Brady Says Congress Unlikely to Avoid Fiscal Cliff (Transcript)

Republican Representative Kevin Brady predicted in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that Congress won’t reach a deal this year to avert the so-called fiscal cliff of automatic spending cuts and tax increases scheduled to start in January.

(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)

AL HUNT: We begin the show with Republican Congressman Kevin Brady of Texas, deputy whip, a senior member of the House Ways and Means Committee, and about to be the chairman of the Joint Economic Committee. Congressman, we’re in a mess. You couldn’t pass plan B. The House has gone home. What’s going to happen? Are we going - it’s now likely we’re going over the fiscal cliff.

KEVIN BRADY: I think it is. I think this was what everyone hoped would not happen. In fact, because of the severity of this, the House acted last summer to actually avoid these problems, but it takes two to make this work. It is past the election. I think with the clock ticking, it just becomes increasingly unlikely we can come together before New Year’s Day.

HUNT: So what happens then? Do you think there’s a mad rush after Jan. 3 to - in the next week to put something together then?

BRADY: One, I think there’s going to continue to be good- faith efforts to try to solve this.

HUNT: Boehner and Obama will keep talking, you think?

BRADY: Yeah, I believe they will. But what’s happened is that in trying to build this bridge, we’ve tried to build one from the House side trying to pull all elements together that does everything that needs to be, both avoiding those tax increases, actually authentic spending cuts, and our belief still is the big issues, our tax code, Social Security, Medicare. We can’t keep putting that off. It’s clear that bridge isn’t going to be built next week from the House side, so now it’s really up to the president and the Senate Democrats to start building the bridge from the Senate side.

HUNT: You noted that you got to deal with Medicare. You got to deal with Social Security. You got to deal with the taxes obviously. There was an election. Barack Obama campaigned on ending the tax cuts for the wealthy. That was something people knew. He has gone now - he’s gone from $250,000 cutoff to $400,000. That’s movement. He also has said he’ll go along with a cost of living adjustment on Social Security. That’s a big deal. And he has clearly indicated he’s willing to consider and actually go along with means testing for affluent Medicare. That’s real movement, Congressman.

BRADY: Well, let me just tell you, I think he hasn’t come close to matching what we’ve agreed to do, which is to take revenue - significant amounts of revenue - and put them on the table. And all those proposals that address Social Security, Medicare, are only because we have pushed so hard as Republicans to make that happen.

HUNT: But he’s done it.

BRADY: And I will tell you while he has talked about doing that, Democrats in the House and Senate this week were insisting that they come off the table. And so I don’t think he’s actually even sold that to his own party for the most part.

HUNT: Let me ask you this. If you called his bluff, if you put a bill on the floor in early January that does COLAs, that does means testing for Medicare, that has a $400,000 cut off, it’s not everything you want to be sure, but if you put that bill on the floor and said, all right, you deliver Democrats, we’ll deliver over half the Democrats, we’ll deliver about half the Republicans, could you do that?

BRADY: Why wait until after the first of the year?

HUNT: OK. Well, do it then.

BRADY: Senate comes back on the 27th. Democrats control the Senate. The president obviously has strong leaders there. Why don’t they move that bill out of the Senate and so that the House can take up those provisions, if they’re real, with real, authentic spending cuts, and then let’s see if we can’t build that bridge.

HUNT: But could you - but that bill that I just outlined, which would be about a billion dollars of cut, you got to do them next year but that would be the promise, COLAs, means testing, $400,000 cut off, maybe $500,000, could you reluctantly support that kind of a bill?

BRADY: I don’t think it has enough spending cuts. Because most of what we’ve seen coming out of the president actually is just taking the cuts that were already in place in the automatic cuts and just counting them a second time. We actually think for us to avoid, we think, another potential downgrade of our credit and because the steps in Social Security and Medicare are baby steps, we think, we think we need to go farther than that if we’re really serious about these issues.

HUNT: Tell me specifically what you need to do then that goes beyond COLA, beyond - that goes beyond means testing. What do you need to do?

BRADY: I think clearly in both Social Security and Medicare we need gradually to raise the ages of those programs because we are living longer.

HUNT: We are doing that on Social Security.

BRADY: We are, but the president hasn’t agreed to. And I think the steps forward on - on reducing future benefits I think is a solid step because most people don’t realize each generation actually gets about a 23 percent bump over the generation ahead of them. So I think that’s actually a good step.

HUNT: He’s going to do that. So what else do you want him to do?

BRADY: Well, we want authentic spending cuts and a commitment on fundamental tax reform. And we just haven’t seen that. We also believe, and I know you know this from our beliefs, is that the more we tax the small businesses and professionals, the harder it is for our economy to recover and the harder it is to do fundamental tax reform.

HUNT: Will you put specific spending cuts on the table in the next week?

BRADY: We already have. In fact, that was voted on the House floor last night.

HUNT: Well, what was voted on the House floor was to cut food stamps instead of the military sequestration, but I’m talking about specific entitlements.

BRADY: It did not do that. In fact, what it did was tackle very wasteful spending. For example, sending government checks to people who aren’t eligible, aren’t here legally, don’t have kids who exist. That’s wasteful spending.

HUNT: You and I are against that, but we also know it’s real small stuff. It’s not big stuff.

BRADY: It’s seven and a half billion.

HUNT: Let me ask you this. Are you going to put entitlement cuts - new entitlement cuts on the table in the next week?

BRADY: Will House Republicans do that?

HUNT: Yes.

BRADY: No. It is - because we’ve already made those proposals -

HUNT: In the Ryan budget -

BRADY: - now it’s time for the Senate and the president to pass a bill and send it to us. Because clearly we are having trouble building that bridge from our side.

HUNT: One other subject, gun control. You have been a strong gun advocate. The terrible horror that occurred a week ago in Connecticut, did that change the atmosphere?

BRADY: I don’t think so. One, I think everyone shares the horror of this. The question is why are we having these rampages. And I - and I think it is much deeper and broader than just a couple gun control - the old warmed-up debates on this. We don’t know the answers. I think we have a culture of violence in America. I don’t think that’s coming from sportsmen or hunting families or those who have to have weapons protecting themselves. So I think it’s much broader.

HUNT: I think you’re no doubt right about that, but in other countries they see violent movies. They have violent video games. That’s clearly part of this culture, but that’s true elsewhere too. The one thing that’s different here is guns, and isn’t guns part of it, and shouldn’t you deal with all of it, including guns?

BRADY: Al, let me just tell you this. Connecticut already had some of those - significant number of those gun control provisions in place and it didn’t prevent this, so we’ve got to ask why. I’ll tell you - and we don’t talk about this much - but in my family, my father was killed in a shooting in a courtroom leaving my mom to raise five of us by ourselves. We’ve been through the criminal justice. We know what it’s like to grow up without a parent. And I don’t want that to happen to any other family, but I am not convinced that the gun control provisions that are out there will change that or prevent that. I think, frankly, we need to take a much broader look at this.

HUNT: OK. Congressman Kevin Brady, merry Christmas to you.

BRADY: Thank you, Al.

HUNT: Get some rest after this last week and we’ll see you next year. Thank you so much.

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