Fiscal cliff talks hit a rocky start

>>> good morning. i'm chris jansing . right now, two critical deals are proving elusive. no cease fire in the middle east where a bus explosion in tel aviv injured at least 19 people. secretary of state hillary clinton just wrapped up talking to the palestinian president about ending the violence, and she'll meet with leaders in cairo next. now, the other deal, the president and congressional leaders are working on, no progress on the fiscal cliff either. congressional leaders are taking a holiday breaks from the talks, but staff members have not been encouraged by their early huddles. let me bring in politico's deputy white house editor and joanne green, managing editor of the brie owe and msnbc contributor. good morning.

>> good morning.

>> we'll get to the situation in the middle east in just a minute. i want to start with the fiscal cliff and politico's front page today. "rough start for fiscal cliff talks." looked like everything was going really well after that first meeting. now that the dealing is really getting under way, the sources tell politico neither side seems actually all that serious. what's going on here?

>> our reporting shows that despite the politics of the seeming to suggest that a deal should be struck and despite the meeting that happened with the congressional leaders at the white house last week that had everybody walk out of it and use the word constructive and talk about how nice the meeting was, when they've gotten down to brass tacks and what would have to be done and where the tax rates would need to be raised and where the cuts to medicare and medicaid would need to be, both sides seem unwilling to believe that the other side is really serious about making the changes that then.

>> ben bernanke weighed in on this yesterday. let me play that for you.

>> indeed, by the reckoning of the congressional budget office , the cbo, and that of many outside observers, a fiscal shock of that size would send the economy toppling back into recession.

>> everyone i've had on this program, all the members of congress, have said to me, joanne , we have to get this done, of course it's going to get done. but we should remember it was a year ago today the grand bargain failed. so what's it going to take?

>> you know, i think it might take the new congress being seated. i mean, if you think about it, you still have a lame duck congress so, while the election may havechanged the atmosphere and sort of the story line for the members, the actual people themselves are still there. so they've not changed their ideologies at all. i think that the problem is that you have john boehner , president and mitch mcconnell negotiating with the exact same congress that they had when they couldn't make a deal the last time. so i think until the personnel change, i'm not sure you can get a deal.

>> and juan kessler, the fact checker for "the washington post ," has reported that, you know, you have to come from, like, some point point. you have to have a negotiating point to start with. he said democrats and republicans haven't even agreed on a baseline yet. they're about $3 trillion apart because of ending the wars, medicare , other cuts. so how do you come to some agreement in what is a numbers game really if you don't even have a number to start with?

>> i think one of the things we'll see happen here is the idea of a grand bargain, of one deal that gets all this stuff averted between now and -- it's not going to happen. it doesn't seem that there's anything that would suggest that they'll be able to get to that point of putting this all together into one deal. so what will happen is they'll figure out some solution that gets us past the next couple of months. of course goes into the beginning of next year when there's another debt ceiling raise that needs to happen, and that leads to all sorts of problems as well, potentially. so they're going to have to figure out some way to get this through for three mos, six months, each one doing part of the deal, part of the revenue changes, part of the spending cuts.

>> a lot of key players in this. one that's talked about quite a bit, joanne , and that is paul ryan . obviously, the budget guy on the republican side . if he's looking at his political future, is it smarter to be a deal maker or hard line conservative?

>> well, see, the problem is it's sort of both. he wants to run another republican primary . he needs to be seen as sticking to his principles. he really doesn't have an incentive to move off particularly the main line principle of not raising taxes. in a republican primary , that can be a big problem, which ironically is the same problem for john boehner . he wants to retain his speakership. if he makes a deal before january 3rd , that's a question for him, too. ryan has a double incentive. on the one hand, the new republican party , quote, unquote, you would think being a deal maker makes more sense but there's still a primary and the base of the republican party hasn't moved.

>> congressman tom cole is a republican from oklahoma. good morning.

>> good to be with you.

>> we said this is a numbers game . here's one bottom line -- 90% of americans will see their bills go up if you don't reach a deal. are republicans willing to compromise?

>> oh, i think we are. i think the speaker's made that very clear, that he's put revenue on the table. pretty important as to how you get that revenue. i was disappointed to see leader pelosi saying it had to be higher rates or nothing. i don't think that's how you begin a negotiation.

>> what about the possibility of keeping the same rates but eliminating deductions for wealthy?

>> that's a very good potential suggestion. again, i think that would meet with broad support. that's consistent with what the speaker's laid out, gets the revenue, but we think in a method that probably helps foster growth. long term, you've got to have a growing economy to deal with problem we're dealing with. unfortunately, we think the proposals from -- some of the proposals from the democratic side are counterproductive.

>> what do you consider counterproductive? what is a nonstarter for you?

>> first of all, i'm not going to talk in terms of nonstarters. let's wait and see what the deal is. you have to let the negotiators do their job. i have a great deal of confidence in the speaker. it's hard for me to believe he would come back with a deal to present to the conference that i couldn't support. again, i trust him. but i think, you know, better not to raise rates. now, the president has a whip in his hand. if he wants rates to go up, he can raise them on everybody. he could have done that two years ago. i think he made a reasonable decision two years ago, extended the bush tax cults, got some things he wanted in exchange. i think the two sides can bargain together. even the debt ceiling isn't a bargain. it's an agreement. this idea that we don't know how to sit down and find middle ground i think is actually not valid and born out by what's occur sod far.

>> let me play for you something senator barry sanders said on "news nation" yesterday.

>> the first question is who should bear the burden of us a ter the austerity? do you go after nutrition programs, throw kids off medicaid, force elderly people struggling to stay alive to pay more for medicare ?

>> why not ask millionaires and billionaires to pay more? you can call them small business owners, jobbey kra or the e creators, but they're still millionaires and billionaires.

>> revenue is on the table. that should answer the question. anything who knows anything about the numbers knows it's not enough. if you don't reform the programs the senator was talking about, we're going to lose those programs. we won't have social security or medicare or medicaid. they're going broke. if the president got every tax increase he's asked for, those programs would still be going broke. at the end of the day , if you don't put fundamental reform on the table, revenue alone simply won't do the trick. let's point out, too, the president must like the bush tax comes. he's accepted 80% of them for about 95% of the american people . so he's ruled a lot of revenue off the table himself. i agree with him on that, but let's recognize that absent reform and these basic entitlement programs you're simply putting a band-aid on a problem that requires major surgery.

>> congressman tom cole , happy thanksgiving to you and yours. thank you.

>> thank you.