Rep. Welch: Boehner doesn't have leverage now

>>> good friday morning. i'm chris jansing . the president will head to pennsylvania in a few minutes, and he'll be visiting a toy company, using that small manufacturer as the latest backdrop to make his case to the american people about the fiscal cliff . yesterday treasury secretary tim geithner presented an offer to the congressional leaders including the stipulation that taxes go up on the wealthy. the headlines tell the story. "the washington post " wrote, " obama offers plan for cliff , not compromise." "the new york times." "gop balks at white house plan on fiscal crisis." and "the wall street journal ," obama 's cliff offer spurned. i want to bring in joanne reed and molly ball, political reporter for "the atlantic." good to see both of you. good morning.

>> good to be here.

>> mitch mcconnell , we are told, literally laughed at the white house 's offer. and if you listen to speaker boehner , it's not going very well. take a listen.

>> i'm disappointed in where we are and disappointed in what's happened over the last couple of weeks. but going over the fiscal cliff is serious business. and i'm here seriously trying to resolve it. and i would hope the white house would get serious as well.

>> and the speaker tweeted, "how serious is the white house about avoiding the fiscal cliff ?" reports suggest, in some cases, not so serious. and also, joanne, what is the strategy here, and is there a risk like looking like you're not really negotiating?

>> well, you know, i think what's interesting is that there's the posture that everyone is taking in public, but then what you're hearing behind the scenes is that everyone's sort of understands what the contours of the deal are going to look like. and what i see is john boehner trying to sort of protect his caucus at this point because he probably understands that at the end of the day , that top rate is going to go up. and republicans are in a really awkward position because right now essentially they're just defending the tax cut for the top 2%. at the same time, the white house 's public posture is to say well, no, we don't want to go over the fiscal cliff because you don't want to send that message to the markets. but then behind the scenes you sort of get the feeling they'd be willing to do it and they'd be okay at least temporarily having everything sort of default to that zero position we'd have on january 3rd and then negotiating with the new congress.

>> well, the game yesterday, at least, seemed to be who's really serious about fixing the problem. let me play for you what harry reid said.

>> he says that democrats have got to get serious about cuts, spending cuts. where's the disconnect, then?

>> i don't understand his brain, so you should ask him. okay?

>> there was an opening offer, as you know, molly, from the president. i want to put it up. $1.6 trillion in tax increases, $50 billion in stimulus spending, $400 billion in medicare entitlement savings. again, an opening offer, but, you know, the question republicans are asking is, like, what's really negotiable here? and do you think that joy- ann is right, these are just both sides playing to their base at this point when in truth they both know the contours of the deal?

>> yeah, i think joy- ann is absolutely right that this is a negotiating position. it's not an attempt to draft what the final offer is going to look like. and there's a lot of bluster on both sides. you know, republicans are saying this is absurd. this is a joke. but it's hard for them to threaten to walk away from the table when democrats have the leverage, and they know it, and they are behaving like they know it. and that seems to be what is shocking the republicans so much because in the past, the president notably hasn't been this tough a negotiator. they've been able to say no, bring us something we like better, and he's done it instead of actually sort of calling their bluff and saying no, i want to see what your offer is.

>> but this is the president, isn't it, saying i got this message from the american people . we were talking about this during the campaign. i won. and frankly, he feels pretty confident here, joy- ann .

>> yeah, absolutely. this was litigated during the election. i mean, the president ran forthrightly on the idea of letting the bush tax cuts for the top 2% expire. and the polls show that most voters supported it.

>> he thinks by going to pennsylvania and other places, he's going to reinforce, i have the american people behind me.

>> absolutely. this is about going to swing districts where republicans will be under a lot of pressure from their home constituencies to not protect the top 2% at the expense of all the rest of the cuts.

>> the other thing that's out there today, you have conservatives, charles krauthammer , erick erickson , to go off the cliff and we'll have the president to blame. do you think they could overplay their hand because conventional wisdom has been if we go off the cliff , it hurts the republicans .

>> absolutely. i mean, the polls show that a slightly larger proportion of the public would blame republicans in congress than democrats or the president. but most voters would blame everyone. and that's sort of the feeling among the electorate in general is they don't like congress, and it would be sort of a pox on all their houses. and the president is betting, number one, that he and his party could weather that better than the republicans could. and number two, that republicans know that enough that they wouldn't let it happen .

>> let me bring in congressman peter welch , democrat from vermont. congressman, good morning.

>> if i've been hearing you right over the last couple of days, you seemed pretty confident that the republicans are going to come over and raise taxes on the wealthy. but do you think they're going to do that without getting something in return? what are you willing to offer them?

>> well, here's the dilemma. it's a real challenge for speaker boehner , and i think your commentators had it pretty accurately. the president did run on a plan to raise taxes on the top 2%. speaker boehner has said revenues have to be part of the deal. but he hasn't done anything specific to say what revenues would be acceptable to him. so the talk about other cuts like medicare, the president has put $400 billion on the table, and the debt ceiling are really diversions that i think the speaker is using to try to keep peace within his own caucus. so the bottom line , we'd be better off -- america would be better off if we reached an agreement, and almost anything we do would provide that reassurance to markets. that are in the long run beneficial.

