Oct. 11 (Bloomberg) -- Senator Bob Corker, a Tennessee Republican, said on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that Congress will open the partially shuttered U.S. government and increase its borrowing limit on at least a short-term basis next week before the debt ceiling is reached Oct. 17.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the show with Senator Bob Corker of Tennessee. Senator, thank you for being with us.
We’re in a mess right now in Washington. What should be done over the next four or five days on the government shutdown and on the debt ceiling?
BOB CORKER: Well, there’s a couple of different tracks, as you know, right now. The House is negotiating with the White House. The Senate, on the other hand, has some proposals that are gaining a lot of traction and my sense is, over the next 24 hours, will be released.
So, you know, there’s a couple of good developments that are occurring. I think we’re going to be out of this soon. And hopefully -
HUNT: We’ll be out of both the government shutdown and the debt ceiling?
CORKER: I think so. I do.
HUNT: Short term?
CORKER: I think - I would hope that the government funding piece would be much longer term. I mean, one of the gains that Republicans, frankly, have had over the last several years is controlling spending. And, you know, sequester is not a great way of controlling spending, but it’s better than nothing else, and so we’ve been able to lock in some gains on spending, and hopefully we will keep those in place on that.
HUNT: Do you imagine that whatever extension you have of the government shutdown, the C.R., if you will, that there won’t be any direct deal, but there will be a side deal that all parties will agree to, so you then negotiate things afterwards?
CORKER: I don’t know. I mean, I will say the House approach and the Senate approach right now is very, very different. I think the end goal is the same, and that is to continue to notch gains as it relates to fiscal reforms that make our country stronger. But I’m talking about - when I say Senate side, Senate Republican side.
But I really do think, Al, things are beginning to break. And I think that we will have a solution to this -
HUNT: On both? Within the next four or five days?
CORKER: I do. I do. I think - I’d be surprised if it goes all the way to the 17th. I think sometime mid-week this will all be resolved, if not sooner, candidly.
HUNT: Well, let’s look ahead then. And there - because you can’t negotiate a big budget deal short-term, but if there’s an agreement to do that later, if the White House and sufficient numbers of congressional Democrats agree to entitlement changes, real changes, chained CPI, means testing, and other stuff, are there Republicans, including Bob Corker, who are willing to compromise on revenues - not higher rates - but more revenues?
CORKER: So, Al, this is the exact conversation we had at the White House. I think you know I was part of a small group that spent a tremendous amount of time with them. Where are the - where Republicans have been on that issue is, if you have transformative changes in these programs, then maybe there’s a way to talk. That’s not something the White House is willing to talk about.
So I don’t think that revenues - I mean, they’ve made it very, very clear, we - we really focused on this heavily in meetings with them, and they’re willing to do some chip-shot kinds of, you know, reforms as it relates to entitlements, and so with that, I don’t think there’s any way that Republicans -
HUNT: Chained CPI and means testing are just chip-shots?
CORKER: They are chip-shots. They’re chip-shots -
HUNT: They’re not -
CORKER: By the way, they’re chip-shots that I support. And I think one of the things where there’s a lot of common ground, there really is, is to say, look, the president offered - in fairness to him - he showed some leg on some entitlement reforms, if you will, in late March and April, and I think to say, hey, let’s look at those - there’s $300 billion to $400 billion worth of those. Let’s take what was in your budget and let’s use them to deal with some of the discretionary cuts that we -
HUNT: But what you’re saying is to get revenues on the table, they have to go for - that’s not far enough to get revenues -
CORKER: It’s really not. I mean, these are not the kinds of things that really change the equation. They’re just not. And, I mean, they - we’ve been very transparent about all that.
HUNT: Senator Corker, you don’t like Obamacare. I know that. You voted against it. But as a practical matter, is the effort of Ted Cruz and the Tea Party Republicans to defund or delay affordable health care dead, at least until the next presidential election?
CORKER: Look, it was dead before it started. I mean, the idea, the tactic, the strategy, whatever you want to call this thing, I mean, I - I tweeted out way on the front end that, look, I - you know, I’m just an average guy from Tennessee, public school-educated. You know, I can count. And -
HUNT: So it’s not going to happen?
CORKER: No, it was never - it was never a strategy that was sensible. No.
HUNT: And it’s - and it’s formally dead now?
CORKER: Well, I mean, you know, look - you know, if you’re a constitutionalist, if you’re somebody who understands how our democracy works, it’s hard to pass a law when you have the majority in one body, and that’s what it would have taken.
So this was a box canyon. We projected that on the front end. The box canyon word has now made its place in American society, and, yes, this was a strategy that never was going to work. We tried to say that, and it’s a shame that we’ve ended up in this box canyon.
HUNT: Let me turn to the Federal Reserve. You - you opposed Janet Yellen for Fed vice chairman three years ago.
CORKER: I did.
HUNT: All indications are you’re going to oppose her now. What will it take for her to win confirmation, 51 votes? Or are you and others going to demand 60?
CORKER: You know, Al, I don’t think, you know, people aren’t - there’s no discussions right now about, you know, what people might do. And, you know, it’s just way too soon. I think she’s probably going to be confirmed, OK?
HUNT: With you - with you voting against.
CORKER: Well, let me - I did vote against her, because, you know, she is dovish. I mean, actually, I read there’s widely respected publications all around our country saying she would be the first acknowledged dove to head the Federal Reserve. So I think it was right in my - you know, my thinking that she was a dove.
But let me say this. She hasn’t said much publicly. And I mean this. I’m not just trying to be, you know, a nice person and saying this. I do look forward to sitting down to her. I may misunderstand where she’s been. Some people have said that she’s really fixated on a 2 percent inflation target, and so we’ll see. The likelihood -
HUNT: But you -
CORKER: - is that, you know, she’s probably not somebody that I can support.
HUNT: But you and others have worried the Bernanke-Yellen approach would risk inflation. Inflation is less than 2 percent. There are no signs of inflation. Haven’t Bernanke and Yellen been right?
CORKER: Well, I have a lot of respect for the chairman. And, you know, we’ve spent personal time together certainly during this - during the crisis. But, you know, Al, I’ve always found that you need to complete a trade before you declare victory. So we’re halfway into the trade. We’ve got a $4 trillion balance sheet. What I would say is -
HUNT: Do you still see inflation dangers?
CORKER: Well, let me - let me finish. One of the reasons we don’t have inflation is because we don’t have any economic growth, right? I mean, that usually drives inflation. So, look, you’re right. Inflation’s been low. We also don’t have a lot of, you know, economic growth.
But my point is, Al, we’ve got to come out the other side of this. And so you got to look at - you have to look at the full cycle. And once we unload or let this balance sheet mature, let’s see where we are. These things take a long time, and you know that.
HUNT: Senator Corker, thank you so much for being with us today.
CORKER: Thank you.
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