Civic leader: ‘We need a long-term fiscal plan’

>>> our challenge is to make sure that, you know, we are able to cooperate together, work together, find some common ground , make some tough compromises, mr. some consensus to do the people's business.

>> still seems a little tired from the election there. back to "hardball" today. president obama met with congressional leaders to kick off talks to avoid that fiscal cliff. it caps a week in which he's reached out to union leaders, business leaders, congressional leaders to soften the ground for a deal. the congressional leaders, boehner, reid, pelosi, mcconnell, were optimistic but cautious about a deal.

>> to show our seriousness we have put revenue on the table as long as it's accompanied by significant spending cuts.

>> we have the cornerstones of being able to work something out. we're both going to have to give up some of the things that we know are a problem.

>> we should have a goal in terms of how much deficit reduction. we should have a deadline before christmas. we should show some milestones of success so that confidence can build.

>> we're prepared to put revenue on the table provided we fix the real problem.

>> the real problem. you got that? mcconditional is all the tree stump on the lawn when you're trying to cut it. this afternoon the president held his fourth and final meetings with stakeholders, civic leaders and meshs of civic leaders. mark morel is president of the you are began league and aaron smith is co-funder of a group called noninvincibles dedicated to ensuring that young people 's perspectives are accounted for in policy and economic opportunity, education, and health care issues. thank you both. i want to start with mayor morel. what can we do about this debt problem? it's growing. do you accept the fact it's a serious threat to our country?

>> yeah. the deficit is a serious threat. we need a lone-term fiscal plan, not a short-term fix. the idea is there has to be shared sacrifice to achieve shared prosperity.

>> aaron with the same question. do you believe the national debt as it's grown up around the size of our gdp, we owe as much as we make every year, is that a dangerous position to be in or not?

>> well, i think there are definitely tough choices we have to make about how we're spending our money and being sustainable. i think there are smart ways to make government more efficient. if you look, for example, we spend about $93 billion every year in social services for unemployed young people , young people who are not connected to school. we only spend about $2.5 billion for job training programs. if we invested in the kind of job training and education that young people need, that could grow our economy and it could reduce some of the government expenditur expenditures.

>> let's get to cuts. where would you get $4 trillion in cuts over 10 years?

>> who are you asking?

>> i'm asking aaron .

>> okay.

>> cuts. what would you cut to get down to save $4 trillion?

>> i think we should start, chris, by talking about what our priorities are.

>> i'm asking you, where are the cuts? give me some ideas -- big chunks of federal spending. big increases in federal revenue to erase that $4 trillion debt we're trying to get rid of.

>> again, chris, i reject the premise that we should start from the focus of cuts when the real priority for young people is jobs and it's making college more affordable.

>> okay. we're talking about debt reduction and the president's problem of avoiding the fiscal cliff and i got to get back to the mayor. i want to go to ways we can actually do this. i know everybody has to give something. i'm wondering what people are willing to give. mayor, what are the areas that affect the big cities ?

>> the big cities are affected by housing, community development investments, education investments, which i might add have already taken cuts. this is what's important is that this is not happening in a vacuum. this is a continuum of looking at with the sequestration and the debt deal where have the cuts already taken place. let me give you an example. community development bloc grant , title one, head start , workforce investment act which is job training. these have taken cuts. the most important thing is, one, to sustain, sustain the middle class tax cuts because to allow them to he can pir would mean a $3,000 hit for someone who makes $50,000 a year. it's important to understand that revenues and expenditures go hand in hand and any plans got to include all.

>> that's right. let me get back to aaron . there's three ways to reduce the debt, increase revenues, reduce expenditures on entitlement programs , or reduce expenditures on regular appropriationings. if you were sitting with the president and he's sitting there with a pencil and paper trying to figure out the arithmetic how could you help him do this thing when he has to do it?

>> let's start by putting some of our spending in perspective. the cost of the bush tax cuts for those above 2% is about $80 billion a year. we only spend about $60 billion a year on our whole education system from a federal perspective. so obviously that's something that's got to be on the table. i agree with marc about the point about middle class tax cuts , things like payroll tax cuts, the aotc, those are critical. there's issues about pell grants which have a shortfall in the future. but i think we need to start with those tax cuts on the upper income earners --

>> would you --

>> 80% of young people support getting rid of those tax cuts .

>> would you do anything besides raise taxes on the rich?

>> i think there are ways we could make some of these programs more efficient by investing in the front end in education and training that in the long term can reduce --

>> mayor --

>> -- over a long period of time.

>> i want to aur this perspective because in the entire conversation what's been missing is the military where military expenditures for the united states are greater than that of the next ten nations combined. so when you talk about putting everything on the table, domestic discretionary is about 14% to 15% of the budget. you have got to have all appropriations on the table. you have got to have all tacks on the table. you have got to have a comprehensive look. but our starting point is to sustain those middle class tax cuts and from a principled position, i believe that those who are most vulnerable shouldn't take the biggest hit, the must substantial hit, and i have confidence that the president is going to take those principles into these negotiations.

>> i think we found out something here very important from a progressive point of view. we have to go after the rich tax breaks at the top. they have to lose those things at the top. the clinton era 39.6% rate. it doesn't hurt our economy in the '90s. we have to do something about the defense budget as part of the discretionary spending . we've got to do that. and we shouldn't whack the middle class again. they've been whacked for 12 years. thank you marc and aaron . good luck, both of you fellows. as the rich gets rich and the middle class stag nats, a new book asked who stole the american grem. one of the great journalists joins us next. this is "hardball,"