>> if you talk to republicans , though, congressman, they feel -- and they will often say to you -- if you look at the numbers, it's not like the president won an overwhelming mandate. that's their line. and house ma -- they think they still have an argument to make to the american people as well as the president, and i just want to play for you something that just came out in the last hour or so. majority whip kevin mccarthy 's office released this video. let me play a little bit of it.

>> however good or bad we do is my income. this notion of $250,000 being top 2% or the wealthy people in america ignores the way most small businesses work in america .

>> this is to the republicans ' point, obviously, that this hurts job creators. this hurts small businesses . and in the end, the tag line of that ad says, small businesses , we've got your back. what do you say to someone like that?

>> well, i say that, you know, that was the argument that mitt romney made, and he lost. and keep in mind, it's not just that president obama won, but the exit polls showed that half of the folks who voted for governor romney agreed with obama , that taxes on the high-income folks had to go up. so the challenge on the republican side , and it is tough, is folks like kevin mccarthy did get elected. and in his district, his no-tax pledge worked for him. these guys are in a very tough spot because they know at the end of the day they're going to have to raise these taxes. but doing so will cause an immense amount of political pain. that's why in my view, it's probably likely that we won't get a deal before january 1st . but on january 3rd , the senate sends a bill over. where now we're voting on a bill to lower taxes. the norquist pledge becomes irrelevant. in fact, they comply with the norquist pledge by voting for a bill that would provide tax relief for 98% of americans. so i just think this is a very difficult political situation on the republican side . you know, the speaker clearly knows that revenues have to go up. and he doesn't have the leverage now. and we're back into brinksmanship politics. but bottom line , the cliff is really much more a slope, and we can act on this ideally before january 1st . but because of political reasons largely on the republican side , it may be after january 1st .

>> you know, i guess part of the discussion this morning has been about whether or not what the president put forward through tim geithner that was laughed at by mitch mcconnell , whether it went a step too far. even former congressman harold ford jr ., a democrat, said this morning on " morning joe " he sees this as a problem. and i want to play that for you, congressman.

>> when you have ceos of the largest companies in the country, the biggest in the world suggesting that one, they might redomicile to a different country, that they're concerned about not only tax rates but the regulatory regime, i'm just not sure that this will sit well.

>> not sure this will sit well. what's your reaction to what former congressman had to say?

>> well, he's really not speaking to the issue. if you're going to have a negotiation, one party has to say, here's my specific offer. and you know, a response that you laugh away that offer is not a real response. that's just avoiding coming up with your own response. the challenge for mcconnell and for boehner is to put something concrete on the table. and why that's a challenge is once they do, if boehner says he's willing to go to 36% but not 39%, all hell is going to break loose in the republican caucus because there's a lot of folks there that will sing the song that yes, revenues will be part of it, but when you get specific, it's very, very tough for them politically to do it. and that's why you're seeing the response be from mr. mcconnell, a laugh as opposed to a concrete, specific counteroffer. and they have got to come forward and show the president the money that they're willing to put on the table, and they haven't done it. and until they do, we're just going to have this circular talkfest.

>> congressman peter welch , it's great to have you on the program again. thanks so much.

>> thank you.

>>> you know, there was all this talk and buzz, and it was among us and the chattering class about this meeting yesterday. a big white house lunch between mitt romney and president obama and somehow would there will be a role maybe in these talks about the fiscal cliff . we don't know a lot about what they talked about. the meeting was about an hour long. they had white turkey chili and southwestern chicken salad . but molly, this is the first time they've seen each other since the election. what do you say beyond congratulations, mr. president?

>> goodness knows. it's pretty telling that the most newsworthy item out of that meeting was the lunch menu. the readout we got from the white house was very sort of boilerplate. we do know what didn't happen, unless there's something they're not telling us. romney was not offered a job or a post in the administration, as some had speculated might happen as sort of a conciliatory gesture. who knows if he would have taken that or wanted something like that. it was sort of very tepid, the language that we got, that they would work together in the future if opportunities arose on issues they were both interested in, and they discussed american leadership in the world, which is about the closest you can come to saying absolutely nothing. these are two men who were never close. they didn't serve in the senate together like obama and mccain did. really the only times they've met have been in the context of campaigning against one another, being on the debate stage together. so i don't think there was any way for them to get together and have it not be sort of stiff and awkward.

>> and in fact, david gregory was reporting that romney doesn't want a part in fiscal cliff negotiations. there were reports that his team said, look, he's not looking for anything from the president, but is there some role he could play given his experience, joy- ann , at some point in the next year or so?

>> i mean, i think the difficulty for mitt romney and the challenge has always been that there really isn't a romney wing of the republican party . it's not like he can bring to bear constituency beyond maybe wall street . that wing of the party was more his niche. but the president can sort of talk to other people in the wall street wing. you know, he had some ceos over to the white house the other day. some of them represent that wing just as much as or more than mitt romney . so i think the awkward position romney is in is that he is sort of a man without a country politically. so i'm not sure what he himself could do. but i think the gesture was important because it does sort of represent sort of the marching on of democracy in the u.s. i think it was important from that standpoint, but i don't think we'll see much of mitt romney .

>> joy- ann reid, great to see you. molly ball, thank you.