Raising rates or closing loopholes: Fiscal cliff talks to begin

>> you predicted fiscal cliff would be the fifth question. it's going to be our second topic today. we turn to the fiscal cliff now where the white house is showing its cards and sending a message ahead of the president's face-to-face meeting with republican congressional leaders on friday. president obama plans to open negotiations by calling for a $1.6 trillion in additional tax revenue over the next decade. that amount is likely far more than republicans would be willing to accept and double the amount that speaker boehner had offered the president during their debt negotiations last year. today the president is scheduled to meet with ceos from a dozen companies. there's some of them on your screen. general electric , ford, ibm all playing a part. they'll discuss ways to work together and try to find a balanced approach to reducing the deficit. during a closed-door meeting yesterday with union leaders and liberal supporters, president obama reportedly vowed that he would, quote, not budge when it comes to letting the bush tax cuts expire for the country's highest earners. labor leader and president of the afl-cio, richard trumka , was among those at the white house meeting. he said he and the president are on the same page.

>> we're very, very committed to making sure that the middle class and workers don't end up paying the tab for a party that we didn't get to go to. the president led with that notion of protecting the middle class , and now you have republicans that have it in their power, they could sign a bill tomorrow that protects the middle class . we'll see what they can. are we going to push them on that? without a doubt we're going to push them on that. are we going to collectively stand up and make sure that workers get a fair shake in all of this? absolutely we are. do we believe that the president is committed to that same thing? absolutely we do.

>>> also congressman paul ryan is dismissing suggestions that president obama 's victory gives his administration a mandate to raise taxes on the rich. returning to capitol hill yesterday for the first time since the election, ryan pointed the republicans keeping control of the house as a sign that the country isn't sold on the democrats' agenda. take a listen to this.

>> whether the people intended or not, we've got divided government .

>> you don't think there's a mandate here?

>> i don't because then they would have put nancy pelosi in charge of the house of representatives . see, i think these ideas that we talked about, i think they're popular ideas. this is a very close election . and unfortunately, divided government didn't work very well the last two years. we're going to have to make sure it works in the next two years. that means, i think, that both parties have to talk to each other.

>> but could you see yourself supporting a plan that raises tax rates ?

>> i'm not for raising tax rates .

>> so you won't support a plan?

>> i don't want to get into negotiating with the media, but i do not support raising tax rates .

>> period.

>> yeah, i've been saying that my entire career.

>> the fiscal cliff. i mean, there are people -- you read them, you hear them, say, you know, let us go off the fiscal cliff. that might be one way to really resolve the situation. what happens if we go off the fiscal cliff? what is the fiscal cliff?

>> well --

>> i can't even balance a checking account. what is it?

>> it's actually more like 2 1/2 cliffs because you have three things happening in the next few months. you have the bush-era tax cuts expiring. you have the obama stimulus tax cuts expiring. you've got a collection of the spending increases that were agreed last year coming into force . and you've also got -- sorry, spending cuts coming into force . and you've also got the debt ceiling in the sense that congress is going to have to get permission to issue more bonds. and those three things coming together create a very nasty shock. and essentially if you do nothing, if you let the spending cuts happen, if you have the tax cuts roll off and you have essentially tax increases, you'll get a hit that's worth 3% to 4% worth of gross domestic production, and that will almost certainly push the economy back into recession. so there's an awful lot at stake right now. what paul ryan said is very interesting because we had an editorial on monday from glenn hubbard , mitt romney 's economic adviser, essentially saying that yes, we recognize we need to talk about tax increases for the rich. i mean, he actually stressed that that should be the starting point of a discussion. he didn't say, glenn hubbard , that he increases -- he wants to see increases in tax rates . he was looking at closing loopholes, things like that, but he was willing to put that on the table. the problem, though, is that even if advisers like glenn hubbard are saying that, what we're seeing is people like paul ryan still very much signaling strong opposition to that idea.

>> what's your head count in the senate, the number of republicans --

>> in the senate?

>> yeah.

>> i think the senate will pass whatever the leaders agree to. i think like with most of these things now, they'll have to go to the house floor without knowing -- without the votes. the question is who can you lose and still pass it? you'll lose some liberal democrats , but i think you're going to get a base support of democrats. and the question is, you'll have to have boehner, and i think you'll probably have to have cantor. can you lose paul ryan ? i think almost anyone who wants to run for president in '16 is going to vote against this on the republican side . and so the question is, you know, who do you need? and i don't think you absolutely need paul ryan . but in the end, i think he'll vote for what's passed even with tax increases.

