Washington, D.C. – Democratic Leader Nancy Pelosi held her weekly press conference today in the Capitol Visitor Center. Below is a transcript of the press conference:
Leader Pelosi. Good morning. Thank you for being here.
Here we are, eighteen days from a possible fiscal cliff, hopefully not; twelve days until Christmas; and here we are once again having a two-day work week in the Congress of the United States. You have to ask the question: why are we going home instead of working very hard to forge an agreement to avoid that fiscal cliff? Why are we not working very hard to pass legislation to address the needs posed by [Sandy]? People out there are waiting to see if we can manage what we are doing. If we take Christmas and engineer back in time, ‘cause this is all about time, the most precious of all commodities because it can produce results, or not. If you take Christmas and engineer it back from there, because that’s a day, well, we won’t be in session, we could engineer a path forward to say what can we do in that amount of time?
We really have to come to some agreement in the next couple of days, or the very beginning of next week, for us to have engineered our way to a solution. I wasn’t trained as an engineer, but I admire their work because they find solutions. They make things work. They make things operate. And what we have to do is, is politically engineer a solution.
If we agree that we will have a solution and that we will avoid the cliff, as I think we all should agree to that, then what are the steps we need to take? And how quickly can we take them? So that we at least have a week of consumer confidence that can improve. But we have a week, as the year comes to an end, where the markets have the confidence to go forward. So far they trust that we would not be so stupid as to go over a cliff. The markets have reflected some optimism, I believe, in that regard. But the consumer spending, as you see by some statements of CEOs – CEO of WalMart for one – that the season is not as, what was hoped for in terms of consumer confidence and consumer purchasing.
We’re coming down to the wire. It’s, you know, a matter of days. Last week we went out on Wednesday morning. This week we’ll probably go out on Thursday morning having come in on Tuesday. Two, two-day work weeks in a row. This is just not right. How does this make sense when time is of the essence while the clock is ticking? And, again, we’re coming down to the wire. And just to be clear: Democrats have said we’ve already agreed in the Budget Control Act, and in other legislation passed by this Congress, to a $1.6 trillion in spending cuts. We already have agreed in the Affordable Care Act, and in the President’s budget, to over a trillion dollars in savings in Medicare to be plowed back to strengthen Medicare and to increase benefits but to strengthen it.
And it just remains for the Republicans to agree to pass the middle income tax cut which gives a tax cut, by the way, to 100 percent of the American people – for people making over $250,000 a year, they get a tax cut up to $250,000 a year and are asked to pay a little more beyond that. This is all about confidence, consumer confidence, market confidence; it’s about creating jobs and growing our economy. Chairman Bernanke, who sort of coined the phrase of the cliff, has said that if we don’t act, and we should act as soon as possible because there’s already a slope here, if we don’t act the economy will go over the cliff – not just our budget process – the economy will go over the cliff. What more motivation do our Republican colleagues have then to get the job done, to manage the issue, to engineer a solution so that we can go forward?
It’ll be two stages. This year we’ll deal with the spending and the issues that I mentioned earlier. And next year we can take a bigger issue of reforming the tax code, closing loopholes, perhaps lowering rates for individuals and for corporate America. That’s a longer endeavor. And also to look at how we increase savings from the entitlement side of it. So, the Speaker had proposed a two-step process. Let’s take step one as a big down payment, then we go to step two, to some of the reforms that we can subject to scrutiny to see if they really do save money, if they do create jobs, if they do reduce the deficit, if they do grow the economy.
Q: Madam Leader, you talked about comprehensive tax reform…
Leader Pelosi. I said Katrina, not Sandy. I was still thinking of Katrina. We have to address the needs. And if I just may say that, thank you, whoever just put that there. Was that you?
We had to do this before, where we had an impasse with a disagreement with the Executive Branch and the Legislative Branch. At that time, it was Katrina. But the important message – every day that we didn't pass something for Katrina really caused great apprehension in that region and with individuals living there. And it is the same thing with Sandy. Where is the confidence they will get if they see we want this little bit now, and maybe this little bit now, and you can't spend that now? No, it's not about only what can you spend now; it's what you can plan on now.
So, the timing is really important for Sandy, as well, as it was when we had a similar impact because of the Iraq war that people were concerned would hold up the Katrina funding.
Q: Speaker Boehner said there's no point in raising tax rates for the top two percent, including some small businesses, if you are just going to turn around next year and do comprehensive tax reform that perhaps lowers everyone's rates. What's your reaction to that?
Leader Pelosi. Completely upside-down. His statement is an argument for decoupling middle income tax cuts and higher income tax. We all agree that we should have a middle income tax cut. Decouple it. Put high end tax cuts on the table when we review comprehensively how do we get additional revenue to reduce the deficit, how do those decisions affect investment and growth and creation of jobs?
So, I take what he said in the complete opposite way. It argues for putting it on the table next week, next year, so we can justify its existence because there is no justification right now, no justification, for a higher tax cut that reduces, that has not created jobs and increases the deficit. That's what it has done for the years it has been in effect.
Q: The Speaker has said that he has gotten no specifics from the White House about what spending cuts they would entertain other than what's in the budget, and he wants significantly more spending cuts to get more revenue. Is he asking for something that is politically impossible for the President, who campaigned on protecting these entitlements?
