Morning Joe | December 13, 2012
>> now you will develop a craving for it.
>> you're right.
>> every day.
>> and i've got to admit, it doesn't hurt.
>> no, that's not worth it.
>> i'm listening to my body.
>> these are not worth it.
>> it's good.
>> mika ! oh, mika !
>> that is a problem.
>> pass me that trash can right now.
>> i just dumped on them. you can't have them anymore, and they're gross. i'm sorry.
>> you look like you're in severe pain.
>> all those doughnuts should be eradicated off the face of the shirt.
>> shut up. stop it. stop it.
>> feeding them into your growing belly like winnie the pooh .
>> hold on. i see one on the floor that survived.
>> what's wrong with you? you're not going to eat that.
>> go ahead. good morning. it's thursday, december 13th . with us on set --
>> don't talk with your mouth full.
>> former treasury official and " morning joe " economic analyst, steve rattner.
>> hold on. let me wash it down with some goo.
>> i mean, you all are fit. what? why can't you follow suit?
>> it hurts so good. we've got msnbc political analyst and visiting professor at nyu, former democratic congressman and all-around good guy, harold ford jr .
>> when would you ever eat a munchkin?
>> i'm at peace here. president of the council on foreign relations , richard haass , and msnbc analyst and former chairman of the republican national committee --
>> very fit.
>> -- very much with me on the battle of the munchkins, michael steele .
>> absolutely. pass the doughnuts.
>> we start with syria, a country coming apart at the seams. president obama a couple days ago making a fairly remarkable statement that we are now with the opposition despite the fact that we don't know exactly who the opposition is.
>> we're with the oppositions in the plural. it's a very splintered opposition. coalition's almost too good of a word. the united states has thrown in its political lot with them. militarily things are beginning to tilt increasingly in the direction of the opposition against the government. we saw now the government is shooting off scud missiles , old ballistic missiles which are essentially terror weapons. you shoot them off, you don't know where they'll come down. some come down in civilian areas. they're not militarily significant, but this is the beginning of a slow end game .
>> richard , i was just going to ask, what is assad's end game , and should he not be contacting the russians right now saying in russian, guys, get me the hell out of here?
>> that day is going to come. the russians can accelerate that day. the day the russians tell him it's over, that will have a tremendous psychological effect.
>> putin is a kgb guy. he knows he's not going to survive. he knows the next government will be hostile towards russia if they don't move quickly.
>> exactly right. one day they'll make that calculation and they figure they'll get positive reaction for it because that will be seen as a decisive change in the context. it's a question of when and not if that happens. this has all taken longer than a lot of people thought, but it's still happening.
>>> let's get to politics here at home and the fiscal cliff. one thing we could probably agree with here, the american people would love to see a deal before new year's day. that's according to a new nbc /" wall street journal " poll. in fact, a majority of both democrats and republicans say they would like their leaders to compromise even if it means giving ground on long-held party positions.
>> wow, look at that.
>> so you know, at this point, what does anybody have to lose but to come together and make a deal? expectations are in check with respondents equally divided, 48%-48% on whether a deal will actually get done. if there's no agreement, 56% say both sides will be to blame. 24% say it will be the republicans ' fault, while 19% will point the finger at president obama .
>> again, let's stop and freeze on that number again. this is a number that is borne not out of what's been happening over the past couple weeks but what's been happening over the past couple years. the republicans have damaged their brand in such a way that the benefit of the doubt , steve rattner, will always lie with the president and the democrats until the republicans change that dynamic.
>> but this is a different number than the last time we saw this poll. remember the last time we saw this poll, they were really hitting the republicans . i think 53% were blaming the republicans , and about half that many, the democrats . and now it looks like it's shifted more toward an equal blame scenario.
>> which is a positive, i think, for the country.
>> the more both sides are liable for what may go wrong, the better chances we have for getting a deal.
>> i admit, it must have been the sugar rush to my head, mr. chairman, i misread the poll, i was associating the 56%. thank goodness there are some people here that live right. mr. chairman, that is, if you look at this poll, that is good news for the republicans . a poll that was out earlier this week did have the number up in the 50s.
>> and so what do the republicans do?
>> well, i think the republicans continue to make the argument for putting on the table some spending cuts. we want to see what the real numbers are. what are the priorities of the administration when it comes to entitlement reform? and i think that poll reflects sort of a change that's going to put some pressure on the white house now. because, you know, you can't get there and beat the drum saying oh, you know, this is all going to fall on the republicans ' head. now it's beginning to lap back on the president and the democrats .
