out of work or looking for work or on unemployment. it is a big deal. it is also a big deal that we extend it for the full year. after all, the president way back in september came before congress and ask for a yearlong extension of all of those things, so now we begin the work of trying to extend all of those beyond the two months for the full year. we will have to find those areas of common ground. there remain some significant differences. that is why it was important to put this two-month extension in place while we work out those other areas. i think we should look to cut out a lot of loopholes, the corporate tax code. the republicans have put forward a proposal to help seniors. there are ways to move toward on these issues. >> is there anything right now

you could identify? republicans like to say that many of the things you put together in the house bill were in their grip on or talked about with a level of specificity to release super committee or with talks with vice-president biden or speaker boehner and president obama. >> there are some items. for example, the sale of some of the spectrum is something has been discussed. its liability is now exceeding the funds the coming in. that is another area that we discussed in the past. there are some of those areas. the to do a full year extension

of all those items, the payroll tax cut, unemployment compensation, and what we call the dock fix, it will probably cost another $170 billion. and that is if you cover all of the offsets for them. simply to go back to reach it would be under, even with the surtax, what they were paying in the clinton administration. the surtax would apply only to millionaires and only through that part of their income in excess of $1 million. we think that is still a way to pay for it.

but the revenue would then come in over a 10-year period. >> but is it true you do not have the vote for the millionaire tax? >> we think it is important to have that conversation going forward. we thought it was important to go forward and extend the tax cuts for 160 million americans. it would be a little more money in their pockets. that is why it is so important that we get to work right away.

is the pay freeze off the table? >> let's remember, federal employees are held there working every day, whether it is on board security, fda, folks checking to make sure our drugs are safe, folks all across the country. they have party had a two-year pay freeze. and they're willing to do their part as part of a large deficit reduction package. clearly, those issues were discussed as part of a multi- year-long deficit reduction plan. i don't know if it is appropriate to be asking those folks to take another hit when we are not asking the corporations. after all, they're not cutting the pensions of folks at the cia. they just help track down osama

bin laden. it is, like, thank you for tracking the guy down. now we're going to freeze your pay. i do not think that they should be part of the short-term plan. but again, we will have a conversation. >> the financing mechanism, fannie and freddie over 10 years, how confident are you a bad deal with these issues? paying for it over 10 years, a fee, that is spending up front, revenue with a long horizon. there are folks on both sides that say that is no way to run the budget. >> so long as you're changing goal, you can be sure that those revenues will come in.

that is something that they will have a guaranteed revenue stream coming in. when you talk about other things, like appropriations caps in the out years, the sometimes become a little bit more iffy. people will have to be careful to monitor that over time. but when you're making changes in the law, like we did with fannie and freddie, you can be assured of that income stream. >> what is your take on what this week met for john boehner and his speakership. >> i think there will be a lot of political analysis to answer that. i think it has been part of a pattern, now that we have seen it all year long. we have these issues with important differences, but there

have been bipartisan answers to these issues. instead of taking a more bipartisan approach, there have been big parts of the republican caucus that have not been interested in the bipartisanship. they have taken these things to the brink. i hope moving forward, we can get beyond that and look for some practical answers to these very real questions. but we have seen that pattern. we saw it over the summer where house republicans threatened to prevent the united states from paying its debts for the first time in its history. we have seen multiple efforts to shut down the federal government if republicans did not get their way. hopefully, in the new year, we will get beyond that and get to more problem-solving. i am glad this issue was resolved finally at the end of the year. it should not have taken this long. it should not have been this hard. but we got it done. now that return to this question about how to extend the payroll

tax cuts for the remainder of the year, it will be very important that people come together in the spirit of compromise so we do not repeat what we just saw. >> speaker boehner -- weaker or stronger after this? >> that will be a question for his caucus. democrats with all the time and the white house ways that all the time. you have a very good feel for these things. stronger or weaker? >> again, that will play out in the coming months. within the republican caucus. certainly, the speaker appeared to having fought that the bipartisan proposal was the right way to go, obviously, the right wing tea party part of his caucus changed the dynamic within his caucus. the question for his caucus is what is the lesson coming out?

what is less and that's where the speakers in sticks right? or, at the end of the day, thaws it to preclude the decision that the president had made earlier in the year? it took so much time, energy, and effort to resolve what should have been a pretty straightforward decision. after all, we are talking about taking measures to make sure the payroll tax did not go up in january. it seemed to be a no-brainer in the senate. you had a bipartisan group. you had 89 at 100 senators. you don't get greater than that in the capital. and you had 80% of republican

senators. again, you had the tea party wing, the more right-wing, the more extreme wing of the caucus put the brakes on that. and tossed us into this firestorm in the closing week. i think that, as we go forward, i hope we will find it easier to resolve our problems without going to those extremes. when the public is watching that, they are understandably frustrated. i am and would be, too, if i were watching this from the outside. >> to you have a concern that the public does not differentiate between republicans and democrats? if you look at the numbers across the board, democrats and independents are giving congress 9% or 10% approval ratings. do you deaf -- do they differ in shape that it is the tea party or that washington is broken?