>> speaking, as long as we're on the house as opposed to the senate, do you hear anything nancy pelosi is going to have a news conference, a press conference, later today ? what do you think she's going to do? any word?

>> i have no idea. no idea.

>> thank you for your honesty. go get me a cup of coffee.

>> did you watch this program yesterday? debbie wassermann schultz said she's staying. most of the people i talk to say she's staying. i think her body language yesterday when she was sparring with the press a little bit suggest she's staying. and if we're wrong, i won't be here tomorrow.

>> let's go back to congressman ryan and his comments. the interesting thing that president obama did yesterday, he's been, you know, criticized -- was criticized a lot from a lot of different angles in the first four years of his time in office. but one of the things that the left and some in the center criticized him for was constantly negotiating against himself, that he was not a tactical negotiator. yesterday was as much as anything an announcement. he's not going to get the tax increases that he wants. that number. but he's not coming in -- he's coming in setting the bar really high on the assumption that he's going to have to end up lower which is actually how most people do conduct negotiations generally instead of starting what you want and then getting it pared back. congressman ryan , you know, i don't really understand how you cannot understand the president's election as a mandate for raising taxes on rich people . only because the president campaigned on almost nothing else specifically. i mean, there were very few specifics. and we criticized president obama throughout the campaign for not being specific about very much. he was very specific about that. and he not only won re-election in a convincing way, but if you look at the exit polls , and again, i know that congressman ryan doesn't want to look at those exit polls because they're brutal for the republican side . the exit polls showed overwhelming support for that proposition, raising taxes on rich people . two-thirds of the country's in favor of it. there's not much that there's a clear mandate for out of this election besides that.

>> elections have consequences. jillian?

>> but the key issue is, it's one thing to say yes, we want to raise taxes rich people . the really critical question now is how. are you going to raise rates by letting the bush-era tax cuts expire, or are you going to try and deal with loopholes? and it matters because raising rates is a very fast way of getting more revenue. you can get that money in quickly. talking about changing loopholes is a very messy, long discussion. and that could take a long time. and if you think back to 1984 , i mean, talk about two years to actually get serious reform of the tax code implemented even when you had a fairly cooperative atmosphere. if a debate now shifts to plugging loopholes, this could drag on a long, long time.

>> the critical question off of heilmann's point is paul ryan and other republicans, do they ever look outdoors and realize what people are doing with their lives? do they understand what's happened and the reality on the street, apparently not off of his comments. shut up, we've got to do this.

>> glenn hubbard , a lot of republicans getting on board on this idea.

>>> coming up, in addition to heilmann, film director oliver stone . actress and director penny marshall , senator dick durbin and moderator of "meet the press," david gregory .

>>> up next, the top stories in the "politico playbook." first, though, is bill karins with -- what were you saying earlier? dreadful forecast coming up?

>> it's not going to be a dramatic forecast. nothing drastic, nothing disturbing. we're actually looking at a nice tranquil weather pattern for once. no snow, no big rainstorms and hopefully no coastal storms either. a little question mark on that. the forecast getting you out the door this morning, much colder in new england than it was at this time yesterday morning. definitely need the hat and the gloves and the winter coat for the kids and maybe even yourself. temperatures in the 30s. windchills in the 20s. sunshine this afternoon, though. bring the sunglasses, doing any extensive drive. because the sun angle's getting a little lower in the sky. by the way, last night, the aurora borealis , the northern lights , was spectacular about midnight. northern portions of vermont, new hampshire, maine, wisconsin and the great lakes, a lot of great pictures online of the fantastic event. also temperatures in the middle of the country continue to be nice and chilly, in the 30s in many areas. then as far as what we'll do as we go throughout wednesday afternoon, we recover nicely in most spots. and finally, talking about next week, monday through wednesday, possibility of a next weather threat. the good news is, this is trending further off the coast. still a possibility of a threat, though, for new england as we go through tuesday, wednesday, we'll watch that carefully. maturity level is astounding. all right. we're leaving you with a shot of 30 rock . it looks like we took down the big, big spruce. third tree arriving at rockefeller plaza . you're watching " morning joe ." we're brewed by starbucks. lists all done. raise