>> and again, i'm not doing the president's bidding because i'm with the republicans . in fact, i want him to be a lot tougher on holding a firm line if they don't get the spending cuts. republicans need to be so careful. they need to be so cautious. again, i'm not talking about substance. i'm talking about on style. i'm talking about how they handle it.
>> absolutely. we're still on our own rhetorical cliff when it comes to this issue. i think by and large, you're still looking at 24% of the people that are polled saying yeah, this is still, you know, a big part of this is going to be republicans ' problem if this doesn't go through. but i think in terms of momentum for the nature of the debate, the american people are putting pressure now equally on both parties to get this done. that's reflected throughout the poll. and i think that's going to move the timetable up, and we'll probably see something, you know, realistically in play before christmas and voted on by the new year.
>> well, that's what the american people want. richard haass , you've had a lot of dealings with certainly the foreign relations context with negotiating. compare how the president was doing a week ago with how he's doing now.
>> two things. one, on the president, i think when he staked out the position at the beginning, it didn't create a context where the republicans could meet him. it looked more like a way of casting blame. the narrowing of the polls, though, i think and we're beginning to see it in the president's movement, he's beginning to give something. there's a sense now of a negotiation dynamic. so it seems that the white house has moved away from pinning the responsibility on the republicans and slightly more towards getting a deal. one other thing that's adding to it, mike duke , the head of walmart, earlier this week.
>> impressive guy.
>> because of what walmart does, he has his finger on the economic pulse as well as anybody. he said 15% of the shoppers coming into walmart said that they were going to spend less going into christmas than they would have otherwise because of the fiscal cliff. this uncertainty, this overhang, was having a tremendous impact. that will also put pressure on the white house . the last thing you need is people underspending going into the holidays.
>> their customers are those that will be primarily affected by the tax increase, a $2,000 average increase. i would imagine the majority of walmart customers would feel that immediately.
>> working middle class .
>> they are. steve rattner, walmart really focuses on what politicians call walmart moms. and they and other retailers are seeing in all of their internal data that their shoppers, their consumers, are very nervous. consumer confidence drives what happens between now and the end of the year. and this will have a major impact on the economy, as you showed us in your charts last time, if the white house and congress fail to make a deal.
>> yeah, and you're seeing it elsewhere as well. i think business is very clearly not hiring as many people, holding back on investment. ben bernanke said yesterday, and i think he's a pretty straight-up guy and calls it as he sees it, this is beginning to affect the economy. two other points. one, this republican rift that the president hasn't spelled out his spending cuts is simply not true. the president has actually -- you may not agree with him --
>> where's he cutting and how much is he cutting?
>> in his february budget , he went through all the components of his $3.6 trillion plan.
>> where do they come from?
>> and they come from $350 billion from the entitlements program, $250 billion from other programs. $1.6 trillion of tax increases. and so on. and so he has actually spelled it out. look, the fundamental issue --
>> you say that's up to 3 -- i'm trying -- and again, i'm not cross-examining you, i'm trying to engage in simple math. $1.6 trillion --
>> $1.6 trillion in tax --
>> this looks like $600 billion in spending cuts from discretionary and mandatory.
>> 350 from entitlements, 250 from other stuff.
>> that gets us to $1.2 trillion. where's the other?
>> you've got about $1.2 trillion of cuts already enacted in 2011 that everybody agrees should be counted. this is not phony math. this is real math. you can add those back in.
>> should you really, though?
>> if you're running a business, do you add that back in when the government has added more debt since 2011 than the amount of those cuts?
>> you know, you have to start somewhere. and everybody's measuring off of where we were before the budget control act, before that trillion dollars of cuts were enacted. look, even i, you know, i consider myself a deficit hawk , agree with that math.
>> you'd add that in.
>> i agree with that math. the point is the president has specified what he wants to do. you may not like it or agree with it. i think what's happening here is really on the republican side . the real problem is on the republican side . boehner cannot get a majority of his caucus to agree to raise rates by any amount. that seems to be what's happening. and so we're in a stalemate. the president -- i don't believe the president will accept a deal that includes some increase in rates. it doesn't have to be 39.6%. it has to be something. but boehner cannot corral his troops to get there.
>> michael steele --
>> yeah, you know that.
>> -- speak to that because i've said clearly and haley barbour has said clearly, if i know there are going to be real cuts in medicare --
>> -- real cuts in social security cuts to sustain those programs, then we can talk about a deal. we can talk about 37%.
>> absolutely, joe.
>> we can talk a lot of different things.
