Cole Backs Including Revenue in Budget Accord (Transcript)

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Representative Tom Cole of Oklahoma, one of the chief Republican negotiators of a congressional budget deal, said in an interview with Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that he supports raising revenue as part of talks with Senate Democrats.

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

AL HUNT: We begin the program with Congressman Tom Cole of Oklahoma. Congressman, you’re a member of the House Senate Budget Committee. With the December 13 deadline, Paul Ryan says the focus has to be on narrow, achievable goals. What are they? And what’s the probability of success?

REPRESENTATIVE TOM COLE: Well, I think the first one is to bridge the difference between the House and the Senate. We’re about $90 billion apart, in terms of discretionary spending. We’ve got the sequester kicking in. We would - I think both sides would like to deal with the sequester. And we’re willing to put more revenue on the table to do that, and we would like to do it with entitlement savings. But there’s also pro-growth revenue. So, number one, find the common number to me and let the Appropriations Committees get to work, get an omnibus -

(CROSSTALK)

HUNT: Would you say you have - in that narrow - that objective, there’s a greater than 50/50 chance you’ll succeed?

COLE: I think so.

HUNT: Do you really?

COLE: I think so. I really do. Look, I think the worst thing to do would be another long-term continuing resolution. I mean, that’s just a bad way to govern.

HUNT: But part of that package, then, will have to be - if you want to replace some or all the sequester -entitlement changes and some added revenue, not tax rates, but added revenue.

COLE: Well, I think that’s possible. Again, it depends on how big a deal the Democrats want to do and whether or not we want to cut - or connect this with a larger tax reform issue, which I think we can and should do.

HUNT: But you could do a number now and then do a bigger tax reform later?

COLE: You could. You absolutely could. And, frankly, there’s more than enough -

HUNT: Are there a number of Republicans who disagree with you on the revenue -

COLE: Oh, sure.

HUNT: - who say no revenue, no matter what?

COLE: Yeah, there are some that feel that way. But, you know, the reality is, you’re going to have to have a deal here. And a deal means everybody gives something up. Now, again, we’re much more into what I’d call pro-growth revenue. And I could give you, you know, a number of examples of what that would be, an amount, although a lot of that would be specified - would have to be worked out between the -

(CROSSTALK)

HUNT: But it also would involve, you know, curbing some loopholes?

COLE: It could. It depends on what they are. So I think there are some things out there -

(CROSSTALK)

HUNT: Do you want to give me one or two examples?

COLE: Well, again, repatriation of stranded profits overseas. In a 10-year period, that’s about $200 billion. Accelerated oil and gas exploration on federal lands and offshore, that generates money. You could have one-time things like timber sales, things like that. Not big money, but it’s some.

HUNT: How about - how about carried interest?

COLE: I think that’s certainly - this is my personal view, it’s not speaking for anybody else - that ought to be something on the table.

HUNT: All right. All right.

COLE: So those kinds of things are reasonable. But I actually think long term the entitlement reform area, where we actually have some overlap with the president’s budget -the president’s been for chained CPI. So has the Ryan budget. The president’s been for modified means testing for Medicare. So has the Ryan budget. The president’s laid out some Medicare savings. And to me, getting a handle on the entitlement side long term for budget stability is the most important -

(CROSSTALK)

HUNT: Where would you go further on entitlements than the president has proposed?

COLE: Oh, we’d go a lot further. I mean, just -

HUNT: Give me some that would save money in the next year or two.

COLE: Well, let’s just start - well, let’s just start, if we wanted to follow the Ryan plan and do what we did with welfare years ago and change Medicaid into a state-run system, guaranteeing them a pot of money -

HUNT: But you know the Democrats aren’t going to -

(CROSSTALK)

COLE: Well, you asked me where I would go.

HUNT: I did. I did. I did.

COLE: And we - there’s a lot of places we can go -

(CROSSTALK)

HUNT: But the president’s proposal is a good starting point for entitlements?

COLE: I think they are a good starting point, and the first time he’s put on the table. You know, he did not do that his first four years, so I give him a lot of credit. And he caught a lot of flak from his left wing. So that tells me - and I tell my Republican friends, look, look how much outrage he got from some of his core constituents.

HUNT: Right.

COLE: So let’s recognize he stepped toward us here, we ought to try to step toward him.

HUNT: You ought to step forward, too. If you don’t succeed - and you are an optimist today - but if you don’t succeed, once again, January, this deadline comes. And if -it could be another government shutdown. Most Americans think it will happen. My question is, if you do hit that January deadline, will the Republicans insist again that some curbing of Obamacare - with all of its problems, you know the president isn’t going to go along with it - will that have to be a condition of not shutting down the government?

COLE: I don’t think so, although, again, I think there are areas where the two sides can come together, medical device tax and maybe looking at whether or not a 30- versus a 40-hour week makes - there are some things within. And people forget, we’ve done that. You know, when people talk about we voted 41 times to repeal, delay, they forget, seven of those became law, and they - that means the Democratic Senate and the president -

HUNT: So you could some Obamacare stuff that maybe the Democrats would sign off on, like the medical device tax?