>> i think the best you can hope for is to urge the american people to closely follow what is going on, to follow what positions everybody is taking. look to see who is willing to enter bipartisan compromises and who goes kicking and screaming. at the end of the day, the country had the right result. that is the important thing. but to answer your question, i think people will be paying closer attention and i believe that is a good thing. i think that greater sunshine on the process and positions of the parties will show that the president and the democrats in congress are working hard to try to get the economy moving.

that is the main focus of the country and jobs will be the main issue during the election. >> would you say that this last debate played out the way it has as a watershed moment for your party? did that clarify or give traction on an issue that you had been tried to get clarification or attraction for the better part of three month for four months? after the 2012 elections coming, will it be looked at as a significant turning point? >> that is a difficult question. there are always these moments that, when you're in the middle of them, people say this will be a watershed moment. i am not sure about that. i do think that this conclusion is the best result. and i do think what this debate has demonstrated was that, when it came to protecting taxpayers for the folks at the high end of the income scale, republicans fight fiercely to protect that.

they have been fighting fiercely to fight tax breaks -- to protect tax breaks for corporations. but when it came to a tax cut for 160 million americans, for six months, the republican leadership in the house was against it. there are multiple statements out there of them saying that a one-year payroll tax cut will not help the economy. but two things happened. first, you had a lot of economists saying, wait a minute, when you have a fragile economy like this, this will make a difference. $1,000 on average in every big american pockets does make a difference. so there is a contrast between republicans really determined and zealously protecting tax breaks for special interests and folks were very wealthy but willing to play the kind of games we saw with respect to the payroll tax cut. i do think that that is something the american people

will pay attention to. >> i understand your caution. from my point of view, you'll not have a clearer or more defined and easily-deductible victory over house republicans then you just add. -- easily-digestible victory over house republicans than you just had. how do not think it will make a difference? >> the main thing for the country is the economy and jobs. that is what people will focus on. the payroll tax cut is a piece of that. this is part of the jobs plan from back in september. >> so your gut tells you that this may be less important than it appears now. >> the overriding factor will be how is the economy performing and what is the vision of the candidates for the economy's future? where do we take the country going forward? i think that the debate, not

just the payroll tax cut, but over the last four months or five months, since the president's speech before congress in september shows that he is focused 100% on getting the economy moving and on jobs. what we saw from our republican colleagues in the house indicated that they, at least initially, did not want to move for on the payroll tax cut. they did not want to move forward on these other items. the payroll tax plan is something that we can -- the president's infrastructure plan is something that we can move forward on. you have 14% unemployment in the construction industry. that seems like a no-brainer. house republicans have not even brought that up for a vote. we hope they will reconsider. those of the kind of issues that we hope will dominate the election. >> one of the things that the democrats say is that there is

skepticism. notable republicans have expressed skepticism over the payroll tax holiday. do you think this is doomed from the start? will it ultimately be a leadership thing? >> i hope we do not -- i certainly hope we are not doomed from the start. house republican members had been on record opposing a year- long payroll tax cut. i hope that, once we get together, they will change their minds about this. it passed -- would pass before the commerce committee -- white passed before the commerce

committee -- what passed before the commerce committee is different. $170 billion is something we should be able to come together on. but only if everybody is willing to put aside these extreme partisan positions that we have seen from house republicans. and now the american people. >> when it comes to unemployment compensation, are you willing to agree to reforms on what republicans want to do? >> we have been willing to look of some of the reforms of people have recommended with respect to training programs and those kinds of things. but we do oppose their proposals to dramatically limit the number of months. those are the kinds of things that will have to be dealt with. i think the drug-testing thing is a red herring. we can talk about it. the reality is that people are

not out of work because they have substance-abuse problems. people are out of work because there are -- there are poor people looking for every job in america. the republican rhetoric has been insulting to a whole lot of working americans who have lost their jobs through no fault of their own. they had a job and in the that economy they lost it. i have to say that this republican effort to blame the people who lost jobs through no fault of their own shows a total insensitivity to the stories we are hearing in districts around the country. frankly, i think the people around the country are hearing and they are not very appreciative. they know that everybody, but for the grace of god, could also be in that position. >> is going from 99 weeks of

maximum jobless benefits to 59 weeks a nonstarter? >> i will not draw any bright lines right now other than to say that the result is something that is good for the economy, good for jobs, and fair to the american people. which is why i think the proposals we put forward on dealing with part of this through closing corporate tax loopholes and that kind of thing meet the test of fairness and it is important that day offset these costs for the purpose of deficit reduction. >> should the medicare dock fix be two years? can we afford to use? >> i would like to see a longer dock fix. as you bring up the question of how much we can pay for and come up with a compromise agreement on what to pay for, look, the longer we continue the doc fix,

