Boehner's "Plan B" Goes Bust; President Obama Remarks about Deficit Reduction Talks
WOLF BLITZER, CNN ANCHOR: And you're in THE SITUATION ROOM. Happening now, President Obama is about to make a statement on the fiscal cliff negotiations. We're going to bring it to you live as soon as it happens. And Newtown responding to the NRA's controversial call for armed guards in every school of the United States. We're going there live. We'll be there live emotions very, very high right now. One parent who made her cry with laughter. We're remembering Newtown's young victims and we're keeping their memories alive. We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM. Looking at pictures of the White House right now as it gets dark here in Washington, D.C. We were just alerted the president of the United States will be in the briefing room momentarily. You can see reporters already standing. They're getting ready to hear from the president. He's about to deliver a statement on where the so-called fiscal cliff negotiations stand right now. We'll, of course, have live coverage of the president's statement. Let's bring in our chief White House correspondent, Jessica Yellin right now. Jessica, set the scene for us. This is, obviously, a very sensitive moment in these negotiations where at so much is at stake for almost every American.</s>JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: That's right, Wolf. It's just days until we hit that so-called fiscal cliff where taxes for all Americans go up and spending cuts -- astronomical spending cuts kick in. It's also a time when already members of the House of Representatives have left town. So, time is running out for a deal to be reached and I can report right now, as Dana Bash has already broken that the president is in a meeting, has been meeting with Senate majority leader, Harry Reid. That's the top Democrat in the Senate. And peculiar that the two would be meeting because you'd think he would need to sit down with Republicans. But now, that Speaker Boehner has not been able to get his members on board a deal, the president is now faced with cutting a deal with Democrats, and he'll have to figure out a way to get this done with Senator Harry Reid push something through the Senate after Christmas probably, and then turn around and try to push that through the House of Representatives. So, it's running a little late, but when he does come in here, maybe he'll have something to report out of that meeting and tell us if they've made any progress on that front, Wolf. Well, I also expect that he will make an appeal to the American public and probably say something we've heard them talking about, that they have gone more than halfway, that the Republicans need to take on their own base, that the Republicans need to meet them part way and it will be a messaging opportunity for the president to argue that it will be not on the president's head, they'll try to say, if the nation goes over the cliff. We will see -- it will also be interesting to see if he'll acknowledge the NRA's statements today and talk about gun violence at all as he's done for the past few days.</s>BLITZER: Are we expecting he will answer reporters' questions, Jessica?</s>YELLIN: I haven't gotten an indication that he will, but we he will, of course, try to get him to.</s>BLITZER: He's in the White House briefing room. You go into the briefing room. I've said this often. You're the president of the United States. You should expect reporters to ask some questions. And, you want to make a statement without questions, do it in the Roosevelt room, the east room, plenty of other rooms in the White House. But if you go into the White House press media room, you should answer reporters' questions. That's just me, former White House correspondent. Let's go to Capitol Hill right now. Dana Bash is standing by. Dana, this has been a pretty bad week for the speaker of the House of Representatives, John Boehner.</s>DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Not a great week, that is for sure. And it was really a stunner what happened to him last night, the fact that he was so far away from getting votes from his own Republican caucus that he didn't even bother to put this plan "B" idea for the fiscal cliff on the floor after he spent 48 hours making the case that not only could he pass it, but it was politically the right thing for Republicans to do to prove the to the American people that Republicans don't want American's taxes to go up, particularly, those making up to a million dollars. But on the meeting that Jessica just talked about, I was told that Harry Reid, the Democratic Senate majority leader is, at the White House one-on-one meeting with the president and that really is indicative of where we are right now. Jessica was alluding to this. The speaker, given what happened last night, given what that illustrated which is that it will be very difficult for him to get Republican votes right now for any kind of effective tax increase. The ball is in the Senate's court. Republicans say that, but it happens to be true. Democrats around the Senate know that very well. So, they're clearly discussing a way forward, and as we talked about in the last hour, one leading contender, if you will, for the way forward might be to go off the cliff. To go off the cliff, have everybody's taxes go up, come back in the next Congress, which starts on January 3rd just two days after that cliff happens and have a piece of legislation that will do the opposite of what they're trying to do now, which is cut people's taxes, which is much more politically palatable than raising people's taxes which is so hard to get votes for right now, especially from Republicans.</s>BLITZER: I want to play a little clip, Dana. This is the House speaker, John Boehner, describing what happened -- maybe more appropriately what didn't happen last night when he couldn't even have a roll call because he didn't have the votes.</s>REP. JOHN BOEHNER, (R) HOUSE SPEAKER: While we may have not been able to get the votes last night to avert 99.81 percent of the tax increases, I don't think -- they weren't taking that out on me. They were dealing with the perception that somebody might accuse them of raising taxes.