Alan Simpson on budget deal : By Dec. 31, ‘go big or go home’

>>> we need to be open to some topics and some issues that are painful and hard to talk about. we cannot stand by the sidelines in denial that this is ever going to engage us in the things that we value. we can't be so naive as to believe that just taxing the rich is going to solve our problems. i really go back to simpson /bowl simpson / bowles . i think they had it right. put everything on the table, repeat, everything on the table.

>> one of my heroes there. welcome back. that was senator dick durbin of illinois who voted for the simpson / bowles plan and today he served on the commission and voted for the proposal. i'll say it again and again even though it includes significant entitlement cuts and he as a democrat doesn't like that. the up coming december 31st deadline has been called anything from that fiscal cliff to that fiscal slope. liberals are saying to that austerity bomb that progressive people don't like at paul. former senator allen simpson proposed a plan to get the united states financial house in order that some say was our best shot at solvency. senator simpson , it's always an honor. politics, i know you understand the irony of politics, it makes strange bedfellows. i want to try something by you. the president wants a deal. the president would obviously like to include something on revenues. the conservative may not want to go along with that. the best push is coming from people i don't normally side with like tom donahue of the u.s. chamber of commerce because he's warning if the congress screws around with this thing, the whole world is going to be watching us screw it up again and it's going to hurt the economy no matter who is in charge, it will hurt everybody, and we better darn well have a deal. i think they're the strongest push, better than the progressives, in get a deal. your thoughts?

>> i think dick durbin is a hero. i'd give him the medal of honor with oak leaf clusters . he was on our commission. when you give a spread between dick durbin and tom coburn and get five democrats and five republicans, one independent, 60% of the commission a supermajority and everybody walks away because they all say, and durbin is tremendous, he's absolutely up front on that, but everybody is saying, well, it's the framework. we don't care whether our names are connected with it. call it rivlin domenici, that's a beautiful piece of work, the gang of eight, but for god's sake get off your can and do something. unless you go big, go home because on december 31st there's a mess floating around right now, about 7.2 trillion bucks worth of stuff in ten years. got to do something.

>> why do members of the house and the senate play the clock? people are now talking today about this ain't going -- isn't going to get done, the need to meet this $4 trillion cut over ten years is not going to get done until you can smell the jet fuel . they have to be on their way to the plane, the kids are crying, they want to go home, their wives or husband are saying we have to be somewhere. we promised, we got the cheap tickets. what are you doing screwing around. it's not until then they actually do something. are we going to face something like that around new year's?

>> you're the man who knows too much. you have been here too long. let me tell you, that's exactly. these people never respond, which would be a beautiful reaction, they react. they react and they're going to react right down to the last point when there's going to be blood and hair and eyeballs all over the floor and they're going to come up with something, but let me tell you, if it's just kicking the can down the road, the can is now a 55 gallon drum filled with explosives. you can't play that game anymore. if it's kick the can down the road, the markets are going to chop us up and it will be an unknown day. durbin was the guy who kept saying where is the tipping point? when the tipping point comes, inflation kicks in, who is the guy that gets diddled the most? the middle class .

>> the payroll tax goes up and the tax goes up for everybody including the people that make just barely enough to live on. my concern is the world. i'm sitting there imagining you're in england right now or australia or africa and you're watching the news every day. and you know that in the united states both political parties, you sort of know who they are, both know there's a problem, both know the number they need to reach, both know they have to reach an agreement and they don't do it. what does it say about our country? we're the great role model for democracy or the republican forms of government and we can't govern ourselves in the simplest damn thing of getting the numbers straight. i worry about that.

>> they love their party more than they love their country. how did we get to that point? don't ask me, but, you know, the whole business of reform and money in the campaign and beat up the guy and it's not a case of who wins. it's you want to be sure somebody loses. and i say to people whether it's grover norquist or whatever, lord sake, if you can't step up to the plate, what can happen to you in they can't murder you, they can't burn your house. the only thing they can do is defeat you for re-election by throwing some cuckoo from the left or from the right if that means more than your country, it means patriots instead of panderers you shouldn't even be in the damn congress.