Leader Pelosi. No, he's not. In fact, the fact is that I don't know if that's a reason, an excuse, or a stalling action, but it's not a serious statement. The fact is go to the table, debate it out, come out with a product, manage the issue, engineer a solution but don't make up excuses as to why we are working two days a week this week, two days a week last week, the week before that, Thanksgiving. Thank God we were able to be home for that. We don't know if we will be home for the rest of Hanukkah or Christmas.
But that's just totally – the Republicans sent a letter, perhaps you saw it, it had a number in it, it had no specifics. It had no specifics. The President has been very specific. If you compare what the President has put forward, I would need something this high for you even to be able to read the finest print. It would be this high, is what the President has put forth in terms of specificity. The Republicans put out a letter that had more signatures than it had ideas, and it had, like, one number.
So, let's get real. Let's really get real about this if we are going to have a solution. And let's stay here and sit at that table and call – you know, make that charge, okay, here are the President's cuts.
Have you seen the President's specifics?
Q: Yes, I've looked at them. I mean, the question…
Leader Pelosi. So, why do you, I mean, the President has been very specific. Do you not agree?
Q: My question is not so much specificity as, is their demand for even more cuts than what he is offering politically impossible for the President?
Leader Pelosi. Well, that – $1.6 trillion? $1.6 trillion? At some point, you are cutting the seed corn of our future. The President wants investments in infrastructure. He wants education. He wants job creating investments for the future. You're not going to reduce the deficit by only cutting your way to it because you will cut the prospects for job creation, which produce revenue.
So, I know that you've all seen the President's specificity. So, if the question is they want more cuts, then that's a different question than they want specifics from the President. But the President has been very specific. In all of it, the President has said, I am open to having a discussion about this, but let's just, you know, let's just all take a deep breath with this thing. The back and forth is only useful if it enhances understanding. The back and forth is only useful if it eliminates possibilities.
As I have said, don't even think about raising the Medicare age. We are not throwing America's seniors over the cliff to give a tax cut to the wealthiest people in America. We have priorities on that.
But, again, on all these other things, go to the table and negotiate.
Q: Madam Leader, $600 billion is where the President has been on entitlement cuts. That's something he hasn't moved on.
Leader Pelosi. Six-hundred billion dollars?
Q: Six-hundred billion dollars, I think, is the number that they've put out. Is there any upward movement, potential for upward movement in that?
Leader Pelosi. Four-hundred billion dollars is what I had heard, but…
Q: Well, $400 [billion] or $600 [billion], is there any room to go further?
Leader Pelosi. I think that, that should be left until next year when you look at what this is. I mean, if you are collecting trophies and you want a scalp in order to – if you want the scalp of seniors before you will touch one hair on the head of the wealthiest people in our country, what's the discussion about? Are we serious about what we do to have the pillars of our society, in terms of economic security for our seniors and their families, protected? Then that's a longer conversation about where to go.
I have said over and over, if you want to talk about Social Security, having it on the table, it's on its own table. Any savings from Social Security that can be created should stay to strengthen the life of Social Security, not to give a tax cut to wealthy people and call that deficit reduction.
Q: Madam Leader, you said that markets so far have been fairly confident that there's going to be a deal here.
Leader Pelosi. I'm just thinking that, that must be why the markets are doing so well.
Q: And I think that's what most market people suspect, as well. What should markets be looking for as clues as to whether or not we are going to get a deal, or not get a deal?
Leader Pelosi. Well, I think that, first of all, when we met with the President, the four leaders met with the President, we talked – we came out with fairly positive statements because we talked about that we wanted to avoid the – we agreed that we wanted to avoid the cliff, that we knew that there had to be the elements of cuts, of addressing the entitlements, and having revenue.
The Speaker suggested, and most [of] us agreed and had our own versions of the same two step, which was that we'll do a down payment now, which will be significant, and then to go to another stage where we would do things like tax reform – fairness, simplification, loophole closing, lowering of rates, whatever you could do in a comprehensive way, not just taking one thing, but in a comprehensive way – and also putting on the table how we strengthen Medicare, Social Security, and the rest of that.
So, my understanding from those who had visited our offices, they understand that we have to have revenue. And what we had hoped from that few weeks ago meeting was that we would see milestones along the way with a reasonable timetable to – as business works and says, what are your goals, where is your timetable, where are the milestones for success, that we would have seen more by now. Because, again, the time is growing short.
So, I think that a comprehensive, big, bold, balanced – which we are perfectly capable of doing – initiative to avoid the cliff as a starter is what they tell us they would like to see.
Q: So are markets getting it wrong, then, so far because we haven't seen those milestones that you're talking about?
Leader Pelosi. Well, hopefully they're not. Hopefully we will have that. And, again, as we get closer to the time – why it has to go this long, I just don't know.
Q: Madam Leader?
Leader Pelosi. But I think we have to go because the Speaker has his press conference about now.
You had one yesterday.
Q: Leader Pelosi, you've been resistant to any major entitlement changes, but the President in his last negotiation with the Speaker did agree to some pretty major changes.
Are you worried that as this goes forward, if there is any progress in negotiations, that he will agree to some entitlement changes that you can't get your Democrats to support?
Leader Pelosi. Let me just remind you that we, in the Affordable Care Act, had savings of over $700 billion by slowing the increase of costs to Medicare. So we took the first step in this regard. The President has several hundred billion dollars more in his budget which we fully support. The President knows our views, shares our values, we respect his leadership, and the Speaker may need our votes to go forward. So, I am confident about how the President is leading us.
Thank you all very much.