</s>BLITZER: Here's what I don't understand, Dana, and maybe you can help me out with this -- a lot of these conservative Republicans who refused to vote in favor of what Boehner and Eric Cantor, the majority leader, what they really wanted, by refusing to vote in favor of that, they are seeing -- they're about to see a huge tax increase, maybe the biggest tax increase in U.S. history for 99.81 percent of the American people who pay federal income tax because all of the tax rates are going to go up January 1st if legislation isn't passed. Why isn't that seen as a violation of their no new taxes pledge?</s>BASH: It's such a great question. What you're seeing are a group of politicians standing on principle, and what they want is being forfeited because of their principle. And that really is the argument that the speaker made to his rank-and-file Republicans. Listen, guys, I'm trying to save you from yourselves here. He understands that politically, for that reason, even when it comes to the process, Republicans will very likely get the blame if everybody's taxes go up. So, that's why the speaker was trying to push this, but it just comes down to the fact that there are a lot of rank-and-file Republicans who feel that they were elected to do one thing, which is cut spending and not raise taxes. So it's one thing, from their perspective, to allow taxes to go up. It's another thing to actively vote to increase taxes. They insist that it is a distinction with a difference, which is why we might be headed for the fiscal cliff to sort of change the process and change the prospects of these votes which could make a very big difference politically voting to cut taxes rather than to raise taxes.</s>BLITZER: Jessica, I know you've been well-briefed over there at the White House and where the president stands on some of the most sensitive issues. He had, for a long time, said no new tax rates for those making under $250,000 a year. He went up recently to $400,000 a year. Boehner's position was a million dollars a year. Is it reasonable to think that maybe between 400,000 and a million, maybe there's some compromise in the works, 600,000, 700,000 that both sides could live with?</s>YELLIN: More wiggle room but not a lot. Their feeling, the Democrat's feeling is that they have given a lot that they have compromised and that, frankly, they have leverage. And that Republicans have to give more. So -- and as you know, Wolf, a lot of the Democrats, I'm sorry, believe that they have the political advantage. If the nation does go over the cliff, Americans will end up blaming the Republicans. Now, we could argue -- look at that and say, in the short term, that may be the case. You know, when the history books are written, it might be the president who's blamed in the long term, who knows. But that's the argument for the short term and that's the calculus that's being made. So, a little bit of wriggle room on more cuts by Democrats and different rates. Somebody just came out and put some remarks on the podium, I should point out. So, I think we might be getting close to the president coming in.</s>BLITZER: Have they given us the two-minute warning yet, Jessica?</s>YELLIN: They have not, but we are seven minute after his appointed time to speak. So, we're well passed our two minutes. Perhaps, he'll be coming out shortly.</s>BLITZER: All right.</s>YELLIN: So, the bottom line is, they've indicated there's a little bit more wriggle room, not a lot. And they think they have the upper hand when it comes to both political leverage and public perception, Wolf.</s>BLITZER: I'm going to play a little clip right now while we await the president of the United States. Here's what he said the other day about his willingness to compromise on these very sensitive issues.</s>BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is not a situation where I'm unwilling to compromise. This is not a situation where I'm trying to rub their face in anything. I think anybody who looks at this objectively would say that coming off my election, I have met them at least halfway.</s>BLITZER: So, the bottom line right now, as we await the president, he's going to tell us where these negotiations stand and make a statement and, Jessica, do we expect -- I asked you this earlier. I don't know if you got any more information. I know that he and his family were hoping to spend Christmas and New Year's at his home state of Hawaii. That may be put on hold a little bit. Maybe the family will go out there, the first lady and the daughters, and he'll meet up with them. Is that a possibility?</s>YELLIN: We'll see what he announces here. I wouldn't be surprised if he's able to go out there and open up his gifts, have some sort of celebration with his family in Hawaii and then come back and wrap up this -- try to wrap up some sort of a deal, if it's possible, after Christmas is done. But, we'll wait and see what they announce about the details of his travel, if he acknowledges that when he speaks, Wolf. It does look like maybe those of us who live in Washington and cover this will have a quiet Christmas but a busy New Year's eve. I'm not so confident that we will be resting on the days leading up to New Year's -- New Year's day and New Year's eve, itself. It could be very busy around that time.</s>BLITZER: It could be very busy, indeed. Let me go up to the Capitol Hill, Dana Bash is still with us. Dana, I take it the House and the Senate, they've sort of recessed until next Thursday. Is that right?</s>BASH: The House is gone until next Thursday. The Senate is on its way, if not, already gone. They were wrapping up a final vote just before I came on with you. But you know, one thing that I think is interesting to point out is that the big reason why the speaker had such a bomb with his plan "B" last night is because Democrats in the House held the line. They all agreed that they would not vote for it. So, he was relying solely on Republican votes that he simply couldn't get. What you're looking at in the future, if there is any kind of bipartisan plan or any hope to put any kind of package, small or large, through the House and the Senate, it is going to very likely be with majority Democratic votes picking off enough Republicans in the Senate and enough Republicans in the House. But what I was told earlier today that Harry Reid who, again, is meeting with the president, maybe that's why he's a little bit late. The Democratic majority leader has made it very clear he is not willing to force his Democratic senators to take a vote that's not going to pass in the House. Whatever they agree to do, if they agree to do anything before December 31st, that fiscal cliff deadline, he wants to make sure that all the votes are lined up to make sure it goes through because he saw what happened last night with the speaker. Another reason they didn't want to take that vote is because they knew it wasn't going to go anywhere. So, it would have been a politically difficult vote to take for not a lot of giveback.