December 12th, 2010

Transcript: David Axelrod on State of the Union with Candy Crowley

Today on CNN’s State of the Union with Candy Crowley, White House senior adviser David Axelrod spoke about the tax deal, ruling out any major changes to the tax package negotiated with Republicans. He also discussed U.S. diplomat Richard Holbrooke’s condition after undergoing surgery saying, “he’s fighting through it.” A full transcript follows.

CROWLEY: Having spent his first two years staring down Republicans, the president now finds himself in a standoff inside his own party. It is not a comfortable place to be and he is not pleased.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: This is a big, diverse country. Not everybody agrees with us. I know that shocks people. The New York Times editorial page does not permeate across all of America. Neither does the Wall Street Journal editorial page.

(END VIDEO CLIP)

CROWLEY: Tomorrow, the Senate is scheduled to vote on and likely pass the president’s tax compromise, but the House Democratic leadership isn’t even willing to put it up for a vote yet. What now? Joining me here in Washington, White House senior adviser, David Axelrod. David, thanks for being here.

AXELROD: Candy, great to be here.

CROWLEY: So what next?

AXELROD: Well, as you said, I think the Senate is going to take this bill up tomorrow, and we believe that when it comes back to the House, that we will get a vote, and that we’ll prevail there, because at the end of the day, no one wants to see taxes go up on 150 million Americans on January 1st. No one wants to see 2 million people lose their unemployment insurance, and everybody understands what it would mean for the economy if we don’t get this done.

On the flipside, if we do get this done, every economist from right to left has said this would mean a big boost for our economy, and so I believe that ultimately people will come together around this plan.

CROWLEY: So is that based on a hope, or are you having ongoing talks with the House leadership and you know that they will put it up for a vote?

AXELROD: I think it’s fair to say that we’re having broad conversations. This is an extraordinarily important moment for the country, and we want to make sure that everyone’s questions are answered and that everyone understands exactly what’s in this package, which is a tremendous win for middle-class people across this country, and again would be a great boost to our economy.

But understand that this is a compromise. There are elements of this plan that we didn’t particularly like. We didn’t particularly like even temporarily extending these high-end tax cuts, which cost money that we could apply to our deficit. We didn’t particularly like the treatment of the estate tax for wealthy estates, but compromise by its very nature includes things that you don’t necessarily like.

CROWLEY: But are you at this point — are you selling it to these reluctant Democrats, or are you willing to change it in a major form, in particular the real estate tax, which really — sorry, the estate tax — that is really sticking in the craw of Democrats on the House side?

AXELROD: Look, this framework represents a compromise that both sides can accept, and we can’t change it in major ways and expect that this thing’s going to pass. Obviously people have discussions —

CROWLEY: So no, you wouldn’t do a big change in the estate tax?

AXELROD: I expect that the framework that was agreed to will be largely what is voted on. And again, that’s the nature of compromise. But it would be a tragic thing for people across this country if we didn’t get this done, and it will be bad for our economy at a time when we really need to be moving forward.

CROWLEY: Just to pin it down, you don’t see any changes in the estate tax compromise as it now stands?

AXELROD: I think that the framework that was agreed to is the one that will be voted on tomorrow, and I think that that’s the one that we’re going to be working with.

CROWLEY: I’m going to read you something, and this came from Jim Moran, who I’m sure you know well, Democrat from Virginia, and in an interview with the Hill he had this to say. “This is a lack of leadership on the part of Obama. I don’t know where the — expletive — Obama is on this or anything else. They are AWOL.”

It does seem to me that Democrats not only object to some of the portions of this compromise, they object to the way you handled it. You cut them out, they say. Why not — I mean, A, are you surprised by the ferocity of this blow-back?

AXELROD: No, no, look, I understand — I understand the concerns of people in the Congress, because they’re worried about their legislative —

CROWLEY: (inaudible) AWOL, it’s like…

(CROSSTALK)

AXELROD: Well, look, I’m not going to comment on the comments of one particular member of Congress. I understand the concerns about the process, but ultimately we’ve got a few days left before the end of the year. If we don’t act, then we’re going to see a major tax increase on people across this country, and 2 million people who are on unemployment insurance will be cut loose. And we simply can’t afford that. The economy can’t afford that, and obviously, you can’t have it both ways. The president took the initiative to try and resolve this so that we don’t have that crisis. That is leadership. And you know, we could engage in endless discussions, let this roll over beyond the first of the year, but the result of it would be very devastating for people across this country.

CROWLEY: Speaker Pelosi on board in terms of putting it on. Are you confident that she will? Have you heard from her that she will put whatever the Senate does on the House floor?

AXELROD: I’m not going to speak for the speaker, but I know she has a great sensitivity to the importance of getting something done, and —

CROWLEY: She also has a pretty big sensitivity over her liberal membership at the moment.

AXELROD: Right, and we will work with her through this period to try and get this done, and to get this done. But ultimately, I think she has a great sense of responsibility to the American people. She understands the consequences of inaction.