>> we're on the exact same page there, and that's exactly what i was referencing when i made the statement that i did about what the republicans are expecting. i appreciate steve , you know, rattling off $320 billion in entitlement cuts, but is that in medicare and medicaid ? is it raising the eligibility age? is it means testing ? how are those cuts manifested? are they real? and steve , you know very well that in washington when you're talking about obligating a future congress to make cuts, that's not a deal. and that's the same hook that republicans have always gotten hung on in previous negotiations with democrats when rate increases are on the table. so republicans are saying, look, we'll go 37%. we may even talk about 39%, but we want to see real cuts that are right now, not something that you're going to obligate the congress of 2020 to do because that's not going to happen.
>> but that's fine, michael , but that's not what they're saying.
>> that is what they're saying.
>> no, no, no. boehner wrote a letter in plain english , typed it out, no rate increases, period. not no rate increases --
>> come on. steve , like that means something?
>> hold on. so he wrote that letter. the president said we're not going to move from 39%. the president --
>> no, he did not say that.
>> let me finish. the president subsequently said we can meet them halfway, and boehner did not rule out a 37% number.
>> no, he briefly didn't rule it out, and then he ruled it out.
>> it's still on the table.
>> tell people what you're saying. instead of 39.6%, we would raise the top rate to 37%. and then the second rate would be at 35%. currently the 35, 33, so we jump to 37, 35.
>> right, you've heard boehner say it, barbour say it, coburn say it, chambliss say it. you've heard a lot of republicans come out and say we will do this, but we need something in return. don't expect john boehner to be leading the charge rhetorically when he's got to figure out how to pull the majority along with him at the end of the day .
>> let's hear the latest from them.
>> really quickly, though --
>> -- it's important. it's important.
>> to let people know, reports from inside the republican caucus suggest that john boehner has the power to pull a majority of the majority now. if a deal is done.
>> but i would be the first to strongly discourage any republican for voting for any increase on any taxes unless they put their cuts on the table.
>> same with democrats . i agree with you.
>> one thing that could embolden the president during these negotiations is his job approval number, which is at 53%. the highest approval rating he's gotten since the poll was taken in january of 2011 . republicans did not fare as well. only 30% of those polled have a positive view of the gop. the lowest for republicans in a year. 44% had a favorable view of the democrats .
>> okay. that's the number that we were talking about earlier, mika , as far as the scar tissue from two years of chaos.
>> there was intense conversation on the phone between president obama and speaker boehner .
>> how do we know about this?
>> well, that's --
>> why --
>> -- republican insiders tell this to nbc news.
>> it's not helpful.
>> okay. just sayin'.
>> i'm saying it's not helpful. the fact that there are intense conversations on the phone and we know about those tense conversations.
>> you want to hear from john painer?
>> okay. he says that he was hinting that the sides were not close on this. do we have the boehner sound bite ? okay, roll it.
>> the president and i had a dleliberate call yesterday, and we spoke honestly and openly about the differences that we face. but the president's called for $1.4 trillion worth of revenue. that cannot pass the house or the senate.
>> we can bring a bill to the floor that the republicans don't have to vote for except for 25 of them. i had to do it as speaker. do you know what it was like for me to bring a bill to the floor to fund the war in iraq? so it's tough. but you have to do it. so is the point that you don't want to put your members on the spot, figure it out. we did. figure it out.
>> you figure it out, richard , when both sides are dealing with each other in good faith. and i think it's important to note that the president was at $1.6 trillion. he's at $1.4 trillion. that ain't nothing. i think that requires john boehner , if we're playing in good faith, to publicly go from 800 to 1. send a message and have the battles that we were talking about. michael was talking about. how are you going to cut? where's it going to come from? it will happen, i think.
>> it will happen. the details -- and we're obviously moving towards something like do the math, $1.2 trillion in revenues, the mix still has to get more specific. and i think the ratio between entitlements and discretionary spending is probably the biggest issue, and that has to get set. it will ultimately get done. i think the real question is whether it gets done before the end of the year or whether it spills over early in the new year and markets have a reaction which spur it to actually happen. i think it's really at the moment more a question of when and not if you get it. and it's still going to be small. i actually think -- and maybe steve disagrees -- no matter what gets done, it's not going to take this entire issue off the table. we'll come back to it in february with the question of the debt ceiling. and more important, all of 2013 , this issue times several is going to be in the center because whatever scale they deal with now won't be enough.
>> richard , you said there's a big divide between discretionary spending and entitlement spending. the folks at home that don't follow it closely, entitlement spending, obviously, social security , medicare, medicaid. on the other side, you've got discretionary spending , education, transportation, r&d.
>> defense. all of these things.
