWLENTY: That in a jujitsu like maneuver, the political dynamics changed once again. So, it's kind of back to a draw for those reasons.

But as to your point, people need to focus on the art of the possible. There are certain things Republicans are never going to do. They're never going to raise income tax rates. There are certain Democrats are never going to do. They're never going to fundamentally, you know, significantly cut Social Security.

But there are some things that they can do, and that's what they should focus on. We wish we could have the grand bargain. In the near term, we can't. So, let's focus on the art of the possible and move the country forward.

GINGRICH: Governor, let me ask you.

ABERCROMBIE: Sure.

GINGRICH: You just had the person in charge of the Hawaii version of the Obamacare Web site tender her resignation and I think you accepted it.

ABERCROMBIE: No. Just to be accurate, we have the only -- Hawaii being unique again, we have a non-profit corporation. The state is not running it. If it was, then I'd be in charge.

GINGRICH: And would you have accepted it?

ABERCROMBIE: No, what happened is that somebody from our organization is going to step in. What we're going to do is take it to where the people are. This, after all, is not an argument about President Obama. It's not an argument about whether to advance the insurance companies. It's to get insurance to people who don't have it.

So, we're going out to the community health centers. We're going to the drugstores. We're going to go out and do it in three dimensions, with real people in real time.

GINGRICH: So, given your experience and the fact that she did resign, if you were president and Secretary Sebelius offered her resignation, would you accept it?

ABERCROMBIE: I wouldn't raise my hand either. You're asking about tax raises in a debate. No, I mean, that's just a hypothetical question about Secretary Sebelius.

My concentration, just as it is with unemployment is not worrying about the compensation getting the jobs. I'm not interested in the Web site. I'm interested in getting the uninsured insured.

GINGRICH: The tyranny of television --

ABERCROMBIE: Yes.

GINGRICH: -- we have to say thank you to both, Neil Abercrombie and Tim Pawlenty.

ABERCROMBIE: Pleasure.

GINGRICH: Go to Facebook or Twitter to weigh in on our "Fireback" question. Do you support extending unemployment benefits for the long-term unemployed? Right now, 54 percent of you say yes, 46 percent say no.

JONES: I finally won one of things, I can't believe it.

The debate continues online @crossfire, Facebook and Twitter.

From the left, I'm Van Jones.

GINGRICH: From the right, I'm Newt Gingrich.

Join us tomorrow for another edition of CROSSFIRE.

"ERIN BURNETT OUTFRONT" starts right now.