>> what do you make of speaker boehner? i like him. he seems he's a jack lemmon character, he's always under assault. a middle class guy under assault, crying a lot. yorn what the purpose of that is. i get the feeling he would like to deal but he has this new constraint. not just the 218 votes to get a majority in the house. there has to be a majority of the republicans in the house and then a majority of the house. he wants to get that first majority -- is that a reasonable demand that he has to deliver? i've seen politicians, you and i know this over the years, they have bucked the majority in their own caucus and they have gotten through deals that way. one party says we'll kick in 100 votes, the other party says we can do 120 and they get stuff done that way. now they're saying, no, i have to get my majority before we get your minority or whatever.

>> he's got -- he lost 11 of the tea party guys, but he's got then 70 guys who didn't go to congress to limit government, they came there to stop it. so how do you deal with guys who came to stop government or grover wandering the earth in his white robe saying you want to drown government in the bathtub. i hope he slips in there with it.

>> well, i can't -- i'm with you on the full metaphor there. the full metaphor. thank you, senator alan simpson , co-chair of the simpson bowles . don't use bowles simpson because the acronyms can be wrong. we don't do that.

>> you had to ruin my day. you were doing so good with that soap and bathtub. thank you, senator.

>>> an article in today's "new york times" points out president obama may get trouble from his own left wing , the progressives, even far progressive when he tries to negotiate a budget deal. it reads in part president obama 's re-election and democratic gains in congress were supposed to make it easier for the party to strike a deal with republicans to resolve the year-end fiscal crisis by providing new leverage, but they could also make it harder as empowered democrats, including some elected on a liberal platforms, resist significant changes in entitlement programs like social security and medicare . joining me is a liberal senator from rhode island , senator sheldon whis whitehouse of rhode island . you're smiling but i don't know whether it's in delight you're going to be a holdout. a friend of mine, frank sullivan , regularly tells me about the unemployment situation in your state, the need a lot of seniors have to have rely on medicare and medicaid and social security . is that going to be your position. no deal if it involves those programs?

>> well, i think the president has already said that social security should be outside of this discussion. it has not contributed to the deficit, and it shouldn't be part of the discussion. i think the press office said that the other day. we completely agree with that. we should set social security aside. it is solvent for decades and by simply kicking in the social security tax above $250,000 you can make it solvent or decades more. so that's less of an issue i think in reality than it is in the long time republican desire to attack it whenever they can. remember, this is a party that tried to put it into the stock market just before the crash.

>> i remember.

>> so they have a long history of going after social security and we have to, i think, set it aside. medicare is a more complicated problem because we have a health care system in this country that's immensely expensive, way too expensive, somewhere between $700 billion and $1 trillion a year by most standards, and 40% of that washes back through the federal budget . my position is that if we're going after the old folks on medicare and cutting their benefits, if we're going after the families who have a disabled child who couldn't take care of them if it wasn't for medicaid and we're not dealing with the overall cost problem, then we are really disgracing ourselves. i had this conversation with senator simpson in the budget committee when he was our witness there. he agrees with it. but and there's always a caveat in these things, that side of the equation is hard to score.

>> i know.

>> so from the technical cbo insider --

>> i know. i want to keep it simple . i always say to people when you talk about cutting spending by the government, you're actually stopping a check from going to some person.

>> yeah.

>> maybe going to a nurse, maybe going to a doctor who is really working very hard in the surgery room. it may be going on an attendant that works in a hospital does a very good job. you're cutting somebody's check off. whose check do you think we could cut off in the health care world that wouldn't hurt the patient? that's my question always.

>> you could do it with efficiencies. if you look at the institutes of medicine, just said there's $750 billion a year we can save. the president's own council of economic advisers said it's $700 billion a year. you go to george bush 's secretary of state o'neil, they're up to $1 trillion a year. when you talk budget numbers, you multiply by ten because that's the budget horizon we talk about. that takes you to $7 trillion to $10 trillion in the budget year. you only get 40% of that back in the federal government , but that's still a very big number. and if you only succeed at getting 25% of those savings, you're still back to $700 billion to $1 trillion.

>> you're looking for a way through. thank you. we're looking for a way through this. we have to get cost control . thank you, senator sheldon whitehouse . it's not easy to turn off the check writing.

>>> coming up, republicans are trying to explain president obama 's re-election victory by crying fraud. i'm reporting this because it's crazy. it's not real. they are saying the president stole the election. nonsense. we're going to cover the nonsense because we like to do it here, in the "sideshow," where it belongs. we sort of fence it off from reality. this is "hardball," the place for