COLE: Absolutely, and I know it saves money - they saved about $62 billion collectively over a 10-year period. So there are some things like that. And I think that’s well within the bounds of what the president is suggesting he’s open to.

HUNT: So you can negotiate?

COLE: Look, I think that’s the only way divided government ever works. And now, the fallback Republican position is, if we can’t find agreement, you know, the law’s pretty clear. Sequester cuts hit, and we’re operating in a continuing resolution at $967 billion or whatever the -

(CROSSTALK)

HUNT: You’d love to replace most of that sequester, particularly those defense -

(CROSSTALK)

COLE: I would - I would - I don’t know if it needs -but quite a bit of, yeah.

HUNT: Quite a bit of it.

COLE: And I think that would be a negotiation. Again, we’re $90 billion apart. I doubt we’ll end up in the Republican number or the Democratic number if we have a deal, but if we can’t come to a deal, the law specifies sequester numbers. And I don’t think that’s where the president wants to be. That’s not where we want to be.

HUNT: Right.

COLE: But if we’re pushed, if it’s - you’ve got to raise tax rates or something, then, you know, it’s pretty easy for Republicans to hold that lower number. They demonstrated from January to March, when the president tried to break them on sequester, that they weren’t going to break.

HUNT: Congressman, you used to run the campaign committee. I’ve been here for more than 40 years. I have never seen such disastrous polls as Republicans have been hit with in recent weeks. Frank Luntz, one of your pollsters, says voters blame Republicans for the shutdown, 63 percent want your friend, John Boehner, dumped, they prefer Democrats to take control of the House. These disastrous poll - bad numbers, what changes does the party need to make?

COLE: Well, the only - the only good number in there is it’s a 2013 poll, it’s not 2014.

HUNT: That’s right. What changes?

COLE: A lot can happen in - look, I think government working, you know, and all - or just getting out of the way, not being a crisis and a problem, that’s number one. Number two, we have to remember, we interfered, in my view, with what was a really bad run for the president. He had a miserable summer. He had the IRS scandal. He had Benghazi. He had the wiretaps.

HUNT: And you guys bailed him out.

COLE: Yeah, we did. We had Syria. Then we had the unfolding Obamacare. And this is where, you know, overreach - and I think driven largely by the Senate, but there certainly were people in the House that went along with it, you know, put us in a bad political position. And we literally threw the president a lifeline at a really critical point.

But I think, again - in a political standpoint, I think it’s good for the country if we just sort of let the normal rhythm of politics work, govern -

(CROSSTALK)

HUNT: So that’s just the normal rhythm?

COLE: Yeah, then - then I think it’s a normal off-year election by next year, and we’ll - we’ll hold the House, pick up ground in the Senate.

HUNT: John Taft, great-grandson of a Republican president, grandson of Mr. Republican, Senator Bob Taft, lifelong GOPer, wrote that Ted Cruz and the House Tea Party Republicans are reminiscent of Joe McCarthy. Do you believe that, like McCarthy, it’s necessary for leaders like you to stand up to Cruz and the Tea Party Caucus?

COLE: Well, I don’t try to stand up to anybody, in that sense. I don’t - look, I’m not one that goes around and bashes the Tea Party. They’ve helped create the modern Republican majority.

HUNT: Well, are they like Joe McCarthy?

COLE: No, I - look, if we’re going to talk about Joe McCarthy, I’m happy to talk about him. I’m not happy to characterize somebody that I’ve never met. On the other hand, do I think this was a wise political strategy? No. And I’ve said that all along and, of course, voted for the deal that got us out of the box that some of these folks pursuing this had put us in, and that’s the sad part. The guys that get you into these - what did Senator Corker call it, you know, box canyons - are never the ones that lead you out, that somebody else has to go make the tough decisions.

HUNT: Senator, let me ask you this.

COLE: Just a congressman.

(LAUGHTER)

HUNT: Congressman, let me ask you this. The Senate passed a comprehensive immigration bill. Will the House do likewise in this Congress?

COLE: No. Look, you have to remember, the bill in the Senate passed - you know, two-thirds of the Republican senators voted against.

HUNT: Right.

COLE: So you’re saying a minority of the minority in the Senate should tell the majority -

HUNT: So no action or just small action?

COLE: No, I think small action. I think there - there could be some things, although I noticed the president has brought this up, and some people - let’s get the budget deal done first. I don’t think there’s any chance to do anything here until we get the basics done. And if the two sides can do that, I think that’s a confidence-building measure. It will be by definition bipartisan. So to me, why worry about that when we haven’t done the bread-and-butter work of, you know, budgeting?

HUNT: Proud Congressman Tom Cole, key member of that Budget Committee, thank you so much for being with us.

COLE: Thank you.

***END OF TRANSCRIPT***

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