CROWLEY: One of our guests coming up, Elijah Cummings, has said that he thinks the president needs to come up to Capitol Hill and look some of these folks in the eye and say, I understand the risk that you took in supporting me on a variety of issues in the first two years of my term. I need you to come along. Here’s why I made this particular decision about these tax cuts. Will he go to Capitol Hill and talk to some of these folks?

AXELROD: Well, Candy, he’s been talking to individual members of Congress all through the weekend, and before. He’ll continue to do that. And what he’s going to say to them is, there is an enormous amount of good in this package, that will help their constituents, that will help the broader public, and that will move our economy forward. Economists say this will ad a point, or a point and a half to our GDP.

CROWLEY: But they have kind of heard that and —

AXELROD: Well, it’s important to focus on that, because you can focus on what you don’t like, and cut your noses off to spite your face, your nose off to spite your face, and that would be the wrong thing to do.

It is egregious that the Republican Party that made their demand, you know, tax breaks for the wealthy — we insisted on a temporary tax breaks. We’re going to have a big debate about this in two years, but right now, given the state of the economy, given the fact that so many people across this country are living with the uncertainty of not knowing whether their taxes are going to go up on January 1st, or whether their unemployment insurance is going to be —

CROWLEY: So you’re sort of selling this as a necessary evil in some ways, that you have to take this because otherwise you cut off the middle class. But I think I’m talking tonally here, because what I get from the Democrats — and I’m sure you get it, too, because you have a great political ear.

AXELROD: I’ve heard from a few of them.

CROWLEY: Yes, you have heard from a few of them. Is that, you know, he is selling us down the river, particularly the liberal side. They feel as though they went out on a limb for him on so many things, and he is sawing it off now in order to —

AXELROD: I don’t think you can ever say you’re selling anyone down the river when you can — when you’re talking about tax cuts that are going to make a significant — in addition to extending —

CROWLEY: They spent an entire election saying they didn’t want tax cuts extended for the wealthy.

AXELROD: — for the middle class, for the — yes he did, Candy, and he still thinks that’s not a good idea. But what is a good idea is extending tax cuts for the middle class. What is a good idea is the payroll tax cut that will go into effect January 1st, under this plan, that wasn’t in effect before that’s going to make $1,000 difference for everyone is going to make paychecks bigger, that will help our economy, it will help families.

That’s what we’re focused on. We’re trying to get something done here for the American people.

CROWLEY: Could you have handled it better?

AXELROD: We handled it as best as we could given the time frame that we had. And I’m not looking for style points here, what I’m looking for is progress for the American people, what I’m looking for is to forestall what would be devastating for the American people and our economy. And that’s what we should be focused on.

CROWLEY: Let me combine your current job as a senior adviser to the president and your soon to be job next year leaving to kind of head up the re-election campaign. Do you expect president Obama to have a challenge in the primary?

AXELROD: I really don’t. I mean I can’t predict obviously anybody can file for an office but I see strong support among Democrats for this president. They understand that he’s fighting hard, trying hard to move this country forward. They understand what we’ve accomplished already.

The biggest lament I hear from Democrats is you’ve done so much, how come people aren’t responding better? Well first of all, his standing is actually compared to other presidents in the midterm in these kinds of circumstances with the difficult economy are fairly good, but beyond that, you know, you can’t expect people, until we complete the recovery, until we push forward, until we get that unemployment rate down, you’re going to have static out there politically and I understand that.

CROWLEY: Do you think, would you agree with this description, the president is tacking back to the center?

AXELROD: No, I think the president is who the president always has been. He’s someone trying to solve problems for the American people. He’s someone who is trying to improve the lives of middle class.

CROWLEY: But the president was one who opposed these, except for what the president was someone who opposed what the Republicans wanted and now he’s someone who has accepted it.

AXELROD: Well, that’s…

CROWLEY: Seems to be tacking to the center.

AXELROD: That’s not true at all. In fact, part of the package this tax package was something the president proposed months ago which is accelerated expensing for businesses across the country so they can buy equipment next year and defer their taxes on it. He thought that would be good and for the economy, that was a Republican idea.

The health care plan that he ultimately passed had at its roots Republican ideas about how to reform the health care system based on the market. So that’s simply not true, Candy. He is who he’s always been and he’s always going to be someone who is going to look for the best ways to improve the lives of people, to build the economy for the future.

CROWLEY: And quickly, if I could, Richard Holbrooke, one of the president’s top foreign policy advisers is critically ill. Can you give us an update on him?

AXELROD: Well he is, Candy but he’s also very tough person. He had a tremendously difficult situation Friday. He had an aortic bleed, and many people would have succumbed to that. Richard is fighting through it. Anyone who knows him – and I was with him Friday morning before this happened, knows how tough and resilient he is. And we’re all praying that that quality sees him through now.

CROWLEY: David Axelrod, senior adviser to the president, thanks for stopping by.

AXELROD: Good to be here.

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