</s>BLITZER: Dana, I want you to listen to what the president said the other day, because he seemed to be suggesting that there's so much dislike of him among so many of these conservative Republicans. It doesn't matter how far he goes in making a proposal. They're going to reject it because it simply has his name on it. Listen to this.</s>OBAMA: They keep on finding ways to say no as opposed to finding ways to say yes. And I don't know how much of that just has to do with, you know, it is very hard for them to say yes to me. But, you know, at some point, you know, they've got to take me out of it and think about their voters, and think about what's best for the country.</s>BLITZER: So, Dana, how much of this is the dislike, the anger towards the president coming from a lot of these Republican lawmakers in the House?</s>BASH: Some of it might be. I asked a number of Republican House members about those comments if that was part of it, and you know, the underlying dislike for him, I don't think it's so much it. It is the underlying, very deep philosophical divide between what a lot of these Republicans came here to do and what the president believes. It may not really is when you get down to it. Certainly, there are politics involved and anything that goes on the Washington. But on this big issue, Republicans, I talked to several of them this morning even say that, look, they feel like this is their moment. This is their moment to achieve what they've wanted to achieve philosophically with regard to government spending, cutting government spending, with regard to taxes, keeping taxes low. That this was their moment that was ushered in with the House Republican House and they're just very, very low to give that up. even though, at the same time, they understand even the most ardent conservatives, fiscal conservatives who I've spoken with in the hallways here, understand that the president has the political leverage. They get it, but they just feel that it is their responsibility to stick to principle when it comes to votes.</s>BLITZER: All right. Hold on for a moment. I want to go back to Jessica Yellin over at the White House. She's in the briefing right now awaiting the president. He should be coming out fairly soon making a statement on where these negotiations to avoid the fiscal cliff stand. The Republican leader in the Senate, Jessica, Mitch McConnell, he made it clear that it's up to the president now to come up with a new plan. Listen to this.</s>SEN. MITCH MCCONNELL, (R) MINORITY LEADER: This isn't John Boehner's problem to solve. He's done his part. He's bent over backwards. Mr. President, how about rallying your party around a solution? How about getting Democrats to support something? I've said it many times before, we simply cannot solve the problems we face, unless, and until the president of the United States either finds the will or develops the ability, the ability to lead. This is a moment that calls for presidential leadership. That's the way out of this. It's that simple.</s>BLITZER: A lot of people have made the point, Jessica, that if there is a collapse of these negotiations, tax rates go up for everyone. Maybe they'll blame Republicans in the short-term, but in the long-term, they'll say this happened on the president's watch, and he needs to show what McConnell says over there is more leadership to get everyone together. What did they say at the White House about that argument?</s>YELLIN: Well, there is a human dynamic to all of this, Wolf, as you point out. The Republicans, when I talked to them, not just in public, but behind the scenes, very frustrated. They argue that President Obama can't offer them, doesn't know what to offer them to give them the cover they need to get the most conservative element of their base on board a deal to get this over the finish line. At the White House, when I bring that up, they sort of shrug their shoulders, roll their eyes, and laugh at me and say, you know, when they put out a very -- what they viewed as a recent compromise during the debt talks of 2011, they were ridiculed and mocked because it was considered a compromised position that they led with their final offer first. And then, Republicans rejected that and then they had nowhere to go. And so, now the President is taking, you know, essentially a more aggressive posture and as somewhere to move in a negotiation, and he's criticized for that. So, you know, they feel, you know, in essence, Democrats broadly feel that the failure of plan "B" is evidence that Speaker Boehner cannot wrangle his conference and it is -- the failure of leadership is on Speaker Boehner's side. The bottom line is, there's a lot of finger pointing when it comes to who is leading and who is failing to lead. And there's a lot of bitterness -- and maybe bitterness is the wrong word, but there's a lot of frustration on both sides that there's not a partner to deal with on the other end. A partner who can actually get the deal done. And so, this human dynamic is sort of fascinating. The bottom line of what really matters to Americans is that this is a Washington- generated problem. The fiscal cliff is not some natural disaster. It's not a hurricane that's hit. This was created by Congress and by the tax plan that George Bush passed and then by the last year sequester. And it didn't have to exist, and now, Congress and Washington cannot solve it. So, they can't wind themselves out of their own pretzel. And it's a little bit confounding to everybody who's dealing with it, Wolf.</s>BLITZER: Jessica, still no two-minute warning?</s>YELLIN: No two-minute warning. And I keep asking what's going on, what's the holdup. No response yet. So, I'm sure we'll find out soon.</s>BLITZER: All right. We'll find out soon enough. You know what, while we're waiting for the president, let's take a quick break. Resume our coverage from the White House right after this.