SCOTUS Allows Don't Ask, Don't Tell; Can Americans Afford Debt Plan?
BLITZER: Many of the new recommendations of the president's Bipartisan Debt Commission are being met with skepticism from both ends of the political spectrum. The plan aims to reduce the nation's debt by $4 trillion over the next 10 years and would cut Medicare and Social Security benefits while eliminating some popular tax breaks. So does it have any chance of being implemented at all? Joining us now is the chairman of the Senate Budget Committee, Democratic Senator Kent Conrad of North Dakota. He is also a member of this Bipartisan Debt Commission. Senator, thank you very much for coming in.</s>SENATOR KENT CONRAD (D) NORTH DAKOTA: Good to be here.</s>BLITZER: Are you on board with these recommendations that the two chairman of the commission, Alan Simpson and Erskine Bowles put up?</s>CONRAD: No, not every detail, but I'm strongly on board with the magnitude of the plan because that's what it's going to take to get us back on track.</s>BLITZER: Are you ready to deal with Social Security the way they're recommending? Because Jan Schakowsky was on this program earlier this week, the Democratic congresswoman from Illinois, also a member of your panel, she was furious. She says it's not good and Nancy Pelosi says it's a non-starter.</s>CONRAD: Well, you know, they have a right to their views. Look, I believe it is, without question, necessary to deal with the entitlements, to deal with revenue, to deal with discretionary spending and to deal with defense. We are borrowing 40 cents of every dollar we spend. We're headed for a debt that will be 400 percent of the gross domestic product of the country.</s>BLITZER: Are you ready to increase taxes?</s>CONRAD: Absolutely. I am ready to cut spending. I am ready to raise revenue. I am ready to deal with every part of the federal budget, because there is no option if America is going to remain economically strong.</s>BLITZER: So what I hear you saying is you're Alan Simpson and Erskine Bowles basically when it comes to these recommendations. You can tinker on the margins, but basically you're with them on that?</s>CONRAD: Let's talk about Social Security. They have said we're going to alter somewhat the inflation adjuster, make less of an inflationary adjustment.</s>BLITZER: People won't be getting the increases they have been until now.</s>CONRAD: Yes, a more accurate adjuster according to most economists. That seems to be a non-starter given the fact that Social Security is going to go cash negative in 2015. It's going to go insolvent. It's going to go broke by 2037. So those who say don't touch it aren't dealing with reality any more than those on the right are dealing with reality who say you can't touch revenue. Look, you have to deal with both sides of the equation.</s>BLITZER: When you say revenue, you mean taxes?</s>CONRAD: Exactly. Revenue as a share of our national income is the lowest it's been in 60 years. Spending is the highest it's been in 60 years as a share of national income. So you've got to deal with both sides of this equation if we're going to get our debt under control.</s>BLITZER: What you're saying is you've got to cut spending and increase taxes?</s>CONRAD: It's undeniable. I think any serious person who has looked at it has concluded that that's the case. By the way, on Social Security, I don't think many people have mentioned that in the Simpson-Bowles plan they're increasing for the bottom 20 percent. They will get an increase --</s>BLITZER: For the poorest Americans.</s>CONRAD: Yes. For those who reach the age of 80, they will get a 1 percent adjustment upward each year for five years in a row.</s>BLITZER: Let's be practical. You need 14 of the 18 members to approve these recommendations. Otherwise, they're just recommendations. If you get 14 on board, then it can go to the Congress as legislation. Do you believe there will be 14 of your colleagues, you and 13 others, who will agree?</s>CONRAD: I don't know. I hope so. I hope for the sake of this country that we have the will to do what's necessary. I can tell you the Chinese have concluded we have lost the will to deal with our debt. And they have concluded as a result the United States is going to become a second tier economic power. I hope we're able to prove the Chinese wrong. I hope we're able to tell all the interest groups in this town to oppose it because their little slice of the pie is getting nicked. It's going to take nicking a lot of the pie to get this job done.</s>BLITZER: You're up for re-election in 2012. Are you going to run?</s>CONRAD: I've not reached conclusion on that. I don't usually make that decision two years in advance but I'm certainly preparing to run.</s>BLITZER: North Dakota is not necessarily all that receptive, at least in the most recent election, to Democrats.</s>CONRAD: I can tell you my ratings have remained very positive.</s>BLITZER: Even though you voted for health care reform?</s>CONRAD: Absolutely. Look, as I explained to the people of North Dakota, we're on an unsustainable track on health care. We're spending 1 in every 6 dollars in this economy on health care. On the trend we're on, we're going to go to spending 1 in every $3 in this economy to health care.</s>BLITZER: So you're not going to break away from that.</s>CONRAD: Absolutely not.</s>BLITZER: And you know the Republicans if you run for reelection will hammer away on that.</s>CONRAD: I'm completely prepared to defend what has been done to prevent a financial collapse. I was in the room when the secretary of the treasury under the previous administration and the chairman of the Federal Reserve told us if you don't act, we are going to have a financial collapse.</s>BLITZER: Henry Paulson and Ben Bernanke, they were that blunt?</s>CONRAD: They were absolutely as clear as they could be and told us we would face a collapse within days.</s>BLITZER: Did they say it would be a depression?</s>CONRAD: They didn't use those words. They used the words financial collapse. On the night that we achieved agreement on the T.A.R.P. plan, we were told if we did not reach agreement by 5:00 on Sunday evening, the Asian markets would collapse, our own markets would open the next morning, and they would collapse.</s>BLITZER: Looking back, were they exaggerating or do you still believe that?</s>CONRAD: I think it is as clear as it can be, that's what it would have been. You saw former President Bush at the University of Texas say it wasn't a hard choice. It was a choice between depression or no depression. I chose no depression. And former President Bush is exactly right.</s>BLITZER: Sounds like someone may be running again from North Dakota in 2012.</s>CONRAD: Look, I am absolutely going to defend what was done, because it was absolutely essential to avert a financial collapse.</s>BLITZER: Senator, thank you very much for coming in.</s>CONRAD: You bet.</s>BLITZER: A former Republican insider is pushing the GOP leadership to embrace tea party members and their agenda. And a tea party retreat and a call for unity. That's coming up in our strategy session. A memento of Marilyn Monroe's love life on the auction block right now.