the better. it is just a question of coming together and identifying the offsets. >> and other issues to what extent the statement can be used for the purpose of the deficit. >> the american medical association and the chairman of the finance committee have come up with a semi-permanent doc fix which uses the overseas contingency funding. it is not supported. it is a baseline that we were going to spend in afghanistan and iraq. we clearly will not. those are not actual savings. it is just accounting savings. how opener you to using oco for something like medicare doctors? -- help open are you teasing

oco for something like medicare doctors? >> if you look today at the spending in the defense accounts and overseas operations accounts, the reality is that some of those overseas contingency moneys are being used for on going non-war functions at the defense department and some of our foreign policy operations. the reality is that those bonds are real -- those funds are real in the fact that they're being used today to finance non-war operations. >> so you can pull them back in. >> i think the defense department should live within its own budget. those funds that are out there right now, the overseen contingency account, in some ways are a multi-year slush

fund. if you do not scaled back, the reality is that those funds are available for expenditure. that is why the non-partisan independent congressional budget office says that scaling back those war funds from the out years does lead to real deficit reduction the way they count it. what i am saying is that this will be part of the conversation. >> we have time for about two more questions. >> i know that it seems far away, but two things of budgetary significance happened. bush tax cuts are set to expire and cuts will be triggered because the super committee was unable to come up with a plan. do you think there will overturn that's a cluster? do you think this is an issue that this congress will be able to solve or -- overturned that sequester?

do you think that is an issue that this congress will be able to solve? >> if you just undo the sequester, automatically, the deficit of the united states increases by $1.20 trillion. we do not want to do that. we should come as a congress, come up with a balanced plan to reduce more than $1.20 trillion from the deficit. but i certainly oppose the idea of increasing the deficit and not looking for offsets. i do think it makes sense to find a reasonable approach and a balanced approach rather than an across-the-board cut. but you put your finger on the big bulk of the coming year, which will be december. while i very much hope that congress throws out a lot of these issues that we have today,

the big question about the economy and a balanced approach toward deficit are likely to take place after the election. in fact, the election will be a great national debate about how to approach those issues. in december of next year, in addition to facing the possibility of an across the board will $0.20 trillion , you also have the 2001-2003 tax cuts. those tax cuts by themselves amount to $4 trillion. when you buy that is that, if congress at its bags and went away, you'd have $4 trillion coming into government. so it will all be part of politics. it will all be part of the conversation during the election. what i hope is that, while the

grand conversation is going on around the country in the next election, we will still be able to do important business for the country, including extending the payroll tax cut, unemployment compensation, and the doc fix. >> do you think the election outcomes will determine the extension of the bush tax cuts? if barack obama loses, will it make it more likely that they will be extended? >> if you look at the swing in the last couple of congressional elections, they have been in the range of 25% +. especially if the conversation continues the way it has been. i think more and more people will be looking for a change in the majority of the house of representatives. but your question as to how the election will affect the outcome

of these big issues we're talking about, i think they will have a very real impact. that is why these elections are so important, both for the presidency -- why it is important to reelect the president -- as well as the house and senate elections. >> we will leave it there. thank you for joining us. we're back with our to reporters. where is their common ground? they headed to two months of negotiations in this payroll tax cut extension to try to make it long-term for lease 10 more months. where do house republicans and some democrats agree? >> he said that selling of broadband spectrum isn't easy one. that gives you a lot of -- spectrum is an easy one. that gives you a lot of revenue. on this christmas day, i would

say that we're looking toward groundhog day. democrats will talk about paying for this with the millionaire surtax. republicans will be revisited all the political elements. that will play out in the next 60 days. >> so where do we end up? where we are now? >> it is probable that they will get something done. i also think that it is possible, when he suggested, the lame duck. they could get it through november and let the decision be made again. i think the democrats finally feel like they have any advantage in the tax debate and the millionaire surtax. i doubt that tax issue will be solved before the election. but i think you'll continue to hammer that. -- but i think they will

continue to hammer that. in terms of the question of solving the problem, finding the pay for, it will be very complicated. >> the next 60 days will tell us a couple of things. one reason speaker boehner was able -- was willing to take the two-month deal is that he had a strategy, never given a chance to be tested, but maybe in the future like this. let's rely on a two-month basis. every time it is too much, let's get something we want. either on job creation or may be some regulatory relief. if that is the way they want to play the game, let's shut a judge for two months and introduce one thing that we want to get each time. this one was the keystone pipeline. that was not obvious when this debate started. boehner convinced -- if boehner convinced republicans to do

that, they may get somewhere. >> do you think there were some lessons learned by house gop rank-and-file? >> i do not know if it is good for boehner or bad for boehner that the house is now gone for a month and they now have a lot to think about what happened this week. i think it was bad for house republicans. >> and speaker boehner admitted that. >> yes. he told them to do which was the two-month extension and then come back to fight another day. he could be criticized for not doing a better job at not making this conference follow him. but as this class has shown, they are not easy -- you cannot tell them what to do. and in the traditional -- and the traditional style of john boehner is different