>> which accounts for about a trillion dollars of the budget every year. we've got less than that.
>> of course, the long-term struggle is with entitlements. i think that's one of the greatest differences where we cut with republicans . i know we have to cut from entitlements because that's what bankrupts us. i know we have to cut from defense. but i'm concerned about r&d. i'm concerned about transportation. i'm concerned about education. i'm concerned about cutting in all of these areas that make china -- give china a bigger advantage as we move forward that give our global competitors a bigger advantage. that's what really concerns me.
>> two quick observations. if you're in business and you're told we've got to make changes at our budget and you look at 6%, 15% of your budget , 9% of your budget , you've got to make cuts, you look at the 60% first and say where can we make manufacture she's cuts. talk about not endangering our ability to compete and win going forward, you don't want to cut those areas as steve has talked about eloquently many times, there are advantages which means you have to look at entitlements. and i think to michael 's point, i think there's credit to that. two, i like the fact that boehner now is in a stronger position with his caucus because if indeed they find a deal, that means he can win a majority of his people over. i like the fact that nancy pelosi 's in a strong position with her caucus. so the pieces are not only coming together substantively, they're coming together politically as well which means we find ourselves closer and closer to getting to a point where a big -- or a deal can pass, will get us through the year and get us to fight another day which means entitlement and tax reform .
>> we need entitlement reform and fax reform. michael , i want to make sure you agree with me. if you don't, please let me know . we used to cut a good bit from domestic discretionary spending . i think now, though, the budget clearly, it's the entitlement programs that are going to bankrupt us. everybody says it from the congressional budget office to the president's people to peterson's foundation to everybody, concord coalition . and for republicans that are thinking you know, we're not going to make the tough choices on entitlement spending. instead we're going to cut education, transportation.
>> r&d. that's like parents saying, you know what? we really need to renovate our kitchen. we want a bigger kitchen because we watch the food network . it's cool they've got those islands and they can chop things up.
>> make doughnuts.
>> and make doughnuts, do all these things in the kitchen.
>> hanging pots.
>> we want to expand our kitchen. that's what we want to do. we can't cut from the kitchen fund. so johnny has to go to college. but maybe he can put off college for a couple of years.
>> we're not going to invest in our children's future in college so we can renovate the kitchen.
>> well, that's actually --
>> and unfortunately for those on both sides, republicans and democrats who say we're going to cut discretionary spending , but we're not going to touch the mandatory stuff. that's what they're doing. they're cutting education. they're playing into the chinese hands. they're cutting r&d. they're playing into the chinese hands. they're cutting transportation. they're playing into all of our competitors' hands over the next century. it seems so shortsighted.
>> i agree 100%. it's a matter of priorities. we live in an age where you don't have to choose between guns and but he ater anymore. it's a matter of priorities. you start with the heavy lift first because that's where the chunk of your challenge is. and the discretionary spending , you look at that after you take care of those issues because then you can prioritize much better. and i think that's what you need to do.
>>> coming up, we'll continue this conversation. fantastic one. coming up in just a few minutes, chairman of the american conservative union , al cardenas, will be here. "hardball's" chris matthews . it was with alex talking in my ear. i like hearing from alex, too. chris matthews will join us, nbc news political director, chuck todd , and eve ensler and mike allen with the "politico playbook." first, bill care ipz with a check on the forecast.
>> mika , are you hoping for a white christmas ?
>> yes, absolutely.
>> i'm starting to get those e-mails. i should call them complaint e-mails. doesn't look good for areas of coastal new england or mid-atlantic. rain headed your way in the next four or five days. that's probably about it. let's show you the weather maps and get you out the door. it's cold in the burbs, nice in the city, similar to yesterday morning. you can bring that winter coat and gloves with you, and that will be about it. later this afternoon with a ton of sunshine. temperatures once again get into the 40s. even in areas of the suburbs, we should be at least low to mid-40s. so a very nice december thursday afternoon. let's talk about boston. you're one area that's snow starved. it doesn't look like any is headed your way with temperatures for highs in the 40s right through sunday and monday. this next storm should primarily be rain for you. you may get a little mix on sunday, but i don't think it's going to accumulate. we'll have to watch that football game sunday night, too, with the patriots and the 49ers. temperatures across the middle of the country looking a little bit on the cool side, but a lot better than it was. what a beautiful forecast. look at kansas city today. you're back up to 55. dallas at 61. only the southwest, los angeles to phoenix, could have some showers, maybe a stray thunderstorm. but for all your travel plans today, we look really, really nice. empire state building , beautiful green. you're watching " morning joe " brewed by starbucks.