On Sunday's Meet the Press on NBC, host David Gregory allowed Massachusetts Senator John Kerry to blame Standard and Poor's downgrade of U.S. debt on the Tea Party without challenge. However, minutes later, in an interview with Arizona Senator John McCain, Gregory was quick to accuse Republicans of "politicizing" the issue by criticizing Democrats.
After quoting a statement from House Speaker John Boehner on the downgrade – which cited the unwillingness of Democrats to curb massive government spending as a cause – Gregory fretted to McCain: "Do you not see this downgrade as something akin to war that should galvanize political leadership on both sides of the aisle, rather than politicizing it?"
McCain condemned the depiction of Tea Party members of Congress as hostage-takers: "And by the way, talking about hostages, of lately the Democrats have been calling us terrorists. So we need to lower that level of rhetoric, obviously."
Responding to McCain's observation that President Obama had failed to lead in the debt ceiling debate, Gregory declared: "The President was dealing....John Boehner was dealing. They were coming up with a plan. They couldn't sell it. Was this really failed presidential leadership?"
Here is a transcript of Gregory's August 7 exchange with McCain over the debt downgrade:
10:44AM ET
DAVID GREGORY: Joining me now, Senator John McCain, Republican of Arizona, ranking member of the Senate Armed Services Committee.
Senator McCain, I, I want to return to the issue of Afghanistan in just a moment because of its crucial importance, but I would like you to respond to your Senate colleague on this issue of the downgrade of America's credit rating, which is an important development. He calls it a 'Tea Party downgrade,' reflecting dysfunction in our system. How do you respond to that?
JOHN MCCAIN [SEN. R-AZ]: Well, I agree that there is dysfunction in our system and a lot of it has to do with the failure of the President of the United States to lead. I would remind you that Republicans control one-third of the government. The Senate and the presidency are controlled by the Democrats. And the fact is that the President never came forward with a plan. Now, I was gratified to hear that he had plans, but there was never a specific plan. There was always the so-called 'leading from behind.'
Now, look, we could have reached an agreement a lot earlier, but the members of the House of Representatives had a mandate, had a mandate last November, and it was jobs and the economy and it was spending. And for them to then agree to tax increases and spending increases, was obviously a repudiation of the mandate that they felt they had from last November.
GREGORY: Right. But Senator, you talked about-
MCCAIN: And again, the President has not led. Yes.
GREGORY: You, you talked about the Tea Party.
MCCAIN: Go ahead.
GREGORY: I mean, you, you had some critical words. You talked about a rush in the House of Representatives to pass a balanced budget amendment as being 'foolish.' There were Republicans and Democrats who said Tea Party members, a lot of them freshmen conservatives, were digging in and, actually, some used the word 'hostage,' holding the whole process hostage because they would not raise any taxes at all. I mean, doesn't – it's not just you – you know, you know how Washington works. The President was dealing. John McCain – I mean, John Boehner was dealing. They were coming up with a plan. They couldn't sell it. Was this really failed presidential leadership?
MCCAIN: I think it's failed presidential leadership when you don't put forward a plan, a specific proposal to work off of. Previous presidents certainly have when we are in a crisis. And by the way, talking about hostages, of lately the Democrats have been calling us terrorists. So we need to lower that level of rhetoric, obviously.
But the fact is that we need to cut the corporate tax rate. We need to fix the tax code. We need to, obviously, have a, in my view, have a moratorium on new federal regulations. There's been thousands of pages of new regulations. By the way, one has been repealed. I'm sure you know, spilled milk, thank God, is no longer an oil spill. We obviously need to do a lot of things.
But remember, it was the housing market that triggered this crisis. We put liquidity into the financial institutions and obviously they're doing fine. They're sitting on a trillion and a half of cash that they're not spending. But the reality is that the housing market is what triggered this crisis, and it's going to be the housing market that recovers. And that means to me, go out and buy up people's mortgages as we did during the Great Depression, and give them a mortgage that they can afford the payments to make, and then we will begin to come out of this problem. And by the way, on the S&P thing, don't shoot the messenger. Is there anybody that believes that S&P is wrong in their assessment of the situation – of the fiscal situation of this country?
GREGORY: Well, there are questions about what their rationale was. But I want to ask you again about S&P. One of the things you said as a presidential candidate and have been saying for a long time is that lawmakers were spending like drunken sailors in this town for years and we're now all paying the price.
But this was the reaction, in part, from House Speaker Boehner, and I'll put it up on the screen. He talked about 'Decades of reckless spending cannot be reversed immediately, especially when the Democrats who run Washington remain unwilling to make the tough choices required to put America on solid ground.' 'The administration,' he says, 'and Democrats in Congress had sought an increase in the debt limit without any spending cuts or reforms. Republicans made clear the American people would not tolerate that and fought for the largest spending cuts possible.' Do you not see this downgrade as something akin to war that should galvanize political leadership on both sides of the aisle, rather than politicizing it?
MCCAIN: I do. And I believe this special committee or select committee will now, I hope, have added incentive – without the President's input, by the way, this is strictly a Congressional committee that will address these issues. And the elephant in the room, as we all know, is Medicare and Social Security. And unless we're ready to reform those entitlements, we're not going to have a long-term fix for our fiscal problems. So let's announce to the American people that we are going to fix those entitlement programs which are unsustainable. Otherwise we end up like Greece, and then we'll be unable to provide those benefits.
GREGORY: David Walker, who was the comptroller general for the U.S., head of the GAO, had a discussion with me during our Press Pass conversation this week, which is available on our website. He was rather skeptical about the road that this new super committee is going to take in addressing the very problems you outlined. This is what he said in part.
DAVID WALKER: Candidly, the deal that was done was very modest. We have to do a lot more. They punted on the big four, namely Medicare, Medicaid, Social Security, and tax reform. And you know, we'll see what happens with this special joint committee. But, candidly, I think the tough choices are probably going to not be made until after the 2012 elections.
GREGORY: After 2012, which includes the question of whether tax increases of any stripe can and should be part of the deal that this super committee works on?
MCCAIN: Well, there's a fundamental belief that many of us have is why should you raise taxes and take money from people and give it to the government, which has grown enormously in size, our debt has grown from one – $10 trillion to $14 trillion. What's the point? The point is that we need to take on the entitlements and we need to reform the tax code so it's flatter and fairer. Why is it that people are sitting on all this money? It's because they don't know what the next regulation that's coming down on them. They don't know what their future is so that they can invest, and that's why a lot of them are going to overseas and where they're making most of their profits.
So, look, this select committee, I believe, can really do what we haven't had the courage to do in the past. And the difference is between it and any other, as you know, is that it is an up or down vote. And I think that a lot of us would have the courage to vote for what the most experienced people in Congress come up with.
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